Over-the-Counter Monograph Drug User Fee Rates for Fiscal Year 2022, 14888-14891 [2022-05542]

Agencies

• Food and Drug Administration
• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 87, Number 51 (Wednesday, March 16, 2022)]
[Notices]
[Pages 14888-14891]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-05542]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2022-N-0284]


Over-the-Counter Monograph Drug User Fee Rates for Fiscal Year 
2022

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 (OMUFA) for fiscal year (FY) 2022. The Federal 
Food, Drug, and Cosmetic Act (FD&C Act) authorizes FDA to assess and 
collect user fees from qualifying manufacturers of OTC monograph drugs 
and submitters of OTC monograph order requests. This notice publishes 
the OMUFA fee rates for FY 2022.

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 
Coronavirus Aid, Relief, and Economic Security Act (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 (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 that 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 
2022 shall be assessed with respect to each facility that is identified 
as an OTC monograph drug facility during the fee-liable period from 
January 1, 2021, through December 31, 2021.\1\ 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 for 
FY 2022 are due on June 1, 2022 (see section 744M(a)(1)(D)(ii) of the 
FD&C Act).\2\
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    \1\ 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 2022 facility fees, that time period 
is January 1, 2021, through December 31, 2021.
    \2\ Assuming that, as we anticipate, the FY 2022 fee 
appropriation will occur prior to June 1, 2022. Under section 
744M(a)(1)(D)(ii), the FY 2022 facility fees are due on the later of 
(1) the first business day of June 2022 (i.e., June 1, 2022) or (2) 
the first business day after the enactment of an appropriations Act 
providing for the collection and obligation of FY 2022 OMUFA fees.
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    As discussed in greater detail below:
     OTC monograph drug facilities are exempt from FY 2022 
facility fees if they had ceased OTC monograph drug activities, and 
updated their registration with FDA to that effect, prior to December 
31, 2020 (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 \3\ are not identified as OTC 
monograph drug facilities subject to OMUFA facility fees.\4\
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    \3\ The term ``hand sanitizer'' commonly refers to consumer 
antiseptic rubs. However, because the Health and Human Services 
(HHS) notice published January 12, 2021, 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,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), 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 healthcare personnel.
    \4\ See HHS Federal Register notice of January 12, 2021, 86 FR 
2420, 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 that 
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.\5\
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    \5\ Under OMUFA, a Tier 1 OMOR is defined as any OMOR that 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 2022, the OMUFA fee rates are: Tier 1 OMOR fees ($507,021), 
Tier 2 OMOR fees ($101,404), MDF facility fees ($24,178), and CMO 
facility fees ($16,119). These fees are effective for the period from 
October 1, 2021, through September 30, 2022.\6\ This document is issued 
pursuant to sections 744M(a)(4) and 744M(c)(4)(B) of the FD&C Act and 
describes the calculations used to set the OMUFA facility fees and OMOR 
fees for FY 2022 in accordance with the directives in the statute.
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    \6\ These OMUFA fees are for FY 2022, per section 744M(a) of the 
FD&C Act.
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II. Facility Fee Revenue Amount for FY 2022

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 for FY 
2022 is the dollar amount of the total revenue amount for the previous 
fiscal year, without certain adjustments made for that previous year, 
and is $8,000,000 (see section 744M(b)(3)(B) of the FD&C Act).

B. Fee Revenue Adjustment for Inflation

    Under OMUFA, the annual base revenue amount for facility fees is

[[Page 14889]]

adjusted for inflation for FY 2022 and each subsequent fiscal year (see 
section 744M(c)(1) of the FD&C Act). That provision states that the 
dollar amount of the inflation adjustment is equal to the product of 
the annual base revenue for the fiscal year and the inflation 
adjustment percentage. For each of FYs 2022 and 2023, the inflation 
adjustment percentage is equal to the average annual percent change 
that occurred in the Consumer Price Index (CPI) for urban consumers 
(Washington-Baltimore, DC-MD-VA-WV; Not Seasonally Adjusted; All items; 
Annual Index) for the first 3 years of the preceding 4 years of 
available data (section 744M(c)(1)(C) of the FD&C Act). As a result of 
a geographical revision made by the Bureau of Labor and Statistics in 
January 2018, the ``Washington, DC-Baltimore'' index was discontinued 
and replaced with two separate indices (i.e., the ``Washington-
Arlington-Alexandria'' and ``Baltimore-Columbia-Towson'' indices). To 
continue applying a CPI that best reflects the geographic region in 
which FDA is located and that provides the most current data available, 
the ``Washington-Arlington-Alexandria'' index is used in calculating 
the inflation adjustment percentage. Table 1 provides the summary data 
for the percent changes in the specified CPI for the Washington-
Arlington-Alexandria area. The data are published by the Bureau of 
Labor Statistics and can be found on its website at: https://data.bls.gov/pdq/SurveyOutputServlet?data_tool=dropmap&series_id=CUURS35ASA0,CUUSS35ASA0.


