[Federal Register Volume 85, Number 249 (Tuesday, December 29, 2020)]
[Notices]
[Pages 85646-85648]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-28714]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA-2020-N-2246]
Fee Rates Under the Over-the-Counter Monograph Drug User Fee
Program for Fiscal Year 2021
AGENCY: Food and Drug Administration, HHS.
ACTION: Notice.
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SUMMARY: The Food and Drug Administration (FDA) is announcing the fee
rates under the Over-the-Counter (OTC) Monograph Drug user fee program
for fiscal year (FY) 2021. On March 27, 2020, a new section was added
to the Federal Food, Drug, and Cosmetic Act (FD&C Act) by the
Coronavirus Aid, Relief, and Economic Security Act, which authorizes
FDA to assess and collect user fees from qualifying manufacturers of
OTC monograph drugs and submitters of OTC monograph order requests. FDA
refers to the OTC Monograph Drug user fee program as ``OMUFA''
throughout this document. This notice establishes the OMUFA fee rates
for FY 2021.
FOR FURTHER INFORMATION CONTACT: David Haas, Office of Financial
Management, Food and Drug Administration, 4041 Powder Mill Rd., Rm.
61075, Beltsville, MD 20705-4304, 240-402-4585.
SUPPLEMENTARY INFORMATION:
I. Background
Section 744M of the FD&C Act (21 U.S.C. 379j-72) authorizes FDA to
assess and collect: (1) Facility fees from qualifying owners of OTC
monograph drug facilities and (2) fees from submitters of qualifying
OTC monograph order requests. These fees are to support FDA's OTC
monograph drug activities, which are detailed in section 744L(6) of the
FD&C Act (21 U.S.C. 379j-71(6)) and include various FDA activities
associated with OTC monograph drugs and inspection of facilities
associated with such products. For OMUFA purposes:
An OTC monograph drug is a nonprescription drug without an
approved new drug application which is governed by the provisions of
section 505G of the FD&C Act ((21 U.S.C. 355h); see section 744L(5) of
the FD&C Act);
An OTC monograph drug facility is a foreign or domestic
business or other entity that, in addition to meeting other criteria,
is engaged in manufacturing or processing the finished dosage form of
an OTC monograph drug (see section 744L(10) of the FD&C Act). The
Agency refers to such facility as Monograph Drug Facility (MDF);
A contract manufacturing organization (CMO) facility is an
OTC monograph drug facility where neither the owner nor any affiliate
of the owner or facility sells the OTC monograph drug produced at such
facility directly to wholesalers, retailers, or consumers in the United
States (see section 744L(2) of the FD&C Act); and
An OTC monograph order request (OMOR) is a request for an
administrative order, with respect to an OTC monograph drug, which is
submitted under section 505G(b)(5) of the FD&C Act (see section 744L(7)
of the FD&C Act).
FDA will assess and collect facility fees with respect to the two
types of OTC monograph drug facilities--MDF and CMO facilities. A full
facility fee will be assessed to each qualifying person that owns a
facility identified as an MDF (see section 744M(a)(1)(A) of the FD&C
Act), and a reduced facility fee of two-thirds will be assessed to each
qualifying person that owns a facility identified as a CMO facility
(see section 744M(a)(1)(B)(ii) of the FD&C Act). The facility fees are
due 45 days after the date of publication \1\ of this notice (see
section 744M(a)(1)(D)(i) of the FD&C Act). As discussed below, OTC
monograph drug facilities are exempt from FY 2021 facility fees if they
had ceased OTC monograph drug activities, and updated their
registration with FDA to that effect, prior to December 31, 2019 (see
section 744M(a)(1)(B)(i) of the FD&C Act).
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\1\ Although under section 744M(c)(4)(A) of the FD&C Act, FDA
was to publish this notice not later than the second Monday in May
of 2020, we note that under section 744M(f)(1) of the FD&C Act,
OMUFA fees ``shall be collected and available for obligation only to
the extent and in the amount provided in advance in appropriations
Acts''. An appropriation of FY 2021 OMUFA fees was provided under
section 123 of the Continuing Appropriations Act, 2021, Division A
of Public Law 116-159 (October 1, 2020).
