FDA Regulation of Over-the-Counter (OTC) Drugs: Overview and Issues for Congress

December 10, 2021 R46985

FDA Regulation of Over-the-Counter (OTC)
December 10, 2021
Drugs: Overview and Issues for Congress
Agata Bodie
The Food and Drug Administration (FDA), under the Federal Food, Drug, and Cosmetic Act
Analyst in Health Policy
(FFDCA), regulates the safety and effectiveness of nonprescription (over-the-counter, or OTC)

drugs sold in the United States. To market an OTC drug, a company may follow one of two
pathways. A company can either (1) submit a new drug application (NDA) to FDA for approval

or (2) use the OTC drug monograph process, although not all drugs are eligible for this pathway.
OTC Drug Approval and Monograph Requirements
Both the NDA and monograph pathways involve a scientific decision by FDA; however, the two mechanisms are different. A
primary difference is that approval of an NDA results in the approval to sell a specific finished drug product, whereas the
OTC drug monograph process focuses on the safety and effectiveness of one or more active ingredients within a drug
category. For the purposes of FDA marketing approval, the NDA process generally requires submitting data from clinical
trials demonstrating the safety and effectiveness of a drug. In contrast, if an OTC drug product complies with a monograph, it
does not need FDA approval of its NDA prior to marketing. A monograph establishes conditions, such as active ingredients
and related conditions (e.g., dosage level, combination of active ingredients, labeled indications, warnings and adequate
directions for use), under which an OTC drug in a given therapeutic category (e.g., sunscreen, antacid) is generally
recognized as safe and effective (GRASE) for its intended use and thus may be marketed without an approved NDA. FDA
assesses monograph compliance as part of its inspection process.
FDA established the OTC drug monograph process through rulemaking in 1972. Until enactment of the Coronavirus Aid,
Relief, and Economic Security Act (CARES Act; P.L. 116-136), monographs were established and amended through a three-
phase, public rulemaking process. The monograph process was intended to provide an efficient mechanism through which
OTC drugs could be marketed without individual FDA evaluation and approval. However, the program had faced several
challenges. For example, some monographs remained unfinalized for decades, resulting in OTC drugs being on the market
without final safety and effectiveness determinations. Another challenge was industry’s ability to propose innovations to
marketed OTC drugs without submitting an NDA, along with limited FDA resources to support OTC monograph activities.
To address these regulatory and resource challenges, legislation was introduced in the 115th and 116th Congresses proposing
to reform the OTC monograph process.
Congressional Action
On March 27, 2020, the CARES Act was signed into law. Section 3851 of the CARES Act established a new FFDCA Section
505G, replacing the OTC drug monograph rulemaking process with the administrative order process—a less burdensome
alternative. This new process allows FDA, on its own initiative or upon request, to issue an administrative order (rather than a
rule) determining that a drug, or class or combination of drugs, is GRASE or not GRASE. Certain monograph changes (e.g.,
new active ingredient, new indication) that are industry-requested and subject to a final administrative order are eligible for
18 months of marketing exclusivity, meaning that a competitor may not market the same drug during that period of time.
Among other things, FFDCA Section 505G
 requires that certain OTC drugs be marketed only pursuant to FDA approval via an NDA;
 provides an expedited process for the issuance of administrative orders in certain circumstances (i.e., a
public health hazard determination, safety labeling changes);
 provides for circumstances under which minor changes in dosage form can be made without a new
administrative order;
 requires FDA to publish on its website information related to final interim and administrative orders, to
develop guidance, and to establish meeting procedures; and
 requires the Government Accountability Office (GAO) to conduct a study on the impact of the 18-month
marketing exclusivity period for certain eligible OTC drugs.
In addition, the CARES Act made changes to regulation of sunscreen products and directed the Health and Human Services
(HHS) Secretary to report to Congress on the agency’s evaluation and revision of the cough and cold monograph with respect
to children under age six. The law also established a legal framework for the HHS Secretary, beginning in FY2021, to assess
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FDA Regulation of Over-the-Counter (OTC) Drugs: Overview and Issues for Congress

and collect fees—specifically, manufacturing facility fees and monograph order request fees—from certain OTC drug
companies to support FDA’s OTC monograph drug activities (e.g., review of order requests, inspections).
Additional Policy Considerations
The changes made by the CARES Act sought to address some of the previously identified limitations of the OTC drug
monograph system. When evaluating future policy changes, Congress may consider additional issues that may not have been
fully addressed by the enacted legislation. These issues include (1) continued marketing of drugs not yet subject to final
GRASE determinations, (2) review of certain sunscreen ingredients, and (3) oversight of foreign OTC drug manufacturers.

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FDA Regulation of Over-the-Counter (OTC) Drugs: Overview and Issues for Congress

he Food and Drug Administration (FDA), under the Federal Food, Drug, and Cosmetic Act
(FFDCA), regulates the safety and effectiveness of prescription and nonprescription (over-
T the-counter, or OTC) drugs sold in the United States. Prescription drugs require health
practitioner supervision to be considered safe for use—due to drug toxicity, potential harmful
effects, or method of use—and may be dispensed only pursuant to a prescription.1 In contrast,
OTC drugs may be used without a prescriber’s authorization, provided they have an acceptable
safety margin, low potential for misuse or abuse, and are adequately labeled so that consumers
can self-diagnose the condition, self-select the medication, and self-manage the condition.2
Although prescription drugs are marketed pursuant to FDA approval via a new drug application
(NDA) or an abbreviated new drug application (ANDA), most OTC drug products are marketed
under a different mechanism, by complying with an OTC monograph. FDA describes OTC
monographs as “standards for the marketing of non-prescription drug products not covered by
new drug applications. These standards provide the marketing conditions for some OTC drug
products including the active ingredients, labeling, and other general requirements.”3 In other
words, OTC monographs set the conditions under which OTC drug products are generally
recognized as safe and effective (GRASE) for their intended use. A monograph functions similar
to a recipe, in that it covers active ingredients, dosages, formulations, and labeling claims. If an
OTC drug product complies with the relevant monograph, it does not need FDA approval prior to
marketing. FDA assesses monograph compliance as part of its inspection process.
Historically, monographs have been established and amended through rulemaking. The
Coronavirus Aid, Relief, and Economic Security Act (CARES Act; P.L. 116-136), enacted on
March 27, 2020, replaced the rulemaking process with the administrative order process—a less
burdensome alternative.4
FDA established the monograph process in 1972 through rulemaking.5 Although the monograph
process was intended to provide an efficient mechanism through which OTC drugs could be
marketed without individual FDA evaluation and approval, FDA described the rulemaking
process as “inefficient and time consuming” with “limited speed and flexibility in responding to
urgent safety issues.”6 Prior to the enactment of the CARES Act, FDA estimated that there were
approximately 88 simultaneous rulemakings in 26 broad therapeutic categories, covering
approximately 800 active ingredients for over 1,400 different therapeutic uses.7 The agency stated
that resource challenges were limiting its ability to carry out monograph activities, noting that it
spent approximately 40 times as much budget authority on the process of reviewing Prescription
Drug User Fee Act (PDUFA) products as it did on OTC monograph products.8 To address these

1 FFDCA §503(b)(1) [21 U.S.C. §355(b)(1)].
2 FDA, “Regulatory Approaches for Prescription to OTC Switch,” July 2, 2015, https://www.fda.gov/media/93193/
download.
3 FDA, “Small Business Assistance: Frequently Asked Questions on the Regulatory Process of Over-the-Counter
(OTC) Drugs,” https://www.fda.gov/drugs/cder-small-business-industry-assistance-sbia/small-business-assistance-
frequently-asked-questions-regulatory-process-over-counter-otc-drugs#OTCmonographs.
4 P.L. 116-136, Title III, Subtitle F.
5 37 Federal Register 85, January 5, 1972, 37 Federal Register 9464, May 11, 1972.
6 Testimony from Janet Woodcock, MD, Director of the Center for Drug Evaluation and Research, in U.S. Congress,
House Committee on Energy and Commerce, Modernizing FDA’s Regulation of Over-The-Counter Drugs, hearings,
115th Cong., 1st sess., September 13, 2017, https://www.fda.gov/news-events/congressional-testimony/modernizing-
fdas-regulation-over-counter-drugs.
7 Ibid.
8 Ibid.
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FDA Regulation of Over-the-Counter (OTC) Drugs: Overview and Issues for Congress

regulatory and resource challenges, legislation was introduced in the 115th and 116th Congresses
that proposed to modify the OTC monograph process. Such legislation also proposed to create a
new user fee program to fund OTC monograph drug activities (e.g., review of order requests),
whereby OTC drug manufacturers would pay user fees to FDA.
On March 27, 2020, the CARES Act was signed into law, replacing the OTC drug monograph
rulemaking process with the administrative order process.9 The CARES Act also created a user
fee program to fund OTC monograph activities.
This report
 summarizes the history of OTC drug regulation in the United States;
 describes the pre-CARES Act framework under which FDA, until recently, has
issued and modified OTC drug monographs;
 provides an overview of the challenges identified under the previous framework
and changes made by the CARES Act to address those challenges;
 explains how OTC sunscreen products are regulated and actions taken by
Congress and FDA to regulate sunscreen; and
 identifies existing issues for Congress.
Brief History of U.S. OTC Drug Regulation
The FFDCA was enacted in 1938 and has been subsequently amended on numerous occasions. As
enacted in 1938, the FFDCA required that drug manufacturers submit, prior to marketing, an
NDA demonstrating, among other things, that a new drug (i.e., a drug that was not generally
recognized as safe under the conditions of its intended use) was safe.10 In 1962, the Kefauver-
Harris Drug Amendments to the FFDCA required drug manufacturers to provide substantial
evidence of drug effectiveness, in addition to safety, prior to marketing a new drug (i.e., a drug
that was not GRASE under the conditions of its intended use).11 This standard became the basis
for the drug approval process in place today.
Drugs introduced between 1938 and 1962 were considered safe but with unknown effectiveness.
To address this issue, in 1966, FDA formed the Drug Efficacy Study Implementation (DESI),
contracting with the National Academy of Sciences/National Research Council (NAS/NRC), to
evaluate the effectiveness of those drugs that had been approved on the basis of safety alone.12
Holders of NDAs approved between 1938 and 1962 were required to submit data and information
supporting the effectiveness of drugs approved during that time to FDA for evaluation.13 This

