Over-the-Counter Drug (OTC)

Key facts

Legal pathways

OTC monograph (FD&C Act Section 505G) or an approved NDA or ANDA

Monograph reform

CARES Act of 2020 replaced rulemaking with administrative orders

Required label

Drug Facts label, 21 CFR 201.66

User fees

Over-the-Counter Monograph User Fee Program (OMUFA)

What is an OTC drug?

OTC drugs treat conditions that people can recognize and manage themselves, such as pain, heartburn, allergies or colds. Ibuprofen, antacids and many antihistamines are common examples. The product must be safe and effective when used as labeled without a clinician supervising.

OTC status belongs to a specific product, strength and use rather than to an ingredient. The same ingredient can be prescription-only at one strength or for one indication and OTC at another. Some OTC products, such as those containing pseudoephedrine, are kept behind the pharmacy counter because of federal and state sales limits.

How OTC drugs reach the market

There are two main routes, plus a path for moving prescription drugs to OTC status:

• OTC monograph: a monograph sets conditions, such as active ingredients, doses and labeling, under which a category of products is generally recognized as safe and effective. Conforming products can be marketed without individual FDA approval.
• Monograph reform: the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 added Section 505G to the Federal Food, Drug, and Cosmetic Act, replacing slow rulemaking with administrative orders and creating OTC monograph user fees.
• NDA or ANDA: products outside a monograph, such as new ingredients or dosage forms, need an approved New Drug Application or Abbreviated New Drug Application.
• Rx-to-OTC switch: a sponsor shows, often with label comprehension and actual use studies, that consumers can use a former prescription drug safely, as the FDA accepted for naloxone nasal spray in 2023.

Why OTC status matters

OTC status moves a product out of most claims-based data and payment systems:

• Coverage: Medicare Part D generally does not cover OTC drugs, and many commercial plans exclude them, so a switch to OTC can shift costs from payers to consumers.
• Market visibility: OTC sales flow mostly through retail cash purchases, so they are largely invisible in prescription claims and prescriber-level data.
• Pricing benchmarks: NADAC includes some OTC products and flags them, so filter on that flag before comparing prescription drug prices.
• Competitor counts: the NDC Directory marketing category separates monograph products from NDA and ANDA products, which matters when counting approved competitors.