Last month, Congress enacted significant reforms to the over-the-counter (“OTC”) drug review process. The reforms, enacted as part of the “Coronavirus Aid, Relief, and Economic Security Act” (“CARES Act”), change fundamentally the way OTC drug products have been regulated for decades.[i]
BACKGROUND
In 1972, to implement product efficacy requirements, the U.S. Food and Drug Administration (“FDA” or “Agency”) implemented a process of reviewing marketed OTC drugs through rulemaking by therapeutic classes (e.g., antacids, antiperspirants, cough-cold remedies). This process involved convening an advisory panel for each therapeutic class of OTC drugs to review data relating to claims and active ingredients. Drug products then on the market were reviewed and classified into one of three categories:
- Category I—Generally recognized as safe and effective (“GRASE”) and not misbranded.
- Category II—Not GRASE.
- Category III—Lacking sufficient data on safety or efficacy to permit classification.[ii]
After reviewing the advisory panel reports, FDA published in the Federal Register an advanced notice of proposed rulemaking (“ANPR”) containing a proposed monograph for the class of drugs and requested comments from interested persons. OTC drug monographs are a kind of “recipe book” covering acceptable ingredients, doses, formulations, and labeling.[iii] Then, after reviewing all comments, FDA published a tentative final monograph (“TFM”) for the class of drugs. After again accepting comments, the final step of this notice-and-comment rulemaking process was publication of a final monograph for each class, which set forth the allowable active ingredients, claims, and labeling for OTC drugs in each class. Drug products marketed in accordance with a final monograph are considered to be GRASE and do not require FDA approval of an individual new drug application (“NDA”) or abbreviated new drug application (“ANDA”).[iv]
Over the last several decades, FDA has published final monographs for many types of OTC drugs. The monograph process is extremely cumbersome as a regulatory procedure, however, and only ANPRs or TFMs have been published for other categories of commonly used OTC drugs, with various requests for data outstanding. FDA’s longstanding policy has been that OTC drugs covered by an ongoing monograph proceeding (i.e., drugs for which an ANPR or TFM has been published but not finalized) generally may remain on the market. Indeed, FDA has stated that “[p]rior to the final publication of a . . . monograph, it would not be in the agency’s interest to pursue regulatory action unless failure to do so poses a potential health hazard to the consumer.”[v] As a result, some categories of OTC drug products (e.g., benzalkonium chloride, ethyl alcohol, and isopropyl alcohol hand sanitizers[vi]; hydroquinone skin bleaching drug products[vii]; and sunscreens[viii]) have been marketed for many years without a final monograph subject to FDA’s enforcement discretion.
THE CARES ACT’S OTC MONOGRAPH REFORM
Section 3851 of the CARES Act adds a new Section 505G to the Federal Food, Drug, and Cosmetic Act (“FD&C Act”). Under Section 505G, the old OTC monograph notice-and-comment rulemaking process is replaced by a new administrative order process that is exempt from Administrative Procedure Act requirements.[ix] Administrative orders must be grounded on a determination that, based on “the evidence,” the drug is GRASE.[x] There are three types of administrative orders:
- FDA-Initiated Administrative Orders. Orders proposed by FDA will involve, among other things, public notice, opportunity for comment, a dispute resolution procedure, opportunity for an administrative hearing, and opportunity for judicial review.[xi]
- Expedited Orders Initiated by FDA. FDA may propose an administrative order on an expedited basis when FDA determines (1) that a drug “poses an imminent hazard to the public health,” or (2) that “a change in the labeling of a drug . . . is reasonably expected to mitigate a significant or unreasonable risk of a serious adverse event associated with use of the drug.” Expedited orders can be issued in final form by FDA before an opportunity for comment, dispute resolution, and a hearing.[xii]
- Industry-Initiated Orders. A “requester” may propose an administrative order seeking approval for an “active ingredient not previously incorporated in a drug” or for a “change in the conditions of use” of existing active ingredients. As with FDA-initiated orders, there would be an opportunity for comment, dispute resolution, an administrative hearing, and judicial review.[xiii] Of note, requesters could receive an 18-month period of marketing exclusivity for industry-initiated orders for drugs (1) that contain a new active ingredient or (2) that have conditions of use “for which new human data studies conducted or sponsored by the requester . . . were essential to the issuance of such order.”[xiv]
In practical effect, the CARES Act brought all ongoing, non-final OTC drug monograph proceedings to a close and made final FDA’s determination in “the most recently applicable proposal” under that proceeding. Thus, to determine the post-CARES Act regulatory status of an unapproved OTC drug product for which no final monograph was in place, the following questions must be answered:
1. What was the “most recently applicable proposal or determination” issued for the OTC drug product under the OTC drug monograph proceeding for that product?