9 P.L. 116-136, Title III, Subtitle F.
10 P.L. 75-717. See also 37 Federal Register 85, January 5, 1972. Prior to the 1938 law, drugs were marketed in the
United States without FDA review.
11 P.L. 87-781. FFDCA §201(p) defines a new drug as “any drug ... the composition of which is such that such drug is
not generally recognized, among experts qualified by scientific training and experience to evaluate the safety and
effectiveness of drugs, as safe and effective for use under the conditions prescribed, recommended, or suggested in the
labeling thereof [i.e., GRASE] ... ” or “any drug ... the composition of which is such that such drug, as a result of
investigations to determine its safety and effectiveness for use under such conditions, has become so recognized, but
which has not, otherwise than in such investigations, been used to a material extent or for a material time under such
conditions.”
12 31 Federal Register, 9426, July 6, 1966. FDA, “Drug Efficacy Study Implementation (DESI),” https://www.fda.gov/
drugs/enforcement-activities-fda/drug-efficacy-study-implementation-desi.
13 31 Federal Register, 9426, July 6, 1966.
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FDA Regulation of Over-the-Counter (OTC) Drugs: Overview and Issues for Congress

review was first conducted for prescription drugs, due to their greater potential for harm, and
FDA determined that a similar review would be appropriate for OTC drugs.14 However, such a
review posed a challenge for OTC drugs, particularly due to the size of the market. At the time,
FDA estimated that there were at least 100,000 (and potentially up to 500,000) OTC drug
products on the market, made up of hundreds of different active ingredients.15 Some OTC drugs
had been approved under an NDA based on safety but not effectiveness, while others had never
been approved at all.16 This discrepancy and the volume of products on the market limited the
feasibility of an FDA product-by-product review of these drugs.
To address this challenge, in 1972, FDA proposed the OTC Drug Review—a mechanism through
which OTC drug products on the market prior to 1972 could be lawfully marketed pursuant to a
GRASE determination, made by FDA through rulemaking, instead of individual evaluation and
approval under an NDA.17 The OTC Drug Review was intended to evaluate the safety and
effectiveness of OTC drug products according to their respective therapeutic drug category (e.g.,
antacids).18 This process became the primary pathway through which OTC drug products were
marketed, with some modifications over time. For example, in 2002, FDA issued a rule
establishing the time and extent application (TEA) process through which conditions marketed in
the United States after 1972 or conditions without any U.S. marketing experience could be
considered for inclusion in the OTC drug monograph system.19 Prior to the TEA rule, many such
conditions could not be added to a monograph; instead, they could be marketed only pursuant to
an approved NDA.20 In 2014, the Sunscreen Innovation Act (SIA; P.L. 113-195) created an
administrative order process for determining whether certain new OTC sunscreen active
ingredients or combinations of OTC sunscreen active ingredients were GRASE.21 In March 2020,
the CARES Act was signed into law, replacing the OTC drug monograph rulemaking process
with an administrative order process. These changes are described in more detail below.
How FDA Regulates the Marketing of OTC Drugs
To market an OTC drug product in the United States, the manufacturer may follow one of two
pathways. A manufacturer can either (1) submit an NDA for approval to FDA or (2) use the OTC
drug monograph process.22 Both the NDA and monograph pathways involve a scientific decision
by FDA; however, the two mechanisms are different. A primary difference is that approval of an
NDA results in the approval to sell a specific finished drug product, whereas the OTC drug
monograph process focuses on the safety and effectiveness of one or more active ingredients

14 37 Federal Register 85, January 5, 1972.
15 Ibid.
16 Ibid.
17 Ibid., 37 Federal Register 9464, May 11, 1972. See also https://www.accessdata.fda.gov/scripts/cder/training/OTC/
topic3/topic3/da_01_03_0080.htm.
18 37 Federal Register 9464, May 11, 1972.
19 21 C.F.R. §330.14. This rule defined condition, for purposes of the TEA process, to mean “an active ingredient or
botanical drug substance (or a combination of active ingredients or botanical drug substances), dosage form, dosage
strength, or route of administration, marketed for a specific OTC use, except as excluded in paragraph (b)(2) of this
section.” 21 C.F.R. §330.14(a)(2).
20 FDA, “Time and Extent Applications for Nonprescription Drug Products,” Guidance for Industry, September 2011,
p. 5, https://www.fda.gov/media/72219/download.
21 21 C.F.R. §330.15. 81 Federal Register 84465, November 23, 2016.
22 FFDCA §505 [21 U.S.C. §355]. 21 C.F.R. Part 330.
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within a drug category.23 According to FDA, “[t]he OTC Monograph system provides lower
regulatory burden for industry and helps to keep OTC drug costs low through the extensive array
of potential products that final monographs can cover.”24
OTC Drug Approval Under an NDA
As mentioned above, a new drug may not be introduced into interstate commerce without FDA
approval.25 To approve a drug, FDA requires data from clinical trials to provide evidence of a
drug’s safety and effectiveness, except under very limited circumstances. Once a manufacturer
completes clinical trials, it submits the results of those investigations, along with other
information, to FDA in an NDA.26 In reviewing an NDA, FDA considers
 whether the drug is safe and effective for its intended use;
 whether the proposed labeling is appropriate; and
 whether the methods used to manufacture the drug and the controls used to
maintain the drug’s quality are adequate to preserve the drug’s identity, strength,
quality, and purity.27
For purposes of approval, an NDA must include substantial evidence of effectiveness, meaning
evidence consisting of adequate and well-controlled investigations.28 FDA has typically
interpreted this provision as requiring two adequate and well-controlled trials, and the agency has
some discretion to determine what evidence is necessary for NDA approval.29
Although manufacturers generally must obtain approval through an NDA (or an abbreviated NDA
[ANDA], in the case of a generic drug) for all prescription drugs prior to marketing, a
manufacturer may obtain such approval for OTC drugs. As part of an NDA for an OTC drug,
FDA may require the sponsor to conduct label comprehension studies assessing the extent to
which consumers understand the information in the proposed labeling.30 FDA also may
recommend that the sponsor conduct self-selection studies to assess whether consumers can
appropriately self-select a drug based on the information in the labeling.31

23 FDA, “The ABCs of OTCs: Little-Known Facts About Over-the-Counter Drugs,” presentation by Karen Murry
Mahoney, MD, FACE, Deputy Director of the Division of Nonprescription Drug Products, Center for Drug Evaluation
and Research, FDA, p. 29, https://www.fda.gov/media/97292/download.
24 Testimony from Janet Woodcock, MD, Director of the Center for Drug Evaluation and Research, in U.S. Congress,
House Committee on Energy and Commerce, Modernizing FDA’s Regulation of Over-The-Counter Drugs, hearings,
115th Cong., 1st sess., September 13, 2017, https://www.fda.gov/news-events/congressional-testimony/modernizing-
fdas-regulation-over-counter-drugs.
25 FFDCA §505(a) [21 U.S.C. §355(a)].
26 FFDCA §505(b) [21 U.S.C. §355(b)] and 21 C.F.R. §314.50.
27 FFDCA §505(b), (d) [21 U.S.C. §355(b), (d)]. For additional information, see CRS Report R41983, How FDA
Approves Drugs and Regulates Their Safety and Effectiveness.
28 FFDCA §505(d) [21 U.S.C. §355(d)] and 21 C.F.R. §314.126.
29 FDA, Draft Guidance for Industry, “Demonstrating Substantial Evidence of Effectiveness for Human Drug and
Biological Products,” December 2019, https://www.fda.gov/media/133660/download.
30 FDA, Guidance for Industry, “Label Comprehension Studies for Nonprescription Drug Products,” August 2010,
https://www.fda.gov/media/75626/download.
31 FDA, Guidance for Industry, “Self-Selection Studies for Nonprescription Drug Products,” April 2013,
https://www.fda.gov/media/81141/download.
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If a manufacturer wants to transfer an approved drug from prescription to OTC status (called an
Rx-to-OTC switch), the manufacturer must submit an NDA (or a supplement to an NDA)32 to
FDA with data to support the switch.33 In addition, FDA may exempt a drug from the prescription
use requirement by regulation if the prescription-only dispensing requirement is not necessary for
the protection of public health.34 FDA may issue such a regulation on its own initiative or in
response to a petition from an interested party.35
OTC Drug Monograph Process
Unlike the NDA process, which requires the individual evaluation of each drug product, the OTC
Drug Review resulted in the development of OTC monographs for specific drug categories.36 The
monographs set the conditions under which OTC drug products in specific drug categories may
be marketed without individual product premarket approval, including the active ingredient(s)
and related conditions (e.g., dosage level, combination of active ingredients, labeled indications,
and warnings and adequate directions for use).37 As explained in FDA monograph regulations, for
purposes of a GRASE determination, general recognition of safety and effectiveness “shall
ordinarily be based upon published studies which may be corroborated by unpublished studies
and other data.”38
Unlike the NDA process, the OTC drug monograph process does not require a manufacturer to
submit clinical trial data demonstrating safety and effectiveness of an individual drug product, nor
does it require an OTC drug product to be approved by FDA before marketing. This is because
FDA had already evaluated the safety and effectiveness evidence as part of its monograph
rulemaking. As long as the drug product complies with the conditions of the monograph,
premarket approval is not necessary. For example, the “Nighttime Sleep-aid Drug Products for
OTC Human Use” monograph defines the term night-time sleep aid, lists the active ingredients
(within established dosage limits) that may be used in OTC night-time sleep aids, and requires
that certain labeling accompany these drug products.39 An OTC night-time sleep aid drug
marketed in accord with those specifications does not need an approved NDA to be marketed.
The manufacturer of an OTC drug that does not meet the conditions of a monograph (e.g., if the
drug differs in dosage form or contains a new indication other than that specified in the
monograph) can apply for approval via the NDA process or by proposing a modification to an
existing monograph pursuant to changes made by the CARES Act (see the “Monograph
Modification and Innovation” section).

