Authority to assess and use OTC monograph fees

21 U.S.C. § 379j–72
in effect
Sign in to generate a plain English summaryAsk Belisarius Agent
(a) Types of feesBeginning with fiscal year 2021, the Secretary shall assess and collect fees in accordance with this section as follows:(1) Facility fee(A) In general(i) Assessment of feesEach person that owns a facility identified as an OTC monograph drug facility at any time during the applicable period specified in clause (ii) for a fiscal year shall be assessed an annual fee for each such facility as determined under subsection (c). (ii) Applicable periodFor purposes of clause (i), the applicable period is—(I) for fiscal year 2026, the 12-month period ending on December 31, 2025; (II) for fiscal year 2027, the 9-month period ending on September 30, 2026; and (III) for fiscal year 2028 and each subsequent fiscal year, the 12-month period ending on September 30 of the preceding fiscal year. (B) Exceptions(i) Facilities that cease activitiesA fee shall not be assessed under subparagraph (A) if the identified OTC monograph drug facility—(I) has ceased all activities related to OTC monograph drugs prior to—(aa) for purposes of fiscal year 2026, January 1, 2025; (bb) for purposes of fiscal year 2027, January 1, 2026; and (cc) for purposes of fiscal year 2028 and each subsequent fiscal year, October 1 of the preceding fiscal year; and (II) has updated its registration to reflect such change under the requirements for drug establishment registration set forth in section 360 of this title. (ii) Contract manufacturing organizationsThe amount of the fee for a contract manufacturing organization facility shall be equal to two-thirds of the amount of the fee for an OTC monograph drug facility that is not a contract manufacturing organization facility. (C) AmountThe amount of fees established under subparagraph (A) shall be established under subsection (c). (D) Due date(i) Fiscal year 2026For fiscal year 2026, the facility fees required under subparagraph (A) shall be due on the later of—(I) the first business day of June of such year; or (II) the first business day after the enactment of an appropriations Act providing for the collection and obligation of fees under this section for such year. (ii) Fiscal year 2027For fiscal year 2027, the facility fees required under subparagraph (A) shall be due—(I) in a first installment representing 50 percent of such fee, on the later of—(aa) October 1, 2026; or (bb) the first business day after the enactment of an appropriations Act providing for the collection and obligation of fees under this section for such year; and (II) in a second installment representing the remaining 50 percent of such fee, on—(aa) February 1, 2027; or (bb) if an appropriations Act described in subclause (I)(bb) is not in effect on February 1, 2027, the first business day after enactment of such an appropriations Act. (iii) Subsequent fiscal yearsFor fiscal year 2028 and each subsequent fiscal year, the facility fees required under subparagraph (A) shall be due on the later of—(I) the first business day on or after October 1 of the fiscal year; or (II) the first business day after the date of enactment of an appropriations Act providing for the collection and obligation of fees under this section for the fiscal year. (2) OTC monograph order request fee(A) In generalEach person that submits an OTC monograph order request shall be subject to a fee for an OTC monograph order request. The amount of such fee shall be—(i) for a Tier 1 OTC monograph order request, $500,000, adjusted for inflation for the fiscal year (as determined under subsection (c)(1)(B)); and (ii) for a Tier 2 OTC monograph order request, $100,000, adjusted for inflation for the fiscal year (as determined under subsection (c)(1)(B)). (B) Due dateThe OTC monograph order request fees required under subparagraph (A) shall be due on the date of submission of the OTC monograph order request. (C) Exception for certain safety changesA person who is named as the requestor in an OTC monograph order shall not be subject to a fee under subparagraph (A) if the Secretary finds that the OTC monograph order request seeks to change the drug facts labeling of an OTC monograph drug in a way that would add to or strengthen—(i) a contraindication, warning, or precaution; (ii) a statement about risk associated with misuse or abuse; or (iii) an instruction about dosage and administration that is intended to increase the safe use of the OTC monograph drug. (D) Refund of fee if order request is recategorized as a Tier 