2. In what category did that “most recently applicable proposal or determination” classify the product?
The answers to those questions reveal whether a currently marketed OTC drug is deemed GRASE and not required to have an approved application; is permitted to remain on the market, pending further proceedings under the administrative order process; must be removed from the market within 180 days of enactment of the CARES Act; or must be removed from the market immediately.
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Most Recently Applicable Rulemaking
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Tentative Final Monograph
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Advanced Notice of Proposed Rulemaking
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Category I
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Drug is Deemed GRASE[xv]
— Drug was classified in Category I in a TFM “that is the most recently applicable proposal or determination issued”
— Drug complies with the TFM
— Drug complies with general rules governing OTC drugs
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Drug Permitted to Remain on the Market[xvi]
— Drug was classified in Category I in an ANPR “that is the most recently applicable proposal or determination for such drug issued”
— Drug complies with the ANPR
— Drug complies with general rules governing OTC drugs
— Unless and until FDA issues a final administrative order determining drug is not GRASE
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Category II
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Drug Must Be Removed from the Market within 180 Days[xvii]
— Drug was classified in Category II in a TFM “that is the most recently applicable proposal issued”
— Drug will be deemed a new drug that is subject to the requirement that it have an approved application
— Drug must be removed from the market within 180 days of the enactment of the CARES Act (i.e., by September 23, 2020), unless FDA takes action to permit its continued marketing
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Drug Must Be Removed from the Market within 180 Days[xviii]
— Drug was classified in Category II in an ANPR “that is the most recently applicable proposal issued”
— Drug will be deemed a new drug that is subject to the requirement that it have an approved application
— Drug must be removed from the market within 180 days of the enactment of the CARES Act (i.e., by September 23, 2020), unless FDA takes action to permit its continued marketing
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Category III
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Drug Permitted to Remain on the Market[xix]
— Drug was classified in Category III in a TFM “that is the most recently applicable proposal or determination for such drug issued”
— Drug complies with the TFM
— Drug complies with general rules governing OTC drugs
— Unless and until FDA issues a final administrative order determining that the drug is not GRASE
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Drug Must Be Removed from the Market[xx]
— Drug was classified in Category III in an ANPR
— No subsequent rulemaking takes place
— Drug is deemed a new drug that is subject to the requirement that it have an approved application
— There is no grace period in the statute for removing such products from the market
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Determining the “most recently applicable proposal or determination” for an OTC drug that was issued under the applicable OTC drug monograph proceeding is critical to determining the drug’s current regulatory status. For example, the most recently applicable proposed classification issued for hydroquinone skin bleaching products was the proposal that such products be classified as Category II (i.e., not GRASE) in the TFM issued in 2006[xxi]; thus, although such products have been marketed for years under the non-final OTC monograph proceedings for OTC skin bleaching drug products, they now must be removed from the market within 180 days of the enactment of the CARES Act (i.e., by September 23, 2020), unless FDA issues an administrative order directing otherwise.[xxii] By contrast, the most recently applicable proposed classification issued for benzalkonium chloride, ethyl alcohol, and isopropyl alcohol hand sanitizers was the proposal that such products be classified as Category III (i.e., lacking sufficient data on safety or efficacy to permit classification) in an amended TFM issued in 2016[xxiii]; such products therefore may remain on the market unless and until FDA issues a final administrative order determining that the drug is not GRASE.[xxiv] (With respect to sunscreen drugs, the CARES Act provides that sunscreens will be deemed GRASE if they conform to the final monograph issued in 1999,[xxv] “except that the applicable requirements governing effectiveness and labeling shall be those specified in” 21 C.F.R. § 201.327.[xxvi])
The statute also outlines a process under which minor changes in the dosage form of an OTC drug can be implemented without having to obtain an administrative order. Under this procedure-for-minor-changes process, the manufacturer must conduct studies showing that the change “will not affect the safety or effectiveness of the drug” and “will not materially affect the extent of absorption or exposure to the active ingredient,” and then provide the information supporting the change to FDA upon request.[xxvii] This procedure will only apply after FDA has adopted an administrative order specifying requirements for a specific dosage forms.[xxviii]
Finally, Section 3862 of the CARES Act adds new Sections 744L and 744M to the FD&C Act.[xxix] These new sections establish a user fee system to fund activities related to OTC drug review.
CONCLUSION
The CARES Act made fundamental changes to the manner in which OTC drugs are regulated. These changes apply prospectively to new OTC drug products, and they also apply retrospectively in the sense that they impact the regulatory status of drug products that are currently marketed. Please let us know if you have questions concerning the new framework for the regulation of OTC drug products, the regulatory status of a currently marketed product, or other matters impacted by the new law.
