New OTC Drug Manufacturing Fees
A little publicized provision buried in the 2020 Corona virus CARES Act amended the Food Drug and Cosmetic Act to implement an assessment of user fees onto manufacturers of over-the-counter (OTC) drug products. The program, known as OMUFA, includes user fees to be paid by manufacturers, which are intended to support FDA activities related to OTC drug regulation and OTC drug manufacturing site inspections. These fees apply to all non-prescription drugs manufactured without a new drug application, and which are governed by the provisions in section 505G of the Act. Essentially the drugs covered under this user fee amendment are all OTC drugs currently manufactured in accordance with an existing OTC drug monograph. Fees apply to all foreign or domestic businesses engaged in manufacturing or processing of OTC monograph drugs in the finished dosage form of the drug for products sold here in the U.S. Firms that manufacture bulk active ingredients used to manufacture OTC drugs are currently exempted. A different set of user fees also apply to what are known as contract manufacturing organizations, which are OTC manufacturing operations where the entity or any affiliate (wholesaler or retailer) of the entity sells the OTC drug products they produce to wholesalers, retailers, or consumers not located in the United States.
FDA OTC monographs have historically been managed by FDA through a system called the notice and comment process. Under this process the agency must provide a public notice of proposed changes, accept comments from basically anyone, and respond accordingly to all the comments. Often there are multiple rounds of notice and comment taking years, or in some cases decades to resolve. This process is widely regarded as cumbersome and slow, and has hamstrung both FDA and the OTC industry in expeditiously addressing significant safety concerns related to OTC drug products. It has also contributed to major delays in creating new OTC monographs, or adapting existing monographs to new technologies, but until the 2020 CARES Act amendment has been the only tool available to FDA to manage OTC monographs.
Updating OTC Monographs
The CARES Act amendment introduces a wholly new system for managing OTC monographs called the administrate order process. Now FDA is authorized to issue administrative orders to add or update OTC monographs. While the agency can still be expected to seek outside input and comments it significantly streamlines the process. It also now allows drug manufacturers to initiate requests to FDA for monograph changes or additions through something called an OTC Monograph Order Request. Now firms can request FDA update, change, or add new OTC monographs. There will be due process applied to these order requests and firms will have to submit appropriate and credible science supporting their requests. These requests also come with a price tag attached. When submitting an OTC monograph order request the submitting firm must pay a fee of either $500,000 or $100,00 per request, depending on the class of drug. Firms submitting an OTC order request for a new monograph will receive a period of exclusivity for the product if and when approved.
In addition to opening an avenue for quickly adding new OTC monographs, this new administrative order process can be expected to also usher in a stream of updates and changes to many of FDA’s older OTC monographs, as it significantly streamlines the OTC drug monograph review and update process for FDA.
User Fees for Manufacturers
A second type of fee included in the OMUFA amendment is a manufacturing facility user fee. Payable in 2021 this fee is applicable to any firm registered with FDA as an OTC drug manufacturer after December 31, 2019. Essentially, the fee now being assessed and payable in 2021 is a retroactive fee covering the calendar year of 2020. Firms that ceased all OTC drug production, and updated their FDA registration accordingly prior to December 31, 2019, will not be required to pay the 2020 fee. Firms registered in 2020 as an OTC drug manufacturing facility, even if they immediately cease all manufacturing activities in 2021, will still be required to pay the fee. That fee is $14,060. The fee is the same for all manufacturers, as FDA does not index their user fees to account for company size or revenues. U.S. based firms that only sold their OTC products outside the U.S. are called contract manufacturers under this new act, and the contract manufacturing fee is $9,373. The same eligibility provisions and fee due date as the full manufacturing fee apply to contract manufacturing.
Payment of Fees
Fees will be due 45 days after the fee schedule is published in the Federal Register. For 2021 the official publication date of the fee notice is 12/29/2020, making the due date for fee payment February 12, 2021. Use this link to view the full announcement, which also includes payment instructions – 2020-28714.pdf (federalregister.gov).
We have seen FDA implement user fees for prescription drugs (PDUFA) in 1992 and generic drug user fees (GDUFA) in 2012. One thing we can advise our clients on is that FDA are very aggressive at fee collections. Some generic drug firms we have worked with have had to take FDA to court numerous times to resolve fee disputes, even after ceasing all manufacturing operations FDA has continued to press for fee payments. The other observation we can pass along related to user fees is that these fees seem to inevitably rachet up every year in the range of 2-4%. Our advice is plan accordingly.
If you have further questions please feel free to give us a call.
Medical Gases and COVID-19
This alert provides some information on medical gas products and the risks they pose to COVID-19 spread. Medical gases, due to their unique physical and chemical properties, present an extremely low hazard for the spread of COVID-19 and other similar viral agents.
Here are some Q&A’s that may be useful in understanding gases as they relate to COVID-19.
- Will my medical gas supply be interrupted? – There are no virus-related supply interruptions currently anticipated. Unlike consumer-focused products such as bottled water, hand sanitizer, or toilet paper medical gases are not subject to consumer panic buying.
- Where do my medical gases come from? Medical gases used in the U.S. and Canada is produced and distributed from within North America. Medical gases do not come from Asia or Europe. Medical gases are bulk chemical products and like other such products, such as gasoline, are transported in large bulk shipments in sealed, and in the case of gases in pressurized tanks. Medical gases are not harvested or processed / manufactured under ambient conditions, and unlike raw agricultural commodities and raw or processed foods, medical gases never come in direct contact with humans or ambient surroundings as they are manufactured or move through the supply chain.
