'Real Challenge' To Improve OTC Monograph Program Without User Fees – FDA

Regardless of the input it receives from OTC drug industry stakeholders and other sources about establishing user fees for the monograph program, FDA knows the program needs more funding to correctly function.

"The FDA does want to see changes to the way that the monograph regulation works to make it a lot more efficient and streamlined," said Karen Mahoney, deputy director of FDA's Division of Nonprescription Drug Products.

However, "Once reforms are in play you have to have the resources to implement them. It would be a real challenge to implement them without sufficient resources," Mahoney said in an interview in advance of FDA's June 10 public meeting for public comment on the potential development of a user fee program for OTC monograph drugs.

The resources include $8.2m for OTC programs in the Center for Drug Evaluation and Research's fiscal 2016 budget, and staffing of 18 full-time equivalents in CDER working only on nonprescription drug issues and 12 other FTEs with work touching OTCs.

The amount of staffing needed is "more than what we've got," said Donal Parks, director of CDER's Division of User Fee Management and Budget Formulation.

FDA is looking at the potential benefits and detriments from establishing user fees for the monograph program, opening a docket for comment in addition to conducting the public meeting, as it also considers comments to a docket launched in February 2014 on overhauling the OTC monograph process .

Mahoney and Parks are among the speakers scheduled for the meeting on a potential user fee program at FDA's White Oak campus headquarters in Silver Spring, Md. Others on the agenda include CDER Director Janet Woodcock, representatives from the Consumer Healthcare Products Association, the Personal Care Products Council, medical professionals associations, consumer and health care advocacy groups, drug manufacturers' organizations and pharmacology experts.

Scheduled Or Event-Based Fees? Both?

In addition to comments weighing the pros and cons of a user fee program, FDA wants input on how and when the fees would be imposed. CDER acknowledges options in how a user fee program could be imposed to establish a stable and predictable source of adequate funding to achieve efficient and timely product-category oversight in the monograph program.

"We will be talking about more set fees, which are fees that would be on things like product listing or facilities, things like that where the fees occur each year, or [fees] that would be application-based or event-based. They would be more like when a sponsor wants FDA to consider a particular action on the monograph, a fee associated with it," Mahoney said.

Alternatively, a monograph user fee program could be a hybrid of set and event-based fees "to generate consistent revenue for FDA to conduct what it needs to do for monograph activity," she added.

However, any arrangement would be new to the OTC industry. Currently, the OTC space intersects with user fees only indirectly – when sponsors file new drug applications to switch an Rx ingredient to nonprescription, a requirement established in the Prescription Drug User Fee Act.

PDUFA also established facility and establishment fees for Rx drug manufacturers, but not for those firms' OTC production operations or for other firms that make only OTC products.

"There aren’t any user fees at all for OTC products," said Parks.

And that means FDA does not have a stable and predictable source of needed funding for its OTC programs.

"I do think that many members of industry see how if FDA has adequate resources, it would be a benefit to them," Mahoney said.

Fees Could Deter Firms

The pros and cons of a user fee program, meanwhile, can be categorized as the incentives or disincentives it creates for the firms it affects. Disincentives can be as beneficial for the industry as incentives.

"Anytime we have a user fee system, it creates some incentives for industry but it can also create some disincentives. We would like to get input on what kinds of things would be ideal to be incentivized and similarly what kinds of behaviors do we not want to disincentivize," Mahoney said.

The agency has found with Rx drugs, for instance, that firms are swayed against submitting supplemental NDAs to add safety information to a product label because each filing creates a fee.

"The FDA has recognized that that can be a disincentive, that we do want sponsors to send in information about safety concerns that they have and sometimes to have a labeling change associated with it. That's an example of an area where having a fee might create a disincentive that FDA doesn't want," Mahoney said.

That is a point to consider for a potential monograph user fee program that could require fees from firms to file applications for amendments or to finalize determinations on the safety and efficacy of ingredients. Sponsors of those applications will need research data to support their requests.

"That's one kind of information that we do want to be receiving. Obviously, receiving sufficient research to support a review of that is something that we need," Mahoney said.

Negotiations Would Determine Details

Total fees collected under PDUFA are increasing 5.7% in fiscal 2016 to almost $851.5m; total user fees in fiscal 2016 from firms filing generic drug applications are expected to be $318.4m.

CDER officials are not estimating user fee funding needed for the monograph program partly because the specifics of a potential program are not known, but also because determining the total would come through negotiations with industry.

"Just like all other use fee programs, if this would proceed, we would be having negotiations with the industry and we would talk about what the various activities it would require in terms of resources," Mahoney said.

"We're doing our due diligence to figure out what different things would cost," Parks said, but those totals "would be a function of discussions with industry if we go down that road."

"Until we have a chance to flesh out what would be covered by the program, it's really hard to say what the total dollar value would be."

And like other use fee programs, FDA would need authorizing legislation from Congress to create one for the monograph system.

While user-fee programs to support food safety oversight were established by the Food Safety Modernization Act, Congress has passed on other fee programs FDA has recommended before and since passing that legislation. The agency is not commenting on potential congressional regard for monograph user fees.

"We do feel that there is a pretty clear cut case for public health that additional resources are needed and consideration of a user fee program is one way, one possible approach to those resources," Mahoney said.