2 OTC monograph order requestIf the Secretary determines that an OTC monograph request initially characterized as Tier 1 shall be re-characterized as a Tier 2 OTC monograph order request, and the requestor has paid a Tier 1 fee in accordance with subparagraph (A)(i), the Secretary shall refund the requestor the difference between the Tier 1 and Tier 2 fees determined under subparagraphs (A)(i) and (A)(ii), respectively. (E) Refund of fee if order request refused for filing or withdrawn before filingThe Secretary shall refund 75 percent of the fee paid under subparagraph (B) for any order request which is refused for filing or was withdrawn before being accepted or refused for filing. (F) Fees for order requests previously refused for filing or withdrawn before filingAn OTC monograph order request that was submitted but was refused for filing, or was withdrawn before being accepted or refused for filing, shall be subject to the full fee under subparagraph (A) upon being resubmitted or filed over protest. (G) Refund of fee if order request withdrawnIf an order request is withdrawn after the order request was filed, the Secretary may refund the fee or a portion of the fee if no substantial work was performed on the order request after the application was filed. The Secretary shall have the sole discretion to refund a fee or a portion of the fee under this subparagraph. A determination by the Secretary concerning a refund under this subparagraph shall not be reviewable. (3) Refunds(A) In generalOther than refunds provided pursuant to any of subparagraphs (D) through (G) of paragraph (2), the Secretary shall not refund any fee paid under paragraph (1) except as provided in subparagraph (B). (B) Disputes concerning feesTo qualify for the return of a fee claimed to have been paid in error under paragraph (1) or (2), a person shall submit to the Secretary a written request justifying such return within 180 calendar days after such fee was paid. (4) NoticeWithin the timeframe specified in subsection (c), the Secretary shall publish in the Federal Register the amount of the fees under paragraph (1) for such fiscal year. (b) Fee revenue amounts(1) In generalFor each of the fiscal years 2026 through 2030, fees under subsection (a)(1) shall be established to generate a total facility fee revenue amount equal to the sum of—(A) the annual base revenue for the fiscal year (as determined under paragraph (2)); (B) the dollar amount equal to the inflation adjustment for the fiscal year (as determined under subsection (c)(1)); (C) the dollar amount equal to the operating reserve adjustment for the fiscal year, if applicable (as determined under subsection (c)(2)); (D) additional direct cost adjustments (as determined under subsection (c)(3)); (E) an additional dollar amount equal to—(i) $2,373,000 for fiscal year 2026; (ii) $1,233,000 for fiscal year 2027; and (iii) $854,000 for fiscal year 2028; and (F) in the case of a fiscal year for which the Secretary applies the one-time facility fee workload adjustment under subsection (c)(4), the dollar amount equal to such adjustment. (2) Annual base revenueFor purposes of paragraph (1), the dollar amount of the annual base revenue for a fiscal year shall be—(A) for fiscal year 2026, the dollar amount of the total revenue amount established for fiscal year 2025 under this subsection as in effect on the day before November 12, 2025, not including any adjustments made for such fiscal year 2025 under subsection (c)(2), as so in effect; and (B) for fiscal years 2027 through 2030, the dollar amount of the total revenue amount established under this subsection for the previous fiscal year, not including any adjustments made for such previous fiscal year under subsection (c)(2) or (c)(3). (c) Adjustments; annual fee setting(1) Inflation adjustment(A) In generalFor purposes of subsection (b)(1)(B), the dollar amount of the inflation adjustment to the annual base revenue for each fiscal year shall be equal to the product of—(i) such annual base revenue for the fiscal year under subsection (b)(2); and (ii) the inflation adjustment percentage under subparagraph (C). (B) OTC monograph order request feesFor purposes of subsection (a)(2), the dollar amount of the inflation adjustment to the fee for OTC monograph order requests for a fiscal year shall be equal to the product of—(i) for fiscal year 2026—(I) the fee for fiscal year 2025 under subsection (a)(2); and (II) the inflation adjustment percentage under subparagraph (C); and (ii) for each of fiscal years 2027 through 2030—(I) the applicable