Overview
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The US Food and Drug Administration's (FDA) framework for review of Over-the-Counter (OTC) drugs has long been a target for modernization.[1] While the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act),[2] signed into law on March 27, 2020, is primarily intended to provide emergency relief for individuals, families, and businesses affected by the ongoing COVID-19 pandemic, it also reforms FDA's OTC drug product review process. This article briefly analyzes the impact of the changes under the CARES Act, reviews the existing regulatory framework for OTC drugs, and summarizes the changes under the act.
Implications of the CARES Act
Inclusion of the OTC drug provisions in the CARES Act reflects many years of work toward OTC drug review reform. There are two primary implications of the act. First, because the act replaces FDA's OTC drug monograph process with a streamlined, administrative order process, we anticipate that obtaining FDA's review of OTC ingredients should be significantly more efficient. This includes active ingredients for sunscreen, which have been subject to their own review process but will now have the opportunity to transfer review. Second, the changes under the CARES Act will help to clarify the legal and regulatory status of OTC products that have been subject to tentative final monographs for many years, such as hand sanitizers, because the act deems currently marketed OTC drugs as either drugs that are generally recognized as safe and effective (GRASE) and that may be marketed OTC, as drugs that may be marketed OTC, or as new drugs that require submission of a New Drug Application (NDA).
The act also introduces two significant new aspects to the OTC drug review process. User fees, which have long been part of the new drug approval process, will now be imposed on facilities manufacturing OTC drugs and on entities requesting an OTC monograph administrative order. More unusually, the act creates a new 18-month exclusivity period for new OTC drugs that are approved under the administrative order process.
The new section 505G that will be added to the Federal Food, Drug, and Cosmetic Act (the FD&C Act) pursuant to the CARES Act is complex, and it will take some time for industry to thoroughly parse its implications. Some initial questions include how an 18-month grant of exclusivity will work in practice, and how active ingredients for which FDA has not made a determination as to GRASE status while waiting for submission of additional information and data, will be treated.
FDA's Current Regulation of OTC Drugs
Under the current regulatory framework, FDA typically determines whether the active ingredients used in OTC drugs are GRASE through its monograph program. Historically, FDA has classified ingredients it reviewed[3] as follows:
- Category I: generally recognized as safe and effective for the claimed therapeutic indication;
- Category II: not generally recognized as safe and effective or unacceptable indications; or
- Category III: insufficient data available to permit final classification.
FDA's OTC drug monographs serve as a kind of "recipe book" that establish permissible ingredients, doses, formulations, and labeling. Finished OTC drugs that comply with a relevant monograph may be marketed without FDA's specific evaluation or approval. In cases where the agency determines that an ingredient is not GRASE, submission of an NDA is required; indeed, it is possible to submit an NDA for an OTC drug instead of going through the monograph process.
OTC drugs and their manufacturers are subject to a slew of regulatory obligations. Domestic and foreign establishments that manufacture, repack, or re-label drug products for sale in the US are required to register and list their products with FDA, and must comply with FDA's Current Good Manufacturing Practice (CGMP) regulations. OTC drugs are subject to a standardized labeling format, with certain label statements, such as the indications for use and warnings, specified by FDA.
OTC Drug Review Under the CARES Act
Subtitle F of the CARES Act amends the FD&C Act to reform FDA’s current regulation of OTC drugs, establishing a new section 505G into the FD&C Act.
New Procedures under the CARES Act
An administrative order process will replace notice-and-comment rulemaking for OTC drug monographs. FDA may issue an administrative order determining OTC and GRASE status for a drug either on the agency's initiative or pursuant to a request. These administrative orders will be made available for public comment. As relevant to the current COVID-19 outbreak, the act establishes an expedited procedure for FDA to issue administrative orders, on its own initiative, in certain circumstances such as an imminent hazard to the public health.
Notably, a final administrative order issued in response to a request will grant the requestor an 18-month exclusivity period, with limitations, to lawfully market the drugs subject to the order. No exclusivity applies to changes to a drug which are either: (1) the subject of a Tier 2 OTC monograph order request (discussed further below); (2) safety-related changes; or (3) changes related to methods of testing safety or efficacy.
