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CARES Act Introduces OTC Administrative Order Process

In a previous blog post, we discussed some significant changes to over-the-counter (OTC) product regulations put into place by the passage and signing into law of the CARES Act.

The previous post focused on the most attention-getting OTC component of the new law: the introduction of user fees for OTC products, coming as soon as this summer. This post will summarize the highlights of other substantive changes the CARES Act brought to OTC product regulation.

Before: The Monograph System

For a long period, roughly since 1972, OTC products were largely regulated through a monograph system. Products were reviewed and classified at a glacial pace, and many monographs were still “tentative” right up to the current changes. Innovations, while not overtly discouraged, were extremely difficult in a practical sense. Similarly, it was difficult for FDA to react quickly to safety issues. The entire process needed an overhaul, and there were several unsuccessful legislative attempts to do so before the CARES Act passed.

Under the monograph system, most OTC products fell into one of three categories:

  • Generally regarded as safe and effective (GRASE)
  • Not GRASE
  • Not classified as GRASE or not GRASE due to insufficient safety/efficacy information

The required notice and comment rulemaking process typically resulted in Final Monographs, Tentative Final Monographs (TFM) and/or Advanced Notice of Proposed Rulemaking (ANPR). Many products continued to be marketed under a status that was hazy at best.

Now: The Administrative Order Process

Finally, as part of the CARES Act, the monograph system has been replaced with an administrative order process.

What is an administrative order?

Descriptions vary, but a good working definition of an administrative order might be something like “an enforceable order issued by an authority under the powers conferred to it by a statute.”

FDA can now issue administrative orders regarding OTC products under the authority granted by the CARES Act, which created a new section to the Food, Drug, and Cosmetic Act — Section 505G.

It’s worth remembering that administrative agencies such as FDA are largely creatures of statute. The laws and amendments to the laws grant the administrative agencies the authority to regulate various activities. Sometimes the authority granted is broad, and unfortunately vague, and in other cases it is more specific, as with the Pediatric Research Equity Act. Section 505G appears to fall on the more specific end of the spectrum.

What has changed?

Products under a Final Monograph before passage of the CARES Act will continue without regulatory changes, and the Final Monographs are considered to be final administrative orders.

Products under a TFM or ANPR at the time of the Act’s passage will be handled based on their classifications:

  • If classified as GRASE, products will be considered as if the TFN/ANPR had been finalized.
  • Products considered not GRASE are considered new drugs and must be removed from sale within 180 days of the enactment of the new administrative order process.
  • Those products classified as not having sufficient information for a GRASE determination will also be treated as if the TFM/ANPR had been finalized, unless FDA issues a final administrative order establishing that the product is not GRASE.

The new system carries with it due process mechanisms such as dispute resolution and access to judicial review of FDA actions.

How does it work?

Under the administrative order process, both FDA and industry (well, anyone) can also propose new administrative orders. This includes a path for FDA to now more easily and quickly address safety issues.

Outside FDA, anyone can propose a new administrative order. For example, an applicant can request a change to the OTC drug labeling regulations (which remain in place). Some types of administrative order requests, those which would require clinical studies, may be accompanied by 18 months of exclusivity if made final. Requests for administrative orders require fees similar to PDUFA and GDUFA fees. Again, due process mechanisms are part of the system.

One other interesting component allows an OTC manufacturer to make minor changes to a dosage form without requesting an administrative order. A manufacturer can make such changes so long as they are able to supply records supporting the continued safety and efficacy of the product upon FDA request.

As with any significant change in the regulatory environment, the details of the new structure and best ways to navigate it will take some time to sort out. Premier Consulting’s regulatory expertise and frequent interactions with FDA put us in the best position to help sponsors understand how legislative changes can affect their products. Contact us today to find out how you could be impacted.