fee under subsection (a)(2) for the preceding fiscal year; and (II) the inflation adjustment percentage under subparagraph (C). (C) Inflation adjustment percentageThe inflation adjustment percentage under this subparagraph for a fiscal year is equal to the sum of—(i) the average annual percent change in the cost, per full-time equivalent position of the Food and Drug Administration, of all personnel compensation and benefits paid with respect to such positions for the first 3 years of the preceding 4 fiscal years, multiplied by the proportion of personnel compensation and benefits costs to total costs of OTC monograph drug activities for the first 3 years of the preceding 4 fiscal years; and (ii) the average annual percent change that occurred in the Consumer Price Index for urban consumers (Washington–Arlington–Alexandria–DC–VA–MD–WV; Not Seasonally Adjusted; All items; Annual Index) for the first 3 years of the preceding 4 years of available data multiplied by the proportion of all costs other than personnel compensation and benefits costs to total costs of OTC monograph drug activities for the first 3 years of the preceding 4 fiscal years. (2) Operating reserve adjustment(A) In generalFor each fiscal year, for purposes of subsection (b)(1)(C), the Secretary may, in addition to adjustments under paragraph (1), further increase the fee revenue and fees if such an adjustment is necessary to provide operating reserves of carryover user fees for OTC monograph drug activities for not more than 10 weeks. (B) DecreaseIf the Secretary has carryover balances for such process in excess of 10 weeks of the operating reserves referred to in subparagraph (A), the Secretary shall decrease the fee revenue and fees referred to in such subparagraph to provide for not more than 10 weeks of such operating reserves. (C) Rationale for adjustmentIf an adjustment under this paragraph is made, the rationale for the amount of the increase or decrease (as applicable) in fee revenue and fees shall be contained in the annual Federal Register notice under paragraph (5) publishing fee revenue and fees for the fiscal year involved. (3) Additional direct cost adjustmentThe Secretary shall, in addition to adjustments under paragraphs (1) and (2), further increase the fee revenue and fees for purposes of subsection (b)(1)(D) by an amount equal to—(A) $135,000 for fiscal year 2026; (B) $300,000 for fiscal year 2027; (C) $55,000 for fiscal year 2028; (D) $30,000 for fiscal year 2029; and (E) $0 for fiscal year 2030. (4) One-time facility fee workload adjustment(A) In generalIn addition to the adjustments under paragraphs (1), (2), and (3), the Secretary may further increase the fee revenues and fees through a one-time adjustment made for fiscal year 2028, 2029, or 2030, in accordance with this paragraph. (B) Adjustment described(i) Conditions for adjustmentAn adjustment under this paragraph may be made for a fiscal year only if—(I) an adjustment under this paragraph had not been made for any prior fiscal year; (II) the average number of OTC monograph drug facilities subject to a facility fee under subsection (a)(1) over the period of the preceding 3 fiscal years exceeds 1,625; and (III) with respect to facilities described in subclause (II), the average number of such facilities (expressed as a percentage) that appeared on the arrears lists pursuant to subsection (e)(1)(A)(i) over the period of the preceding 3 fiscal years is less than 30 percent. (ii) Amount of adjustmentAn adjustment under this paragraph for a fiscal year shall equal the product of—(I) the total facility revenue amount determined under subsection (b) for the fiscal year, exclusive of the adjustment under this paragraph for such fiscal year; and (II) the excess facility percentage described in clause (iii). (iii) Excess facility percentageThe excess facility percentage described in this clause is—(I) the amount by which the average number of OTC monograph drug facilities subject to a facility fee under subsection (a)(1) over the preceding 3 fiscal years exceeds 1,625; divided by (II) 1,625. (5) Annual fee settingThe Secretary shall, not later than 60 days before the first day of each fiscal year—(A) establish for such fiscal year, based on the revenue amounts under subsection (b) and the adjustments provided under this subsection—(i) OTC monograph drug facility fees under subsection (a)(1); and (ii) OTC monograph order request fees under subsection (a)(2); and (B) publish such fee revenue amounts, facility fees, and OTC monograph order request fees in the Federal