This bill amends the Federal Food, Drug, and Cosmetic Act to extend and revise the user-fee program for over‑the‑counter (OTC) monograph drugs for fiscal years 2026–2030. It changes when and how facility fees are assessed and due, updates the revenue formula with specific supplemental amounts, and authorizes a one‑time workload fee adjustment tied to facility counts and arrears.
The bill also adds a definitional hook allowing recognition of voluntary consensus standards for new or modified testing procedures.
Beyond the fee mechanics, the measure expands reporting and transparency obligations (new metrics in the FDA’s annual performance report and public meeting minutes), directs GAO studies on OTC supply chains and Rx‑to‑OTC switches, and requires new FDA guidance on topical active‑ingredient evidence standards and non‑animal testing alternatives. The statute sunsets the fee authority October 1, 2030, and makes fees effective starting October 1, 2025.
At a Glance
What It Does
Recalibrates OTC monograph facility and order‑request fees for 2026–2030 with explicit supplemental dollar additions for early years, changes assessment periods and due dates (including a two‑installment approach for FY2027), and permits a one‑time workload-based increase if facility counts exceed a threshold and arrears are low.
Who It Affects
OTC monograph drug facility registrants and contract manufacturers (they pay facility fees and face new due dates), FDA (receives dedicated user‑fee revenue and new reporting obligations), manufacturers seeking Rx‑to‑OTC switches, and standards organizations that develop voluntary consensus testing procedures.
Why It Matters
The bill shifts funding and administrative predictability for the FDA’s OTC monograph work while adding concrete timelines and transparency requirements that affect how sponsors plan submissions, how FDA budgets and reports performance, and how nonclinical testing alternatives are evaluated for topical drugs.
More articles like this one.
A weekly email with all the latest developments on this topic.
What This Bill Actually Does
SB2292 is a targeted reauthorization and revision of the OTC monograph user‑fee program. It keeps fees dedicated to OTC monograph activities but changes the base assessment windows used to determine who pays and when.
For 2026 the statute uses a 12‑month lookback ending Dec 31, 2025; for 2027 a nine‑month lookback ending Sep 30, 2026; and for 2028+ the lookback returns to a typical 12‑month period ending the prior Sep 30. The bill also prescribes explicit fee due dates: a June due date for FY2026 (or later if appropriations aren't in place), a two‑installment model for FY2027 (50% on or after Oct 1, 2026; 50% Feb 1, 2027, subject to appropriations timing), and standard Oct‑1 due dates thereafter tied to appropriations enactment.
On revenue, the bill replaces prior formulas with a multi‑part approach for 2026–2030: an annual base revenue linked to FY2025 levels, an inflation adjustment, an operating reserve adjustment when applicable, specified additional direct cost line items, and three named supplemental dollar amounts ($2,373,000 for 2026; $1,233,000 for 2027; $854,000 for 2028). It also creates a narrowly defined one‑time facility fee workload adjustment for FY2028–2030 if the average facility count over the prior three years exceeds 1,625 and arrears appearances among those facilities are under 30 percent; the adjustment scales with the excess facility percentage.The bill tightens several administrative and programmatic pieces.
It adds a definition that allows the FDA to recognize new or modified testing procedures when they reflect voluntary consensus standards and are recognized through an established guidance process. It augments the FDA’s annual performance report with granular metrics (counts and timelines for Tier 1/2 and specified safety order requests, processing timelines, postmarket activity, facility registration/payment status, and use of testing/evidence standards for topical products).
The Secretary must publish meeting minutes from fee negotiations and the bill directs two GAO reports — one on OTC monograph supply chains (due Sept 30, 2027) and one on Rx‑to‑OTC switches (within one year of enactment) — and requires FDA guidance and stakeholder engagement around Rx‑to‑nonprescription switches and non‑animal testing for topical ingredients. Finally, the authorization and its reporting provisions sunset in 2030–2031, and fees are set to be assessed starting Oct 1, 2025.
The Five Things You Need to Know
The bill specifies three supplemental facility‑fee additions: $2,373,000 (FY2026), $1,233,000 (FY2027), and $854,000 (FY2028) that are added to revenue targets.
A one‑time workload adjustment may raise facility fee revenue in FY2028–2030 only if the 3‑year average facility count exceeds 1,625 and fewer than 30% of those facilities appeared on arrears lists; the adjustment equals the excess facility percentage times the total facility revenue amount.
FY2027 facility fees are payable in two installments: 50% on or after October 1, 2026 (subject to appropriations), and the remaining 50% on February 1, 2027 (delayed if appropriations are not enacted).
Section 744L gains a new clause permitting the FDA to accept additions or modifications to testing procedures that reflect voluntary consensus standards recognized through FDA guidance (initially July 2023 guidance or successor), explicitly tying FDA recognition to standards‑development organizations.
The bill requires two GAO studies: an OTC monograph supply chain assessment (due Sept. 30, 2027) and an evaluation of Rx‑to‑OTC switch approvals and timelines (due within 1 year of enactment).
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Recognize voluntary consensus testing standards
This section adds clause (vii) to the definitions used for OTC monograph activities: the FDA may treat the addition or modification of a testing procedure as within scope when that procedure reflects a voluntary consensus pharmaceutical quality standard established by a national or international standards body and recognized through FDA guidance. Practically, this creates a route for industry standards (for example, USP or ISO-derived methods) to be accepted without bespoke regulatory text, but only if the FDA follows its guidance process to recognize the standard.
Reset assessment lookback periods and fee due dates
The bill changes how the agency determines the applicable period for assessing who is subject to facility fees (different lookback windows for FY2026, FY2027, and FY2028+). It also prescribes explicit due dates: a June 1 locus for FY2026 (or later if appropriations are missing), a split payment schedule for FY2027, and a standard post‑Oct‑1 schedule for subsequent years tied to appropriations. These changes affect cash flow planning for registrants and require close attention to appropriations timing.
New revenue formula and named supplemental amounts
For 2026–2030 the statute composes the facility fee revenue target from multiple parts: an annual base revenue (anchored to FY2025 levels), an inflation adjustment, operating reserve adjustments if applicable, direct cost adjustments, and three explicit dollar add‑ons for the early years. That gives FDA-specific dollar increases rather than leaving all adjustments to formulaic indexing, increasing transparency about planned revenue but also locking in near‑term cost recovery expectations.
Inflation indexing, specified per‑year fee caps, and a conditional one‑time increase
The bill refines the inflation adjustment language and sets discrete per‑year figures for certain adjustments (e.g., facility fee amounts for specific years). It creates a narrowly tailored, one‑time workload adjustment available in a single future year (2028–2030) if three conditions are met: no prior use of the adjustment, average facility counts exceed 1,625, and arrears rates among those facilities are below 30%. The adjustment is formulaic—based on the excess facility percentage—so its magnitude will scale with industry growth above the threshold.
Expanded annual reporting and public negotiation minutes
The FDA’s annual fee performance report must now include granular metrics: counts and finalization rates for different OTC monograph order request tiers, average processing timelines by submission type, postmarket safety activities, registration and fee payment status for facilities, and progress on topical evidence/testing standards. The bill also requires the agency to publish detailed minutes of fee‑negotiation meetings on its public website within 30 days, including substantive proposals and significant controversies (while preserving statutory confidentiality protections).
Evidence and testing standards for topical active ingredients; non‑animal testing guidance
Adds subsection 505G(r), directing FDA to permit use of real‑world evidence to supplement traditional trial data when evaluating topical active ingredients, and to consider nonclinical testing alternatives to animal studies. The Secretary must issue draft guidance on use of non‑animal testing alternatives for topical products within one year, and the provision clarifies it does not alter statutory safety/effectiveness standards.
Rx‑to‑nonprescription switch process: meetings, guidance, and stakeholder plan
Adds a new subsection that lets sponsors request pre‑submission meetings specifically to plan Rx‑to‑OTC switch applications, requires FDA to publish guidance within 18 months clarifying evidentiary expectations for such switches (including how literature, prior safety experience, and decision aids may be used), and directs FDA to produce a stakeholder engagement plan addressing candidate drugs for Rx‑to‑OTC consideration.
Effective date, fee assessment start, and sunsets
The bill takes effect Oct 1, 2025 (or upon enactment if later), but mandates that fees be assessed beginning Oct 1, 2025 regardless of enactment timing. The user‑fee authority in sections 744L and 744M expires Oct 1, 2030, and the reporting provision in 744N sunsets Jan 31, 2031. A savings clause preserves prior law for fees assessed before FY2026.
This bill is one of many.
Codify tracks hundreds of bills on Healthcare across all five countries.
Explore Healthcare in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Food and Drug Administration — Gains multi‑year, dedicated user‑fee revenue with explicit supplemental items and a conditional workload adjustment, which the agency can use to staff and prioritize OTC monograph review and postmarket work.
- Standards development organizations (e.g., USP, ISO) — The statutory link to voluntary consensus standards creates a clearer pathway for their pharmaceutical quality testing methods to be recognized by FDA for OTC monograph products.
- Manufacturers pursuing Rx‑to‑OTC switches — Benefit from a mandated FDA guidance, pre‑submission meetings framework, and a public engagement plan that should improve predictability around evidentiary expectations.
- Sunscreen and topical product stakeholders — Gain a specific statutory mandate that FDA consider historical safety data, SPF public‑health context, and non‑animal testing alternatives when finalizing sunscreen ingredient orders.
Who Bears the Cost
- OTC monograph facility registrants and contract manufacturers — Face reassigned assessment periods, new due dates (including a two‑installment requirement in FY2027), and potential higher fee burdens if the one‑time workload adjustment triggers.
- Small and niche manufacturers — May be disproportionately affected by near‑term supplemental dollar add‑ons and compressed payment schedules, complicating cash‑flow and pricing decisions.
- FDA administrative teams — Must produce more detailed annual reports, publish negotiation minutes within 30 days, develop guidance on non‑animal testing and Rx‑to‑OTC criteria, and respond to GAO study requests, creating additional resource and coordination demands.
- Industry negotiators — Will operate with the knowledge that negotiation minutes will become public, which could alter negotiation dynamics and increase legal or reputational risk for proposals discussed in those forums.
Key Issues
The Core Tension
The central dilemma is balancing predictable, dedicated funding for FDA’s OTC monograph responsibilities against the burden and rigidity that explicit fee formulas, named dollar additions, and tight payment schedules impose on registrants—especially smaller firms—and the risk that transparency and standards‑recognition mechanisms will inadvertently change negotiation dynamics and the innovation pathway for new testing methods.
The bill trades flexibility for clarity in several places. Specifying dollar add‑ons for certain years and setting precise lookback windows and due dates reduces ambiguity about revenue targets but also hard‑wires near‑term cost recovery that may not align with actual workload or market shifts.
The one‑time workload adjustment is narrowly conditional (average facilities >1,625 and low arrears), which limits its usefulness if facilities grow slowly or arrears behavior changes; it also depends on accurate facility counts and arrears lists, administrative datasets that can be noisy.
The public‑minutes requirement increases transparency but raises implementation questions: how much detail constitutes the required "robust written minutes," how to redact confidential commercial information consistent with section 301(j) and FOIA exemptions, and whether publicizing proposals will chill frank negotiation. Similarly, recognizing voluntary consensus standards expedites acceptance of accepted methods but risks unintentionally locking in standards development organization processes as the primary route for innovation; newer or proprietary methods may face a higher hurdle to acceptance unless the guidance process is nimble.
Finally, the non‑animal testing and real‑world evidence directions for topical drugs set laudable objectives but place heavy reliance on guidance timing and content; absent specific validation pathways or regulatory acceptance criteria, sponsors may face uncertain paths for meeting the statutory instructions.
Try it yourself.
Ask a question in plain English, or pick a topic below. Results in seconds.