The OTC drug industry is not unified in support of FDA's consideration of asking Congress to require monograph drug user program fees as some firms have doubts about the potential benefit to manufacturers and consumers.

Speakers from industry trade groups, medical professional associations, consumer and health care advocacy groups, drug manufacturers' organizations and pharmacology experts agreed with Center for Drug Evaluation and Research officials during a public meeting on June 10 that the agency has insufficient funding available for OTC drug regulation, which is $8.2m for fiscal 2016.

However, executives from OTC drug firms stated numerous concerns about the equity and effectiveness of a potential program that would impose user fees on firms that make or market monograph drugs, the vast majority of nonprescription pharmaceutical products.

"We will strongly oppose an FDA appeal to Congress to for user fees to fund the monograph-based OTC market," said Steven Woolf, executive vice president and chief financial officer at Austin, Texas-based Humco Holdings Co., which makes and markets branded and private label OTCs and active pharmaceutical ingredients and provides contract manufacturing.

The speakers also suggested that FDA exhaust all potential options for targeting additional funds from its annual appropriation for its OTC drug regulation costs. They noted, too, that additional costs for manufacturers likely would lead to higher prices for OTC drugs.

"A monograph use fee program will require careful consideration and design to ensure it provides value for both health care consumers and product manufacturers," said Greg Collier, Procter & Gamble Co.'s global director, healthcare safety, regulatory and analytical.

"The economic impact of user fees will ultimately pass through to the consumer. This increased costs to the consumer should be top of mind as we debate and talk about the user fee issue," said Woolf.

Woolf also suggested user fees are not appropriate for monograph ingredient reviews. "The OTC drug review is by nature a public process and funding to complete the review should come from public funds appropriated by Congress," he said.

Perrigo Co. PLCwould prefer that FDA use its existing resources for the monograph program, said Richard Stec, the OTC private label leader's vice president for global regulatory affairs.

"In our opinion, the current monograph rulemaking process works. FDA, however, has elected not to resource executing the process," said Stec, like Collier and Woolf speaking during the open period of the meeting and not invited to make a presentation.

He added that user fees would "appear not to augment the appropriations but rather to fund the majority of the monograph program. This simply is not an OTC industry responsibility."

P&G also suggests that FDA exercise "expedited hiring authority" to add OTC regulation staff, Collier said. "As a first step consider additional appropriations funding adequate to staff and manage a streamlined monograph review process for completion" of priority tentative final monographs, he said.

No NDAs In Monograph Process

Like other open period speakers as well as stakeholders FDA included on the meeting's agenda, Stec noted that user fee programs for Rx drugs and medical devices apply to applications for pre-market evaluation and review of a product. Monograph reviews are not pre-market regulatory actions as the ingredients already are available but are being proposed in different delivery formats or formulations or for new indications.

The Prescription User Fee Act program, for instance, "was born out of the agency's inability to keep pace with the increasing body of FDA's mission," Stec said. "The pharma industry was willing to pay user fees to supplement papers for the purpose of clearing this mission backlog and building better review capabilities to expeditiously review and approve NDAs."

OTC monograph products, however, do not require FDA approval of an NDA, including abbreviated and supplemental applications, and the agency has not received a "dramatic increase" in monograph ingredient reviews "creating a backlog of products that cannot enter the market," the Perrigo executive said.

Instead, 52 monographs were established in the OTC drug review and "only 10 remain pending and have been pending for decades," Stec said. "The proposal for user fees to clean up decades of old tentative [final] monographs has no tether to provide greater access to new products to the public and, therefore, little incentive for the industry."

Exclusivity Among Incentives?

CDER officials acknowledged before the meeting that a user fee program could create disincentives for OTC firms' innovations by adding costs to already costly processes for preparing requests for FDA to evaluate an ingredient as generally recognized as safe and effective, the threshold for monograph status, or for the agency to consider other monograph updates ([A#05160613011]).

"Care must be taken that a new fee structure doesn't become a disincentive for a manufacturer to request safety-related product enhancements that could better serve health care consumers," P&G's Collier said.

Instead, exclusivity for formulations, delivery formats or indications that firms request from FDA after investing in research needed as support could incentivize monograph innovations. Industry stakeholders also recommended that in looking at a potential monograph program user fees, FDA factor in lower profit margins for OTC than Rx drugs.

"This is a factor that the agency should consider in any decision regarding user fees. It will be extremely difficult to justify the application of any user fee in the absence of any incentive to encourage innovation," said Jethro Ekuta, Johnson & Johnson's vice president for North America regulatory affairs.

Ekuta, also speaking in the open period, said it is "important to highlight that for the most part, current OTC monograph products generate less revenue than our prescription counterparts."

He noted PDUFA and other user fee programs for drugs and devices "are lined with some corresponding form of exclusivity," which "should be considered an important element of any application-based user fees imposed on OTC monograph products."

An application- or event-based fee program, however, would not provide sufficient predictable revenues for CDER's Division of Nonprescription Drug Products and other FDA units working on OTC regulation, according to the agency and industry stakeholders.

While event-based fees would come only from the requesting firms, scheduled fees such as annual facility registrations would apply across the OTC monograph drug sector of the industry, from large to small firms. Those fees would be more predictable, but perhaps less equitable.

"The heterogeneity of current OTC monograph drug manufacturers will make it more difficult to develop a user feel model that that equitably distributes costs," Collier said.

Perrigo's Stec said "pay-to-play user fees might be a mechanism to support" making additional OTC drugs available, but "it must be fair to all companies."

The International Pharmaceutical Excipient Council of the Americas recommends that FDA consider not making firms providing "atypical active" ingredients used in monograph products subject to user fees. Excipients are common as active ingredients in monograph suppository and anti-gas products, for instance.

"The fees that would be applied to an excipient ingredient manufacturer could be prohibitive," said Priscilla Zawislak during her scheduled presentation.

The impact could be so extreme that "many ingredients may no longer be available," Zawislak added.

FDA is looking at potential user fees for the monograph program, with a docket for comment in addition to the public meeting, while it also considers comments a docket launched in February 2014 on overhauling the OTC monograph process ([A#05150525005]).

Like FDA's existing user fee programs, authority to establish a monograph user fee requires legislation passed by Congress.

Like the agency's May 11 Federal Register notice, CDER officials at the meeting stated that the docket about considering a user fee program is separate from the monograph reform docket. Several speakers, however, noted monograph process problems in their presentations at the user fee meeting.

A "backlog of monograph changes currently languishing under FDA review is unacceptable," said David Bromberg, a physician and a member of the American Academy of Pediatrics board of directors.

The monograph process, which FDA launched in 1972 and requires multiple-step rulemakings with corresponding notice-and-comment periods, leaves the agency "unable to act decisively in the face of mounting evidence," said Bromberg, among the speakers CDER invited after they asked to make presentations.

Changing the monograph process could affect the OTC drug marketplace more than FDA’s ongoing consideration of allowing Rx-to-OTC switches under conditions of safe use and potentially incorporating uses of technology ([A#05150713005]).

FDA is accepting comments on its look at monograph user fees at docket FDA-2016-N-1092.

(Look for additional coverage during this week in "The Tan Sheet" online from the June 10 public meeting on FDA's look at OTC monograph program user fees.)

OTC Monograph User Fees Inspire Wary Support From Industry

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