32 A supplement refers to a request submitted to FDA to approve a change to an approved application. FFDCA §735(2)
[21 U.S.C. §379g(2)].
33 21 C.F.R. §310.200(b).
34 FFDCA §503(b)(3) [21 U.S.C. §353(b)(3)].
35 21 C.F.R. §310.200(b).
36 The 26 drug categories are listed in 21 C.F.R. §330.5: antacids, laxatives, antidiarrheal products, emetics,
antiemetics, antiperspirants, sunburn prevention and treatment products, vitamin-mineral products, antimicrobial
products, dandruff products, oral hygiene aids, hemorrhoidal products, hematinics, bronchodilator and antiasthmatic
products, analgesics, sedatives and sleep aids, stimulants, antitussives, allergy treatment products, cold remedies,
antirheumatic products, ophthalmic products, contraceptive products, miscellaneous dermatologic products, dentifrices
and dental products (e.g., analgesics, antiseptics), and miscellaneous (all other OTC drugs not falling within one of the
above therapeutic categories).
37 21 C.F.R. §330.10(a)(5).
38 21 C.F.R. §330.10(a)(4).
39 21 C.F.R. Part 338.
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Pre-CARES Act: Three-Phase Public
Rulemaking Process
The OTC Drug Review was established as a three-phase public rulemaking process (see Figure
1). Prior to the enactment of the CARES Act, FDA published final monographs as regulations in
the Code of Federal Regulations (C.F.R.).
Figure 1. Pre-CARES Act: OTC Drug Review

Source: Figure created by CRS based on 21 C.F.R. §330.10.

Notes: ANPR= Advanced Notice of Proposed Rulemaking; TFM= Tentative Final Monograph; FM= Final
Monograph.
Phase I
In the first phase of the OTC Drug Review, which was completed, FDA convened advisory panels
of qualified experts “to evaluate the safety and effectiveness of OTC drugs, to review OTC drug
labeling, and to advise [the FDA Commissioner] on the promulgation of monographs establishing
conditions under which OTC drugs are [GRASE] and not misbranded.”40 An advisory review
panel was established for each category of OTC drugs, and every category was required to be
considered by a panel.41 For each category of drugs, the Commissioner published a notice in the
Federal Register calling upon interested persons to submit specified data and information for
review by an advisory panel.42 After completing the review, each panel would submit to FDA a
report containing its conclusions and recommendations regarding which active ingredients and
related conditions within a drug category were GRASE (i.e., Category I). The panel could
determine that certain conditions should be excluded from the monograph, resulting in a drug
being not GRASE (i.e., Category II), or that data were insufficient to classify conditions as
Category I or II and that further testing was required for those conditions (i.e., Category III).

40 21 C.F.R. §330.10(a)(1).
41 Ibid.
42 21 C.F.R. §330.10(a)(2).
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Following submission of the advisory panel’s report, FDA then published in the Federal Register,
with a public comment period, an advance
notice of proposed rulemaking (ANPR)
OTC Monograph Categorization
containing the following: (1) the advisory
Category I: GRASE. Category I includes conditions
panel’s report, (2) a proposed monograph(s)
considered to be safe and effective on the basis of
existing data and information.
establishing the conditions under which a
Category II: Not GRASE. Category II includes
specific OTC drug(s) or category of OTC
conditions that are not GRASE.
drugs would be considered GRASE (i.e.,
Category III: Insufficient data. Category III includes
Category I), (3) a statement of the conditions
conditions for which there is not enough information to
excluded from the monograph based on the
place them in Category I or II.
Commissioner’s determination that they
Conditions: Include active ingredients, dosage strength,
would result in a drug not being GRASE
dosage form and route of administration, patient
(i.e., Category II), and (4) a statement of the
population, indications for use, required labeling (e.g.,
warnings).
conditions excluded from the monograph
because data were insufficient to classify
conditions as Category I or II (i.e., Category III).43
Phase 2
In the second phase of the OTC Drug Review, FDA reviewed and evaluated the advisory panel’s
findings, public comments, and any new data submitted to the agency.44 FDA regulations required
FDA, after reviewing all comments and new data and information submitted with respect to the
ANPR or proposed monograph, to publish in the Federal Register a tentative final monograph
(TFM) proposing conditions under which a specific OTC drug(s) or category of OTC drugs were
GRASE (Category I), accompanied by another public comment period.45 The Commissioner was
allowed to publish in the Federal Register a separate TFM containing a statement of those active
ingredients and related conditions reviewed and proposed to be excluded from the monograph
because they would result in a drug product not being GRASE (Category II).46 FDA also could
propose that data are insufficient to classify conditions as Category I or II (Category III).
Phase 3
The third phase of the OTC Drug Review was monograph finalization. In this phase, FDA
considered the public comments provided in response to a TFM and any new data the agency
received. FDA regulations provided for a period of public comment, specified processes for
submission of new data and information by interested parties, and required FDA to schedule a
hearing based on objections filed to a TFM, as specified. “After reviewing the objections, the
entire administrative record including all new data and information and comments, and
considering the arguments made at any oral hearing,” FDA then would publish a final monograph
(FM) as a final rule, delineating the active ingredients and related conditions under which OTC
drug products in a specific therapeutic category are GRASE, to become effective as specified.47
Only active ingredients classified as GRASE were included in an FM and thus the category

43 21 C.F.R. §330.10(a)(6).
44 FDA, “Over-the-Counter (OTC) Drug Monograph Process,” https://www.fda.gov/drugs/current-good-
manufacturing-practices-cgmp-drugs-reports-guidances-and-additional-information/over-counter-otc-drug-monograph-
process.
45 21 C.F.R. §330.10(a)(7)(i).
46 21 C.F.R. §330.10(a)(7)(ii).
47 21 C.F.R. §330.10(a)(9).
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designations (i.e., I, II, or III) are not used in FMs. An exception to this is the “negative
monograph” (codified at 21 C.F.R. §310.545), which lists conditions that are not GRASE.
In September 2017 testimony, then-Director of the Center for Drug Evaluation and Research
(CDER) Janet Woodcock indicated that although some monographs were finalized using these
three steps, in reality, the process had shifted. For example, her testimony included Figure 2
below and noted that “this lengthy and circuitous path is not unusual.”48
Figure 2. Selected Example: OTC Monograph Rulemaking for External Analgesic
Drug Products

Source: Testimony from Janet Woodcock, MD, Director of the Center for Drug Evaluation and Research, in
U.S. Congress, House Committee on Energy and Commerce, Modernizing FDA’s Regulation of Over-The-Counter
Drugs, hearings, 115th Cong., 1st sess., September 13, 2017, https://energycommerce.house.gov/sites/
democrats.energycommerce.house.gov/files/documents/Testimony-Woodcock-HE-Hrg-on-Modernizing-
FDA%E2%80%99s-Regulation-of-Over-the-Counter-Drugs-09-13-17.pdf.
Monograph Modification
Once a monograph was finalized in regulation, it could be modified on the initiative of the FDA
Commissioner, by an interested party via a citizen petition, or through submission of a time and
extent application (TEA) by an interested party (typically a drug manufacturer). The filing of a
citizen petition or TEA triggered a public rulemaking process to amend the appropriate OTC
monograph. A TEA also could lead to the creation of a new OTC monograph. Alternatively, an