- Do medical gas supplies like tanks and cylinders come from a part of the world experiencing rapid spread of COVID-19? – Some bulk tanks and high-pressure cylinders do come from outside the U.S. However, Corona virus cannot exist outside a human body for prolonged periods of time. Under optimal conditions of light, humidity, and temperature the virus’s transmissible life is estimated on stainless steel at somewhere around 72 hours. It takes an average of 30 days to ship supplies like tanks and cylinders to U.S. ports, which is 10 times longer than the estimated transmissible life of the virus. Once here, those tanks and cylinders are then shipped and stored in un-conditioned spaces, or they are stored outside. It is very unlikely cylinders and tanks from overseas are a virus source hazard.
- What special provisions have you implemented with your product and deliveries? – Medical gases are stored in sealed containers as a pressurized gas or as a cryogenic liquid. The normal storage conditions of cryogenic liquids range from 50-250 psig, and below -300o High pressure cylinders of medical gases are 1,800-2,500 psig and above when stored at room temperature. This pressure is a barrier to any potential ingress of COVID-19 into a medical gas container. Medical gas containers have outlet connection covers on them, and all or delivery truck hoses, and truck connections are kept capped. During the delivery process customer tank connections are inspected prior to making a delivery. Our delivery procedures requires customer notification if we observe anything a-miss with the storage tank or hose connections. .
- What special provisions have you implemented with your employees? – Our FDA compliance safety program has always included provisions for any employee who is sick or feeling ill to be excused from food operations. We are taking a commonsense approach and advising all our employees who feel sick or may have been exposed to stay home. Our FDA compliance program has also always included specific provisions to ensure employees follow good hygienic practices.
- Can COVID-19 be transmitted by the bulk medical gas delivery truck? – Cryogenic delivery vehicles operate in a controlled environment. They are not exposed to large crowds. Typically, only the driver(s) of the vehicle and possibly a product loader are the only people who interact with the vehicle at all. There is an extremely low likelihood of our vehicles encountering a source of COVID-19
- Are incoming and returning high pressure cylinders a hazard? – We ask that all customers begin disinfecting every empty cylinder before pick up. This will help further ensure nothing is transmitted from the customer environment back to a cylinder filling facility. Our full cylinders are shipped primarily in open trucks, and even the closed cylinder trucks are ventilated. This ambient exposure is significantly lessens the potential for COVID-19 to be transmitted on full high-pressure cylinders.
Sanitization of Medical Gas Cylinders or Equipment
We recommend to not transport cylinders or equipment, which are suspected to be contaminated with any type of a pathogen or an other potentially infectious material (OPIM), including COVID-19. We recommend implementing a returning cylinder inspection process, and if your personnel detect, or reasonably suspect, the presence of an OPIM, notify the facility person in charge and make a request for them to decontaminate the items prior to leaving the facility. If a contaminated cylinder or other equipment is inadvertently returned to your facility, we recommend you quarantine the items and follow the requirements in CGA publication P-83 Guidelines for Cleaning Externally Contaminated Medical Gas Containers.
Here are some additional tips in sanitizing medical gas cylinders or equipment where you suspect there could be an issue. These guidelines apply to cylinders and equipment either returning from a customer location or being prepared to be shipped to a customer.
- These tips are for sanitizing a container not for cleaning. Any cylinder or tank cleaning must be done before attempting to sanitize the item.
- Most large size cylinders typically do not encounter patient spaces. They are used to supply manifolds connected to piping systems in the facility. Provided these cylinders have not been in direct communication with patient treatment spaces there should be no issues and they can be handled as normal unless there is a reason to suspect they are contaminated with an OPIM.
- Smaller cylinders, such as D&E size, and especially VIPR cylinders, are more likely to be in direct communication with patients being treated in the facility and should be inspected closely.
- When retrieving cylinders from a facility known to have COVID-19 infected patients, or where the driver believes sanitization of the cylinders is indicated for any reason, use these tips to conduct sanitization activities.
- When handling cylinders to be sanitized individuals should be equipped with appropriate disposable gloves, and preferably a face mask.
- Use an appropriate area of the facility or loading dock where cylinder sanitization can be performed.
- Where a healthcare facility will not permit sanitizing contaminated cylinders at their facility, we recommend not loading the cylinders on the vehicle and transporting them back for sanitization at the fill facility.
- Medical gas containers and equipment can be disinfected by using isopropyl alcohol (IPA) or equivalent disinfectant wipes. Any sanitization products should be used in accordance with the manufacturer’s recommendations. The application of alcohol-based disinfectants shall be performed carefully to prevent excessive amounts of alcohol on the valve and/or cylinder that could cause a potential fire risk.
- Using a sprayer filled with potable water, or a hose connected to a potable water source, thoroughly rinse the cylinders to remove any residual sanitizing solution.
- The individual performing the sanitization should use another wipe containing the sanitizing solution on their gloves before removing them, and then immediately apply hand sanitizer to their hands.
- Dispose of the gloves properly.
Additional resource documents:
- The U.S. Centers for Disease Control and Prevention (CDC) has issued guidelines for disinfecting equipment that is potentially exposed to the COVID-19 virus. (https://www.cdc.gov/infectioncontrol/guidelines/disinfection/tables/table1.html).
- Further information on cylinder cleaning may be found in the CGA publication CGA P-83, Guidelines for Cleaning Externally Contaminated Medical Gas Containers.
- GAWDA Issued Safety Alerts
Corona Virus and Other Infectious Agents: Protection Measures For Employees And Cylinders
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B&R continues to monitor the COVID-19 situation and will implement additional controls and provisions if and as needed to ensure the safety of the medical gases we provide.
If you need additional help in managing your medical gases during this pandemic, or have additional questions about medical or food gases please give us a call at (610) 868-7183, or by email at ron.ball@brcompliance.com .
Stay Safe!
