Philippines FDA Finalizes Revisions to LTO Guidelines

On November 27, 2024, Philippines Food and Drug Administration (FDA) issued the Administrative Order (AO) No. 2024-0015, titled Prescribing the Rules, Requirements and Procedures in the Application for License to Operate of Covered Health Product Establishments with the Food and Drug Administration Repealing for the Purpose Administrative Order No. 2020-0017. It shall take effect 15 days after its publication in the Official Gazette or in a newspaper of general circulation, and upon filing at the Office of the National Administrative Register (ONAR) of the UP Law Center, replacing AO No. 2020-0017.¹

The License to Operate (LTO) is a permit granted by the Philippines FDA that authorizes businesses to operate within the country, and also a prerequisite for notifying cosmetic products with the FDA. AO No. 2020-0017 outlines the necessary documents and procedures for LTO applications. To further streamline the application process, the FDA proposed several amendments to AO No. 2020-0017 between 2022 and 2024. Based on these amendments, the FDA has now issued AO No. 2024-0015.

In comparison to its predecessor, AO No. 2024-0015 primarily brings the following changes concerning cosmetics:

1. Refining LTO application procedures

While AO No. 2020-0017 highlighting the key steps of the LTO application process with brief guidelines, AO No. 2024-0015 incorporates three additional steps and offers more thorough guidelines for each. Below is the updated application process diagram from AO No. 2024-0015.

FDA Licensing Procedure Flow

Among all the steps outlined, AO No. 2024-0015 provides especially provides very detailed introduction to the regulatory inspection process, particularly the pre-licensing inspection. Previously, pre-licensing inspection applied only to a manufacturer's initial LTO application. However, under AO No. 2024-0015, this step will apply to all types of businesses making initial or major variation applications within the first five years since the order's entry into force.

For pre-licensing inspections, applicants will receive a "Notice of Inspection" five calendar days before the inspection date. They shall demonstrate satisfactory compliance with applicable good practices and other relevant standards. Upon confirming the applicant's compliance with documentary and technical requirements, the FDA will issue a Certificate of Compliance and/or a Recommendation Letter. The former is required for the issuance of the LTO and the approval of a major variation application, while the latter supports the approval of automatic renewal application and minor variation application.

2. Modifying the requirements and validities for LTO applications

Built upon the amendments proposed between 2022 and 2024, AO No. 2024-0015 revises the requirements for initial, renewal, and variation applications, and establishes longer LTO validity periods, as outlined in the table below.

Application Types	Validity		Requirements
Application Types	Micro and Small Enterprises	Medium and Large Enterprises	Requirements
Initial	3 years	6 years	1. Accomplished eApplication form with Declaration and Undertaking; 2. Proof of business name registration, and FDA-regulated activity; 3. For micro small medium enterprises (MSMEs): latest audited Financial Statement with Balance Sheet; 4. Risk Management Plan; 5. For manufacturers (including packers / re-packers): Site Master File (SMF); 6. For manufacturers (including packers / re-packers), traders, distributors (importers, exporters, wholesalers): list of sources and authorized suppliers/clients*; 7. Payment of appropriate fees.
Renewal	6 years	12 years	Automatic Renewal (subject to exceptions provided in Annex E of this draft): a. Accomplished eApplication form; b. The application is filed before the expiration date of the license; c. The prescribed renewal fee is paid upon filing of the application; d. A sworn statement (Declaration and Undertaking) indicating no change or variation whatsoever in the establishment is attached to the application. Regular Renewal a. Accomplished eApplication form; b. For MSMEs: latest audited Financial Statement with Balance Sheet; c. Payment of appropriate fees.
Variation	Corresponding to the remaining validity of the existing LTO		1. Accomplished eApplication form with Declaration and Undertaking; 2. Documentary requirements depending on the variation applied for; 3. Payment of appropriate fees.
*Notes:* * Any changes to the submitted list of sources, authorized suppliers, or clients will be considered a minor variation and subject to a corresponding variation application. This requirement will take effect immediately for pharmaceutical establishments upon the implementation of AO No. 2024-0015, and will apply to other FDA-regulated health product establishments one year later.

3. Strengthening the requirements for the Qualified Person

A Qualified Person (QP) is an organic or full-time employee of the establishment who possesses technical competence related to the establishment's activities and health products by virtue of his profession, training and/or experience. In addition to provisions about the QP stated in AO No. 2020-0017, the new order provides additional guidance on the QP in three specific aspects:

Employment: the QP is not and shall not be connected to, employed by, or engaged with any other FDA-regulated establishments. Moreover, a single QP may be allowed to oversee multiple FDA-licensed activities within a single establishment, provided that the QP can adequately fulfill his or her duties;
Qualification: for cosmetic traders and distributors, in additional to previously recognized allied health fields, the QP qualifications will extend to cover registered professionals or graduates in fields like chemistry, chemical engineering, or cosmetic science with recognized cosmetic safety training;
Obligations: the QP shall ensure all LTO application requirements are met with accurate and truthful information, maintain compliance with FDA guidelines and standards, and inform the FDA of any changes to the submitted documents for ongoing regulatory adherence.

4. Detailing FDA's decision grounds for LTO applications and issued LTOs

AO No. 2020-0017 covers the disapproval grounds for LTO applications, and provides a brief overview of LTO cancellation. AO No. 2024-0015 enhances these provisions by specifying the grounds for LTO approval, and adding details on the suspension, cancellation, or revocation of issued LTOs, as shown below:

FDA Decisions

Grounds for the FDA's Decisions

Approval of LTO application

1. Upon evaluation, the submitted application is deemed compliant;

2. During inspection, the company demonstrates full adherence to technical standards.

Suspension, or Cancellation/Revocation of issued LTOs

1. The applicant has willfully violated FDA-implemented regulations, or failed to file a renewal application 120 days after the previously issued LTO expired;

2. The application requirements submitted demonstrate that the company does not meet the required technical requirements or appropriate standards;

3. The applicant has made misrepresentations or false entries, and/or has withheld any relevant data contrary to the provisions of FDA-implemented regulations;

4. The owner has violated any of the terms and conditions of its license;

5. FDA determines that there are other similar grounds for suspension, or cancellation/revocation.

Additionally, AO No. 2024-0015 introduces a reconsideration mechanism for disapproved applications. To initiate it, applicants shall file a request within 15 days after receiving the disapproval decision and pay the reconsideration fees. The request should specify which findings in the Notice of Disapproval are not supported by facts, rules, or technical standards. The FDA will resolve the request within 20 working days after receipt.