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  • Federal Hiring Shake-Up (Again): What the Latest Executive Action and Supreme Court Decision Mean for Industry

    On July 7, 2025, President Trump, via Executive Order (“EO”), issued a presidential memorandum and accompanying fact sheet directing major changes in federal civilian hiring, including extending the federal civilian hiring freeze through October 15, 2025.  Under the titular theme “Ensuring Accountability and Prioritizing Public Safety in Federal Hiring,” the EO aims to align staffing decisions more closely with agency oversight, performance goals, and legal exemptions.

    Broad Hiring Freeze with Specific Exemptions

    • Most notably, a hiring freeze is in effect through October 15, 2025, prohibiting federal agencies from filling vacant positions or creating new roles without written approval from presidential appointees like FDA Commissioner Martin Makary—unless exempted.
    • Exempted roles include those that support national security, immigration enforcement, public safety—clearly, and likely intentionally, vague buckets for the first and third categories.  Specifically, the EO exempts roles including but not limited to military personnel, firefighters, air traffic controllers, Veteran Affairs medical staff, National Weather Source employees, and food inspectors.  The last exemption for food inspectors may be related to this administration’s focus on the Make America Healthy Again (“MAHA”) agenda as spearheaded by the Department of Health and Human Services (“HHS”) Secretary Robert F. Kennedy.  Granted, the fact sheet also does not specify whether “food inspectors” refers to FDA personnel who inspect food facilities and farms, and/or members of the U.S. Department of Agriculture Food Safety and Inspection Service who are responsible for inspecting meat, poultry, and eggs products, as well as (certain) fish.
    • The provision of Social Security, Medicare, or veteran’s healthcare or benefits are also not to be “adversely impact[ed]” by the EO, although no further specificity is provided.
    • The EO makes clear that it does not apply to the Executive Office of the President or its components.

    Role of Presidential Leadership in Hiring Approval

    • Agencies must now secure explicit sign-off from leaders appointed by the president—such as department heads or chiefs of staff—before initiating hires.
    • Approved hires proceed one business day after the Office of Personnel Management (“OPM”) receives confirmation, ensuring direct presidential oversight.

    Aligning with the Merit Hiring Plan

    • All hiring must adhere to the May 29, 2025 Merit Hiring Plan, which emphasizes competency-based hiring and aims to curb bureaucratic inefficiencies.

    Fiscal Discipline & Deregulation

    • Framed as a strategy to enhance fiscal accountability, the initiative is part of the administration’s purported broader goals to control taxpayer spending, streamline government, and reverse the last administration’s federal job growth.
    • This is consistent with the Trump Administration’s 10-to-1 deregulation policy, voluntary attrition programs (see link), and ongoing restructuring efforts.
    • Echoes the hiring restrictions enacted by EOs 14173 and EO 14151 in January, which also eliminated certain Diversity, Equity, and Inclusion (“DEI”) programs.

    Supreme Court Clears Path for RIF Actions

    Coinciding with the July 7th EO, the U.S. Supreme Court issued a decision permitting the federal government to proceed with its Reduction-in-Force (“RIF”) terminations even while legal challenges continue to wind through the courts.  For FDA, this means that thousands of employees previously marked for RIF may soon be officially removed from their positions.

    This decision removes a key procedural barrier that had protected federal employees while litigation played out.  As of now, neither Secretary Kennedy nor Commissioner Makary has commented publicly on the Agency’s response or whether other injunctions will continue to prevent terminations in the short term.

    What This Means for Industry

    For FDA-regulated sectors—including pharmaceuticals, medical devices, food safety, and cosmetics—this convergence of executive and judicial action could have immediate and longer-term consequences such as regulatory delays or disruptions.

    This large-scale personnel reduction at FDA could slow review timelines for applications, and already has in the case of one new drug application, and guidance issuance.

    The FDA’s silence so far has left stakeholders uncertain about how quickly these changes will take effect or how they will be managed.  Industry should stay closely attuned to updates from HHS and FDA leadership, prepare contingency plans for potential regulatory disruptions or delays, and consider deepening their engagement with government affairs teams to monitor and respond to unfolding developments.

    Final Thoughts

    This federal hiring overhaul heralds a new era of presidential oversight, tighter budget constraints, and a shift in prioritization toward “public safety” roles, although it is not entirely clear what this last piece encompasses or means.  Opponents of these presidential initiatives will argue that the administration’s moves centralize authority and politicize the civil service, while supporters will extoll the virtues of a streamlined government, efficiency, and accountability.  Regardless, industry stakeholders should remain vigilant for further updates as well as build in contingencies and temper expectations about predictability with respect to FDA decisions and guidance, including transparency thereinto.

    Interestingly, as of July 11, USAJOBS—the online platform providing access to federal employment opportunities—continues to list 14 open and currently hiring positions at FDA.

    Radical Transparency or Radical Redundancy? FDA Publishes 200+ Complete Response Letters, Most of Which Are Already Public

    In a move FDA is calling “radical transparency,” the Agency announced on July 10, 2025 that it has published 200+ Complete Response Letters (CRLs) issued in response to marketing applications for drugs and biologics on its openFDA database.  These particular CRLs were issued in response to original and supplemental drug and biological product applications submitted to the Agency between 2020 and 2024 that ultimately gained approval. However, the vast majority of the CRLs posted in the openFDA database are already available in the action packages posted on FDA’s Drugs@FDA database and approved biologics product pages. While the announcement states that FDA is planning to publish additional CRLs from its archives, it is not clear if those CRLs will also be for approved products for which the action packages are already available or products that have not been approved.

    Commissioner Makary linked this initiative to his broader effort to enhance public trust through transparency, stating “[d]rug developers and capital markets alike want predictability. Greater transparency into our decisions will help align expectations and foster better communication among stakeholders.” The announcement goes on to say that, due to the historical practice of “refrain[ing] from publishing CRLs for pending applications, sponsors often misrepresent the rationale behind FDA’s decision to their stakeholders and the public” (emphasis added). The announcement references a 2015 analysis conducted by FDA of 61 CRLs issued between 2008 and 2013 (48 for New Drug Application [NDAs] and 13 for Biologics License Application [BLAs]) attempting to compare the reasons identified in those CRLs for not approving a product with the respective applicants’ public statements regarding the CRL (which we blogged about here; the FDA’s full analysis is available here). This latest initiative suggests FDA’s concerns regarding sponsors’ disclosure of the substance of CRLs persists.    However, it is difficult to see how releasing CRLs to the openFDA database that are already available as part of a product’s action package at Drugs@FDA mitigates these concerns.

    Taking a step back, a CRL is a letter sent to an applicant at the end of FDA’s review cycle of an NDA or BLA when the Agency concludes that the application cannot be approved in its current form. The CRL outlines the specific deficiencies preventing approval or licensure, which often relate to safety or efficacy concerns, problems with manufacturing processes, or, in the case of generics, failures to demonstrate bioequivalence. The letter provides detailed descriptions of the deficiency(ies) and often includes FDA’s suggestions or requirements for resolving them. After receiving a CRL, the applicant must decide whether to address the deficiencies noted in the CRL or, if addressing the deficiencies are too burdensome, withdraw the application entirely. If a drug is approved, section 916 of the Food and Drug Administration Amendments Act of 2007 (FDAAA) (codified at 21 U.S.C. § 355(l)) requires that action packages (which include CRLs, if issued) for approved original NDAs and BLAs (i.e., where no active moiety for a drug or no active ingredient for a biological product has been approved in any other application) be posted online within 30 calendar days of approval or within 30 days of the third Freedom of Information Act (FOIA) request for that package.