48 Testimony from Janet Woodcock, MD, Director of the Center for Drug Evaluation and Research, in U.S. Congress,
House Committee on Energy and Commerce, Modernizing FDA’s Regulation of Over-The-Counter Drugs, hearings,
115th Cong., 1st sess., September 13, 2017, https://www.fda.gov/news-events/congressional-testimony/modernizing-
fdas-regulation-over-counter-drugs.
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NDA could be used to request approval of an OTC drug that deviates from the monograph.
Historically, the citizen petition and TEA processes have taken more time than a final decision by
FDA on an NDA.49
Citizen Petition
A citizen petition could be used to request that FDA amend or repeal conditions marketed in the
United States before 1972 (i.e., conditions eligible for inclusion in the OTC Drug Review).50 The
petition had to be accompanied by data demonstrating the general recognition of safety and
effectiveness of the amended condition. If FDA determined that such a request should be granted,
the agency would issue a proposed rule, along with a period for public comment, and then a final
rule amending the monograph or withdrawing the proposed rule.51
TEA
The TEA process, established by FDA through rulemaking in 2002, could be used to request, for
the first time, that conditions marketed in the United States after 1972 or without any U.S.
marketing experience be included in the OTC drug monograph system.52 Prior to the issuance of
these regulations, many conditions were ineligible for such inclusion and could be marketed only
under an NDA. In November 2016, FDA amended its TEA regulations, as required by the
Sunscreen Innovation Act (P.L. 113-195), to establish timelines for reviewing and acting on non-
sunscreen TEAs.53
The TEA regulations established a two-step process for incorporating new conditions into an
OTC drug monograph. The first step was eligibility—the interested party was required to submit
a TEA to FDA demonstrating that the condition had been marketed for OTC purchase for a
“material time” and to a “material extent” by submitting specified information to FDA.54 If FDA
determined that the condition was eligible for inclusion in the monograph, the second step was
submission of safety and effectiveness data. FDA would publish a notice in the Federal Register
asking interested parties to submit data and pertinent information to support the safety and
effectiveness of the proposed condition.55 FDA or an advisory panel then reviewed the data using
the same safety and effectiveness standards as the OTC Drug Review. After reviewing the safety
and effectiveness data, if FDA determined that the condition was GRASE for the intended use,
the agency would publish a proposed rule to incorporate the new condition into an existing
monograph, or create a new monograph if necessary.56 FDA also could make an initial

49 FDA, “Time and Extent Applications for Nonprescription Drug Products,” Guidance for Industry, September 2011,
p. 4, https://www.fda.gov/media/72219/download.
50 FDA regulations describe the process by which FDA may amend or repeal an existing monograph in response to a
citizen petition. 21 C.F.R. §330.10(a)(12). FDA, “Time and Extent Applications for Nonprescription Drug Products,”
Guidance for Industry, September 2011, p. 5.
51 FDA, “Time and Extent Applications for Nonprescription Drug Products,” Guidance for Industry, September 2011,
p. 5.
52 21 C.F.R. §330.14. The TEA regulations defined a condition to mean an active ingredient or botanical drug
substance (or combination of both), dosage form, dosage strength, or route of administration marketed for a particular
OTC use [21 §330.14(a)(2)].
53 81 Federal Register 84465, November 23, 2016.
54 21 C.F.R. §330.14(c). “Material time” is defined as marketing for a minimum of five continuous years in the same
country, and “material extent” is defined as marketing a sufficient quantity and is further described in FDA regulations.
55 21 C.F.R. §330.14(e) & (f).
56 21 C.F.R. §330.14(g)(3).
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determination that the condition was not GRASE. After considering comments and information
submitted with respect to the proposed rule, FDA would publish a final rule incorporating that
condition into a final monograph (FM), or issue a re-proposal if necessary.57 A condition
submitted under a TEA for OTC monograph consideration could be marketed in accordance with
an applicable FM only after the agency determined that the condition was GRASE and included it
in the appropriate FM. If an OTC monograph had not been finalized and finalization was not
imminent, FDA could publish a notice of enforcement policy allowing marketing to begin
pending completion of the FM, as specified.58
NDA
An NDA may be used to request approval of an OTC drug that deviates from a monograph. An
approved NDA would apply only to the product (and dosage, indications, manufacturing process,
and labeling) covered explicitly by the NDA.
General OTC Drug Requirements
While most OTC drugs are not required to go through the premarket approval process, they are
required to comply with various other statutory and regulatory requirements. For example,
manufacturers of OTC drugs are required to register their facilities and list the OTC drugs
manufactured there,59 to comply with current good manufacturing practices (CGMPs), 60 to meet
labeling requirements,61 and to report serious adverse events to FDA.62 In addition, OTC drugs
may contain only those inactive ingredients that are safe in the amounts administered and that do
not interfere with the effectiveness of the preparation.63 FDA may inspect OTC drug
manufacturing facilities and take enforcement action against violative OTC drugs through
issuance of warning letters, import alerts, and voluntary recalls. FDA can, with DOJ assistance,
pursue more stringent actions, such as product seizure or injunction.
The CARES Act and OTC Monograph Reform
The OTC Drug Review created by FDA in 1972 was one of the agency’s largest and most
complex regulatory programs.64 While it was intended to provide an efficient mechanism through
which OTC drugs could be marketed without individual FDA evaluation and approval, the
program encountered several challenges. First, some monographs remained unfinalized for
decades, resulting in OTC monograph drugs on the market that were not subject to a final
determination regarding their safety and effectiveness. Second, FDA’s ability to respond to safety
concerns with OTC monograph drugs in a timely and efficient manner was limited under the

57 21 C.F.R. 330.14(g)(5).
58 21 C.F.R. 330.14(h).
59 21 C.F.R. §330.1(b).
60 21 C.F.R. §330.1(a).
61 21 C.F.R. §330.1(c).
62 FFDCA §760 [21 U.S.C. §379aa].
63 21 C.F.R. §330.1(e).
64 Testimony from Janet Woodcock, MD, Director of the Center for Drug Evaluation and Research, in U.S. Congress,
House Committee on Energy and Commerce, Modernizing FDA’s Regulation of Over-The-Counter Drugs, hearings,
115th Cong., 1st sess., September 13, 2017, https://www.fda.gov/news-events/congressional-testimony/modernizing-
fdas-regulation-over-counter-drugs.
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rulemaking process. Third, under the previous monograph framework, it was a challenge for
industry to propose modifications to marketed OTC drugs without submitting an NDA, which
limited innovation. Finally, by its own account, FDA had limited resources to support OTC
monograph activities.65 As described below, the CARES Act sought to address these regulatory
and resource challenges by modifying the OTC monograph process and creating a new user fee
program to fund OTC monograph drug activities. This new user fee program is referred to as the
Over-the-Counter Monograph User Fee Act (OMUFA).66
Monograph Finalization
Although the OTC Drug Review began in 1972, some monographs have not been finalized. As a
result, some OTC monograph drugs on the market have not received final GRASE
determinations. According to a July 2020 Government Accountability Office (GAO) report, FDA
officials indicated that as of December 2019, 7 of the 26 original OTC monograph categories had
no FM in effect, and of the 17 that did have an FM in effect, 12 had proposed changes associated
with them.67
The reforms made by the CARES Act aimed to facilitate monograph finalization, thus decreasing
the OTC monograph drugs on the market not subject to a final determination regarding their
safety and effectiveness. The act created a new process for issuing monographs through
administrative orders rather than rulemaking. Specifically, FFDCA Section 505G, as added by the
CARES Act, provides a process through which FDA, on its own initiative or upon request from a
requestor(s), may issue an administrative order determining whether there are conditions under
which a drug, or class or combination of drugs, is GRASE or not GRASE.68 FDA publishes
proposed and final administrative orders on its website.69
FFDCA Section 505G also specifies which OTC monograph drugs may continue to be marketed
without an approved application prior to monograph finalization and which drugs may not be
marketed. Specifically, FFDCA Section 505G
 deems as GRASE drugs that are classified in Category I in a TFM and that meet
the applicable general requirements for OTC drugs;70
 allows for certain OTC monograph drugs not yet subject to a final GRASE
determination to continue to be marketed, specifically if the drug is classified in
Category III in a TFM or Category I under an ANPR and meets the applicable
requirements for OTC drugs (these drugs are expected to eventually be subject to
FDA-initiated administrative orders);71

65 Ibid.
66 P.L. 116-136, Title III, Subtitle F. FDA, “Over-The-Counter Monograph User Fee Program (OMUFA),”
https://www.fda.gov/industry/fda-user-fee-programs/over-counter-monograph-user-fee-program-omufa. FDA, “Over-
the-Counter Monograph User Fee Program Performance Goals and Procedures—Fiscal Years 2018-2022,”
https://www.fda.gov/media/106407/download.
67 GAO, Over-the-Counter Drugs: Information on FDA’s Regulation of Most OTC Drugs, GAO-20-572, July 2020 p.
9, https://www.gao.gov/assets/gao-20-572.pdf. The GAO report does not address the remaining two categories.
68 FFDCA §505G(b)(1)(B) [21 U.S.C. §355h(b)(1)(B)].
69 FDA, “OTC Monographs@FDA,” https://www.accessdata.fda.gov/scripts/cder/omuf/index.cfm.
70 FFDCA §505G(a)(1)(A) [21 U.S.C. §355h(a)(1)(A)].
71 FFDCA §505G(a)(3) [21 U.S.C. §355h(a)(3)].
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 provides that a drug classified in Category II in a TFM is a new drug and
misbranded and cannot be marketed without an approved application beginning
180 days after enactment, unless FDA determines that it is in the interest of the
public health to extend this period of time.72
FMs published in the C.F.R. and certain TFMs (i.e., those establishing conditions of use for a
drug classified as Category I) have been deemed final orders.73 Further, the provisions of 21
C.F.R. §310.545 (the “negative monograph”), as in effect on the day before enactment of the
CARES Act, were deemed to be a final order.74 The final order specifies that these active
ingredients are not GRASE and cannot be legally marketed under FFDCA section 505G.75
Issuance of Administrative Orders
In the case of FDA-initiated GRASE determinations, the agency must take the following steps in
issuing an administrative order determining whether a drug or class or combination of drugs is
GRASE (see Figure 3):
 notify (or make reasonable efforts to notify) sponsors who will be affected by the
administrative order at least two days before issuing a proposed order;
 issue a proposed order with reasons for its issuance and provide for a public
comment period of at least 45 days—if the proposed order concerns a
determination that the drug is not GRASE, the notice must include the general
categories of data necessary to establish that the drug is GRASE and provide a
comment period of at least 180 days; and
 issue a final administrative order with a detailed statement of reasons, providing
sponsors with the opportunity for formal dispute resolution, a hearing, and
judicial review, as specified.76
With respect to industry-initiated requests, a requestor may submit an OTC Monograph Order
Request (OMOR) asking FDA to issue an administrative order determining that a drug, or class or
combination of drugs, is GRASE (see Figure 3).77 An OMOR also could request that FDA issue
an administrative order for a change to a monograph; for example, the addition of a new active
ingredient or indication to a monograph that already has one or more ingredients that have been
found to be GRASE.78 Innovations or changes may be requested only for ingredients that have a
final GRASE determination. If an ingredient does not (e.g., is classified in Category III in a
TFM), the OMOR also must include a request for GRASE determination.79