        Table 1--Annual and 3-Year Average Percent Change in CPI for Washington-Arlington-Alexandria Area
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                                                                                                      3-year
                      Year                             2018            2019            2020           average
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Annual CPI......................................         261.445         264.777         267.157  ..............
Annual Percent Change...........................         2.0389%         1.2745%         0.8989%         1.4041%
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    Pursuant to the statute, the FY 2022 base revenue of $8,000,000 is 
increased by 1.4041 percent, yielding an inflation adjusted base 
revenue amount of $8,112,328 for FY 2022 (see section 744M(c)(1)(A)).

C. Additional Dollar Amounts

    The inflation adjusted revenue amount of $8,112,328 is increased by 
an additional dollar amount of $7,000,000 as specified in the statute 
(see section 744M(b)(2)(E) of the FD&C Act). This yields an adjusted 
fee revenue subtotal of $15,112,328.

D. Fee Revenue Adjustment for Additional Direct Cost

    Fee revenue is further adjusted for additional direct costs as 
specified in the statute. In FY 2022, $7,000,000 is added to the 
facility fee revenues to account for additional direct costs (see 
section 744M(c)(3)(B) of the FD&C Act). Adding the additional direct 
costs amount of $7,000,000 to $15,112,328 yields an additional direct 
cost adjusted fee revenue of $22,112,328.

E. Fee Revenue Adjustment for Operating Reserve

    Under OMUFA, FDA may further increase the FY 2022 facility fee 
revenue and fees if such an adjustment is necessary to provide up to 7 
weeks of operating reserves of carryover user fees for OTC monograph 
drug activities (see section 744M(c)(2)(B) of the FD&C Act). 
Accordingly, in setting fees for FY 2022, the Agency must estimate its 
carryover for FY 2022, to ensure the Agency has sufficient carryover to 
continue its OTC monograph drug activities, as required under the 
statute, including an operating reserve to mitigate certain financial 
risks, such as under collections, unanticipated surges in program 
costs, or a lapse in appropriations. Under the statute, if FDA has 
carryover for OTC monograph drug activities that would exceed 10 weeks 
of such operating reserves, FDA is required to decrease FY 2022 fee 
revenues and 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). As described below, a fee revenue adjustment for the FY 2022 
operating reserve is necessary to ensure that FDA has sufficient 
resources to maintain its authorized OTC monograph drug activities.
    Per the statute, OMUFA facility fees are not due until the third 
quarter of each fiscal year (i.e., June 1). To address this timing of 
facility fee collections for late in the fiscal year, the Agency must 
set aside additional carryover, beyond that for an operating reserve, 
to sustain the Agency's OTC monograph drug activities until the 
facility fees for the subsequent fiscal year are due and payable on 
June 1, 2023. Thus, the Agency will require FY 2022 carryover 
sufficient to cover payroll and operating expenses for the first 8 
months (i.e., 35 weeks rounded) of the following fiscal year (i.e., 
October 1, 2022, to May 31, 2023). To determine the carryover needed, 
the Agency starts with the additional direct cost adjusted fee revenue 
of $22,112,328 (calculated in section D), divides it by 52 to yield a 
weekly operating amount of $425,237, and then multiplies the weekly 
operating amount by 35. Based on this calculation, FDA requires 
$14,883,298 to support the program until the FY 2023 fees are due. 
After running analyses on the projected collections and obligations for 
FY 2022, FDA estimates the FY 2022 carryover to be $13,107,260 which is 
$1,776,038 lower than the total required to support the program through 
the 35-week period (i.e., $14,883,298).
    Therefore, FDA is applying an operating reserve adjustment for FY 
2022 in the amount of $1,776,038, equating to approximately 4 weeks of 
program costs, to increase the FY 2022 facility fee revenue and fees to 
enable the Agency to sustain program operations through the 35-week 
period of FY 2023. As a result of the above calculations, the final FY 
2022 OMUFA target facility fee revenue is $23,888,000 (rounded to the 
nearest thousand dollars).

III. Determination of FY 2022 OMOR Fees

    Under OMUFA, the FY 2022 Tier 1 OMOR fee is $507,021 and the Tier 2 
OMOR fee is $101,404 (see section 744M(a)(2)(A)(i) and (ii) of the FD&C 
Act, respectively) including an adjustment for inflation. 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 appropriate OMOR fee has been submitted following 
receipt of the OMOR and the fee.