    FOIA is a federal law that gives the public the right to request access to records from any federal agency, including FDA. The goal of FOIA is to promote transparency and accountability in government by allowing the public to obtain information about agency operations, decisions and communications. However, FOIA has exemptions, which are categories of information that agencies are allowed or are required to withhold. Relevant here, FOIA Exemption 4 protects trade secrets and confidential commercial information. As such, any information in an approval package, including a CRL, must be redacted prior to public disclosure to protect this information and these redactions may be substantial, particularly in cases involving manufacturing processes, formulation details, or future development plans.

    Commissioner Makary’s announcement, made the same day as his statement touting his accomplishments in his first 100 days leading FDA, raises questions about whether this effort is truly “radical transparency” or just a repackaging of existing requirements. The key difference may lie in timing and ease of access; despite the statutory requirement under FDAAA, action packages are often slow to appear on FDA’s website, especially following staffing disruptions at FDA. For example, the FDA staff responsible for posting action packages and responding to FOIA requests were subject to the FDA’s Reduction in Force earlier this year (which we blogged about here). This disruption led to a backlog in public postings of approval materials and responses to FOIA requests. Even as some FOIA staff have returned to the Agency, a backlog continues to persist and some approval packages have yet to appear on FDA’s website.

    It is currently unclear whether FDA intends to publish CRLs close in time to their issuance or for applications that are not subsequently approved. (Query how FDA would make this determination and when – only after a sponsor withdraws their application?) The prospect of publication of such CRLs would likely be of great concern to many applicants and of great interest to their competitors. Regardless, we will be watching to see how this radical transparency initiative unfolds.

    State-Led Food Transparency: Texas and Louisiana Lead the Charge

    Two southern states are taking bold steps to change the way they approach food labeling—and they’re not mincing words.  In a growing movement aligned with the “Make America Healthy Again” (MAHA) agenda, Texas and Louisiana have each passed sweeping new laws requiring clearer warnings and disclosures for food additives and seed oils.

    Together, these laws signal a significant shift in how state governments may begin to challenge the status quo on food transparency, consumer rights, and ingredient safety.  Here’s what industry needs to know.

    Texas Goes BIG on Food Warnings

    Beginning on January 1, 2027, Texans may notice new warning labels on some food products sold in their fair state.  On June 22, 2025, Texas Governor Greg Abbott signed into law SB 25—nicknamed the “Make Texas Healthy Again” law—requiring, among other things, that any food or beverage containing one of 44 specified “ingredients” must carry a prominent warning label if FDA “requires the ingredient to be named on a food label.”  The law applies to all foods, even if produced outside of the state.  This labeling requirement will apply to packages “developed or copyrighted” from January 1, 2027 onward.

    The labels of such products must clearly state:

    WARNING: This product contains an ingredient that is not recommended for human consumption by the appropriate authority in Australia, Canada, the European Union, or the United Kingdom.

    Thus, the warning requirement is predicated on the regulatory status of the listed substances in the foreign jurisdictions of Australia, Canada, the European Union (EU), or the United Kingdom.

    The warning must “be placed in a prominent and reasonably visible location” and “have sufficiently high contrast with the immediate background to ensure the warning is likely to be seen and understood by the ordinary individual under customary conditions of purchase and use.”  It also must be provided on manufacturers and retailers’ websites that offer the product for sale, or otherwise communicated to consumers.

    What Made the List?

    The law covers 44 substances—from azodicarbonamide (ADA) to bleached flour, titanium dioxide, and synthetic dyes like yellow 5 and 6 and red 3, 4, and 40.  The law includes a federal preemption clause for laws and regulations promulgated by FDA or the U.S. Department of Agriculture (USDA) that:  (1) prohibit the use of the ingredient; (2) impose conditions on the use of the ingredient, including requiring a warning or disclosure statement; or (3) determine that the ingredient or class of ingredients are safe for human consumption.  Some of the substances included on the list—such as partially hydrogenated oils and red 3—are already prohibited in the United States.  Others, such as yellow 5, are already the subject of regulations that impose conditions on their use.  It is not clear to us what exactly the drafters of the law had in mind, but the preemption provision seems to significantly reduce the possible impact of this law.

    Louisiana Follows Suit—with a Twist

    Just days earlier, on June 20, Louisiana Governor Jeff Landry signed SB 14 into law, delivering what may be an even more comprehensive MAHA-aligned measure.  The Louisiana law completely bans certain food and color additives from school meals, requires a warning for certain food ingredients for foods sold in the state, and becomes the first law in the nation to require restaurant disclosures of seed oil use.

    Major Elements of the Louisiana Law:

    • Bans 15 additives in public school, or nonpublic schools receiving state funds, meals (food and beverage) starting in the 2027–2028 school year, including:
      • Artificial sweeteners like aspartame and saccharin.
      • Preservatives such as BHA and BHT.
      • Synthetic dyes.
    • Requires food manufacturers to provide QR codes that will redirect consumers to a webpage that must include a disclosure about the presence of 44 additives.  The disclosure must be accompanied by the statement:  “NOTICE: This product contains [insert ingredient here].  For more information about this ingredient, including FDA approvals, click HERE.”  The QR codes and digital disclosures must be included on the outer product packaging by January 1, 2028.  Notably, this is less of a “warning” than the Texas law’s provision.  Another notable difference between the Louisiana and Texas law is that the Louisiana bill does not include a preemption provision.
    • Requires seed oil disclosures be displayed on restaurant menus or in-store signage for items prepared with oils such as canola, soybean, sunflower, or cottonseed.

    While the Louisiana law stops short of requiring on-package printed warnings like Texas, its QR-code-based digital notice system aims to balance transparency with practicality.  The approach, lawmakers say, is modeled on international labeling practices but tailored for local implementation.

    Industry Implications

    It remains to be seen how industry will respond to the Texas and Louisiana laws.  Reformulation to avoid the warning requirements might seem the least “painful.”  However, if that is not an option, will there be two warnings/disclosures on the label?  And what if a third state requires yet another warning/disclosure?  The options are bad enough that the possibility of a judicial challenge to one or both of the laws cannot be excluded.

    A Growing MAHA Movement

    Both laws appear to be part of a broader effort to advance the MAHA agenda.  The Department of Health and Human Services Secretary Robert F. Kennedy Jr., a vocal opponent of seed oils and food additives, praised the state laws as essential tools to fight chronic disease and reduce national healthcare costs.  Pat McMath, a Louisiana Senator, emphasized that the Louisiana bill would give federal regulators and reform-minded lawmakers the leverage to “force the food companies to the table to change and alter the ingredients that are all making us sick.”

    Governor Landry echoed this sentiment, citing Louisiana’s dismal health rankings and declaring that the new law marked “the beginning of a healthy transformation for Louisiana.”  See, e.g., link.

    A Sign of Things to Come?

    This may foreshadow future legislative action at the state level. The size of Louisiana and Texas’s markets, as well as their economic influence, could and likely will have ripple effects throughout the country.

    With Virginia, West Virginia (see our previous blog post here), Utah, and Arizona having adopted similar, though narrower, measures—especially targeting school meals—Texas and Louisiana are shaping what may become a template for future state (and possibly federal) action.

