Senate HELP committee clears OTC monograph reform bill

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Ben Comer Senior Manager, Health Research Institute, PwC US November 08, 2019

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The Senate health committee has advanced an over-the-counter (OTC) bill that would add new incentives – and new user fees – to the FDA’s process for approving drugs that do not require a prescription. The OTC bill aims to update the FDA’s OTC process after several years of stalled legislation.

The Over-the-Counter Monograph Safety, Innovation, and Reform Act, or S.2740, would allow an OTC manufacturer to ask the FDA for 18 months of exclusivity upon approval. The FDA would grant the exclusivity period for products that are new to the OTC market, not “me too” formulations, according to the bill.

Both the House and Senate bills also would create a new FDA user fee program, similar to other user fee programs that help fund the agency’s regulatory reviews. The fees range from $100,000 to $500,000, depending on the type of OTC product.   

HRI impact analysis

A $100,000 to $500,000 price tag for securing 18 months of exclusivity on pharmacy or grocery store shelves may prevent some smaller manufacturers from bringing new OTC products to consumers, but it could help large companies hoping to grab market share at launch.

For drugmakers weighing a move from prescription to OTC for a product, the 18-month exclusivity period could make the decision a little more attractive. Drug companies consider these moves, in part, for products that have lost patent exclusivity and have a history of safe and effective use by patients. Direct-to-patient marketing and promotional rules for OTC products are not as stringent as those for prescription drugs. Still, most prescription-to-OTC switches require a New Drug Authorization from the agency, according to the FDA.

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Trine K. Tsouderos

HRI Regulatory Center Leader, PwC US

Tel: +1 (312) 241 3824

Ben Comer

Senior Manager, Health Research Institute, PwC US

Crystal Yednak

Senior Manager, Health Research Institute, PwC US

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