OTC Monograph Reform Emerges In Senate Proposal For Covid-19 Economic Relief

Senate pandemic economic relief legislation legislation would reform monograph drug program and allow purchases of OTC drugs with pre-tax health savings accounts. But lingering disagreements between Democrats and Republicans blocked the Senate's passage of the bill on 25 March.

US lawmakers’ arguments over the details of coronavirus economic relief legislation could have opened a door for passage of the OTC drug industry’s top regulatory priorities – reforming the monograph drug program and allowing purchases of nonprescription drugs with pre-tax health savings accounts.

The latest text for Senate pandemic relief legislation would impose both regulatory changes following an agreement between Senate Democrats and the White House. However, following the announcement on an agreement, additional objections surfaced on 25 March from Republicans opposing the amount and extent of emergency unemployment benefits the relief package will provide.The Senate continued debating the legislation late into the evening.

The Senate legislation language, introduced as amendments to a bill the House passed in July 2019 to repeal the excise tax on employer-sponsored health care coverage, H.R. 748, includes language on overhauling and streamlining the FDA’s OTC monograph drug program, the system through which the large majority of nonprescription drugs are allowed for sale in the US, and for buying OTC drugs with pre-tax health savings accounts. (The amendments were circulated in two documents, here and here.)

The Senate's early draft of an economic recovery proposal, S. 3548, would have allowed OTC drug purchases with pre-tax health savings accounts, but omitted any mention of monograph reform.  (Also see "Senate Proposes Restoring Direct OTC Purchases With Pre-tax Savings In Covid-19 Response Bill" - HBW Insight, 23 Mar, 2020.)

Prior to objections Republicans' objections on unemployment benefits, the major disagreement was over the level of control the federal government will have over funding targeted for struggling industries. Republicans prefer approving the bill with few strings attached, but Democrats insist on prohibiting use of the support for share buybacks and executive bonuses while requiring that some of the support go to keeping employees in their jobs.

The House also has introduced a pandemic economic relief bill, the Take Responsibility for Workers and Families Act, H.R. 6379, but it doesn't include provisions on either monograph reform or buying OTC drugs with pre-tax health savings accounts. (Also see "More FDA Funding In House Coronavirus Stimulus Bill, But No OTC Purchases With Pre-tax Savings" - HBW Insight, 24 Mar, 2020.)

The House bill includes provisions members stated in separate legislation to grant the FDA authority to destroy imports of counterfeit medical equipment and tests. Energy and Commerce Committee members Eliot Engle, D-NY, and Brett Guthrie, R-KY, on 23 March said existing regulations preclude destroying the products. They co-sponsored the Safeguarding Therapeutics Act and recommended that Congress’ economic relief response to the coronavirus include the change. (Also see "US House Members Say FDA Should Destroy Fake Covid-19 Tests, Other Fraudulent Products It Finds" - HBW Insight, 23 Mar, 2020.)

Both the House and Senate bills are proposed as Congress’ third act responding to the novel coronavirus pandemic. Both were drafted by members amid heated debates in the Senate and dueling announcements from Democrat and Republican leaders blaming their opponents for stalling the process of providing emergency economic aid to industries and consumers and additional funding to the Food and Drug Administration and other federal agencies.

A relief package Congress passed on 18 March included more than $100bn for free testing for Covid-19 and paid emergency leave, and on 5 March lawmakers passed $8.3bn in emergency funding to combat the outbreak. President Trump signed both bills.

Through 4 p.m. EDT on 25 March, the Centers for Disease Control and Prevention reported that 54,453 people in the US have been diagnosed with the Covid-19 and 737 deaths have been linked to the disease. Cases are reported in all states and Washington, DC, Puerto Rico, Guam, and US Virgin Islands.

New Vehicle To Move Monograph Reform

Legislation on moving the FDA’s OTC monograph process from lengthy notice-and-comment rulemaking proceedings to more efficient administrative processes with timelines for the FDA's decisions on proposals and with 18-month exclusivity granted to certain additional formulations approved for a monograph has been circulating in Congress since 2017. (Also see "OTC Monograph User Fee Goals Document Beats Authorization To Finish Line" - HBW Insight, 27 Jul, 2017.)

The FDA and drug manufacturers long have considered existing monograph program rules prevented adding or making changes to monographs, including label updates needed for emerging safety concerns, due to amount of time, typically five years or more, required for notice and comment before the agency could make a rulemaking. Additionally, drug firms are hesitant to invest in research to support generally regarded as safe and effective determinations for additional OTC drug formulations, or for additional indications for existing formulations, because approved monograph changes can be incorporated immediately by all manufacturers.

Sunscreen ingredient manufacturers’ complaints about no success in making monograph changes, including after Congress passed the Sunscreen Innovation Act in 2014 specifically to improve their chances, added urgency to the FDA’s and the OTC industries’ interests in overhauling the program. (Also see "GAO Report Casts Shade On Sunscreen Ingredients' Chances With FDA" - HBW Insight, 27 Nov, 2017.)

Legislation has been introduced in Congress since agency officials and industry representatives negotiated details on a potential overhaul, which include a user fee program that is part of the economic stimulus package provision and which was authorized in the FDA’s fiscal year 2020 appropriation.

The monograph reform language in the House relief package tracks largely with a bill the Senate passed in December 2019, a first for the Senate after the House had previously passed three bills that would impose the changes. (Also see "US Senate Passes First Monograph Reform Bill After House Passed Three" - HBW Insight, 10 Dec, 2019.)

Congress initially began considering OTC monograph reform as it also worked on legislation to reauthorize the FDA’s prescription drug and other pharma product user fee programs. Adding monograph reform, including a user fee, program was touted as an efficient method to bring the changes, however, Congress, working against a deadline, gave the topic little discussion as it forged an agreement on the FDA’s existing user fee programs.

Since then, monograph reform has been discussed in multiple congressional hearings and championed by members as an important change needed at the FDA , but no legislation has gained traction to impose the changes.

Decade Of Lobbying For Health Savings Account Change

The industry didn’t need the FDA’s cooperation on pushing for allowing direct purchases of OTC drugs using health saving, flexible spending and similar pre-tax savings accounts.

Like the provision in the House and Senate economic relief bills, Congress’ latest standalone bill to make OTCs eligible for pre-tax savings account purchases, introduced in the House in November 2019, proposes including menstrual care products.

Legislation has been introduced in every session of Congress to return all or large categories of OTC drugs to eligibility after the Affordable Care Act in 2011 required consumers to have prescriptions for nonprescription drugs they purchase with the accounts. However, none of the bills has gained sufficient support for passage. (Also see "Health And Wellness Industry News: Restoring Access Bill Introduced, Another Dietary Fiber Meets FDA Definition, More" - HBW Insight, 27 Mar, 2019.)

OTCs had been made part of FSA and HSA benefits because of the expected health care savings for consumers. But the ACA included the prescription requirement based on the argument that health care savings were not being realized from exclusively consumer-driven choices.