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In addition to facility fees, the Agency will assess and collect
fees from submitters of OMORs, except for OMORs which request certain
safety-related changes (as discussed below). There are two levels of
OMOR fees, based on whether the OMOR at issue is a Tier 1 or Tier 2
OMOR.\2\
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\2\ Under OMUFA, a Tier 1 OMOR is defined as any OMOR which is
not a Tier 2 OMOR (see section 744L(8) of the FD&C Act). Tier 2
OMORs are detailed in section 744L(9) of the FD&C Act.
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For FY 2021, the OMUFA fee rates are as follows: Tier 1 OMOR fees
($500,000), Tier 2 OMOR fees ($100,000), MDF facility fees ($14,060),
and CMO facility fees ($9,373). These fees are effective as of October
1, 2020, and will remain in effect through September 30, 2021. This
document describes the calculations used to set the OMUFA facility fees
and OMOR fees for FY 2021.
II. Facility Fee Revenue Amount for FY 2021
A. Base Fee Revenue Amount
Under OMUFA, FDA sets annual facility fees to generate the total
facility fee revenues for each fiscal year established by section
744M(b) of the FD&C Act. The yearly base revenue amount is the starting
point for setting annual facility fee rates. The base revenue amount
for FY 2021 is $8,000,000 (see section 744M(b)(3)(A) of the FD&C Act).
B. Fee Revenue Adjustment for Inflation
Under OMUFA, the annual base revenue amount for facility fees is
adjusted for inflation for FY 2022 and each subsequent FY (see section
[[Page 85647]]
744M(c)(1) of the FD&C Act). Because the adjustment for inflation does
not apply until FY 2022, the FY 2021 facility fee revenue is not
subject to an inflation adjustment by FDA.
C. Fee Revenue Adjustment for Additional Direct Cost
Under OMUFA, $14,000,000 is added to the facility fee revenues for
FY 2021 to account for additional direct costs (see section
744M(c)(3)(A) of the FD&C Act).
D. Fee Revenue Adjustment for Operating Reserve
Under OMUFA, FDA may further increase the FY 2021 facility fee
revenue and fees if such an adjustment is necessary in order to provide
up to 3 weeks of operating reserves of carryover user fees for OTC
monograph drug activities (see section 744M(c)(2)(A) of the FD&C Act).
However, under the statute, if the carryover balance exceeds 10 weeks
of operating reserves, FDA is required to decrease fees to provide for
not more than 10 weeks of operating reserves of carryover user fees
(see section 744M(c)(2)(C) of the FD&C Act).
FDA is applying the operating reserve adjustment to increase the FY
2021 facility fee revenue and fees to enable the Agency to maintain 3
weeks of operating reserves of carryover user fees. To determine the 3-
week operating reserve amount, the FY 2021 annual base revenue adjusted
for additional direct costs (i.e., $8,000,000 + $14,000,000 =
$22,000,000), is divided by 52, and then multiplied by 3. The 3-week
operating reserve amount for FY 2021 is $1,269,231.
As a result of the above calculations, the final FY 2021 OMUFA
target facility fee revenue is $23,269,000 (rounded to the nearest
thousand dollars).
III. Determination of FY 2021 OMOR Fees
Under OMUFA, the FY 2021 Tier 1 OMOR fee is $500,000 and the Tier 2
OMOR fee is $100,000 (see section 744M(a)(2)(A)(i) and (ii) of the FD&C
Act, respectively). OMOR fees are not included in the OMUFA target
revenue calculation, which is based on the facility fees (see section
744M(b)(1) of the FD&C Act).
An OMOR fee is generally assessed to each person who submits an
OMOR (see section 744M(a)(2)(A) of the FD&C Act). OMOR fees are due on
the date of the submission of the OMOR (see section 744M(a)(2)(B) of
the FD&C Act). The payor should submit the OMOR fee that applies to the
type of OMOR they are submitting (i.e., Tier 1 or Tier 2). FDA will
determine whether the requestor has submitted the appropriate OMOR fee
following receipt of the OMOR and the fee.
