FDA Draft Guidance: Everything You May Want to Know about OMUFA Fees

November 14, 2022By Riëtte van Laack & Deborah L. Livornese

Early Nov. 2022, FDA published a draft guidance on FDA’s implementation of the Over-the-Counter Monograph Drug User Fee Program (OMUFA). The draft guidance provides information regarding various aspects of the OMUFA program under sections 744L and 744M of the FDC Act,  as added by the CARES Act.

FDA’s newly released draft guidance describes the types of OMUFA fees, the due dates for fee payment, exceptions to certain fees, the process for submitting fee payments, the consequences of failing to pay the required fees, and the process for submitting refund requests or disputing FDA’s assessment of OMUFA fees.  Much of the guidance repeats the law and FDA’s previous notices (see e.g., our blog posts here and here).  That said, the guidance  will be a helpful reference for companies that are not sure whether they are subject to the OMUFA facility fees, whether there any exceptions, how much they have to pay, when they need to pay, etc.

FDA is authorized to charge an annual facility fee for OTC monograph drug facilities. The facility fee applies to a single manufacturing facility.  The guidance explains that a facility counts as a single facility subject to a single facility fee if it is under one management and in one geographic location and address, and is engaged in manufacturing or processing the finished dosage form of an OTC monograph drug product.  Importantly, to be deemed a single site, a multiple-facility operation must be listed with the agency under one “FDA establishment identifier” (FEI).  If a party believes that its facilities should be considered a single facility and multiple FEIs have been assigned in error, it may request consolidation of the FEIs. The consolidated FEI will be reflected in the following fiscal year user fee assessments, only (i.e., FDA will not refund any fees that have been incurred already).

For purposes of the facility fees, a facility at one geographic location but under multiple management will be considered multiple OTC monograph drug facilities, one per management entity.  Size, revenue, and number of finished drug products manufactured at a facility do not affect the OMUFA facility fee.

The guidance also addresses the timing of the determination as to whether  a facility is subject to a fee.  To determine if a facility is subject to a fee, FDA will look at the activities at the facility and at the registration status.  Facility fees are set per fiscal year (from Oct. 1 through Sept. 30).  However, the relevant time to determine whether a facility is subject to a facility fee is the period of Jan. 1 through Dec. 31.  For example, a facility that was registered at any point during the period Jan 1 through Dec. 31, 2021 is subject to the fee for FY 2022. (In other words, to avoid being subject to a fee, a facility must cease manufacturing of OTC monograph drug product and undo its registration by Dec. 31, 2020).  Thus, updating facility registration in a timely manner is critical to avoid being charged fees long after a facility has discontinued manufacturing of OTC monograph drug products.  FDA stresses that the law does not provide exemptions or waivers. That said, any facility that first registered after Jan. 27, 2020, solely for the purpose of manufacturing hand sanitizer products during the public health emergency is exempt from OMUFA fees. The guidance also provides clarification about some types of facilities that are not subject to facility fees under OMUFA.  It appears that some of these clarifications may reflect issues FDA has faced as some in the regulated community were surprised to receive invoices for the fee.  For example, the guidance expands on the statutory language that provides that a facility is not subject to an OMUFA facility fee if the only manufacturing or processing activity is overpackaging.  Specifically, the guidance states that FDA considers overpackaging to be the enclosure of individual drug products that each bear full and complete labeling information required under the FDC Act to allow legal marketing individually.  If the individual packages do not include this level of labeling information and the only processing activity is to take those packages and put them into an outer container that includes the full labeling information, the facility will be subject to a facility fee, but if each individual package does have full labeling information, the same activity should not subject the facility to a fee under OMUFA.

The guidance also addresses fees for OTC monograph order requests (OMORs).  Under section 744M(a)(2) of the FDC Act, the Agency is authorized to assess and collect fees from each person that submits an OMOR, except for OMORs that request certain safety-related changes.  OMOR fees are due on the date of the submission of the OMOR. However, if the requestor withdraws the OMOR before FDA accepted or refused the OMOR for filing or FDA refuses to file the OMOR, FDA will refund 75 percent of the OMOR without a written refund request.  If an OMOR is withdrawn after it is filed, FDA may refund the fee or a portion of the fee if no substantial work was performed on the OMOR.  FDA has sole discretion as to the amount that it will refund.

The guidance describes the process to dispute fees. To qualify for the return of a facility fee or an OMOR fee claimed to have been paid in error, an entity must submit a written request with justification for the refund or reduction within 180 calendar days after the date the fee was paid. If FDA denies the request, the entity may submit a request for reconsideration within 30 days of FDA’s decision.  If a request is denied upon reconsideration, the entity may choose to appeal the denial up the chain of command.

FDA has several tools to enforce payment of fees. For OMOR fees, FDA will not file the OMOR unless the entity submitting the OMOR is up to date on fees and pays the applicable OMOR fee in full.  If an entity does not pay the full facility fee in a timely manner (meaning within 20 days of the due date) FDA will include the name in a publicly available arrears list, and all OTC monograph drug products produced at that facility are misbranded.  Delinquent entities will receive an invoice from FDA detailing information on the user fee incurred, the due date, and the payment instructions. If full payment is not received by the date specified on the invoice, interest will be charged at a rate set by the U.S. Department of Treasury. In addition, delinquent invoices will have a $20 administrative fee assessed for each 30-day period that the invoice remains outstanding. In addition, FDA will assess a penalty of 6 percent per year on any invoice delinquent for more than 90 days.

To be considered by FDA, comments must be submitted by January 3, 2023.