72 FFDCA §505G(a)(4) [21 U.S.C. §355h(a)(4)].
73 FFDCA §505G(b)(8) [21 U.S.C. §355h(b)(8)]. 86 Federal Register 52474, September 21, 2021.
74 FFDCA §505G(k)(2)(A) [21 U.S.C. §355h(k)(2)(A)]. 86 Federal Register 52474, September 21, 2021.
75 FDA, “ Non-Monograph Conditions NM900: Drug Products Containing Certain Active Ingredients Offered Over-
the-Counter for Certain Uses,” Order ID OTC000007, September 24, 2021, https://www.accessdata.fda.gov/scripts/
cder/omuf/index.cfm?event=NewMonograph&ID=
5AC274A6E59616F32A8E19D6DE726E9AA0C741220E8ABFFECF2E3FC5CA768476&OMUFID=OTC000007.
76 FFDCA §505G(b)(2) [21 U.S.C. §355h(b)(2)].
77 FFDCA §505G(b)(5) [21 U.S.C. §355h(b)(5)].
78 FDA, “Over-the-Counter Monograph User Fee Program Performance Goals and Procedures—Fiscal Years 2018-
2022,” p. 10, https://www.fda.gov/media/106407/download.
79 FFDCA §505G(b)(5)(B)(i)(II) [21 U.S.C. §355h(b)(5)(B)(i)(II)]. FDA, “Over-the-Counter Monograph User Fee
Program Performance Goals and Procedures—Fiscal Years 2018-2022,” p. 10.
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Figure 3. Administrative Order Process

Source: FDA, “Monograph Reform is Here!” presentation by Theresa M. Michele, MD, Director Office of
Nonprescription Drugs CDER, FDA, May 29, 2020.
Notes: 1 Final orders are subject to dispute resolution, administrative hearings, and judicial review. 2 FDA may
initiate the administrative order process through expedited procedures (see the “Response to OTC Drug Safety
Issues” section).
Based on discussions between FDA and industry, it is expected that most requests for GRASE
finalization would be FDA-initiated, while OMORs for innovation or changes would be industry-
initiated.80 As an example, FDA would be expected to initiate the process to issue an
administrative order finalizing the GRASE status of existing active ingredients, (e.g., those
classified in Category III under a TFM). In contrast, industry would be more likely to submit an
OMOR requesting, for example, the addition of a new active ingredient or indication to an
existing monograph. In the OMUFA goals letter, FDA has agreed to specified timelines for
OMOR review.81
Response to OTC Drug Safety Issues
FDA indicated that under the pre-CARES Act framework, the agency’s ability to respond to
safety issues related to OTC monograph drugs in a timely and efficient manner was limited due to
certain regulatory requirements pertaining to the monograph process. For OTC drugs marketed
under an NDA, FDA approves the labeling as part of the premarket review process and can
require labeling changes once a drug is on the market if the agency becomes aware of new safety
or effectiveness information.82 For OTC drugs not subject to an NDA, however, FDA can require
labeling changes through amendments to the monograph via rulemaking.83 According to then-

80 FDA, “Over-the-Counter Monograph User Fee Program Performance Goals and Procedures—Fiscal Years 2018-
2022,” p. 28.
81 FDA, “Over-the-Counter Monograph User Fee Program Performance Goals and Procedures—Fiscal Years 2018-
2022.” FDA, “Updated Over-the-Counter Monograph User Fee Program Performance Goals Dates—Fiscal Years
2021-2025,” https://www.fda.gov/industry/fda-user-fee-programs/over-counter-monograph-user-fee-program-omufa.
82 FFDCA §505(o)(4) [21 U.S.C. §355(o)(4)].
83 Testimony from Janet Woodcock, MD, Director of the Center for Drug Evaluation and Research, in U.S. Congress,
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CDER-Director Janet Woodcock’s September 2017 testimony, “a number of planned safety
labeling changes for monograph ingredients have not yet taken place while similar changes have
already been made to prescription drugs containing the same ingredient.”84
One example of FDA’s limited ability to address safety issues pertains to children’s cough and
cold medicines. Between 2004 and 2005, more than 1,500 children under two years of age were
treated in U.S. emergency departments for adverse events associated with cough and cold
medications.85 In addition, concerns arose regarding the use of these medications in children
under six years of age. In 2007, a citizen petition was submitted to FDA requesting that the
agency amend the OTC drug monograph for Cold, Cough, Allergy, Bronchodilator, and
Antiasthmatic Drug Products in 21 C.F.R. Part 341 to require that labeling for the covered OTC
drugs state that they have not been found to be safe or effective in children under six years of age
for the treatment of cough and cold and should not be used for such treatment in children that
age.86 In October 2007, FDA convened the Joint Meeting of the Nonprescription Drugs Advisory
Committee and the Pediatric Advisory Committee to discuss the safety and effectiveness of OTC
cough and cold products marketed for pediatric use.87 The committees determined that the
available published studies did not demonstrate that the cough and cold products in the
monograph were effective in children and recommended additional studies.88 FDA has not
amended the monograph for Cold, Cough, Allergy, Bronchodilator, and Antiasthmatic Drug
Products in 21 C.F.R. Part 341 to reflect this recommendation.
Absent rulemaking, FDA issued several consumer updates warning of the potential harms
associated with the use of children’s cough and cold medicines. FDA also issued guidance for
consumers to help them select appropriate medicines for children. Manufacturers voluntarily
removed OTC infant cough and cold products intended for children under two years of age and
voluntarily updated product labeling to include the warning “do not use in children under 4 years
of age.”89 However, such labeling changes were not required by FDA under the cough and cold
monograph, and in order for FDA to require such labeling for these products, the agency would
have had to amend the monograph through rulemaking.
To address these limitations, FFDCA Section 505G provides an expedited mechanism for issuing
administrative orders to address certain safety issues. Specifically, in instances where a drug,
class, or combination of drugs poses an imminent hazard to the public health, the HHS Secretary
may issue an interim final administrative order with such determination, to take effect on a date

House Committee on Energy and Commerce, Modernizing FDA’s Regulation of Over-The-Counter Drugs, hearings,
115th Cong., 1st sess., September 13, 2017, https://www.fda.gov/news-events/congressional-testimony/modernizing-
fdas-regulation-over-counter-drugs.
84 Ibid.
85 FDA, “Use Caution When Giving Cough and Cold Products to Kids,” https://www.fda.gov/drugs/special-features/
use-caution-when-giving-cough-and-cold-products-kids.
86 Citizen Petition to FDA from the Baltimore City Health Department et al., March 1, 2007, Docket ID FDA-2007-P-
0050-0023.
87 FDA, Center for Drug Evaluation and Research (CDER), “Joint meeting of the Nonprescription Drugs Advisory
Committee and the Pediatric Advisory Committee,” agenda, October 18 and 19, 2007, http://wayback.archive-it.org/
7993/20170404050512/https://www.fda.gov/ohrms/dockets/ac/07/agenda/2007-4323a1-Final.pdf.
88 Meeting minutes, Joint Meeting of the Nonprescription Drugs Advisory Committee and the Pediatric Advisory
Committee October 18-19, 2007, http://wayback.archive-it.org/7993/20170404050526/https://www.fda.gov/ohrms/
dockets/ac/07/minutes/2007-4323m1-Final.pdf.
89 FDA, “Use Caution When Giving Cough and Cold Products to Kids,” https://www.fda.gov/drugs/special-features/
use-caution-when-giving-cough-and-cold-products-kids.
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specified by the Secretary and before the public has had an opportunity to comment.90 The
Secretary must make reasonable efforts to notify affected sponsors at least two days prior to
issuing the interim final administrative order and publish the order in the Federal Register with a
statement of reasons and public comment period of at least 45 days, followed by a final order.
This expedited procedure also applies to certain labeling changes for new warnings and other
information to mitigate serious adverse events associated with the drug.91 The Secretary must
provide sponsors subject to the order with an opportunity for formal dispute resolution, a hearing,
and judicial review, as specified.
The CARES Act further requires that, not later than one year after enactment and annually
thereafter until FDA completes its evaluation, the HHS Secretary must submit a letter to the
specified congressional committees describing FDA’s progress in (1) evaluating the cough and
cold monograph under 21 C.F.R. Part 341 with respect to children under age six and (2) revising
the monograph, as appropriate, to address children under age six through the new administrative
order process.92
Monograph Modification and Innovation
Under the previous monograph system, absent submission of an NDA, monographs could be
modified in a timely manner through few mechanisms (see the “Monograph Modification”
section). According to former CDER Director Janet Woodcock’s September 2017 testimony,
“restrictions in the monograph system may discourage manufacturers from innovating.”93
FFDCA Section 505G allows companies to request changes to or propose new conditions of use
for drugs that are GRASE through the administrative order process rather than rulemaking.94
There are two types of OMORs that companies can submit: Tier 1 and Tier 2. A Tier 1 OMOR is
defined as any OMOR not determined to be a Tier 2 OMOR and generally would be used to
request more significant changes.95 Tier 2 OMORs are limited to requests involving reordering
existing information on a drug’s label; addition of information to the “Other Information” section
of the label; modification to directions for use consistent with a minor dosage form change;
addition of an interchangeable term under 21 C.F.R. 330.1(i) (e.g., under these regulations,
“administer” can be used interchangeably with “give”); a change to ingredient nomenclature to
align with the nomenclature of a standards-setting organization; or standardization of the
concentration or dose of a specific finalized ingredient within a particular FM.96
For example, a company may submit an OMOR requesting the addition of a new active
ingredient to an existing monograph. An OMOR also could request the addition of a new
indication or new route of administration that would apply to one or more active ingredients
already found to be GRASE. Both would be considered Tier 1 OMORs. To incentivize