    We will monitor the Texas and Louisiana laws’ implementation, enforcement, and broader impact on national food-labeling practices.

    FDA Softens August 2025 NDSRI Deadline—Progress Reports Now Accepted

    Recently, FDA announced a deadline shift, although the Agency did so quietly.  On June 23, 2025, FDA updated its CDER Nitrosamine Impurity Acceptable Intake Limits webpage to permit manufacturers and sponsors more time to submit required changes for nitrosamine drug substance‑related impurities (NDSRIs) for approved or currently marketed products.  The Agency confirmed that it will now accept progress reports in lieu of full compliance by August 1, 2025, and has explicitly asked sponsors to detail their mitigation efforts in their upcoming annual or amended annual reports.  21 C.F.R. § 314.81(b)(2).

    What does this mean?

    • Confirmatory testing remains due by August 1, 2025, but FDA has now acknowledged that full implementation of mitigation strategies—such as reformulation or the addition of new specifications—may take longer.
    • For firms unable to meet the deadline, progress updates must be submitted by August 1, 2025.
    • These updates should be included under a new section titled “NDSRI Update” in the Log of Outstanding Regulatory Business (eCTD 1.13.14) within the annual report—or submitted as an amendment if the company’s annual report for the year has already been filed.

    What should be included in the progress report?

    FDA has provided a clear checklist for the updates, which must address:

    1. Whether NDSRIs can form under forced degradation;
    2. The specific NDSRIs detected;
    3. Nitrosamine test method(s) with validation information;
    4. Product batch(es) analyzed, with dates relative to manufacture;
    5. Confirmatory test results (in ng/day or ppm);
    6. Root cause of impurity (if known);
    7. Mitigation strategies undertaken; and
    8. Estimated timeline for completing mitigation.

    Per FDA’s update, non-application products without annual report requirements should prepare similar documentation and retain it for FDA inspection requests.

    Why FDA changed course

    During the April 2025 Generic Drugs Forum (beginning at the 2:38 mark), FDA officials reasserted the August 1 deadline—but also hinted at flexibility in cases of product shortages or technical challenges.  The June 23rd decision to extend the deadline reflects FDA’s recognition that nitrosamine mitigation strategies vary widely and can demand extensive time and supply‑chain adjustments.  Further, determining the root cause of the nitrosamine source/contamination as well as gathering stability data for reformulation can be difficult and lengthy undertakings.  In addition, the sponsor or manufacturer will need data on nitrosamine buildup over at least part of the dating period to assess whether the levels (ng/day) are problematic.  All of these efforts require much time and many resources.

    So, what does this update mean?

    • FDA committed to reviewing all progress reports submitted by August 1 and stated that it may issue revised target timelines based on these reports.
    • The Agency continued to emphasize that confirmatory nitrosamine testing should be completed even if mitigation lags behind.
    • FDA pledged to update its online guidance periodically with new timelines, methods, and scientific insights.

    The bigger picture

    FDA’s updated approach toes a careful line—enforcing public safety by mandating confirmatory tests and acceptable intake standards, while also avoiding drug shortages by allowing more time for companies to adjust and adapt.  For example, if FDA were to take action now, many generic drugs products could be taken off the market given that the cancer risk is assessed over a 70 year-period.  See FDA, Guidance, Recommended Acceptable Intake Limits for Nitrosamine Drug Substance-Related Impurities (NDSRIs) at 4 (Aug. 2023); FDA, Guidance, Control of Nitrosamine Impurities in Human Drugs at 12 (Sept. 2024).

    Such action would provide little public benefit.  Rather, FDA’s update aligns with the Agency’s ongoing nitrosamine strategy since 2018, which has tackled contaminants in APIs such as ranitidine, metformin, and valsartan.  Coupled with the aforementioned August 2023 NDSRI guidance on acceptable intake limits, testing, and mitigation frameworks and the September 2024 guidance on the control of NDSRIs, this update offers a pragmatic pathway forward for manufacturers.

    What should industry do?

    • By August 1, 2025:
      • Complete confirmatory testing for at-risk products.
      • Submit the required changes to drug applications via a Prior Approval Supplement or a detailed progress report in your annual report or amended annual report if you have already submitted an annual report for this yearly cycle.
    • Continue to move forward on developing and implementing mitigation plans.
    • Monitor FDA communications, including the aforementioned webpage, as the Agency may put forth revised timelines and new/revised guidance based on submissions.

    Food for thought

    FDA’s decision to accept progress reports offers crucial and practical relief for manufacturers and sponsors racing against this looming deadline.  However, this flexibility comes with responsibility:  companies must maintain transparency, complete rigorous testing, and accelerate root cause investigations and mitigation strategies to protect patient health.

    We recommend a proactive approach—prioritize preparing now for both documentation and real-world process changes that can help you remain compliant and competitive—and HPM is here to help.

    HPM’s Larry Houck Speaking at Opioid and Fentanyl Abuse Management Summit

    The diversion of controlled substances intended for patients by physicians, pharmacists, nurses and other trusted healthcare employees is a significant issue facing hospitals and healthcare facilities.

    Controlled substances are a necessary component of medical care for patients, and recent employee diversion incidents illustrate the continued vulnerability of hospitals.  Hospitals that fail to fulfill their obligations under the federal Controlled Substances Act and DEA regulations pose serious risks to their patients for undertreatment and worse, and to their employees for overdose and death.  Employee diversion of significant controlled substance quantities from hospitals has also resulted in large civil monetary settlements, some in the millions of dollars, costly compliance remediation programs, and in unwanted local and national publicity.

    HPM Director Larry Houck is presenting “Hospital/Healthcare Facility Controlled Substance Diversion: Recent Case Studies,” focusing on this timely topic, at the World Conference Forum’s 2025 Opioid & Fentanyl Abuse Management Summit in Chicago on July 17th-18th.

    Attendees will learn:

    • How employees in some high-profile cases were able to divert significant controlled substance quantities;
    • Red flags that hospitals missed;
    • Safeguards to minimize internal diversion risks; and
    • Best practices for maximizing diversion detection.

    Click here to learn more about WCF’s Opioid & Abuse Management Summit.

    Better Late Than Never: FDA Published FR Notices For De Novo Classifications Dating As Far Back as 2013

    In late June, FDA published five Federal Register notices that caught our eye, particularly for the dates the classifications were first applicable.

    Each notice listed the action as “Final amendment; final order” rather than “Final order.” This editorial change began in December 2019 to indicate that the document amends the Code of Federal Regulations.

    Below we summarize the device type and original applicable classification date for each of these notices:

    Device TypeOriginal Applicable Classification Date
    Muscular dystrophy newborn screening testDecember 12, 2019
    Fluorescence in situ hybridization (FISH)-based detection of chromosomal abnormalities from patients with hematologic malignanciesDecember 21, 2018
    Lysosomal storage disorder newborn screen test systemFebruary 3, 2017
    Herpes simplex virus nucleic acid-based assay for central nervous system infectionsMarch 21, 2014
    Cream for x-ray attenuationMay 9, 2013

    Note that two of the above classifications date back well over a decade, stretching back to the Obama administration. It’s not clear why there was a delay but better late than never.

    Categories: Medical Devices

    The OTC Fee Fallout: Are Hundreds of Companies Ignoring FDA’s User Fee Requirements?

