FDA Finalizes Rule on ACNU Drugs, Signaling Opening for Next-Gen OTC Drugs
UPDATE: On January 24, 2025, FDA delayed the effective date for the final rule until March 21, 2025, in accordance with the “Regulatory Freeze Pending Review” Executive Order issued on January 20, 2025. The ACNU Final Rule was originally scheduled to take effect on January 27, 2025.
On December 26, 2024, the U.S. Food and Drug Administration (FDA) finalized its new rule governing approval of a Nonprescription Drug Product with an Additional Condition for Nonprescription Use (the ACNU Final Rule).1 The ACNU Final Rule, which largely hews to the proposed rule, establishes requirements for approval of over-the-counter (OTC) drug products that rely on ACNUs to ensure appropriate self-selection and/or appropriate actual use by consumers without the supervision of a healthcare practitioner. The ACNU Final Rule establishes a new category of over-the-counter drug products: those that include additional measures that go beyond traditional OTC drug labeling. This may open pharmacy shelves to OTC drugs that rely on, for example, mobile applications, in-store digital diagnostics and training, secured websites, telephone response systems, consumer response videos, and other associated platforms that consumers must use before purchasing or using the OTC drug.2
By broadening opportunities for sponsors to assist with selection and use, the ACNU Final Rule has the potential to increase opportunities for drug sponsors to develop novel tools for more complex OTC treatments, including potentially treatments for chronic diseases and conditions.3 And, expansion of OTC labeling beyond the traditional Drug Facts Label — including a high-prominence statement alerting consumers to the ACNU — will have important implications for OTC drugs, as well as potentially setting a precedent for FDA’s use of such statements more generally.
The ACNU Final Rule, which takes effect on January 27, 2025, was updated from the proposed rule in a few notable ways: (1) clarifications regarding the labeling statement required for a product approved with an ACNU; (2) updates to the requirements for postmarket reporting of “ACNU failures”; and (3) modifications to the discussion of when an ACNU product may be misbranded. However, the ACNU Final Rule stopped short of addressing the “800 pound gorillas” in the proposed rule. First, despite stakeholder comments, the agency did not modify its approach under which an OTC drug would have to fail without an ACNU before endeavoring to include one. Second, FDA did not make changes to address comments objecting to allowing a prescription and OTC version of the same drug product with an ACNU from being marketed simultaneously. We address each of these in turn.
Background
Under the preexisting OTC regulatory framework, manufacturers could either seek approval of an OTC product in an new drug application (NDA) or else market the drug without premarket review by meeting all of the requirements of an OTC monograph.4 An approved NDA for a prescription drug can be “switched” to OTC on the basis of data demonstrating that consumers can properly select and use the product safely without healthcare practitioner supervision.
The ACNU Final Rule added another option to the mix — allowing manufacturers of certain drugs to submit an OTC NDA with an ACNU that bridges any gaps between involvement of a prescribing healthcare prescriber and proper selection and use by patients in the absence of such supervision.
FDA published the proposed rule, which coined the term “ACNU,” in 2022. See our July 2022 Advisory for further information. In response, the agency received about 200 comments from entities and individuals including members of the pharmaceutical industry, trade organizations, public advocacy groups, and consumer groups. These comments fell into general topics such as the proposed definition of ACNU; ACNU application requirements and timing; exclusivities; labeling and reporting requirements; simultaneous marketing; and, treatment of generic drugs under the proposed rule.
Clarifications Made in the Final Rule
In response to comments received on the proposed rule, FDA revised the ACNU Final Rule to clarify several aspects related to labeling, the application process, and reporting requirements.
Labeling Requirements
The ACNU Final Rule added flexibility to certain labeling requirements, including the requirement that labeling include adequate directions for use. In particular, the proposed rule would have required an OTC drug product approved with an ACNU to include specified labeling statements notifying consumers about the presence of an ACNU and how that ACNU is to be fulfilled. Some of these requirements were made final. For example, an OTC ACNU product must include a statement that says, on the principal display panel and also on the immediate container surface, “[y]ou must complete an extra step to see if this drug is safe for you before you use it. Do not take this drug without completing this step. See the Drug Facts Labeling for more information.”
But, FDA agreed with commenters recommending flexibility in how the ACNU is conveyed to patients, and updated the labeling requirement in the ACNU Final Rule to provide FDA an option to approve an applicant’s revisions if such revisions to the text are appropriate for the drug product and are reasonably understood by consumers.5 Exemptions applicable to OTC drugs in small containers will not extend to OTC ACNU products. Those products generally will have to comply with applicable labeling requirements regardless of size. We will be on the lookout for additional guidance from FDA concerning labeling statements, locations, and whether symbols or other non-textual objects may be used as the agency gains experience in the type and breadth of proposed and approved ACNUs.
