Locke Lord QuickStudy: Major Amendment to the Food Drug and Cosmetic Act

With few exceptions for drugs like Ibuprofen and Claritin, which entered the Over the Counter Drug (“OTC”) market through the FDA Rx to OTC switching process, most of the OTCs marketed today are old drugs that were on the market prior to the passage of the 62 Amendments to the Food Drug and Cosmetic Act (“Act”). The 62 Amendments created the requirement that all New Drugs be reviewed and approved by the FDA for safety and efficacy prior to marketing.  The 62 Amendments also required that old drugs be reviewed for safety and efficacy in order to stay on the market.

The FDA created two different pathways for review of these old drugs, one for prescription drugs, which entailed specific product review, and the other for OTC drugs, which established a novel review system referred to as the OTC Monograph proceedings. Under the OTC Monograph proceedings, ingredients as opposed to products were reviewed by therapeutic class to establish the safe and effective ingredients for such therapeutic class and the conditions of use.  The actual reviews were conducted by expert panels and the FDA with public comment that were permitted at several stages in the process.  The OTC Monograph proceedings that started in 1972 are still not complete.  While the FDA has finalized a large number of these OTC Monograph proceedings, a number of them still remain open and have not been finalized.

Perhaps the most publicized of these OTC Monograph proceedings were the antibacterial OTC Monograph proceedings which nearly banned hand sanitizers, and the Sunscreen Monograph proceeding, which was finalized, reopened and modified several times for indications, testing, and labeling and then most recently a change in the status of most of the active sunscreen ingredients from a category I finding of safe and effective to a category III finding of insufficient data to support a finding of safety and efficacy.

While proposed legislation has been pending in Congress for several years to reregulate OTC drugs, it was the Covid-19 crisis that brought this to a head.  Congress realized the importance of this category especially in the areas of personal hygiene and self-medication, and the opportunity and need to encourage product innovation in this Category. 

So, what did Section V of the Cares bill titled “Over the Counter Drugs” change in the regulation of over the counter drugs?

• Changes the way the Agency reviews and regulates OTC products from a regulation by category approach to an individual product review approach.
  
  
• Authorizes the Secretary to determine whether there are conditions under which a specific drug or class of drugs or a combination of drugs are generally recognized as safe and effective for OTC marketing. 
  
  
• Authorizes review of a series of requested changes in marketing conditions for OTC drugs which includes not only Rx to OTC reviews but changes in other conditions as well.  Minor changes, including dosage form, may not require preapproval by order.
  
  
• Permits the Agency authority to grant 18 months of marketing exclusivity for certain approvals.  
  
  
• Permits review of Time and Extent Applications against standards that are intended to permit more OTC internationally approved drugs to enter in the U.S., especially in the Sunscreen area.
  
  
• Permits Applications filed under the Sunscreen Innovation Act to elect to be reviewed under these new proceedings.
  
  
• Closed the OTC Monograph proceedings and recognized the Category I active ingredients in the Final Monographs as well as active ingredients in non-final Monographs in Category I and III, generally recognized as safe and effective, thus providing statutory recognition of the right of sponsors (marketers) to continue to market drugs with these active ingredients.
  
  
• Closed the Sunscreen Monograph proceedings and permits sponsors to continue marketing sunscreens with ingredients that the FDA reclassified as Category III.
  
  

• Authorizes the Secretary to take action by order in the event of an imminent health hazard that arises from use of an OTC Monographed drug and provides the Secretary with the right to make a determination that a marketed OTC drug is no longer generally recognized as being safe and effective. In the event of such orders the sponsors of the drug are provided with the right to informal dispute resolution, an administrative hearing and the right to seek judicial review.  If the drug in question is one that was based upon an active Category III ingredient where no human data was submitted the sponsor’s right to contest the order are significantly more restricted. 
  
  
• Provides participating sponsors significant procedural rights to contest the finding in the event the Secretary makes a finding that a drug is no longer generally recognized as safe and effective.
  
  

• Sets fees for Applications and Facility Fees
  
  
  • $100,000 for Tier 1 Applications
    
    
  • $500,000 for Tier 2 Applications
    
    

• Levies fees on OTC drug sponsors (marketers and/or manufacturers) and on contract manufacturers. The Cares Bill left determination of these fees to the FDA to establish. The only indication of apportionment of these fees is that contract manufacturers will pay a reduced fee of 2/3 of what sponsors will pay.
  
  
• Sunsets the Sunscreen Innovation Act. Drugs that are automatically excluded from the OTC treatment are those covered by an IND (Investigational New Drug Application) or New Drug Applications. 

While the FDA has for the past several years announced the exercise of prosecutorial discretion in enforcement in this OTC Monograph proceeding area, this will now change as there is great clarity on what is legal and what is not of the OTC ingredients. While it will take some time for the government, including the FDA to get back to work, we can expect with greater funding and emphasis on this, inspections and compliance reviews will go up.

Please visit our COVID-19 Resource Center often for up-to-date information to help you stay informed of the legal issues related to COVID-19