[Federal Register Volume 86, Number 57 (Friday, March 26, 2021)]
[Notices]
[Pages 16223-16226]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-06361]


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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 or the Agency) 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, new 
provisions were added to the Federal Food, Drug, and Cosmetic Act (FD&C 
Act) by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, 
which authorize 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 publishes 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, 240-402-9845.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 744M of the FD&C Act (21 U.S.C. 379j-72), as added by the 
CARES Act, 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 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 (MDF) 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);
     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).
    Under section 744M(a)(1)(A) of the FD&C Act, a facility fee for FY 
2021 shall be assessed with respect to each facility that is identified 
as an OTC monograph drug facility during the period from January 2020 
through December 2020. Consistent with the statute, 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 of this notice (see section 
744M(a)(1)(D)(i) of the FD&C Act).\1\
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    \1\ FDA is required to publish OMUFA fee rates under section 
744M(a)(4) of the FD&C Act. FDA published an earlier version of this 
notice in the Federal Register on December 29, 2020. That notice was 
withdrawn by the Department of Health and Human Services (HHS) on 
January 6, 2021 (see https://www.federalregister.gov/documents/2021/01/06/2021-00030/withdrawal-of-fda-notice-regarding-fee-rates-under-the-over-the-counter-monograph-drug-user-fee). FDA has updated and 
is republishing the OMUFA fee rates for FY 2021 consistent with the 
January 12, 2021, HHS notice described below (and with the 
concurrence of HHS that publication of this fee-setting notice does 
not require prior notice and comment).
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    As discussed in greater detail 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).
     Entities that registered with FDA during the Coronavirus 
Disease 2019 (COVID-19) pandemic whose sole activity with respect to 
OTC monograph drugs during the pandemic consists (or had consisted) of 
manufacturing OTC hand sanitizer products are not identified as OTC 
monograph drug facilities subject to OMUFA facility fees.\2\
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    \2\ See HHS Federal Register notice of January 12, 2021, https://www.federalregister.gov/documents/2021/01/12/2021-00237/notice-that-persons-that-entered-the-over-the-counter-drug-market-to-supply-hand-sanitizer-during.
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    In addition to facility fees, the Agency is authorized to assess 
and collect fees from submitters of OMORs, except for OMORs which 
request certain safety-related changes (as discussed below).

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There are two levels of OMOR fees, based on whether the OMOR at issue 
is a Tier 1 or Tier 2 OMOR.\3\
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    \3\ 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 ($20,322), 
and CMO facility fees ($13,548). These fees are for the period from 
October 1, 2020, through September 30, 2021.\4\ This document is issued 
pursuant to sections 744M(a)(4) and (c)(4)(A) \5\ of the FD&C Act and 
describes the calculations used to set the OMUFA facility fees and OMOR 
fees for FY 2021 in accordance with the directives in the statute.
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    \4\ These OMUFA fees are for FY 2021, per section 744M(a) of the 
FD&C Act.
    \5\ 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 
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). Additionally, as described 
above, this notice republishes the FY 2021 OMUFA fees following 
withdrawal of the Agency's earlier December 29, 2020, fee notice.
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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 
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, as determined under the statute, 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. Calculating the Number of Qualifying Facilities and Setting the 
Facility Fees

    Under the statute, certain information submitted to FDA for drug 
establishment registration purposes under section 510 of the FD&C Act 
is also used for OMUFA fee-setting (see section 744M(d) of the FD&C 
Act). Thus, for FY 2021, FDA utilized the Agency's Electronic Drug 
Registration and Listing System (eDRLS) to calculate 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 
order to apply the statutory fee-setting calculations, FDA assessed 
which OTC monograph drug facilities had selected in eDRLS the business 
operation qualifiers 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 
indicated at least one of the following business operations: finished 
dosage form manufacture, label, manufacture, pack, relabel, or 
repack.\6\ FDA analyzed eDRLS

[[Page 16225]]

