Hatch Closing Act: OTC Monograph Reform Legislation?

The Utah Republican has been instrumental during his more than 40 years in office in passing legislation central to the growth of the OTC drug and dietary supplement industries. But the expansion of the OTC market is stifled by FDA's monograph system for making more ingredients available, a process agency officials say no longer works.

Sen. Orrin Hatch's legacy as a pharmaceutical industry champion could grow in his final year in office if he puts his support behind reforming FDA's OTC monograph system, legislation that could be as influential in the consumer health space as any he's already shepherded.

The Utah Republican, who announced his retirement on Jan. 2, has been instrumental during more than 40 years in office in passing legislation across a wide variety of topics and issues, including acts central to the growth of both the OTC drug and dietary supplement industries.

The expansion of the OTC drug market, however, is stifled by FDA's current rules for making more ingredients or indications available by adding them to the monograph through showing they are generally regarded as safe and effective for the indicated use, a process that agency officials, including Commissioner Scott Gottlieb, say no longer works.

Sen. Orrin Hatch's name is synonymous in the OTC sector with incentives firms are eligible for when they sponsor proposals to move Rx ingredients to nonprescription.

The monograph system began in 1972 to allow long-used ingredients to remain available and to make additional ingredients available. While the new drug application process, for nonprescription as well as Rx ingredients, evaluates specific products, monograph applications concern ingredients or indications allowed for multiple products.

The monograph system has stalled, however, due to its requirement for notice-and-comment rulemaking for any addition or change, impeding not only adding OTC ingredients and indications but also preventing FDA from efficiently responding to problems with monograph products on the market.

Proponents suggested adding OTC monograph reform, including user fee provisions, to legislation that renewed FDA's existing pharmaceutical and medical device user fee programs, but Congress in August passed the reauthorization without the monograph provisions and the OTC industry has turned its hopes to separate legislation.

Name Synonymous With Health Care

Should Hatch or other members of Congress get behind monograph reform legislation and engineer its passage, the bill would join a list of others he has authored or sponsored that are integral to the success of businesses across the pharma and nutritional products sectors and to consumer access to self-care products.

"Obviously, he's been a champion for the entire pharmaceutical industry," said pharma regulatory counsel Kurt Karst, a director at Hyman, Phelps & McNamara PC in Washington.

A 1984 bill Hatch co-authored, the Drug Price Competition and Patent Term Restoration Act (Public Law 98-417), encouraged production of Rx generic drugs and established FDA's current system of regulating the sector, becoming known around the pharma industry as the Hatch-Waxman Act. But in the OTC sector, it made his name synonymous with incentives firms are eligible for when they sponsor proposals to move Rx ingredients to nonprescription access, or otherwise introduce an OTC ingredient through the new drug application process.

Among dietary supplement manufacturers and marketers, the seven-term senator's name likely is even more synonymous with legislation that established FDA's framework for oversight of the industry, keeping open a door for growth and innovation while imposing regulations on manufacturing and labeling. The Dietary Supplement Health and Education Act (PL 103-417) passed in 1994, or general references to it are common in most media accounts about FDA's regulation of the industry, or about firms' compliance with their regulatory burdens.

Hatch also is a co-chair of the Congressional Dietary Supplement Caucus (see sidebar).

Additionally, both the OTC drug and supplement industries worked with Hatch as a primary author of the Dietary Supplement and Nonprescription Drug Consumer Protection Act (PL 109-324) passed in 2006 that requires marketers to submit to FDA reports of serious adverse events they receive about their products and to include on labels a phone number and address for receiving those reports along with a statement that explains why the information is included.

That same year, Hatch received the Consumer Healthcare Products Association’s lifetime achievement award for his actions creating a positive impact on consumer health care.

"As we reflect on Sen. Hatch’s many policy achievements over four decades in the US Senate, his contribution to the health care of our nation is particularly impressive. In addition to his authorship of landmark legislation with Congressman Henry Waxman, spearheading pharmaceutical innovation, Sen. Hatch has been a tireless advocate for responsible self-care and measures that empower consumers through access to over-the-counter medicines and dietary supplements," CHPA President and CEO Scott Melville said in a statement.

Hatch also supports eliminating the Affordable Care Act provision that requires consumers to have prescriptions to purchase OTC drugs with health savings, flexible spending and other pre-tax accounts. He introduced the Health Savings Act of 2017, S.403, matched by H.R. 1175 from Rep. Erik Paulsen, R-MN, to make the change and also allow dietary supplements to be considered deductible medical expenses under the accounts among a broad swath of changes it proposes to replace the ACA. (Also see "Direct OTC Purchases With Pre-Tax Accounts Swing On ACA Change, Not Repeal" - Pink Sheet, 27 Feb, 2017.) The bills have not moved out of committee.