    Since the U.S. Food and Drug Administration (FDA) launched the Over-the-Counter Monograph User Fee Program (OMUFA) in 2020, the Agency has been pushing for modernization and self-funding of its regulatory oversight for over-the-counter (OTC) products.  But five years in, the Agency’s OMUFA Facility Arrears List paints a concerning picture:  nearly 1,400 businesses—foreign and domestic—appear to have either ignored or fallen behind on their facility registration payments.

    As the character Winston Bishop from the sitcom New Girl would say, “Shame shame I know your name.” (link – start from around the 28-second mark).  In this case, we all know the delinquent companies’ names.  What we don’t know is whether each of those companies ought to be on the list.

    Importantly for industry, under the federal Food, Drug, and Cosmetic Act (FDCA), failure to pay OMUFA fees and inclusion on the public arrears name-and-shame list render all products from that site as misbranded.  FDCA § 502(ff).  This applies to all “[d]rugs manufactured, prepared, propagated, compounded, or processed in facilities for which fees have not been paid.”  Id.

    OMUFA: A Quick Refresher

    OMUFA was established under the Coronavirus Aid, Relief, and Economic Security (CARES) Act as a way to streamline the approval and oversight of OTC monograph drugs.  As we described in a prior blog post (here), the program introduced two major fee categories:

    • Facility Fees:  Charged annually to manufacturers and contract manufacturing organizations (CMOs).
    • OTC Monograph Order Request (OMOR) Fees:  Paid when companies request changes to drug monographs, like adding a new ingredient or indication.

    These fees are critical for funding FDA’s ability to review monographs, inspect facilities, and enforce compliance.

    Arrears List 2025: A Red Flag for Industry Compliance

    In June 2025, FDA’s Division of User Fee Management published a 70-page OMUFA Facility Arrears List covering fiscal years 2021 through 2025.  The report identifies 1,377 entries—well above the Agency’s 1,134 estimate of entities expected to pay OMUFA fees in FY2025.

    This discrepancy likely highlights a systemic issue:  many firms are still listed despite no longer manufacturing OTC products or having failed to formally cancel their registration.  Among them are companies that ramped up production of hand sanitizers during the COVID-19 pandemic but exited the market once demand normalized.  At least some other small OTC manufacturers exited the market following the imposition of fees.

    Who’s Not Paying

    The arrears list includes:

    • 956 foreign and 421 domestic facilities
    • Well-known and -established firms with long histories of regulatory expertise and experience
    • Defunct firms
    • Startups and small-scale manufacturers who may have limited regulatory expertise or are still unaware of the OMUFA requirements

    The Numbers

    For FY2025, facility fees rose to:

    • $37,556 for OTC monograph drug manufacturers (up $3,390 from FY2024)
    • $25,037 for contract manufacturing organizations (up $2,260 from FY2024)

    OMOR fees are even steeper:

    • $559,777 for Tier 1 requests (e.g., adding new ingredients or indications)
    • $111,955 for Tier 2 changes (e.g., altering drug facts labels)

    Late payment triggers penalties, interest accrual, and regulatory consequences, including being barred from submitting OMORs or meeting with FDA on monograph issues.

    Public Shaming as a Compliance Tool

    Publication of the arrears list isn’t just administrative—it’s strategic.  Under Section 744M(e) of the federal FDCA, listing a facility in arrears publicly flags and renders all products from that site as misbranded.  FDCA § 502(ff).  This means these products cannot legally be marketed in the United States, and any submitted OMORs will be automatically rejected.

    On its webpage Other OMUFA Fee-Related Questions, FDA makes clear that failure or refusal to pay OMUFA fees can have significant ramifications including the issuance of Warning Letters and use of “various enforcement tools with respect to marketing of products deemed misbranded for failure to pay fees.”  It is unclear what the latter category of “enforcement tools” encompasses.  The webpage further explains that the U.S. government will treat any outstanding fee that is not paid within 30 calendar days of its due date as a claim subject to federal collection activity.

    To date, we have not seen any Warning Letters specifically based on a failure to pay OMUFA fees.  However, not only FDA but online retailers may be reviewing and relying on this list because the Agency can issue and has issued Warning Letters for introducing or delivering for introduction a misbranded OTC drug into interstate commerce.  FDCA § 301(a).  Some online retailers may use the list to decide whether to carry certain products and manage their own risk of FDA enforcement.

    What’s to come?

    The OMUFA program expires at the end of FY2025 (expiring on September 30, 2025), and reauthorization is not guaranteed.  In its proposed commitment letter for FY2026–2030, FDA vows to strengthen fee collection, more aggressively update and monitor its registration data, and continue publishing non-compliance lists.  HPM is available to assist companies who find themselves on this list and believe they don’t belong there and to help others who require assistance determining whether they do belong and, if so, how to register.

    HP&M Seeks Experienced Regulatory Expert

    Hyman, Phelps & McNamara, P.C. (HP&M) seeks to add an experienced regulatory expert to our strong and busy team of non-attorney regulatory experts.  Our team assists clients with a wide variety of quality and manufacturing regulatory topics for drugs and biologics.  Types of matters include:

    • Developing regulatory strategy for manufacturing and related issues that arise in product development programs. Specifically, manufacturing/testing procedures and compliance with cGMPs.
    • Reviewing test protocols and reports for small molecule or biologic drug programs.
    • Meeting with FDA on behalf of clients or assisting clients seeking marketing authorization in preparing to meet with FDA and in other interactions with the Agency.
    • Conducting internal investigations and audits of manufacturing facilities for compliance with 21 CFR 211/600.
    • Preparing for and responding to government inspections and other compliance matters.
    • Conducting due diligence on manufacturing facilities and products related to transactions and securities offerings

    A background in chemistry, biochemistry, engineering, or biomedical engineering is preferred.  Strong verbal and writing skills are required.  Experience working at FDA in CDER or CBER for at least 2 years as a scientific reviewer or a consumer safety officer, with experience conducting inspections is strongly preferred.

    The boutique, collaborative nature of this firm provides regulatory experts unique opportunities to work directly with clients and to contribute in substantive ways to sophisticated, high-end matters.

    Compensation is competitive and commensurate with experience.  HP&M is an equal opportunity employer.  Please send your curriculum vitae and transcript to Deborah Livornese (dlivornese@hpm.com).

    Categories: Miscellaneous

    Controlled Substance Reporting Isn’t Just for DEA Anymore

    A memorable Florida Orange Growers’ television ad campaign in the late 1970s proclaimed that “Orange juice from Florida isn’t just for breakfast anymore.” The Federal Controlled Substances Act (“CSA”) and its regulations require Drug Enforcement Administration (“DEA”) registrants to submit certain reports related to narcotic drug transactions, thefts and significant losses, and suspicious orders. However, some DEA registrants may not realize that they may also have to submit the same or similar reports to their state professional boards or controlled substance authorities. They do not know that controlled substance reporting isn’t just for DEA anymore.

    DEA registrants include manufacturers, distributors, importers, exporters, practitioners, pharmacies, hospitals, and narcotic treatment centers who handle federally-controlled substances. State-controlled substance requirements generally mirror federal requirements, but there are some subtle and not so subtle differences. Let’s take a short stroll through a few federal and state controlled substance reporting requirements. Note that we are not focusing on listed chemicals here.

    A. Transactions

    1. DEA

    Manufacturers and distributors must report all schedule I and II, schedule III narcotic, and GHB transactions, quarterly via DEA’s Automated Reports and Consolidated Ordering System (“ARCOS”). Manufacturers must also report selected schedule III and IV psychotropic drugs quarterly. 21 U.S.C. § 827(d)(1); 21 C.F.R. § 1304.33.