An OMOR fee will not be assessed if the OMOR seeks to make certain
safety changes with respect to an OTC monograph drug. Specifically, no
fee will be assessed if FDA finds that the OMOR seeks to change the
drug facts labeling of an OTC monograph drug in a way that would add to
or strengthen: (1) A contraindication, warning, or precaution; (2) a
statement about risk associated with misuse or abuse; or (3) an
instruction about dosage and administration that is intended to
increase the safe use of the OTC monograph drug (see section
744M(a)(2)(C) of the FD&C Act).
IV. Facility Fee Calculations
A. Facility Fee Revenues and Fees
For FY 2021, facility fee rates are being established to generate a
total target revenue amount equal to $23,269,000 (rounded to the
nearest thousand dollars). FDA used the methodology described below to
determine the appropriate number of MDF and CMO facilities to be used
in setting the OMUFA facility fees for FY 2021. FDA took into
consideration that the CMO facility fee is equal to two-thirds of the
amount of the MDF facility fee (see section 744M(a)(1)(B)(ii) of the
FD&C Act).
B. Estimate of the Number of Qualifying Facilities and Setting the
Facility Fees
For FY 2021, FDA utilized the Agency's Electronic Drug Registration
and Listing System (eDRLS) to estimate the number of qualifying MDF or
CMO facilities that engage in the manufacturing or processing of the
finished dosage form of an OTC monograph drug. In setting the FY 2021
facility fees, FDA considers the fee-qualifying population of OTC
monograph drug facilities to be the population of establishments coded
in eDRLS with the business operation qualifier of ``manufactures human
over-the-counter drug products produced under a monograph'' or
``contract manufacturing for human over-the-counter drug products
produced under a monograph'' and indicating at least one of the
following business operations: Finished dosage form manufacture, label,
manufacture, pack, relabel, or repack. FDA estimated this population
through December 30, 2020, based on information provided by facilities
in eDRLS during the first three calendar quarters of 2020.
Those facilities that only manufacture the active pharmaceutical
ingredient (or API) of an OTC monograph drug do not meet the definition
of an OTC monograph drug facility (see section 744L(10)(A)(i)(II)) of
the FD&C Act). Likewise, a facility is not considered an OTC monograph
drug facility if its only manufacturing or processing activities are
one or more of the following: (a) Production of clinical research
supplies; (b) testing; or (c) placement of outer packaging on packages
containing multiple products, for such purposes as creating multipacks,
when each monograph drug product contained within the overpackaging is
already in a final packaged form prior to placement in the outer
overpackaging (see section 744L(10)(A)(iii) of the FD&C Act). In
addition, as noted above, certain OTC monograph drug facilities are
exempt from facility fees. Under the statute, a facility fee will not
be assessed if the identified OTC monograph drug facility: (1) Has
ceased all activities related to OTC monograph drugs prior to December
31 of the year immediately preceding the applicable fiscal year; and
(2) has updated its eDRLS registration to reflect that change (see
section 744M(a)(1)(B)(i) of the FD&C Act). As the applicable fiscal
year for fee-setting under this notice is FY 2021, the year immediately
preceding the applicable fiscal year is FY 2020. December of FY 2020 is
December 2019. Thus, a FY 2021 facility fee will not be assessed with
respect to an OTC monograph drug facility that, prior to December 31,
2019, had ceased all activities related to OTC monograph drugs and
updated its eDRLS registration to that effect.