registration data from January 1, 2020, through December 31, 2020,\7\ 
based on information provided by facilities in eDRLS.
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    \6\ See section 744L(10)(A); see also section 744L(10)(A)(iii) 
of the FD&C Act, excluding from the definition of ``OTC monograph 
drug facility'' those facilities whose manufacturing or processing 
consists solely of a narrow range of specified activities (e.g., 
placement of outer overpackaging on products already in final 
packaged form); cf section 744A(6)(A)(ii) of the FD&C Act. See also 
21 CFR 207.1 (addressing drug establishment registration), stating 
that ``[m]anufacture means each step in the manufacture, 
preparation, propagation, compounding, or processing of a drug,'' 
and indicating that ``the term `manufacture, preparation, 
propagation, compounding, or processing,' as used in section 510 of 
the Federal Food, Drug, and Cosmetic Act, includes relabeling, 
repackaging, and salvaging activities.''
    \7\ Under section 744M(a)(1) of the FD&C Act, ``Each person that 
owns a facility identified as an OTC monograph drug facility on 
December 31 of the fiscal year or at any time during the preceding 
12-month period shall be assessed an annual fee for each such 
facility.'' For purposes of FY 2021 facility fees, that time period 
is January 1, 2020, through December 31, 2020.
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    Those facilities that only manufacture the Active Pharmaceutical 
Ingredient (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 an OTC monograph drug facility 
if its only manufacturing or processing activities are one or more of 
the following: (1) Production of clinical research supplies; (2) 
testing; or (3) 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).
    Further, in a January 12, 2021, Federal Register notice, the 
Department of Health and Human Services (HHS) clarified that ``persons 
that entered into the over-the-counter drug industry for the first time 
in order to supply hand sanitizers during the COVID-19 Public Health 
Emergency are not persons subject to the facility fee the Secretary is 
authorized to collect'' under section 744M of the FD&C Act.\8\ As the 
January 12, 2021, HHS notice explained, persons that were not 
registered with FDA as drug manufacturers prior to the COVID-19 Public 
Health Emergency, which then later registered with FDA for the purpose 
of producing hand sanitizers, ``are not `identified . . .facilit[ies]' 
under section 744M of the FD&C Act, 21 U.S.C. 379j-72, and are thus not 
subject to the facility fee contained therein'' (86 FR 2421). As 
further explained in the HHS notice, ``imposing facility fees on these 
entities is inconsistent with Congress' stated intent elsewhere in the 
CARES Act.'' Section 2308 of the CARES Act provides a temporary 
exemption from excise taxes for distilled spirits ``use[d] in or 
contained in hand sanitizer produced and distributed in a manner 
consistent with any guidance issued by the Food and Drug Administration 
that is related to the outbreak of [COVID-19].'' As stated in the HHS 
notice, ``[i]t is unlikely Congress intended to save these entities 
from excise taxes only to impose tens of thousands of dollars in 
facility fees from an unfamiliar regulator.'' (86 FR 2420 at 2421)
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    \8\ See https://www.federalregister.gov/documents/2021/01/12/2021-00237/notice-that-persons-that-entered-the-over-the-counter-drug-market-to-supply-hand-sanitizer-during (86 FR 2420).
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    Accordingly, as stated in the January 12, 2021, HHS Notice, FDA 
will not assess OMUFA facility fees upon those firms that first 
registered with FDA on or after the January 27, 2020 declaration of the 
COVID-19 Public Health Emergency (PHE),\9\ solely for purposes of 
manufacturing hand sanitizer products \10\ during the PHE.\11\ We note, 
however, that under the FD&C Act, whether an entity is subject to OMUFA 
fees has no bearing on whether the entity or the entity's products are 
subject to other requirements under the FD&C Act. FDA will continue to 
use its regulatory compliance and enforcement tools to protect 
consumers, including from potentially dangerous or subpotent hand 
sanitizers.
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    \9\ See https://www.phe.gov/emergency/news/healthactions/phe/Pages/2019-nCoV.aspx.
    \10\ The term ``hand sanitizer'' commonly refers to consumer 
antiseptic rubs. However, because the HHS notice referred to 
``persons that entered the over-the-counter drug market to supply 
hand sanitizer products in response to the COVID-19 Public Health 
Emergency'' (86 FR 2420), we are using the same terminology--``hand 
sanitizer products''--to refer to OTC monograph drug products 
intended for use (without water) as antiseptic hand rubs or 
antiseptic hand wipes by consumers or health care personnel, 
including products manufactured or prepared consistent with the 
Agency's ``Temporary Policy for Preparation of Certain Alcohol-Based 
Hand Sanitizer Products During the Public Health Emergency (COVID-
19) Guidance for Industry'' (see https://www.fda.gov/media/136289/download). Our use of the term ``hand sanitizer products'' in this 
notice to refer to antiseptic hand rubs and antiseptic hand wipes 
intended for use by consumers or health care personnel does not 
alter any existing regulatory distinctions between these products.
    \11\ See 86 FR 2420. The January 12, 2021, HHS notice explained 
that fees would be assessed on entities that ``manufacture, 
distribute, and sell over-the-counter drugs in addition to hand 
sanitizer'' and entities that ``continue to manufacture (as opposed 
to hold, distribute, or sell existing inventories) hand sanitizer 
products as of December 31 of the year immediately following the 
year during which the COVID-19 Public Health Emergency is 
terminated.''
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    In addition, FDA will not assess a facility fee 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 (per 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 31 of FY 2020 is December 31, 2019. Thus, FDA 
will not assess a FY 2021 facility fee 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 PHE. In undertaking the statutorily-directed fee calculations, 
the Agency made certain assumptions, including that: (1) Facilities 
using expired business operation qualifier codes within their 
electronic registration (also known as Structured Product Labeling) 
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 did not include OTC monograph drugs but 
instead indicated such products as OTC drug products under an approved 
drug application or OTC animal drug products) were not engaged in 
manufacturing or processing the finished dosage form of an OTC 
monograph drug; and (4) facilities that registered but did not have an 
active OTC monograph drug product listing associated in their 
registration profile were 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 
1,184 fee-paying units. The Agency estimates that 90 percent (1,184 x 
.90 = 1,066, rounded) will incur the MDF fee and 10 percent (1,184 x 
.10 = 118, 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 (1,066) and a value of \2/3\ to each CMO (118 x \2/3\ 
= 79) for a full facility equivalent of 1,145 (rounded). The target fee 
revenue of $23,269,000 is then divided by 1,145 for an MDF fee of 
$20,322 and a CMO fee of $13,548.

V. Fee Schedule for FY 2021

    The fee rates for FY 2021 are displayed in table 1.

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                    Table 1--Fee Schedule for FY 2021
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                                                                FY 2021
                        Fee category                           fee rates
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OMOR:
    Tier 1..................................................    $500,000
    Tier 2..................................................     100,000
Facility Fees:
    MDF.....................................................      20,322
    CMO.....................................................      13,548
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VI. Fee Payment Options and Procedures

    The new fee rates are for the period from 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 OMOR request, for example, 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.
    If you are assessed an FY 2021 OMUFA facility fee and believe your 
facility is not an OTC monograph drug facility as described in this 
notice, please contact [email protected].

    Dated: March 23, 2021.
Lauren K. Roth,
Acting Principal Associate Commissioner for Policy.
[FR Doc. 2021-06361 Filed 3-25-21; 8:45 am]
BILLING CODE 4164-01-P