    2. The States

    About a dozen states require reporting controlled substance transactions to the responsible state authority. New York, for example, requires electronic reporting of all controlled substances to the state’s Bureau of Narcotic Enforcement. N.Y. Codes R. Regs., tit. 10, § 80.23(f). Texas requires reports of all controlled substance distributions in an ARCOS format. Tex. Health & Safety Code Ann. § 481.0766. Florida requires reporting all controlled substance receipts and distributions monthly also in ARCOS format, and zero transaction reports if no transactions occur in a calendar month. Fla. Stat. Ann. § 499.0121(14). Ohio also requires monthly controlled substance transaction reports, including zero reports, to the Ohio Automated Rx Reporting System. Oh. Admin. Code 4729:8-3-04. Several states, including California and Georgia require transaction reporting when requested by the California Board of Pharmacy and the Georgia Drugs and Narcotics Agency. Cal. Code Regs., tit. 16, § 1782; Ga. Code Ann. § 26-4-115(b)(11).

    B. Thefts/Significant Losses

    1. DEA

    Registrants must notify the DEA Field Division Office in writing of the theft or significant loss of any controlled substance within one 1 business day of discovery. They must also submit a Report of Theft or Loss of Controlled Substances, a DEA Form 106, through DEA’s secure network application within 45 calendar days after discovery. 21 C.F.R. § 1301.74(c) and .76(b).

    2. The States

    The vast majority of states likewise require reporting controlled substance thefts and significant losses. Consistent with federal requirements, a number of states, such as Arizona, Colorado, and Delaware require submitting the DEA-106 that they submit to DEA. Ariz. Admin. Code § R4-23-1003(A)(2); 3 Colo. Code Regs. § 719-1:7.00.10; Del. Code Regs. 24 § 7.3.1-.2. Some states require reporting immediately or within 1 business day of discovery. Others have different timing requirements: Connecticut (72 hours); New Mexico (5 days); Nevada (10 days); Mississippi (15 days), and Colorado (30 days). Conn. Agencies Regs. § 21a-262-3(b); N.M. Code R. § 16.19.20.36B; Nev. Rev. Stat. § 453.568; 30-030 Miss. Code R. § 3001, Art. XXXII.4; 3 Colo. Code Regs. § 719-1:15.05.13.

    Ohio requires reporting thefts or significant losses of any prescription drug, including controlled and non-controlled substances upon discovery, followed by a DEA-106 within 30 days. Oh. Admin. Code 4729:6-3-02. California, Kentucky, and New Hampshire require pharmacies to report. Cal. Code Regs. tit. 16, § 1715.6; Ky. Rev. Stat. § 315.335(1); N.H. Admin. Code § Ph 702.03(a). A few states require that registrants include and adhere to theft and loss reporting in their policies and procedures.

    C. Suspicious Orders

    1. DEA

    Manufacturers and distributors must design and operate a system to identify suspicious orders of controlled substances, and inform the DEA Field Division in their area of suspicious orders or a series of orders when discovered. A suspicious order may include, but is not limited to:

    1. Orders of unusual size;
    2. Orders deviating substantially from a normal pattern; and
    3. Orders of unusual frequency. 21 U.S.C. §§ 802(57), 832; 21 C.F.R. § 1301.74(b).

    2. The States

    For about half of the states, suspicious order criteria mirror DEA’s criteria and require registrants to identify and report suspicious orders. Several states, like Maryland, allow registrants to satisfy their reporting requirement by submitting the reports that they provide to DEA. Md. Code Ann., Crim. Law § 5-303(e). Georgia requires reports of excessive controlled substance purchases using DEA’s suspicious order criteria to the Georgia Drugs and Narcotics Agency. Ga. Code Ann. § 26-4-115(b)(2). Ohio and Washington require a report indicating that no suspicious orders were identified in a calendar month. Oh. Admin. Code 4729:6-3-05(F); Wash. Admin. Code § 246-945-585(1). Virginia requires registrants who cease distributing controlled substances because of suspicious orders to report to the Board of Pharmacy within 5 days. Va. Code Ann. § 54.1-3435.01(b). Idaho requires processes to be in place for monitoring customers’ purchase activity and suspicious ordering patterns. Idaho Code r. 24.36.01.250.02.

    ****

    So, registrants, the next time you submit a required federal report, remember the states because “controlled substance reporting isn’t just for DEA anymore.” (In some states reporting may never have been just for DEA.)

    The RFD Process: Time for Reform?

    The Federal Food, Drug, and Cosmetic Act (FD&C Act) has very different regulatory regimes for pharmaceutical products than devices. Knowing how a product will be regulated is essential to companies. The means to gaining that knowledge for combination products or single entity products where the regulatory classification is unclear is the Request for Designation (RFD). A sponsor may submit an RFD, not to exceed 15 pages, to the Office of Combination Products (OCP) to obtain the product classification (i.e., drug, device, biologic, or combination product) and/or review/lead Center (i.e., CDER, CDRH, CBER). In the 15 allotted pages, amongst other things, the submitter:

    • Identifies “any component of the product that already has received premarket approval, is marketed as not being subject to premarket approval, or has received an investigational exemption,”
    • Describes the “chemical, physical, or biological composition,” and
    • Provides a “description of all known modes of action, the sponsor’s identification of the single mode of action that provides the most important therapeutic action of the product, and the basis for that determination.” (21 CFR 3.7 (c)(2)(iv), (v), (ix)).

    The sponsor is also expected to provide their “recommendation as to which agency component should have primary jurisdiction based on the mode of action that provides the most important therapeutic action of the combination product.” (21 CFR 3.7 (c)(3)).

    OCP then makes the binding determination within 60 calendar days of filing the RFD by determining the primary mode of action (PMOA). If OCP does not issue a decision within the statutory timeline, the sponsor’s recommendation for the classification or assignment of the product is the designation. (21 CFR 3.8 (b)).

    FDA also offers sponsors the opportunity to submit a Pre-RFD (which we have blogged about here) and obtain FDA’s preliminary, nonbinding assessment of the product classification and/or review Center.  Unlike an RFD, the Pre-RFD does not have a page limit. Companies can use that feedback in deciding whether to submit an RFD, and if they decide to submit, how best to frame it. OCP’s goal is to provide feedback within 60 calendar days. While the content of Pre-RFD and RFD is different, in part because one allows for unlimited text and the other is confined to 15 pages, FDA would conduct the same PMOA analysis in both the Pre-RFD and RFD process.

    In 2016, we said that “OCP has earned a reputation for designating products as drugs rather than devices.” (This was demonstrated in the decision to regulate PREVOR’s Diphoterine® Skin Wash product as a drug, which a District Court vacated after finding that FDA failed to provide a reasoned basis for its classification decision, which we summarized here. The District Court then vacated FDA’s classification decision to regulate the product as a drug a second time (see our previous post here).) Recently, we reviewed the most recently available data, which is the FY 2023 OCP Performance Report. This raises a separate question: where is the FY 2024 report, given that we are more than halfway through FY 2025? This is not the first time FDA has been delinquent in releasing information (see our De Novo post) that allows stakeholders to be more informed.  (In that vein, FDA just released the formal classification regulation for a device that had received De Novo authorization eight years ago.