[[Page 14890]]

    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 2022, facility fee rates are being established to generate a 
total target revenue amount, as determined under the statute, equal to 
$23,888,000 (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 
2022. 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

    For FY 2022, FDA utilized data consisting of the number of 
facilities that were registered in FDA's electronic Drug Registration 
and Listing System (eDRLS) to manufacture human OTC products produced 
under a monograph \7\ during the FY 2021 fee-liable period (i.e., 
January 1, 2020, through December 31, 2020) and the number of 
facilities that paid FY 2021 OMUFA fees, as the primary sources for 
estimating the number of each facility fee type (i.e., MDF and CMO). In 
addition, the Agency considered data provided by firms regarding their 
operation as MDFs and CMOs during FY 2021--i.e., October 1, 2020, 
through September 30, 2021--when they were submitting OTC Monograph 
User Fee Cover Sheets to pay the FY 2021 fee. These data helped FDA 
estimate the number of firms operating as MDF and CMO facilities during 
the FY 2022 fee-liable period (i.e., January 1, 2021, through December 
31, 2021) \8\ and thus informed FDA's calculation of the number and 
ratio of MDF and CMO facilities used in determining the FY 2022 fee 
rates. FDA's review of data also reflected input received during the 
first three quarters of the FY 2022 fee-liable period from facilities 
whose manufacturing or processing practices meet the definition of fee-
eligible OTC monograph drug facilities, to help capture those 
facilities that are in the market and intend to remain in the market 
for FY 2022.
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    \7\ OTC monograph drug facilities had selected in the 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.
    \8\ 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'' (emphasis added).
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    Those facilities that only manufacture the active pharmaceutical 
ingredient 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).
    Consistent with the January 12, 2021, HHS Federal Register Notice 
\9\ and FDA's subsequent March 26, 2021, Federal Register Notice 
publishing FY 2021 OMUFA fees,\10\ facilities are not identified as an 
``OTC monograph drug facility'' and will not be assessed a FY 2022 
OMUFA facility fee if they: (1) Were not registered with FDA as OTC 
drug manufacturers prior to the HHS declaration of the COVID-19 public 
health emergency on January 27, 2020 \11\; (2) registered with FDA on 
or after the declaration of the COVID-19 public health emergency; and 
(3) registered for the sole purpose of producing hand sanitizer 
products during the COVID-19 public health emergency. 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 86 FR 2420, 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.
    \10\ See 86 FR 16223, https://www.federalregister.gov/documents/2021/03/26/2021-06361/fee-rates-under-the-over-the-counter-monograph-drug-user-fee-program-for-fiscal-year-2021.
    \11\ See https://www.phe.gov/emergency/news/healthactions/phe/Pages/2019-nCoV.aspx.
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    In undertaking the statutorily directed fee calculations, the 
Agency also made certain assumptions, including that: (1) Facilities 
using expired Structured Product Labeling (SPL) codes in eDRLS, that 
did not reregister for calendar year (CY) 2022, 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; (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; and (5) facilities that, at the close 
of FY 2021, remain on the arrears list for failure to satisfy the FY 
2021 facility fee are likely to be placed on the FY 2022 arrears list 
as well.
    Based on the above-referenced factors and assumptions, FDA 
estimates there will be 1,118 OMUFA fee-paying units. The Agency 
estimates that 65 percent (1,118 x 0.65 = 727, rounded) will incur the 
MDF fee and 35 percent (1,118 x 0.35 = 391, 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 (727) and a value of \2/3\ to each CMO (391 x \2/3\ = 
261) for a full facility equivalent of 988 (rounded). The target fee 
revenue of $23,888,000 is then divided by 988 for an MDF fee of $24,178 
and a CMO fee of $16,119.

V. Fee Schedule for FY 2022

    The fee rates for FY 2022 are displayed in table 1.

[[Page 14891]]



                    Table 1--Fee Schedule for FY 2022
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                                                                FY 2022
                        Fee category                           fee rates
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OMOR:
  Tier 1....................................................    $507,021
  Tier 2....................................................     101,404
Facility Fees:
  MDF.......................................................      24,178
  CMO.......................................................      16,119
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VI. Fee Payment Options and Procedures

    The new fee rates are for the period from October 1, 2021, through 
September 30, 2022. 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 2022 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 9, 2022.
Lauren K. Roth,
Associate Commissioner for Policy.
[FR Doc. 2022-05542 Filed 3-14-22; 8:45 am]
BILLING CODE 4164-01-P