Over-the-Counter Monograph Drug User Fee Amendments
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The bill would reauthorize the FDA's user-fee program for over-the-counter monograph drugs through fiscal year 2030, resetting fee calculations and due dates so the agency can keep funding reviews of nonprescription drugs like sunscreens and pain relievers.
It would also require the FDA to allow real-world evidence and non-animal testing methods in evaluating topical drug ingredients, and to issue guidance clarifying how prescription drugs can be switched to nonprescription status.
What this bill would do
What it would do
The bill would reauthorize the Over-the-Counter (OTC) Monograph Drug User Fee Program through fiscal year 2030, revising how facility fees are calculated, assessed, and due each year, and setting specific additional revenue amounts for FY2026-FY2028. It would require the FDA to allow real-world evidence and consider non-animal testing alternatives when evaluating the safety and effectiveness of active ingredients in topical nonprescription drugs, including sunscreens, and would require new guidance on that testing within a year. It would also add a formal process for companies planning a prescription-to-nonprescription ("Rx-to-OTC") switch, including optional FDA meetings, required guidance on evidentiary standards within 18 months, and a stakeholder engagement plan. The bill would not change the underlying legal standard for what makes a drug "generally recognized as safe and effective," and it preserves prior-year fee collection under the law as it existed before enactment. It also directs two separate Government Accountability Office reports on the OTC drug supply chain and on FDA handling of switch applications.
Key provisions
- 1Would reauthorize OTC monograph drug facility and order-request user fees through fiscal year 2030 with revised calculation methods and due dates
- 2Would set additional fixed revenue amounts of $2,373,000 (FY2026), $1,233,000 (FY2027), and $854,000 (FY2028) added to base fee revenue
- 3Would expand annual FDA performance reporting requirements starting FY2026 and require public posting of negotiation meeting minutes within 30 days
- 4Would require the FDA to allow real-world evidence and consider non-animal testing alternatives for evaluating topical nonprescription active ingredients, including sunscreens
- 5Would create a formal meeting and guidance process to help sponsors develop applications for switching prescription drugs to nonprescription status
- 6Would require GAO reports on the OTC monograph drug supply chain and on FDA's handling of Rx-to-nonprescription switch applications
- 7Would set October 1, 2030, and January 31, 2031, sunset dates for the fee authority and reporting requirements, respectively
Who would be affected
OTC monograph drug manufacturers and facilities that pay user fees, contract manufacturing organizations, companies seeking to switch prescription drugs to nonprescription status (including sunscreen makers), and the FDA offices that review and regulate nonprescription drugs.
Why it matters
Without reauthorization, the FDA could lose a funding stream tied to reviewing and regulating OTC drugs, potentially slowing safety reviews and monograph updates. Companies seeking Rx-to-OTC switches would gain clearer guidance and a formal meeting process, while manufacturers face revised fee schedules and deadlines through FY2030.
What would change
Changes to existing law
Amends Federal Food, Drug, and Cosmetic Act, Section 744M (OTC monograph fee authority) (Sec. 4)
Revises fee types, calculation methods, due dates, and revenue amounts for facility and order-request fees through FY2030
Amends Federal Food, Drug, and Cosmetic Act, Section 744N (reporting requirements) (Sec. 5)
Extends reporting through FY2030, adds new required content on processing timelines, safety activities, and negotiation meeting minutes
Amends Federal Food, Drug, and Cosmetic Act, Section 505G (Sec. 6)
Adds evidence and testing standards allowing real-world evidence and non-animal testing for topical nonprescription active ingredients
Amends Federal Food, Drug, and Cosmetic Act, Section 505(b) (Sec. 7)
Adds a new paragraph creating meeting requests and guidance requirements for Rx-to-nonprescription switch applications
Amends Federal Food, Drug, and Cosmetic Act, Section 744L (definitions) (Sec. 3)
Adds a new category of minor monograph change for testing procedures reflecting voluntary consensus quality standards
Reauthorizes OTC Monograph Drug User Fee Program (OMUFA) (Sec. 4)
Extends fee collection authority for OTC monograph drug facilities through fiscal year 2030
Agencies directed to act
Effective dates
- Amendments made by the Act generally take effect
- FDA guidance on non-animal testing alternatives for topical drugs
- FDA guidance clarifying Rx-to-nonprescription switch application standards
- FDA stakeholder engagement plan for identifying Rx-to-OTC switch candidates
- GAO report on Rx-to-nonprescription switch applications
- GAO report on the OTC monograph drug supply chain
- Sunset of fee authority under Sections 744L and 744M
- Sunset of reporting requirements under Section 744N
Funding and costs
- $2,373,000
additional facility fee revenue amount for OTC monograph drug program
- $1,233,000
additional facility fee revenue amount for OTC monograph drug program
- $854,000
additional facility fee revenue amount for OTC monograph drug program
- $135,000
direct cost adjustment to OTC monograph facility fees
- $300,000
direct cost adjustment to OTC monograph facility fees
- $55,000
direct cost adjustment to OTC monograph facility fees
- $30,000
direct cost adjustment to OTC monograph facility fees
- $0
direct cost adjustment to OTC monograph facility fees
How implementation would work
The FDA would set annual facility and order-request fees each year based on statutory formulas, publish them in the Federal Register, and collect them on schedules that vary by fiscal year. The agency must issue draft guidance on non-animal testing alternatives within one year and guidance on Rx-to-nonprescription switch applications within 18 months of enactment, plus a public stakeholder engagement plan within one year. FDA must expand its annual performance report starting FY2026 to include processing timelines and safety data, and publish negotiation meeting minutes within 30 days. The Government Accountability Office must deliver two reports to relevant congressional committees, one on the OTC supply chain by September 30, 2027, and one on Rx-to-nonprescription switch applications within a year of enactment.
Legislative status & sources
Latest action
Placed on Senate Legislative Calendar under General Orders. Calendar No. 152.
Official CRS summary
Show the CRS summaryHide the CRS summary
This bill reauthorizes the Over-the-Counter (OTC) Monograph Drug User Fee Program (OMUFA); revises procedures used by the Food and Drug Administration (FDA) to evaluate topical, nonprescription drugs (e.g., sunscreens); and requires the FDA to clarify the process through which a prescription drug may be switched to nonprescription status.
Under current law, many OTC drugs are marketed through compliance with an OTC monograph issued by the FDA, rather than through an approved new drug application. Monographs establish the conditions under which OTC drugs are generally recognized as safe and effective. The bill reauthorizes the collection of OMUFA fees from OTC drug facilities through FY2030 and revises methods for calculating such fees.
Separately, the bill requires the FDA to allow for the use of real-world evidence to demonstrate the safety and effectiveness of active ingredients in topical, nonprescription drugs. The FDA must consider nonclinical tests and other alternatives to animal testing in evaluating such drugs.
The FDA must also issue guidance to clarify the application process for nonprescription drugs, including applications to switch a prescription drug to nonprescription status. The FDA must plan to engage stakeholders in identifying drugs that are promising candidates for a switch. Moreover, applicants seeking a switch may request to meet with the FDA to develop a plan for the requisite application.
Finally, the Government Accountability Office must report on (1) the OTC monograph drug supply chain, and (2) the FDA’s handling of applications to switch a prescription drug to nonprescription status.
Legislative subjects
Congressional oversight; Drug safety, medical device, and laboratory regulation; Health; Supply chain; User charges and fees