    The data from this report provide some interesting insights.  As shown below, when it comes to combination products CDER was identified as the presumptive review Center in 74% (23 of 31) of the assessments.  Those determinations were relatively swift, with 57% were issued within 60 days. In contrast, of the six presumptively assigned to CDRH, only two (33%) were decided within 60 days. For non-combination products, 75% of decisions (6 of 8), when assigned to CDRH, were made within 60 days; in contrast, only 15% (2 of 13) had a decision in 60 days when OCP determined the product to be non-combination with CDER as the review Center.  In all comparisons except for the non-combination products assigned to CDRH, OCP performed worse in 2023 than in 2022.   The tailing off for non-combination products assigned to CDER was particularly pronounced, with only 15% being issued in 60 days.  Given that the FY 2024 OCP report has not been released, we don’t know if these patterns have persisted, worsened, or improved.

    ProductCenter AssignmentPre-RFD AssessmentsPercent Issued in 60 Days
    2022202320222023
    CombinationCDER172370%57%
    CBER2250%0%
    CDRH11645%33%
    Non-CombinationCDER101370%15%
    CBER2550%40%
    CDRH7857%75%
    OtherN/A2N/A0%

    Perhaps more important, our 2016 comment about drug determinations being more common is still valid. The table above clearly shows that 74% (25 of 31) of combination products were found to have a chemical PMOA. The proclivity for finding chemical PMOA in FY 2023 was not an anomaly. In FY 2022 a chemical PMOA was also more common, albeit by a less lopsided margin (63% (19 of 30))     Since most companies that submit Pre-RFDs want to be designated as devices and believe that device classification is appropriate, presumably  the majority of submitters are disappointed by the outcome.

    The FY 2023 report also acknowledged 66 RFD submissions. Of those 66, only seven RFDs (11%) had a decision issued, 54 (82%) had insufficient information for filing, three (4%) were withdrawn, and two (3%) were still under review at the close of FY 2023 (these were later determined to lack sufficient information for filing). Similarly, the FY 2022 report stated that OCP received 41 RFD submissions. Of those, four (10%) had a decision issued, 35 (85%) had insufficient information for filing, one (2%) was withdrawn, and one (2%) was within the 60-day review period at the close of FY 2022. A process which results in so few decisions obviously needs revamping.

    This raises the question of why so many of these RFDs were deemed insufficient. We had proposed changes in 2018 to remove the 15-page limit such that there be a “free exchange of relevant information about a proposed product.” This limitation is burdensome in light of the heavy expectations for submitters. In our experience, if anything, OCP is demanding even more details now than it did before. And while one can argue that removing the page limit does not necessarily ensure sufficient information is included, it can’t hurt. As the administration looks at ways to reduce the regulatory burden, eliminating the 15-page limit would be a good candidate. While ordinarily one would expect shorter submissions to be less burdensome, that is not the case here; squeezing complex technical arguments into 15 pages is highly challenging.

    Of the eight RFD determinations (one was received in FY 2022 and completed in 2023) made in FY 2023 (all of which were issued by the statutorily mandated 60-day deadline), half were classified as combination products; the other half were classified as non-combination products. More specifically:

    CombinationDevice-Drug2
    Device-Drug-Biologic1
    Drug-Biologic1
    Non-Combination

     

    Drug3
    Biologic1

    Notably all eight RFD assessments which reached a decision were completed on time. As noted above, that was not the case for Pre-RFDs. These data show that by imposing mandatory deadlines coupled with consequences, Congress can ensure prompt action by FDA.  If FDA will not itself make improvements to the RFD program, perhaps Congress will.

    Categories: Medical Devices

    New Report on Patent Litigation Settlements Says that they are Critically Necessary to Ensure Prompt Generic and Biosimilar Market Entry

    Earlier this month, the Association for Accessible Medicines and its Biosimilars Council (“AAM”) announced (here and here) the release of a report, titled “Assessment of the Impact of Settlements,” examining the effects of patent litigation settlements on patient savings and access to generic drugs and biosimilar biological products.  The report, based on research and analysis undertaken by the IQVIA Institute for AAM, concludes “that patent settlements between brand and generic/biosimilar medicine manufacturers accelerated patient access to generic and biosimilar medicines to market by, on average, more than five years before patent expiration,” and that there were significant healthcare system savings.

    That the IQVIA Institute concluded that patent settlement agreements are a good thing is not news to this blogger.  That’s pretty much the message this blogger has been saying in posts on this blog for years (here): If you limit a generic drug manufacturer’s ability to settle cases, that manufacturer does not settle fewer cases, it submits fewer Paragraph IV ANDAs; fewer ANDAs means less, not more, generic drug competition.  And now we have a pretty comprehensive data set from the IQVIA Institute to show the positive effects of patent settlement agreements.

    As detailed in the report, the IQVIA Institute assessed 288 molecules for settlement information, 84 of which involved patent settlements and early or timely generic/biosimilar entry.  And of that cohort, the IQVIA Institute found that product launches averaged 64 months (more than 5 years!) before patent expiry (with 17% of the cases accelerating generic or biosimilar entry by more than a decade prior to patent expiry).  We all know that time is money.  The IQVIA Institute report shows just how much money: “Savings to the healthcare system from patent settlements since the FTC v. Actavis decision in 2013 total $423 billion, and the average savings to the healthcare system per molecule are $5 billion.”

    The report was published just a week before the Federal Trade Commission and the Department of Justice announced a series of “listening sessions” intended to implement, in part, Executive Order No. 14273, Lowering Drug Prices by Once Again Putting Americans First.  According to a recent description of the listening sessions, one panel will look at “recent trends in pharmaceutical patent settlements.”  Given the FTC’s long history of opposition to patent litigation settlement agreements in general, we suspect there may be a renewed effort to fan the flames and push for the passage of legislation (see our earlier post here) that we think would ultimately chill procompetitive patent settlement agreements.  But maybe the data from the IQVIA Institute detailed in AAM’s new report can put a wet blanket on those efforts.

    FDA Issues Proposed Order to Facilitate Minor Changes to Solid Oral Dosage Forms to OTC Monograph Drugs, but Such Changes May Come at a Price

    On June 5, 2025, FDA announced two proposed monograph orders: 1) Proposed order OTC000038 proposes to make it easier to make (minor) changes to solid oral dosage forms not currently permitted under the specific order, and 2) proposed order OTC000037 proposes to require that certain oral dosage forms, namely orally disintegrating tablets (“ODTs”) and film dosage forms, be packaged in single unit or unit dose containers.

    FDA’s proposed order OTC000038, “Over-the-Counter Monograph Procedure for Minor Changes C001: Minor Changes to Solid Oral Dosage Forms for Certain Over-the-Counter Monograph Drugs,” when finalized, will permit manufacturers to make minor changes in the dosage form of certain over-the-counter (“OTC”) monograph drugs, from tablets and capsules to chewable tablets, ODTs, and films, without requesting a separate order, i.e., companies making such dosage form changes need not submit a request for amendment of the applicable OTC monograph order. (To be clear, the minor changes are permitted only for OTC monograph drug products that are included in deemed final orders, and not for OTC monograph products that may remain on the market pending FDA monograph orders allowing or prohibiting such products.)  The proposed order is intended to significantly simplify the development of new dosage forms for oral monograph order drugs that, at this time, may be marketed only in tablets or capsules.