Requirements for OTC NDAs With ACNU
Commenters recommended that FDA revise the proposed ACNU definition to underscore that applicants, not FDA, should determine when an ACNU is necessary. FDA’s position that the agency remains the ultimate decision maker regarding whether an ACNU is necessary also raises timing and resource questions, which was not lost on commenters.
Perhaps not surprisingly, FDA disagreed with this recommendation because of the agency’s concern that an alternative approach would result in unnecessary ACNUs. Instead, FDA encouraged applicants to share and discuss their drug development plans with FDA and seek feedback on whether an ACNU is necessary. As it stands, sponsors are required to include information describing, among other things, how the ACNU ensures appropriate self-selection or appropriate actual use, the additional conditions(s) implemented, and “the criteria by which the consumer would successfully fulfill the ACNU.”6 It will be interesting to see how much direction FDA gives in the recommended meetings and whether any quasi-assurances are sufficient to allay investor concerns about potentially unnecessary ACNU-related studies.
The ACNU Final Rule clarifies that applicants are required to submit a separate application for an OTC drug product with an ACNU7 — not use the Rx-OTC switch process.8 This clarification is important because commenters asserted that the proposed rule was inconsistent with existing FDA bundling guidance and FDA authorities concerning NDA and abbreviated new drug application (ANDA) supplements.9 However, FDA disagreed, noting that the ACNU Final Rule is not inconsistent with FDA’s bundling guidance because does it not address submissions for an OTC drug with an ACNU and also that the ACNU Final Rule does not change or effect an applicant’s ability to submit a supplemental application for an Rx-OTC switch for a drug product without an ACNU.10
ACNU Failure Reporting Requirements
OTC-ACNU drug sponsors will be required to monitor, evaluate, and report any “ACNU failures,” within 15 calendar days through FDA’s Adverse Event Reporting System. The ACNU Final Rule defines “failure” as the failure of either (a) the implementation of a key element of the ACNU or (b) the operationalization of an ACNU. From FDA’s perspective, this revision ensures greater consistency with existing reporting requirements. Specifically, FDA clarified applicant obligations and removed the proposed text, “that may cause or lead to inappropriate medication use or harm” from the description of when a report is required, meaning that an ACNU failure can occur and must be reported even if the failure did not cause or lead to inappropriate medication use or consumer harm. FDA also clarified that if an applicant receives or otherwise obtains information regarding an adverse drug experience prior to the submission of a report of an ACNU failure, a single individual case report must be submitted.
Looking ahead, FDA notes that it intends to propose a rule to modernize post-marketing safety reporting requirements for human drug and biologic products, which may also impact the requirements of the ACNU Final Rule. No information was included about proposed timing of such a proposed rule.
Clarifications Left Unmade in the Final Rule
Perhaps more important than what the rule said is what the rule left unsaid. FDA declined to revise the ACNU Final Rule in several important respects that had drawn substantial commentary from stakeholders: what contours define whether a condition of use is an ACNU, how will regulatory exclusivities work for products with ACNU, and how generic drugs will be treated when they reference listed drugs with ACNU. In addition, FDA chose not to take head on the thorny issue of whether it is, in fact, permissible for the same product to be marketed concurrently as both prescription and OTC. We expand on each of these below.
Simultaneous Marketing
Perhaps the most awaited decision by FDA concerning the proposed rule was the answer to questions raised by commenters regarding whether and how a sponsor can simultaneously market a drug as an OTC drug with an ACNU and as a prescription drug. Industry was particularly focused on this issue because simultaneous marketing generally is not permitted for prescription and non-ACNU OTC drugs.11 FDA has stated that a prescription product and an OTC product cannot be simultaneously marketed unless there are meaningful differences between the products. As the Consumer Healthcare Products Association’s (CHPA) comment on the proposed rule explained, this is a question of great significance “as simultaneous marketing of a previously approved generic prescription product would undercut any incentive for companies to take on the enormous costs of a switch in the first instance.”12 In the ACNU Final Rule, FDA establishes that an ACNU presumptively means that the OTC version of a drug product is meaningfully different from the prescription version of the drug. And, FDA explained in support of this surprising position, the ability to simultaneously market an OTC ACNU drug and a prescription one helps fulfill key goals of the ACNU Final Rule, including increasing options for OTC drug product applicants, and increasing consumer access to safe and effective drugs. The agency appears to be anticipating litigation on this point — going so far as to include its position that, should the simultaneous marketing provision be stayed or determined to be invalid or unenforceable, “the remaining provisions of the rule should no longer continue in effect because the rule would not meet FDA’s objectives.”13
Comments had been diametrically opposed on the issue. On one side, commenters argued that simultaneous marketing would lead to a less competitive marketplace by disincentivizing investment in prescription-to-OTC switches through the existing NDA-supplement framework. These commenters also asserted that simultaneous marketing is not necessary to increase access and that permitting simultaneous marketing would undermine both incentives to innovate through the new pathway and regulatory exclusivity awarded to the OTC drug because it would permit continued marketing of generic prescription drugs that would compete with the OTC ACNU drug. On the other side, commenters argued that simultaneous marketing should be permitted to align with FDA’s requirement that an OTC drug with an ACNU be submitted in a new NDA (rather than an NDA supplement, which is typically done for an Rx-OTC switch).