90 FFDCA §505G(b)(4)(A) [21 U.S.C. §355h(b)(4)(A)]. FDA, “Monograph Reform is Here!” presentation by Theresa
M. Michele, MD, Director Office of Nonprescription Drugs CDER, FDA, May 29, 2020, p. 20.
91 FFDCA §505G(b)(4)(B) [21 U.S.C. §355h(b)(4)(B)].
92 P.L. 116-136, §3855.
93 Testimony from Janet Woodcock, MD, Director of the Center for Drug Evaluation and Research, in U.S. Congress,
House Committee on Energy and Commerce, Modernizing FDA’s Regulation of Over-The-Counter Drugs, hearings,
115th Cong., 1st sess., September 13, 2017, https://www.fda.gov/news-events/congressional-testimony/modernizing-
fdas-regulation-over-counter-drugs.
94 FFDCA §505G(b)(5)(B)(i) [21 U.S.C. §355h(b)(5)(B)(i)].
95 FFDCA §744L(8) [21 U.S.C. §379j-71(8)].
96 FFDCA §744L(9) [21 U.S.C. §379j-71(9)].
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innovation, certain changes to marketed OTC monograph drugs (requested in an OMOR) are
eligible for 18 months of marketing exclusivity upon issuance of a final administrative order from
FDA determining that a drug marketed with such change is GRASE. Specifically, if FDA issues
an administrative order that provides for a drug to contain a new active ingredient not previously
incorporated into a monograph drug,97 or provides for a change in the conditions of use of a drug
for which new human data studies were essential to issuance of the order, the requestor may
receive such exclusivity.98
If the requestor submits an OMOR to incorporate a new active ingredient into a marketed OTC
drug, the OMOR must include information sufficient for a prima facie (“on its face”)
demonstration that the drug has a history of marketing and safe OTC use in the United States or
another country under comparable conditions of use, as specified, or includes other information
the Secretary determines is sufficient.99 If the OMOR does not include such information, FDA
must refuse to file the request. If FDA refuses to file the OMOR, the requestor may resubmit for
filing only if (1) the drug is marketed OTC, under comparable conditions of use, for a period of
time deemed appropriate by the Secretary (not to exceed five consecutive years), under an
approved NDA or ANDA, and (2) during such period, 1 million retail packages of the drug, or an
equivalent quantity as determined by the Secretary, were distributed for sale.100
FFDCA Section 505G also provides that minor changes in dosage form may be made without
FDA issuing an administrative order if the requestor maintains information to show that the
change will not affect safety or effectiveness of the drug and will not materially affect the extent
of absorption or other exposure to the active ingredient.101 This process will be available to
industry once FDA issues a final order and guidance regarding the types of minor changes that
can be made without submitting an OMOR.102
The CARES Act further required that any TEA application submitted to FDA be “extinguished”
as of the date of enactment.103
Resource Challenges
In addition to the purported lack of flexibility within the pre-CARES Act monograph process,
FDA also faced resource challenges that contributed to delayed monograph finalization.
According to September 2017 testimony from former CDER Director Janet Woodcock, FDA

97 For the purposes of exclusivity, FFDCA §505G(b)(5)(C)(ii) defines the term drug to refer to a drug that is subject to
a FM or is classified in Category I in a TFM and that meets the applicable general requirements for OTC drugs; a drug
not yet subject to a final GRASE determination that may continue to be marketed, specifically if the drug is classified
in Category III in a TFM or Category I under an ANPR and meets the applicable requirements for OTC drugs; a drug
subject to a final administrative order; an active ingredient subject to a final sunscreen order under the SIA; and a drug
marketed without an approved application that is not subject to an administrative order to which FFDCA §505G(a)(1)-
(5) does not apply.
98 FFDCA §505G(b)(5)(C) [21 U.S.C. §355h(b)(5)(C)].
99 FFDCA §505G(b)(6)(C) [21 U.S.C. §355h(b)(6)(C)].
100 FFDCA §505G(b)(6)(D) [21 U.S.C. §355h(b)(6)(D)].
101 FFDCA §505G(c) [21 U.S.C. §355h(c)].
102 FDA, “Monograph Reform is Here!” presentation by Theresa M. Michele, MD, Director Office of Nonprescription
Drugs CDER, FDA, May 29, 2020, p. 26.
103 P.L. 116-136 §3854(d).
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spent approximately 40 times as much budget authority on the process of reviewing Prescription
Drug User Fee Act (PDUFA) drug products as it did on OTC monograph drugs.104
At the time, OTC monograph activities were funded solely by discretionary appropriations from
the General Fund (i.e., budget authority). FDA’s prescription drug105 activities, however, were
funded by a combination of budget authority and industry-paid user fees. (In 1992, PDUFA gave
FDA the authority to collect fees from the pharmaceutical industry and to use the revenue to
support “the process for the review of human drug applications.”)106 PDUFA connected
prescription drug user fees to performance review goals negotiated between FDA and industry.
That five-year authority has been renewed on five subsequent occasions, most recently as PDUFA
VI in 2017.107 Manufacturers of OTC drugs marketed under an NDA are subject to PDUFA fees,
but manufacturers of OTC drugs marketed without an NDA and in compliance with a monograph
are not.
To address these prior resource challenges, the CARES Act created a new OTC monograph user
fee program (OMUFA). Specifically, in FFDCA Chapter VII the law added a new Part 10—“Fees
Relating to Over-The-Counter Drugs”—and the following new FFDCA sections: Section 744L
(“Definitions”), Section 744M (“Authority to Assess and Use OTC Monograph Fees”), and
Section 744N (“Reauthorization; Reporting Requirements”).108 New FFDCA Section 744M
establishes a legal framework for the HHS Secretary, through FDA, beginning with FY2021, to
assess and collect facility fees and monograph order request fees (i.e., OMOR fees) to support
FDA’s OTC monograph drug activities (e.g., review of OMORs, inspections). With respect to
facility fees, FDA is to assess a full facility fee to each person who owns an OTC monograph
drug facility (MDF), and a reduced facility fee (i.e., two-thirds of the MDF fee) to each person
who owns a facility identified as a contract manufacturing organization (CMO).109 For FY2021,
the OMUFA target facility fee revenue is $23,269,000, with MDF facilities paying $20,322 and
CMO facilities paying $13,548.110 In addition to the facility fees, under OMUFA, FDA also
assesses a fee to each person who submits an OMOR. (OMOR fees are not included in the
OMUFA target revenue calculation.) For FY2021, a Tier 1 OMOR is $500,000, and a Tier 2
OMOR is $100,000.111 Certain safety-related OMORs are exempt from an OMOR fee.
Fees may be collected and spent only to the extent and in the amount provided in advance in
appropriations acts, may remain available until expended, and may be transferred as specified for