    A “requestor” (defined in proposed order OTC000038 as “[a]ny person or group of persons marketing, manufacturing, processing, or developing a drug”) of an OTC monograph order drug making changes to dosage forms subject to the order may manufacture and market that new dosage form, provided the requestor maintains information necessary to demonstrate that the change 1) will not affect the safety or effectiveness of the drug, and 2) will not materially affect the extent of absorption or other exposure to the active ingredient(s) in comparison to a suitable reference product. The suitable reference product must be a capsule or tablet that is swallowed. FDA issued a companion draft guidance, which provides recommended procedures for companies to meet these requirements.

    Although this order would provide more flexibility, it does come with a price as, in a companion order, FDA proposes to require that the packaging of drugs in ODT and film dosage form must be consistent with the requirements described in monograph proposed order OTC000037, “Over-the-Counter Monograph Condition B001: Single-Unit or Unit-Dose Containers for Over-the-Counter Monograph Drugs in Orally Disintegrating Tablet and Film Dosage Forms.”  That proposed order, if finalized as proposed, will require that OTC monograph drugs in an ODT or film dosage form and subject to OTC monograph orders be packaged in single-unit or unit-dose containers.

    FDA notes that it has, in the past, required single-unit or unit-dose containers for approved new drugs in ODT and film dosage form due to concerns about such products being more palatable than capsules or tablets. Moreover, they are designed to dissolve rapidly and, for products in film dosage form, there is a concern of films sticking together.  FDA asserts that the single-unit or unit-dose containers help ensure safe and effective use of OTC monograph order drugs in ODT and film dosage forms.

    The requirement for the single-unit or unit-dose containers is not a substitute for special packaging, i.e., child resistant packaging required for certain products under the Poison Prevention Packaging Act and implementing regulations.  See 16 C.F.R. part 1700.  The proposed order describes the scope of the order to apply to all orally administered monograph order drug products in ODTs and film dosage form, even those that currently already may be marketed in such dosage form.  As readers of this blog may know, the requirement for child resistant packaging applies only to OTC oral drug products containing certain specific active ingredients.

    Comments to proposed order OTC0000037 must be submitted by August 4, 2025, and comments to proposed order OTC0000038 and the accompanying draft guidance must be submitted by October 3, 2025.

    Last Friday was a Good Day for Those Who Want to Litigate Against the Federal Government

    Last Friday, the Supreme Court delivered a trio of decisions making it easier to litigate against the federal government.  The facts and law in each case matter, and as is often the case when the Supreme Court “decides” an issue, much remains to be seen.  That said, it’s hard to see how the score on Friday wasn’t 3 for regulated industry and 0 for the federal government.

    In a pair of 7-2 decisions authored by Justice Kavanaugh, the Court took the more expansive view of who can sue the government.

    • In FDA v. R. J. Reynolds Vapor Co., the Court held that the Tobacco Control Act’s language permitting “any person adversely affected” by a denial order permitted not just the applicant, but retailers and an association of retailers to seek judicial review of the order.  While in the present case, the manufacturer, retailer, and trade association were all part of the same lawsuit, nothing in the Court’s decision requires that the applicant be a party to such a challenge.  Nor does the analysis limit the statute’s scope to retailers.  The right of consumers to bring such a statutory action is not addressed, although consumers are much discussed in analyzing prior precedent, but it is hard to see from the Court’s analysis why a consumer disappointed by a denial order would not be able to sue where they resided.
    • In Diamond Alternative Energy, LLC v. EPA, the Court held that producers of automobile fuels had Article III standing to challenge EPA’s approval of state regulations requiring automobile manufacturers to manufacture more electric and fewer gasoline powered vehicles. While the legal issue and analysis was different than in FDA v. RJ Reynolds, the outcome was the same, additional parties had the right to challenge government regulation.

    Finally, in McLaughlin Chiropractic Associates, Inc. v. McKesson Corp., a 6-3 majority held that notwithstanding statutory language providing “exclusive jurisdiction” in the courts of appeals to set aside final orders of the FCC, a party could challenge the validity of an agency’s interpretation in the district court. In sum, the Court concluded that pre-enforcement review in the courts of appeals was optional but not mandatory, and a party could wait to litigate the issue in an enforcement proceeding.  While this case interpreted the Hobbs Act, the FDC Act, CSA, and other statutes that more directly affect blog readers also contain similar exclusive jurisdiction provisions for certain agency orders. The Court’s analysis preserving the right to contest agency interpretations in district court enforcement proceedings logically extends to those statutes as well.

    We’ll be watching to see how these cases play out in the lower courts as parties in litigation with the federal government test their limits.

    FDA’s New Priority Voucher Pilot Program Has Landed: CNPV

    After teasing a new rapid review pilot program for the past few weeks, on June 17, 2025, FDA officially announced the Commissioner’s National Priority Voucher (“CNPV”) program to expedite new drug and biologic (but not device or drug-device combination product) reviews.  As described in the press release and accompanying FAQ, the CNPV program is designed to reduce review time to 1-2 months following final drug application submission.  This would be substantially shorter than PDUFA goal timelines (including for priority review as it is currently known), which range from 6 months to 12 months from submission.  The CNPV program will begin in 2025, and FDA will give a limited number of vouchers during a first-year pilot phase.  This pilot phase may be followed by an increase in the number of CNPVs issued.

    The press release describes the CNPV process as a “team-based review rather than using the standard review system of a drug application being sent to numerous FDA offices.”  This multidisciplinary team will “pre-review” the submitted information and convene for a “1-day ‘tumor board style’ meeting,” drawing on Commissioner Makary’s experience as a surgical oncologist.  As defined by the National Cancer Institute, tumor board meetings convene multidisciplinary specialists to decide on the best treatment plan for new and complex cancer cases.

    FDA plans to issue a limited number of vouchers, without specifying an exact number as of yet.  The vouchers will be issued to “companies aligned with U.S. national priorities.”  According to the press release, which uses slightly different language than the FAQ, the Commissioner will establish these national priorities, which may include, but are not limited to:

    • Addressing a health crisis in the U.S.
    • Delivering more innovative cures for the American people.
    • Addressing unmet public health needs.
    • Increasing domestic drug manufacturing as a national security issue.

    The Commissioner will use “specific criteria” to award the vouchers, and information will be provided in the near future on how companies can apply for a CNPV and “indicate their alignment with the FDA Commissioner’s criteria to meet national priorities.”  Although many of the initial criteria are broadly applicable, and FDA has not indicated that any single criterion is more important than any other, manufacturing in the U.S. may turn out to be a significant differentiator, particularly while numbers of CNPVs are more limited.

    According to the press release, “[v]ouchers can be directed by the FDA towards a specific investigational new drug of a company or be granted to a company as an undesignated voucher, allowing a company to use the voucher for a new drug at the company’s discretion and consistent with the program’s objectives.”  As suggested by this language and made clear in the FAQ, there will be “product designated” and “product undesignated” CNPV vouchers.  We look forward to additional information about the scope of each type of voucher and, in particular, the criteria and limitations for product undesignated vouchers.  With the available information, a product undesignated voucher would seem to provide the most flexibility and allow companies to pivot from one program to another in the event of unforeseen circumstances, such as ambiguous clinical trial results or problems with a manufacturing facility.

    If a company receives a voucher, it must meet certain requirements to qualify for expedited review: an applicant must submit the CMC portion of its application and draft labeling at least 60 days prior to the final application submission and be available for “ongoing communication with prompt responses to FDA inquiries.”  Commissioner Makary stated that this new program “will allow companies to submit the lion’s share of the drug application before a clinical trial is complete.”  While an interesting idea, it is not clear how that timing would ultimately work in practice and whether this refers to more than the CMC section and labeling being submitted 60 days early.