[i] See CARES Act, Pub. L. 116-136, § 3851 (enacted Mar. 27, 2020) (adding new Section 505G to the Federal Food, Drug, and Cosmetic Act).
[ii] See 21 C.F.R. § 330.10(a)(5)(i)-(iii).
[iii] FDA, Drug Applications for Over-the-Counter (OTC) Drugs (updated Mar. 31, 2020), https://www.fda.gov/drugs/types-applications/drug-applications-over-counter-otc-drugs.
[iv] See 21 C.F.R. § 330.10(a)(9) & (b).
[v] FDA, CPG § 450.200, Drugs—General Provisions and Administrative Procedures for Recognition as Safe and Effective (Mar. 1995); see also FDA, CPG § 450.300, OTC Drugs—General Provisions and Administrative Procedures for Marketing Combination Products (Mar. 1995) (stating that “prior to final publication of a proposed monograph it is not appropriate to pursue regulatory action unless directed by headquarters”).
[vi] See FDA, News Release, FDA issues final rule on safety and effectiveness of consumer hand sanitizers: Action completes a series of actions on the FDA’s review of OTC antiseptic active ingredients (Apr. 11, 2019), https://www.fda.gov/news-events/press-announcements/fda-issues-final-rule-safety-and-effectiveness-consumer-hand-sanitizers; see also FDA, Final Rule, Safety and Effectiveness of Consumer Antiseptic Rubs; Topical Antimicrobial Drug Products for Over-the-Counter Human Use, 84 Fed. Reg. 14,847 (Apr. 12, 2019).
[vii] See FDA, Rulemaking History for OTC Skin Bleaching Drug Products (updated Oct. 4, 2017), https://www.fda.gov/drugs/status-otc-rulemakings/rulemaking-history-otc-skin-bleaching-drug-products.
[viii] See FDA, Rulemaking History for OTC Sunscreen Drug Products (last updated (Aug. 30, 2019), https://www.fda.gov/drugs/status-otc-rulemakings/rulemaking-history-otc-sunscreen-drug-products.
[ix] See FD&C Act § 505G(p).
[x] See id. § 505G(b)(1)(A).
[xi] See generally id. § 505G(b).
[xii] Id. § 505G(b)(4)(A)-(B) & (D).
[xiii] Id. § 505G(b)(5)-(6).
[xiv] Id. § 505G(b)(5)(C).
[xv] See id. § 505G(a)(1)(B).
[xvi] See id. § 505G(a)(3)(B) & (b).
[xvii] See id. § 505G(a)(4) & (b).
[xviii] See id.
[xix] See id. § 505G(a)(3)(A) & (b).
[xx] See id. § 505G(a)(6).
[xxi] See FDA, Proposed Rule, Skin Bleaching Drug Products For Over-the-Counter Human Use, 71 Fed. Reg. 51,146 (Aug. 29, 2006) (proposing to classify OTC skin bleaching drug products containing hydroquinone as not GRASE, misbranded, and new drugs requiring an approved NDA, i.e., Category II).
[xxii] See FD&C Act § 505G(a)(4) & (b).
[xxiii] See FDA, Proposed Rule, Safety and Effectiveness of Consumer Antiseptics; Topical Antimicrobial Drug Products for Over-the-Counter Human Use; Proposed Amendment of the Tentative Final Monograph; Reopening of Administrative Record, 81 Fed. Reg. 42,912, 42,914 (June 30, 2016) (noting that benzalkonium chloride and isopropyl alcohol were classified in Category III in a 1994 TFM and concluding that benzalkonium chloride, isopropyl alcohol, and ethyl alcohol need additional “safety and effectiveness data to support a classification of GRAS/GRAE for consumer antiseptic rub use”).
[xxiv] FD&C Act § 505G(a)(3). Because of the public health emergency posed by the COVID-19 pandemic response, FDA stated that it would not “take action against firms that prepare alcohol-based hand sanitizers for consumer use and for use as health care personnel hand rubs for the duration of the public health emergency,” provided the hand sanitizers meet certain conditions. FDA, Guidance for Industry, Temporary Policy for Preparation of Certain Alcohol-Based Hand Sanitizer Products During the Public Health Emergency (COVID-19) (updated Apr. 15, 2020), https://www.fda.gov/media/136289/download.
[xxv] See 21 C.F.R. pt. 352, partially stayed FDA, Final Rule, Sunscreen Drug Products for Over-the-Counter Human Use; Final Monograph, 66 Fed. Reg. 67,485 (Dec. 31, 2001).
[xxvi] FD&C Act § 505G(a)(2).
[xxvii] Id. § 505G(c)(1)-(2).
[xxviii] See id. § 505G(c)(3).
[xxix] See CARES Act, Pub. L. 116-136, § 3862 (adding new FD&C Act §§ 744L and 744M).