The CARES Act also establishes two types of user fees that will be dedicated to OTC monograph drug activities: facility fees and OTC monograph order request fees.[4]
Facility fees: starting in 2021, an annual facility fee will be assessed for any person who owns a facility identified as an OTC monograph drug facility. For 2021, the facility fee will be due on the later of the first business day of July 2020, or 45 calendar days after publication of a Federal Register notice publishing the fees. Thereafter, the facility fee will be due on the later of the first business day of June, or the first business day after the enactment of an appropriations act providing for the collection and obligation of user fees.
OTC monograph order request fees: there will be a user fee associated with an OTC monograph order request.
- The fee for a Tier 1 OTC monograph order request will be $500,000 (adjusted for inflation). A Tier 1 request is any request determined to not be a Tier 2 request.
- The fee for a Tier 2 OTC monograph order request will be $100,000 (adjusted for inflation). Tier 2 requests include:
- Modifications to drug facts labels, such as reordering of existing information, addition of information to the other information section, and certain modifications to the directions for use section;
- Standardization of the concentration or dose of a specific finalized ingredient within a particular finalized monograph;
- A change to ingredient nomenclature to align with nomenclature of a standards-setting organization; or
- Addition of an interchangeable term in accordance with 21 C.F.R. §330.1.
Furthermore, the CARES Act sunsets the Sunscreen Innovation Act,[5] which amended the FD&C Act to provide an alternative process for review of the safety and effectiveness of nonprescription sunscreen active ingredients, as of the end of fiscal year 2022. Until that time, a sponsor of an OTC sunscreen active ingredient that is currently subject to a proposed sunscreen order under section 586C of the FD&C Act may elect to transition into a review under the CARES Act. This will be considered a request for an administrative order and the request must be made within 180 calendar days of the enactment of the act. A final sunscreen order will grant the order requestor an 18-month exclusivity period, with limitations, to lawfully market such sunscreen ingredient pursuant to the order.
Deeming of Currently Marketed OTC Drugs
Drugs currently on the market are deemed GRASE, not new drugs, and may be marketed over-the-counter, if they comply with a final monograph, or if they are classified in Category I under a tentative final monograph and comply with such tentative final monograph.[6]
Other drugs currently on the market are not required to be the subject of an approved drug application and may be marketed OTC[7] if they are classified in Category III in the preamble of a proposed rule establishing a tentative final monograph and that meet additional criteria, or if they are classified as Category I drugs under a proposed monograph or advance notice of proposed rulemaking (ANPRM) that comply with the requirements of such proposed monograph or ANPRM and any applicable subsequent determination by FDA.
Drugs that are classified in Category II under a tentative final monograph,[8] drugs that are subject to a determination to be not GRASE in a proposed rule, drugs that FDA has determined not to be GRASE under a final determination issued under 21 C.F.R. Part 330, and other non-prescription drugs that are not described in specified provisions in the CARES Act are deemed new drugs, misbranded, and must be the subject of a new drug application.
FDA is currently in the process of implementing the changes required under the CARES Act. The agency will update the public, as well as a designated webpage, as it obtains additional information.
[1] The CARES Act provisions represent a modified version of the Over-the-Counter Monograph Safety, Innovation, and Reform Act of 2019, S. 2740.
[2] Coronavirus Aid, Relief, and Economic Security Act, Pub. L. No. 116-136, H.R. 748 (2020).
[3] FDA's finalized monographs are incorporated into its regulations. See 21 C.F.R. Part 331 et seq.
[4] The act establishes exceptions for both types of user fees, as well as criteria for refunds of user fees.
[5] Sunscreen Innovation Act, Pub. L. No. 113-195, 128 Stat. 2035 (2014). This Act is found in section 586 of the FD&C Act.
[6] The drugs must also meet additional criteria, including compliance with general requirements for OTC drugs and compliance with conditions or requirements under specific OTC drug provisions in the CARES Act.
[7] The drugs must meet additional criteria for these provisions to apply.
[8] The provisions applicable to Category II drugs begin 180 days after the enactment of the Act.