Register. (d) Identification of facilitiesEach person that owns an OTC monograph drug facility shall submit to the Secretary the information required under this subsection each year. Such information shall, for each fiscal year—(1) be submitted as part of the requirements for drug establishment registration set forth in section 360 of this title; and (2) include for each such facility, at a minimum, identification of the facility’s business operation as that of an OTC monograph drug facility. (e) Effect of failure to pay fees(1) OTC monograph drug facility fee(A) In generalFailure to pay the fee under subsection (a)(1) within 20 calendar days of the due date as specified in subparagraph (D) of such subsection shall result in the following:(i) The Secretary shall place the facility on a publicly available arrears list. (ii) All OTC monograph drugs manufactured in such a facility or containing an ingredient manufactured in such a facility shall be deemed misbranded under section 352(ff) of this title. (B) Application of penaltiesThe penalties under this paragraph shall apply until the fee established by subsection (a)(1) is paid. (2) Order requestsAn OTC monograph order request submitted by a person subject to fees under subsection (a) shall be considered incomplete and shall not be accepted for filing by the Secretary until all fees owed by such person under this section have been paid. (3) MeetingsA person subject to fees under this section shall be considered ineligible for OTC monograph drug meetings until all such fees owed by such person have been paid. (f) Crediting and availability of fees(1) In generalFees authorized under subsection (a) shall be collected and available for obligation only to the extent and in the amount provided in advance in appropriations Acts. Such fees are authorized to remain available until expended. Such sums as may be necessary may be transferred from the Food and Drug Administration salaries and expenses appropriation account without fiscal year limitation to such appropriation account for salaries and expenses with such fiscal year limitation. The sums transferred shall be available solely for OTC monograph drug activities. (2) Collections and appropriation Acts(A) In generalSubject to subparagraph (C), the fees authorized by this section shall be collected and available in each fiscal year in an amount not to exceed the amount specified in appropriation Acts, or otherwise made available for obligation, for such fiscal year. (B) Use of fees and limitationThe fees authorized by this section shall be available to defray increases in the costs of the resources allocated for OTC monograph drug activities (including increases in such costs for an additional number of full-time equivalent positions in the Department of Health and Human Services to be engaged in such activities), only if the Secretary allocates for such purpose an amount for such fiscal year (excluding amounts from fees collected under this section) no less than $12,000,000, multiplied by the adjustment factor applicable to the fiscal year involved under subsection (c)(1). (C) ComplianceThe Secretary shall be considered to have met the requirements of subparagraph (B) in any fiscal year if the costs funded by appropriations and allocated for OTC monograph drug activities are not more than 15 percent below the level specified in such subparagraph. (D) Provision for early paymentsPayment of fees authorized under this section for a fiscal year, prior to the due date for such fees, may be accepted by the Secretary in accordance with authority provided in advance in a prior year appropriations Act. (3) Authorization of appropriationsFor each of the fiscal years 2026 through 2030, there is authorized to be appropriated for fees under this section an amount equal to the total amount of fees assessed for such fiscal year under this section. (g) Collection of unpaid feesIn any case where the Secretary does not receive payment of a fee assessed under subsection (a) within 30 calendar days after it is due, such fee shall be treated as a claim of the United States Government subject to subchapter II of chapter 37 of title 31. (h) ConstructionThis section may not be construed to require that the number of full-time equivalent positions in the Department of Health and Human Services, for officers, employers, and advisory committees not engaged in OTC monograph drug activities, be reduced to offset the number of officers, employees, and advisory committees so engaged.

Starting a business? Corpus forms LLCs in all 50 states and DC.