The US Food and Drug Administration is paid fees by the pharmaceutical industry to review brand-name and generic drugs. Now, the agency wants to collect money to review over-the-counter medicines.

Specifically, the agency wants companies to pay for reviewing OTC monographs. Unlike brand-name and generic drugs, which involve individual companies seeking approval to market individual drugs, the OTC monographs refer to multiple medicines that share the same ingredient for the same use. Moreover, numerous companies can make these drugs, but do not require FDA approval prior to marketing.

Although the agency first floated the idea two years ago, the issue emerges as the FDA struggles to cope with reviewing a steady stream of brand-name and generic drugs, despite industry fees that supplement government funding. There has been a large backlog of generic drug  applications, in particular, even though the number of full and tentative drug approvals has been rising each month over the past year.

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Just the same, the pharmaceutical industry has largely supported so-called user fees. For one thing, the fees helped transform the relationship between companies and regulators, who are under increasing pressure to meet benchmarks for speeding applications through the review process. Given the workload, the FDA argued that user fees will only bolster its ability to review OTC medicines.

In fiscal year 2014, the FDA collected $327.2 million in user fees from generic drug makers and $796.7 million in fees from brand-name drug makers. This was the last year for which data was available. The FDA budget, overall, in fiscal year 2016 is $4.9 billion.

In a Federal Register notice issued today, the FDA noted that there are approximately 800 active ingredients for more than 1,400 different therapeutic uses. This is why the FDA says it needs additional resources to finalize the monograph review process and address safety issues faster and more efficiently. To make its case, the agency will hold a public meeting next month.

About $32 billion in OTC medicines were sold in the US last year, according to the Consumer Healthcare Products Association, a trade group, up 4.5 percent from 2010.

For these reasons, some regulatory watchers believe the fees will eventually be adopted.

“You have the large OTC companies interested in a modernized system who will support it in exchange for some concessions from FDA,” said Ramsey Baghdadi, a principal at Prevision Policy, a health care policy consulting firm. “The smaller, more fragmented (companies) will probably oppose it as (fees represent) more regulatory burden on them in an area that has worked for decades” without fees.

Another expert says the fees are inevitable, but foresees problems.

“I think that some of the problems associated with a steady source of income may be difficult to ensure due to the up and down number of requests that may be made,” said Robert Pollock, a former acting deputy director of the FDA Office of Generic Drugs, who now works at Lachman Consultants and advises drug makers.

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“I would hope that FDA does not impose a product fee for each OTC product that is marketed (because) that would be very burdensome for firms and the agency. (The FDA released) interesting talking points, but I’m not sure there is a good path forward.”

As for OTC drug makers, the Consumer Healthcare Products Association released a noncommittal statement that endorsed further discussion. “The regulatory system for nonprescription monograph drugs is very different from that of other drugs currently under other user-fee programs. Fees can create certain incentives and disincentives for activity subject to the fee.”

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  • One category should DEFINITELY have to pay a fee: formerly prescription drugs that are converted to OTC, like Claritin and Flonase. These companies do this for one main reason: cut the market out from under generic makers and extend their Blockbuster Franchise. GSK extended that phony Flonase patent exclusivity by all means, legal and illegal (had to pay hundreds of millions to settle antitrust claims because it abused the Citizens Petition process), then dis an “authorized generic,” then converted to OTC. The amount of work they created for the FDA to maximize their billion-dollar profits was FAR inexcess of any fees thay had to pay. In other words, they socialized the rick and capitalized the reward. That MUST change.

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