FDA considered a number of factors that could affect collection of
the target revenue, including that FY 2021 is the first year of this
new user fee program and uncertainties related to the effects of the
COVID-19 public health emergency. In estimating the total number of
fee-paying facilities, the Agency made certain assumptions, including
that:
(1) Facilities using expired Structured Product Labeling (SPL)
codes in eDRLS were no longer manufacturing and marketing OTC monograph
drugs;
(2) Facilities that have deregistered in eDRLS have exited the
market;
(3) Facilities that FDA believes registered incorrectly as OTC
monograph drug facilities (for example, because the associated drug
listings for these facilities do not include OTC monograph drugs but
instead indicate such products as OTC drug products under an approved
drug application or OTC animal drug products) are not engaged in
manufacturing or processing the finished dosage form of an OTC
monograph drug; and
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(4) Facilities that registered but do not have an active OTC
monograph drug product listing associated in their registration profile
are not manufacturing or processing such drug products.
Each establishment paying the facility fee is counted as one fee-
paying unit. The total estimate of fee-paying units is further analyzed
to determine the number of respective MDF and CMO fee-paying units.
Based on the data obtained from eDRLS, FDA estimates there will be
1,712 fee-paying units. The Agency estimates that 90 percent (1,712 x
.90 = 1,541, rounded) will incur the MDF fee and 10 percent (1,712 x
.10 = 171, rounded) will incur the CMO fee.
To determine the number of full fee-paying equivalents (the
denominator) to be used in setting the OMUFA fees, FDA assigns a value
of 1 to each MDF (1,541) and a value of \2/3\ to each CMO (171 x \2/3\
= 114) for a full facility equivalent of 1,655 (rounded). The target
fee revenue of $23,269,000 is then divided by 1,655 for an MDF fee of
$14,060 and a CMO fee of $9,373.
V. Fee Schedule for FY 2021
The fee rates for FY 2021 are displayed in table 1.
Table 1--Fee Schedule for FY 2021
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FY 2021 fee
Fee category rates
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OMOR:
Tier 1................................................ $500,000
Tier 2................................................ 100,000
Facility Fees:
MDF................................................... 14,060
CMO................................................... 9,373
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VI. Fee Payment Options and Procedures
The new fee rates are effective October 1, 2020, through September
30, 2021. To pay the OMOR, MDF, and CMO fees, complete an OTC Monograph
User Fee Cover Sheet, available at: https://userfees.fda.gov/OA_HTML/omufaCAcdLogin.jsp. A user fee identification (ID) number will be
generated. Payment must be made in U.S. currency by electronic check or
wire transfer, payable to the order of the Food and Drug
Administration. The preferred payment method is online using electronic
check (Automated Clearing House (ACH) also known as eCheck) or credit
card for payments under $25,000 (Discover, VISA, MasterCard, American
Express).
FDA has partnered with the U.S. Department of the Treasury to use
Pay.gov, a web-based payment application, for online electronic
payment. The Pay.gov feature is available on the FDA website after
completing the OTC Monograph User Fee Cover Sheet and generating the
user fee ID number. Secure electronic payments can be submitted using
the User Fees Payment Portal at https://userfees.fda.gov/pay (Note:
Only full payments are accepted. No partial payments can be made
online). Once an invoice is located, ``Pay Now'' should be selected to
be redirected to Pay.gov. Electronic payment options are based on the
balance due. Payment by credit card is available for balances that are
less than $25,000. If the balance exceeds this amount, only the ACH
option is available. Payments must be made using U.S. bank accounts as
well as U.S. credit cards.
For payments made by wire transfer, include the unique user fee ID
number to ensure that the payment is applied to the correct fee(s).
Without the unique user fee ID number, the payment may not be applied,
which could result in FDA not filing an application and other
penalties. The originating financial institution may charge a wire
transfer fee. Applicable wire transfer fees must be included with
payment to ensure fees are fully paid. Questions about wire transfer
fees should be addressed to the financial institution. The account
information for wire transfers is as follows: U.S. Department of the
Treasury, TREAS NYC, 33 Liberty St., New York, NY 10045, Acct. No.:
75060099, Routing No.: 021030004, SWIFT: FRNYUS33. If needed, FDA's tax
identification number is 53-0196965.
Dated: December 22, 2020.
Lauren K. Roth,
Acting Principal Associate Commissioner for Policy.
[FR Doc. 2020-28714 Filed 12-28-20; 8:45 am]
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