104 Testimony from Janet Woodcock, MD, Director of the Center for Drug Evaluation and Research, in U.S. Congress,
House Committee on Energy and Commerce, Modernizing FDA’s Regulation of Over-The-Counter Drugs, hearings,
115th Cong., 1st sess., September 13, 2017, https://www.fda.gov/news-events/congressional-testimony/modernizing-
fdas-regulation-over-counter-drugs.
105 For purposes of PDUFA, the term prescription drug includes both small-molecule, chemical drugs approved under
Section 505 of the FFDCA and biologics (drugs derived from or made in living organisms) licensed under Section 351
of the Public Health Service Act (PHSA).
106 P.L. 102-571.
107 Title I of the FDA Reauthorization Act of 2017 (P.L. 115-52). For additional information, see CRS Report R44864,
Prescription Drug User Fee Act (PDUFA): 2017 Reauthorization as PDUFA VI.
108 P.L. 116-136, §3862.
109 FFDCA §744M(a)(1) [21 U.S.C. §379j-72(a)(1)].
110 FDA, “Fee Rates Under the Over-the-Counter Monograph Drug User Fee Program for Fiscal Year 2021,” 86
Federal Register 16223, March 26, 2021.
111 Ibid. FFDCA §744M(a)(2) [21 U.S.C. §379j-72(a)(2)]. These amounts are specified in statute. For FY2022 and each
subsequent year, FDA must adjust these amounts by an inflation adjustment percentage, as specified.
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monograph drug activities only.112 Because this user fee program is authorized through FY2025,
its reauthorization schedule diverges from the reauthorization of other medical product user fee
programs (e.g., PDUFA).
FFDCA Section 744N requires the HHS Secretary, through FDA, to submit annual performance
and fiscal reports on OMUFA fee collection and spending to the Senate HELP and House Energy
and Commerce Committees. The performance and fiscal reports must be made publicly available
on FDA’s website. FFDCA Section 744N also specifies the process for reauthorization of the user
fee program, requiring the HHS Secretary to consult with stakeholders on recommendations for
future monograph activities and to transmit the recommendations to Congress no later than
January 15, 2025.113
In exchange for FDA collection of OMUFA fees, FDA has agreed to meet certain performance
goals (e.g., issuing guidance documents, reviewing OMORs in a specified period of time).114
OTC Sunscreen Products
Sunscreen products are regulated as OTC drugs. In 1978, FDA published an ANPR that included
advisory panel recommendations on the safe and effective use of OTC sunscreens. The ANPR
identified 21 sunscreen active ingredients and related conditions (e.g., a minimum SPF value of 2
and labeling requirements) that the advisory panel determined to be GRASE.115 In 1993, FDA
issued a TFM, proposing 20 active ingredients (all but one included in the 1978 ANPR) and
related conditions to be GRASE;116 the proposed rule was subsequently amended several times.
In 1999, FDA issued a final rule establishing a sunscreen FM, which included 16 active
ingredients and related conditions—including combinations of active ingredients, maximum
concentrations, dosage forms, and labeling—that FDA determined to be GRASE.117 The rule was
published with an effective date of May 21, 2001, but was stayed indefinitely because FDA had
not yet established ultraviolet A/broad spectrum testing and labeling requirements for OTC
sunscreens.118
In the absence of an effective FM for OTC sunscreen products, in 2011, FDA issued guidance
explaining the agency’s enforcement policy with respect to certain OTC sunscreens marketed
without an approved application.119 Specifically, FDA explained that it would not take
enforcement action against OTC sunscreen products marketed without an approved NDA if they
contained only those 16 active ingredients or combinations of active ingredients and related

112 FFDCA §744M(f) [21 U.S.C. §379j-72(f)].
113 FFDCA §744N(d)(3) [21 U.S.C. §379j-73(d)(3)].
114 FDA, “Over-the-Counter Monograph User Fee Program Performance Goals and Procedures—Fiscal Years 2018-
2022,” https://www.fda.gov/media/106407/download. Updated Over-the-Counter Monograph User Fee Program
Performance Goals Dates—Fiscal Years 2021-2025, https://www.fda.gov/industry/fda-user-fee-programs/over-counter-
monograph-user-fee-program-omufa.
115 43 Federal Register 38206, August 25, 1978.
116 58 Federal Register 28194, May 12, 1993.
117 64 Federal Register 27666, May 21, 1999.
118 21 C.F.R. Part 352 “Sunscreen Drug Products for Over-the-Counter Human Use [Stayed Indefinitely].” FDA,
“Enforcement Policy—OTC Sunscreen Drug Products Marketed Without an Approved Application Guidance for
Industry,” May 2018, https://www.fda.gov/media/80403/download. (The draft guidance was issued on June 17, 2011).
119 Ibid.
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conditions that were listed in 21 C.F.R. Part 352 (the stayed sunscreen regulations) and complied
with CGMP requirements and adverse event reporting, among other things.120
In 2002, FDA established the TEA process through which conditions marketed in the United
States after 1972 or without any U.S. marketing experience could be considered for inclusion in
the OTC drug monograph system.121 This process provided a way for conditions marketed in
foreign countries—for example, sunscreen active ingredients marketed in Europe—to be included
in the U.S. OTC monograph system. However, at the time, the TEA regulations did not include
deadlines for FDA review. Between 2002 and 2009, TEAs for eight new sunscreen active
ingredients were submitted to FDA. These active ingredients were not included in the stayed
sunscreen regulations and thus were not allowed to be marketed without an approved NDA.
According to a 2017 GAO report, FDA took between 6 and 13 years to issue initial GRASE
determinations for those eight TEAs.122
Industry and some Members of Congress perceived FDA to be delaying consumer access to new
sunscreens, and legislation was introduced to bring transparency and predictability to the FDA
review process.123 In November 2014, the Sunscreen Innovation Act (SIA; P.L. 113-195) was
enacted. The SIA modified the pathway for FDA review of new OTC sunscreen active
ingredients, or combinations of OTC sunscreen active ingredients, and established timeframes for
FDA review. Similar to the TEA process, the SIA procedure included an initial eligibility
determination by FDA followed by submission of safety and effectiveness data. However, the SIA
required FDA to make GRASE determinations in the form of administrative orders (i.e., proposed
and then final orders), in contrast to the TEA rulemaking procedures.124
Changes made by the SIA were expected to facilitate the marketing of the eight pending
sunscreen ingredients submitted to FDA between 2002 and 2009 under the TEA process. Among
other things, the SIA required FDA, within 90 days of enactment, to issue proposed orders for
pending sunscreen TEAs submitted prior to enactment of the SIA that did not receive feedback
letters from the agency prior to enactment.125 Feedback letters issued in response to TEAs
submitted prior to enactment were deemed proposed sunscreen orders.126 GAO reported that “for
the eight sunscreen applications FDA received since 2002, FDA took between approximately 6
and 13 years to issue initial GRASE determinations starting from the date that the application was
submitted. For six of the eight sunscreen applications, it took FDA more than 8 years to issue an
initial GRASE determination.”127 For each of the eight pending sunscreen active ingredients,
FDA’s review resulted in initial determinations (i.e., proposed orders) that those ingredients were
not GRASE due to insufficient data; the agency further requested additional safety and

120 Ibid.
121 21 C.F.R. §330.14. FDA, “Additional Criteria and Procedures for Classifying Over-the-Counter Drugs as Generally
Recognized as Safe and Effective and Not Misbranded,” 67 Federal Register 3074, January 23, 2002.
122 GAO, SUNSCREEN: FDA Reviewed Applications for Additional Active Ingredients and Determined More Data
Needed, GAO-18-61, November 15, 2017, p. 19, https://www.gao.gov/products/GAO-18-61.
123 H.Rept. 113-558, accompanying H.R. 4250 (113th Congress), “Sunscreen Innovation Act.” See also S. 2141 (113th
Congress), which was enacted as P.L. 113-195, “Sunscreen Innovation Act.”
124 FDA, Guidance for Industry, “Sunscreen Innovation Act: Section 586C(c) Advisory Committee Process,” October
2016, https://www.fda.gov/media/94237/download.
125 FFDCA §586C(b)(4) [21 U.S.C. §360fff-3(b)(4)).
126 FFDCA §586C(b)(3) [21 U.S.C. §360fff-3(b)(3)).
127 GAO, SUNSCREEN: FDA Reviewed Applications for Additional Active Ingredients and Determined More Data
Needed, GAO-18-61, November 15, 2017, p. 19, https://www.gao.gov/products/GAO-18-61.
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effectiveness data to support a GRASE determination.128 Specifically, the agency requested
submission of data from human clinical safety studies (including conduct of a Maximal Usage
Trial [MUsT]), human effectiveness studies, and nonclinical animal studies, as well as submission
of human safety data from adverse event reports and related postmarketing information.129 Thus,
despite enactment of the SIA in 2014, as of November 2021, no new sunscreen active
ingredients—that is, ingredients beyond those listed in 21 C.F.R. Part 352 (the stayed
regulations)—have been determined by FDA to be GRASE.130
The SIA had also directed FDA to amend and finalize its then-stayed sunscreen regulations at 21
C.F.R. Part 352 not later than five years after the date of enactment (i.e., by November 26,
2019).131 In February 2019, FDA issued a proposed rule determining that of the 16 active
ingredients listed in the stayed sunscreen monograph, 2 ingredients (zinc oxide and titanium
dioxide) were GRASE for use in sunscreen; 2 ingredients (PABA and trolamine salicylate) were
not GRASE for use in sunscreen due to safety issues; and the remaining 12 ingredients lacked
sufficient safety data for a GRASE determination.132 The proposed rule also would have (1)
required that certain dosage forms of sunscreen (e.g., wipes and towelettes) be considered new
drugs requiring an NDA due to a lack of data showing they were eligible for inclusion in the
monograph; (2) clarified FDA’s expectations for sunscreen testing and record keeping; and (3)
proposed new sunscreen labeling requirements, among other things.133
Despite congressional efforts to facilitate marketing of new OTC sunscreens without an NDA
(e.g., through enactment of the SIA in 2014), FDA has not issued any determinations finding new
sunscreen ingredients to be GRASE, instead requesting that sponsors submit additional safety and
effectiveness data. Given these challenges, in March 2020, the CARES Act included provisions to
address the issuance of sunscreen administrative orders. Specifically, the law allowed a sponsor
of an OTC sunscreen active ingredient subject to a proposed sunscreen order under the SIA to
transition into the new administrative order process under FFDCA Section 505G (established by
the CARES Act).134 The sponsor must have notified FDA of its decision to transition to the new
process within 180 days of enactment, as specified. Otherwise, the order would continue to be
reviewed under the SIA.135 Any final sunscreen orders issued under the SIA would be deemed
final administrative orders under FFDCA Section 505G,136 and certain final sunscreen orders
issued under FFDCA Section 505G are eligible for 18 months of marketing exclusivity.137 The