FDA maintained that OTC versions of a drug could have an ACNU, while prescription versions did not, and that approval of an NDA for a prescription drug is not a prerequisite for approval of an OTC drug with an ACNU. Commenters also suggested that an OTC ACNU drug would be misbranded unless a meaningful difference “in indication, strength, route of administration, dosage form, or patient population” existed between the OTC and prescription versions, because the OTC version would not include “Rx Only” in its label (or because the prescription version would).14 FDA disagreed, explaining that it does not view an ACNU as “labeling” because an ACNU “is a condition that must be affirmatively fulfilled by a consumer,”15 and also that a drug can both meet and not meet the criteria for necessitating a prescription.16
Generic Drugs
Several comments raised questions about how the ACNU Final Rule would affect generic drugs, including the content of ANDAs and generic drug labeling.
According to FDA, an ANDA that references an OTC drug product with an ACNU (the “reference listed drug” or RLD) must demonstrate that the generic ACNU has the same purpose as the RLD’s ACNU and that the “key elements of the ACNU are the same.”17 However, FDA will not require that the generic ACNU be operationalized the same way. If the generic applicant plans to operationalize the ACNU in a different way than the RLD, FDA expects that consumers would be able to fulfill both the listed drug’s ACNU and/or the generic drug’s ACNU in cases where only one version is available. Sponsors looking to submit an ANDA referencing an OTC RLD with an ACNU will, however, be required to match the purpose of the generic ACNU to that of the RLD. FDA will approve a description of the key elements of a RLD’s approved ACNU which will be made publicly available (in labeling). The generic drug will still need to comply with “same labeling” requirements, which will almost certainly create further questions; if the operationalization of the ACNU is different, one wonders whether the label would need to be different as well.
FDA Declines To Address Exclusivity or Biological Products in the Final Rule
FDA notes in the preamble to the ACNU Final Rule that it received comments seeking clarification on whether an NDA with an ACNU would be eligible for a three-year new clinical investigation exclusivity, or whether an ANDA could give rise to a 180-day exclusivity period in cases where the RLD was originally approved as a prescription drug.18 In response, FDA declined to include any language in the ACNU Final Rule and instead referred sponsors to the existing statutory requirements for exclusivity in anticipation of the need to evaluate such questions on a case-by-case basis given the likelihood of unique and variable ACNUs.19
Further, the preamble to the ACNU Final Rule does not include any discussion of whether a similar mechanism for biological products is in the works or otherwise being developed, so applicants developing biosimilar products will have to stay patient for future news. OTC biologics are rare, to be sure, but particularly after the March 23, 2020 Biologics Price Competition and Innovation Act transition, FDA may need to take these questions on.20 Likewise, we will be thinking about whether and, if so how, OTC monographs may be updated to include ACNU.
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© Arnold & Porter Kaye Scholer LLP 2025 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.
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89 FR 105288 (Dec. 26, 2024); see proposed rule at 87 FR 38313 (June 28, 2022).
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Id., see also, “FDA Proposes Rule on Use of Innovative Technologies and Other Conditions of Use to Expand Options for Nonprescription Drug Products” (Jun. 28, 2022).
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See Submitting Separate Marketing Applications and Clinical Data for Purposes of Assessing User Fees.
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Section 503(b) of the Federal Food, Drug, and Cosmetic Act.
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CHPA Comments on the FDA Proposed ACNU Final Rule, FDA Docket #FDA-2021-N-0862, at 6.
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89 FR 105308 (Response No. 39); see further, id. at Response Nos. 40-43.
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Id. at 150309 (Response No. 40).
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Id. See section 503(b)(1) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. § 353(b)(1)).
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89 FR 105324 (Comment and Response No. 72).
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See Pub. L. No. 111-148, §§ 7001-7003, 124 Stat, at 7002(e).