Document ID: FDA-2020-N-2246-0001
Agency: fda
Document Type: Notice
Title: Fee Rates Under the Over-the-Counter Monograph Drug User Fee Program for Fiscal Year 2021
Posted Date: 2020-12-29T05:00Z

[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]

-----------------------------------------------------------------------

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.

-----------------------------------------------------------------------

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).
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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

[[Page 85648]]

    (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
------------------------------------------------------------------------
                                                            FY 2021 fee
                      Fee category                             rates
------------------------------------------------------------------------
OMOR:
  Tier 1................................................        $500,000
  Tier 2................................................         100,000
Facility Fees:
  MDF...................................................          14,060
  CMO...................................................           9,373
------------------------------------------------------------------------

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]
BILLING CODE 4164-01-P