128 GAO, SUNSCREEN: FDA Reviewed Applications for Additional Active Ingredients and Determined More Data
Needed, GAO-18-61, November 15, 2017, pp. 16-17, https://www.gao.gov/products/GAO-18-61.
129 GAO, SUNSCREEN: FDA Reviewed Applications for Additional Active Ingredients and Determined More Data
Needed, GAO-18-61, November 15, 2017, pp. 18-19, https://www.gao.gov/products/GAO-18-61.
130 FDA, “Regulatory Policy Information | Sunscreen Innovation Act,” accessed November 16, 2021,
https://www.fda.gov/drugs/guidance-compliance-regulatory-information/regulatory-policy-information-sunscreen-
innovation-act.
131 FFDCA §586E [21 U.S.C. §360fff-5], as added by the SIA, required FDA to amend and finalize regulations under
21 C.F.R. Part 352 concerning OTC sunscreen not later than five years after SIA enactment. The SIA was enacted on
November 26, 2014.
132 84 Federal Register 6204, February 26, 2019.
133 Ibid.
134 P.L. 116-136, §3854(a).
135 Ibid.
136 FFDCA §586C(e)(3) [21 U.S.C. §360fff-3(e)(3)], as amended by P.L. 116-136 §3854(b).
137 FFDCA §586C(f) [21 U.S.C. §360fff-3(f)], as added by P.L. 116-136 §3854(b)(3).
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CARES Act sunsets at the end of FY2022, FFDCA Chapter V Subchapter I—Nonprescription
Sunscreen and Other Active Ingredients (i.e., the provisions added by the SIA).138
The CARES Act also directed the HHS Secretary to amend and revise the final administrative
order for OTC sunscreen, which, prior to CARES Act enactment, was represented by the stayed
monograph at 21 C.F.R. Part 352. FDA announced the issuance of a deemed final order for
sunscreens on September 24, 2021, which effectively maintains the pre-CARES Act conditions
under which a sunscreen may be marketed.139 The CARES Act further directed FDA to issue a
proposed order revising this deemed final order for sunscreens not later than 18 months after
enactment (i.e., by September 27, 2021), with no deadline for issuance of a final revised order.140
On September 24, 2021, FDA announced its issuance of the proposed revised order, which if
finalized, would replace the deemed final sunscreen order.141 The proposed order specifies the
conditions under which sunscreen products could be marketed and is substantively the same as
the February 2019 proposed rule issued by FDA.142
Considerations for Congress
The changes made by the CARES Act aimed to address some of the previously identified
limitations of the OTC drug monograph system. When evaluating future policy changes,
Congress may consider three additional issues that may not have been fully addressed by the
enacted legislation: (1) continued marketing of drugs not yet subject to final GRASE
determinations, (2) review of certain sunscreen ingredients, and (3) foreign drug manufacturing.
First, as mentioned above, numerous OTC monograph drugs currently on the market are not yet
subject to final GRASE determinations. Although the CARES Act attempted to remedy this issue
by creating a less burdensome process for finalizing GRASE determinations, some OTC drug
products may remain on the market before a final GRASE determination is made, just as under
the Pre-CARES Act framework. In addition, consistent with the lower regulatory burden provided
under the previous monograph rulemaking process, the modifications made by the CARES Act do
not require a product-by-product review of OTC drug products.
Second, despite congressional efforts to facilitate marketing of new OTC sunscreens via the
monograph process—for example, through enactment of the SIA in 2014—such efforts may not
have had the intended effect. The CARES Act generally provided sunscreen companies with the
option of either continuing through the SIA procedures (until a certain date) or switching to the
administrative order process proposed in the OTC bills. However, it is not clear whether the new

138 FFDCA §586H [21 U.S.C. §360fff-8], as added by P.L. 116-136 §3854(b)(4).
139 FDA, “FDA Takes Steps Aimed at Improving Quality, Safety and Efficacy of Sunscreens,” September 24, 2021,
https://www.fda.gov/news-events/press-announcements/fda-takes-steps-aimed-improving-quality-safety-and-efficacy-
sunscreens.
140 P.L. 116-136 §3854(c)(1).
141 FDA, “FDA Takes Steps Aimed at Improving Quality, Safety and Efficacy of Sunscreens,” September 24, 2021,
https://www.fda.gov/news-events/press-announcements/fda-takes-steps-aimed-improving-quality-safety-and-efficacy-
sunscreens.
142 86 Federal Register 53322, September 27, 2021. In May 2021, FDA had announced its intent to prepare an
environmental impact statement (EIS) prior to issuance of the proposed order, which included a public comment period
to inform scoping of the EIS. As indicated by FDA, the purpose of the EIS is “to evaluate the potential environmental
effects of revised conditions for marketing certain [OTC] sunscreen products” without an approved NDA. In particular,
questions have been raised about two sunscreen active ingredients, oxybenzone and octinoxate, that may affect coral
and/or coral reefs, and were considered GRASE under the stayed monograph at 21 C.F.R. Part 352. See 86 Federal
Register 26224, May 13, 2021.
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process would be advantageous to sunscreen companies given FDA’s expectations regarding the
submission of data from human clinical safety studies (including conduct of a Maximal Usage
Trial [MUsT]), human effectiveness studies, and nonclinical animal studies, as well as the
submission of human safety data from adverse event reports and related postmarketing
information.143 Some stakeholders have questioned the need for these additional studies because
many of these sunscreen ingredients are available in other countries. In addition, some
stakeholders have stated that these studies are as rigorous as, or more rigorous than, those
required for NDA submission and would cost millions of dollars, while the profit margins for
sunscreen products can be low.144 On the other hand, companies now may be incentivized to
conduct additional studies given the eligibility for marketing exclusivity.
Finally, recent reports have raised concerns about the quality of drugs manufactured abroad,
including OTC drugs, and, in particular, a loophole regarding registration of facilities
manufacturing OTC monograph drug ingredients.145 CDER maintains a catalog of all
establishments manufacturing drugs for the United States, whether they are doing so through an
approved application (e.g., NDA) or by registering and listing with FDA to manufacture drugs for
the U.S. market. The catalog includes manufacturers making active pharmaceutical ingredients
(API) and finished drugs. However, the data available to CDER are limited. For example, CDER
has little information about establishments that provide API for drug products that do not need an
approved application from FDA to be marketed (e.g., OTC monograph drugs). According to
testimony from CDER Director Janet Woodcock, “API suppliers for such products may not
register their facility with FDA if they are sending material to a drug product manufacturer
outside the United States to make the FDF [finished dosage form], which is then sold in the
United States.”146 As an example, in the case of an establishment in China manufacturing an API
that is exported to Germany to be made into a finished OTC monograph drug that is then
exported to the United States, the establishment in China may not be registered with FDA, since it
is not importing directly to the United States. Although FDA may obtain information about a
foreign API manufacturer through the NDA process, the agency has limited information about
upstream establishments involved in the manufacture of drug products not subject to an NDA or
ANDA (e.g., OTC monograph drugs).147

143 FDA, “Nonprescription Sunscreen Drug Products—Safety and Effectiveness Data,” Guidance for Industry,
November 2016, https://www.fda.gov/media/94513/download. GAO, SUNSCREEN: FDA Reviewed Applications for
Additional Active Ingredients and Determined More Data Needed, GAO-18-61, November 15, 2017, p. 18,
https://www.gao.gov/products/GAO-18-61.
144 GAO, SUNSCREEN: FDA Reviewed Applications for Additional Active Ingredients and Determined More Data
Needed, GAO-18-61, November 15, 2017, pp. 22-24, https://www.gao.gov/products/GAO-18-61.
145 Statement of Janet Woodcock, MD, CDER Director, FDA, in U.S. Congress, Subcommittee on Health of the
Committee on Energy and Commerce, Safeguarding Pharmaceutical Supply Chains in a Global Economy, hearings,
116th Cong., 1st sess., October 30, 2019, https://energycommerce.house.gov/sites/
democrats.energycommerce.house.gov/files/documents/Testimony-Woodcock-API_103019.pdf.
146 Ibid.
147 Ibid. See also GAO, DRUG SAFETY, Better Data Management and More Inspections Are Needed to Strengthen
FDA’s Foreign Drug Inspection Program, GAO-08-970, September 2008, p. 18, https://www.gao.gov/assets/290/
281366.pdf.
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Appendix. Abbreviations Used in This Report
ANDA
Abbreviated New Drug Application
ANPR
Advance Notice of Proposed Rulemaking
CARES Act
Coronavirus Aid, Relief, and Economic Security Act
CDER
Center for Drug Evaluation and Research
C.F.R.
Code of Federal Regulations
CMO
Contracting Manufacturing Organization
FDA
Food and Drug Administration
FFDCA
Federal Food, Drug, and Cosmetic Act
FM
Final Monograph
GAO
Government Accountability Office
GRASE
Generally Recognized as Safe and Effective
MDF
OTC Monograph Drug Facility
NDA
New Drug Application
OMOR
Over-the-Counter Monograph Order Request
OMUFA
Over-the-Counter Monograph User Fee Act
OTC
Over-the-Counter
PDUFA
Prescription Drug User Fee Act
SIA
Sunscreen Innovation Act
TEA
Time and Extent Application
TFM
Tentative Final Monograph

Author Information

Agata Bodie

Analyst in Health Policy

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FDA Regulation of Over-the-Counter (OTC) Drugs: Overview and Issues for Congress

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