New Opportunity for OTC Product Market Exclusivity

New Opportunity for OTC Product Market Exclusivity

Long-anticipated revisions to the over-the-counter (OTC) monograph process have finally been enacted. President Trump signed the OTC monograph reform provisions into law on March 27, 2020 as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Under the previous, nearly 50-year-old system, FDA evaluated OTC drug product safety and effectiveness by either the OTC monograph review process, or the §505 New Drug Application (NDA) process. FDA (typically a review panel with the Center for Drug Evaluation and Research, Office of Nonprescription Drugs) reviewed OTC drug product claims, determined whether active ingredients were “generally recognized as safe and effective” (GRASE), and advised on labeling.

FDA issued these results in a notice of a tentative final monograph (TFM) in the Federal Register with an invitation to comment. For drug products that met GRASE conditions, FDA created a final OTC monograph establishing manufacture and marketing requirements for that product (no need for FDA pre-approval). Drug products that did not fall within a final monograph had to go the NDA route.

FDA could apply the marketing conditions of a proposed TFM if a product’s indications or active ingredients lacked a final monograph. Drug companies could also petition to change a final monograph to modify labels or add ingredients.

Why change? Industry experts, stakeholders, and regulators have had numerous criticisms regarding the previous OTC monograph system over the years. For example, unlike most drug approval systems, the previous system did not offer OTC drug sponsors incentives for innovation or periods of marketing exclusivity.

In addition, making monograph changes and updates was time-consuming and cumbersome – some OTC monographs took several years to finalize. The previous OTC monograph system did not incorporate a means of responding to evolving safety and efficacy concerns or scientific developments, and, unlike prescription drugs, the OTC drug system did not incorporate user fees to supplement FDA resources.

New OTC Monograph Administrative Order Process 

To address these problems, the CARES Act makes several amendments to the previous system. To facilitate processing, the previous system of notice publication and public comment was replaced with an administrative order process. For example, as long as (1) the drug is deemed GRASE under certain conditions, (2) meets nonprescription drug requirements, (3) meets minor changes in dosage form requirements (if applicable), and (4) conforms to administrative order marketing conditions, a drug will not require NDA approval.

Administrative orders are not required to market an OTC drug with minor changes to dosage forms as long as the drug (among other requirements) is GRASE and the minor change does not alter the drug’s safety, effectiveness, bioavailability, or other activity.

FDA is also free to approve certain TFMs as GRASE. For OTC monographs, ingredients are classified as:

  • Category I: GRASE for the therapeutic indication
  • Category II: not GRASE / unacceptable indications
  • Category III: insufficient data for classification

For drugs previously included in a monograph, the CARES Act amends GRASE status and marketing requirements based on (1) the drug category and (2) whether it is subject to a proposed, tentative, or final monograph.

Final monographs and Category I ingredients subject to a tentative final monograph are deemed final administrative orders.

Category I ingredients deemed GRASE in a proposed monograph and Category III ingredients subject to a tentative final monograph will remain pending. This means they are not GRASE, but they do not require an NDA (and are not subject to prescription requirements).

Category II ingredients that are subject to a tentative final monograph or are ruled not GRASE in a proposed rule have until September 27, 2020 before they are deemed unapproved new ingredients and must undergo the NDA approval process.

FDA will also utilize accelerated procedures to address safety concerns. Instead of having to wait until the judicial review period ends, the HHS Secretary can bypass proposed orders with interim final orders – effective immediately – to address safety concerns.

18-Month Exclusivity for Innovative OTC Drugs

To help boost innovation, the CARES Act amends the FD&C Act to now provide an 18-month exclusivity period to OTC drug administrative order requesters (1) whose product contains an active ingredient not previously incorporated in a monograph drug, or (2) who change the conditions of use and sponsor or conduct studies or trials essential to the order’s issuance. The 18-Month period will begin “on the date the requestor may lawfully market such drugs pursuant to the order.”

Novel OTC Monograph User Fee Program 

The new OTC monograph user fee program will begin charging OTC monograph order request fees and annual OTC monograph drug facility fees to expedite OTC claim review and management. Monograph order request fees will be based on the product’s impact on safety or efficacy (in general, lower fees for less impact) according to HHS Secretary discretion. Exemptions for order request fees may be provided to requesters who change labeling in a way that increases safe usage.

The good news is, OTC drug sponsors and stakeholders may now enjoy incentives for innovation, market exclusivity, and expedited market entry. Of course, expanded FDA resources and a streamlined, modernized process will likely mean more stringent FDA oversight regarding OTC monograph approval and regulation.

New regulatory requirements may apply to both sponsors of existing monograph drug products and new requestors. Sponsors of OTC drug products under existing monographs should seek to determine whether an administrative order is required for continued marketing or other regulatory requirements for their drug product have changed. FDA may send notices to sponsors regarding requested administrative orders.

Changes to the OTC monograph review process can be found in Title III, Subtitle F, Part I of the Coronavirus Aid, Relief, and Economic Security (CARES) Act and have been added as §505G of the Food, Drug, and Cosmetic Act (FD&C Act). The new OTC monograph user fee provisions are outlined in Title III, Subtitle F, Part II of the CARES Act and the FD&C Act §744L and §744M. In addition, the FDA created a User Fee Program Performance Goals and Procedures letter describing FDA timeline goals and how changes will be implemented through the Fiscal Year 2022.

Share


Gregory J. Glover MD JD is a patent attorney and non-practicing physician. A noted expert on developments and emerging conflicts in the pharmaceutical industry, Greg is an expert on regulatory IP issues.



Recent articles: