OMUFA II Reauthorization and New Fee Structure Confirmed

The FDA has announced the fiscal year (FY) 2026 fees for the Over-the-Counter (OTC) monograph order management program (OMUFA II), which aims to secure funding for the review of non-prescription OTC monograph drugs. This follows the reauthorization of OMUFA II on March 18, 2026. Under the new fee structure, OTC manufacturers (MDFs) will pay an annual facility fee of $19,188, while contract manufacturing organizations (CMOs) will pay $12,792. Additionally, the order modification request (OMOR) fees for drug monograph revisions have been set at Tier 1: $587,529 and Tier 2: $117,505. This decision comes after the U.S. Congress passed the OMUFA II reauthorization bill on November 12, 2025, ensuring a stable funding source for the FDA's regulatory review processes.

Background of Fee Reduction and Increase in Registered Facilities

Notably, the FY 2026 facility fee has been significantly reduced to almost half of the FY 2025 fee, which was $37,556. This reduction is attributed to the substantial increase in the number of registered OTC manufacturing facilities and CMOs. According to the OMUFA legislation, the FDA calculates individual facility fees based on the total number of registered facilities to achieve the statutory annual target revenue of $16,885,000. Therefore, the increase in the denominator (registered facilities) has resulted in a significant reduction in the financial burden for large healthcare companies like Kenvue (KVUE) and Haleon (HLN) in maintaining their individual facilities.

Introduction of Installment Payments and Expansion of Regulatory Flexibility

One of the most significant changes in the OMUFA II program is the introduction of a more flexible fee payment system. Starting in FY 2027, manufacturers will have the option to pay the fees in two installments of 50% each, instead of a single lump-sum payment. The first installment will be due on October 1, 2026, and the remaining balance will be due on February 1, 2027. This change reflects a consensus between the FDA and the industry to alleviate the short-term financial burden on small and medium-sized manufacturing facilities and multinational CMOs, enabling them to maintain stable production.

Regulatory Actions and Market Exclusion Risks for Non-Payment

Failure to pay the required OMUFA facility fees within the specified timeframe will result in severe regulatory consequences. Facilities that fail to pay will be immediately listed on the FDA's official arrears list. Furthermore, all products manufactured by these facilities will be considered misbranded under the Federal Food, Drug, and Cosmetic Act, leading to a complete ban on their distribution and import into the United States. This can severely damage the brand reputation of global pharmaceutical companies and potentially lead to production disruptions, making thorough budget management and regulatory monitoring essential for manufacturers.

Acceleration of OTC Market Innovation and Long-Term Impact

With the stabilization of funding, the FDA will be able to accelerate the review process for the safety and efficacy of OTC drug ingredients, which has been a long-standing issue. The U.S. OTC market, valued at approximately $30 billion annually, is undergoing a complete transformation from a traditional system with multi-year administrative procedures to a streamlined administrative order system. As a result, leading companies such as Kenvue and Haleon will be able to significantly shorten the ingredient approval timeline and accelerate the launch of new products that cater to consumer trends.