"This common-sense legislation is aimed at improving access to quality, affordable healthcare while reducing other healthcare costs and improving prevention and wellness," Melville said.

Hatch has not been linked so far to discussions on monograph reform, and the senator's Capitol Hill staff did not respond to requests for comment about his potential interest in supporting legislation.

Karst suggested legislation on monograph reform might be a natural next step for Hatch. "Maybe he's interested in getting involved with it as his final achievement for the industry in his last year," he said.

CHPA declined to comment on potential Hatch interest in the legislation.

Changing 'Obscure Program' Gains Steam

Although FDA's monograph accounts for the majority of OTC ingredients available in the US, the program is little known outside the agency and industry stakeholders. That's partly because with the exception of sunscreen ingredient firms' exasperation with failing to clear FDA's threshold for adding ingredients or indications, the monograph system receives a fraction the attention of the agency's decisions on Rx-to-OTC switches.

Even after Congress passed legislation backed by the sunscreen products sector to set deadlines on FDA evaluations of proposals and facilitate adding ingredients to the monograph, the agency in 2015 advised eight sponsors that their proposals provided insufficient data to support GRASE determinations. The notices, which were published within a deadline set by the Sunscreen Innovation Act (PL 113-195), stated that the applications did not contain adequate studies on sensitization or adequate sample sizes, or featured incomplete study reports. (Also see "Sunscreen Group Remains Cloudy About FDA's Ingredient Evaluations" - Pink Sheet, 3 Nov, 2016.)

FDA expected when the process was launched to complete all monographs by 2000, but 25 of the 80 planned monographs remain in tentative final monograph status.

“The rulemaking process has become very long and very inefficient and just doesn’t work for getting monographs done in a very timely manner. There is no end in sight in getting these TFMs finished,” said Center for Drug Education and Research Direct Janet Woodcock at a two-day public hearing in 2014 on potential improvements to the monograph system. (Also see "“No End In Sight” For Completing OTC Monographs – CDER Director Woodcock" - Pink Sheet, 26 Mar, 2014.)

However, during a House subcommittee hearing on draft legislation in September 2017, Woodcock allowed that monograph reform has not been a priority legislative issue at the agency. "This is a rather obscure program and many people are unaware of it and how it works," she told the Energy and Commerce Committee's Health subcommittee. (Also see "Legislators On OTC Monograph Reform: What Took You So Long?" - Pink Sheet, 14 Sep, 2017.)

Subcommittee Chairman Michael Burgess, R-TX, didn't offer a timeline for the subcommittee's potential work on monograph reform legislation, but he agreed with FDA's assessment that the program is bogged down by a public rulemaking process that turns any change commonly into more than five and sometimes as many as 10 years of work. "The regulatory agency needs to be much more agile than it currently is able to be under the monograph system," Burgess said.

The discussion draft, principally authored by Energy and Commerce member Robert Latta, R-OH, would provide more flexibility for OTC monograph decisions and establish user fees and includes provisions to provide market exclusivity for sponsors of certain monograph proposals. (Also see "Exclusivity Provision Surfaces In OTC Monograph Bill" - Pink Sheet, 14 Sep, 2017.)

Meanwhile, Commissioner Gottlieb said during his confirmation hearing in April that he knew of monograph concerns before he ended a previous post in FDA in 2007. "Anytime a problem persists from when I was there 10 years ago to today it is an indication that I think it requires immediate action," he said. (Also see "OTC Monograph Woes No Surprise To FDA Commissioner Nominee Gottlieb" - Pink Sheet, 5 Apr, 2017.)

Health, Education, Labor and Pensions Committee member Sen. Robert Casey, D-PA, and Sen. Johnny Isakson, R-GA, circulated draft monograph reform legislation earlier than House members and hoped to have it added to the FDA Reauthorization Act on reauthorizing for five years FDA's existing user fee programs for drugs and medical devices. (Also see "OTC Monograph User Fees Totaling $22m To $34m Floated In Senate Discussion Draft" - Pink Sheet, 19 May, 2017.)

However, the path to reform legislation became more difficult when Congress in August passed FDARA (PL 115-52) without the monograph provisions. (Also see "OTC Monograph User Fees Still On The Table, But Not In Legislation" - Pink Sheet, 11 Aug, 2017.)

Through Jan. 9, no member in either chamber had introduced legislation to make the changes.

From the editors of the Tan Sheet.