    If a company will not yet know if its clinical trial will be successful when it begins submission of the application, it might result in a situation where “the lion’s share” of an application has been submitted to FDA, and a review initiated, for an application that may never be fully submitted due to disappointing results.  The risk of cashing in a voucher in such a situation would be magnified in the case of a product undesignated voucher that could have been better used on a different program.  This assumes that the early submission would be considered a “use” of the voucher, though it is not clear that this is the intent.  Even if a company decides to wait until it has topline results in hand to decide to use a voucher, the potential for a 1-2 month review could be very valuable.  We also note that the agency has given itself some latitude to extend the review window if the data or application components are insufficient or incomplete, if pivotal trial results are ambiguous, or if the review is particularly complex.

    The benefits of the CNPV are not limited to FDA review of marketing applications.  The FAQ states that the CNPV can be applied to a product “at any stage in development.”  Such benefits during the IND phase include “enhanced communication” and “prompt responses.”  Among the questions we have are whether the voucher award criteria will differ for a product in development as compared to at the application submission stage and whether a voucher that is used for enhanced communication benefits during development can carry over to the subsequent review of an application.

    Although there are some conceptual similarities with other FDA priority review voucher programs, CNPVs are non-transferrable.  However, they remain valid through changes in company ownership, suggesting they are transferrable through mergers and acquisitions.  Vouchers must also be used within two years following receipt or the voucher will expire, so companies should consider their application submission timelines when applying for the CNPV. Time will tell if this leads to some creative corporate mergers and acquisitions.

    The CNPV program appears to share some aspects in common with the Real-Time Oncology Review (“RTOR”) program for cancer drugs and the Split Real Time Application Review (“STAR”) pilot program.  While we await additional details for the CNPV program, these programs might provide a reference for some of the details not yet provided.

    The RTOR program also involves the earlier submission of certain information, initially top-line efficacy and safety data to determine eligibility, and, if accepted, a maximum of three presubmissions and a final submission.  As described in guidance, the eligibility criteria for RTOR are as follows:

    • Clinical evidence from adequate and well-controlled investigation(s) indicates that the drug may demonstrate substantial improvement on a clinically relevant endpoint(s) over available therapies.
    • Easily interpreted clinical trial endpoints (e.g., overall survival, response rates), as determined by the review division and the Oncology Center of Excellence.
    • No aspect of the submission is likely to require a longer review time (e.g., requirement for new REMS, advisory committee, etc.).

    As described in a 2022 FDA analysis, the median time-to-approval from submission for RTOR applications was 3.3 months, ranging from 0.4 months to 5.9.  As an extreme example, FDA approved a supplement for Adcetris (brentuximab vedotin) for a new indication 11 days following application submission.

    Similarly, the STAR pilot program “aims to shorten the time from the date of complete submission to the action date” leveraging an earlier submission of much of the application prior to a final submission. However, there is not much public information about the success of the STAR program, perhaps due to low participation (in November 2024, FDA said that there had been no applications in the STAR program to date).

    Unsurprisingly, the criteria for the RTOR and STAR program are relatively similar.  They require clear and robust evidence of efficacy without any aspects that would otherwise delay a review.  The RTOR program has shown that FDA is capable of meeting ambitious review time goals under the right circumstances.  However, given that the CNPV program anticipates allowing the “lion’s share” of the application to be submitted before a trial is complete, there may not be efficacy data available at the time of this submission.  This raises questions about the extent to which the use of the CNPV will depend on evidence of efficacy and how that might affect the ability of a review to be completed in the target timeframe.

    We applaud FDA in its efforts to set, and hopefully meet, ambitious goals to approve safe and effective drugs in an expedited fashion.  However, at a time when non-expedited FDA approval decisions are delayed due to heavy workloads, we wonder whether such goals can be regularly met and whether they might come at a cost to non-participating programs.  We will be monitoring this program closely to see how it is implemented.

    DEA Cranks Out Updated Special Surveillance List and Proposed Regulatory Actions

    Special Surveillance List of Chemicals, Products, Materials and Equipment Updated

    A “laboratory supply” is any List I or List II chemical, or any chemical, substance, or other item on a special surveillance list published by the Attorney General (delegated to the Drug Enforcement Administration (“DEA”)) of chemicals, products, materials, or equipment used in the illicit manufacture of controlled substances and listed chemicals.  21 U.S.C. § 842(a).  DEA publishes the Special Surveillance List to inform about potential illicit uses of a laboratory supply and reminds that civil penalties may be imposed on businesses that distribute a laboratory supply with reckless disregard for the illegal uses to which it will be put.  21 U.S.C. § 842(a)(11).

    There is a rebuttable presumption of reckless disregard if DEA notifies a firm in writing that a laboratory supply it sold has been used by a customer, or distributed further by a customer, “for the unlawful production of controlled substances or listed chemicals a firm distributes and 2 weeks or more after the notification the notified firm distributes a laboratory supply to the [same] customer.”  21 U.S.C. § 842(a).  Distribution of a laboratory supply with reckless disregard subjects the seller of distributor to a civil penalty of not more than $250,000, now $470,640 with inflation.  21 U.S.C. § 842(c)(2)(C).

    DEA issued a notice on June 4th effective immediately updating the Special Surveillance List for the second time in less than two years.  Special Surveillance List of Chemicals, Products, Materials and Equipment Used in the Manufacture of Controlled Substances and Listed Chemicals, 90 Fed. Reg. 23,711 (June 4, 2025). DEA published the original Special Surveillance in May 1999.  The agency revised the list in October 2023 when it added twenty-eight chemicals, removed two List I chemicals automatically included as a laboratory supply and added “tableting machines, including punches and dies.”

    The newly updated Surveillance List includes chemicals, materials and equipment used in the manufacture, production and distribution of currently abused synthetic drugs like fentanyl, amphetamine, methamphetamine, PCP, LSD, ketamine and others.  Id. at 23,712.  Updating the list, DEA consulted law enforcement officials, forensic laboratory authorities, intelligence groups, drug signature and profiling programs, and international organizations.  Id.  The agency examined clandestine laboratory seizure reports, drug signature and profiling reports, intelligence reports, and scientific literature regarding:

    1. Illicit controlled substance and listed chemical production methods;
    2. Chemicals, materials, and equipment used in the clandestine production; and
    3. Their role and importance in the synthesis of controlled substances and listed chemicals.  Id.

    DEA added fourteen additional chemicals to the Surveillance List, updated the listing of a chemical on the list to include its other esters, and removed a List I chemical that is automatically a laboratory supply.  In addition, DEA added binding, disintegrating, filling, flowing, and lubricating agents that are excipients, specifically including products containing:

    • Dicalcium phosphate,
    • Magnesium stearate,
    • Microcrystalline cellulose,
    • Silicon dioxide, and
    • Stearic acid.  Id.

    The Surveillance List continues to include hydrogenators, “tableting machines, including punches and dies,” encapsulating machines and twenty-two liter heating mantels.  Id. at 23,713.

    DEA did not touch the Special Surveillance List for over twenty years, and has revised it twice within the past two years.  We think that the agency will revise and update the list more frequently as clandestine manufacturing trends require.

    Propionyl Chloride, A Proposed List I Chemical

    DEA issued a notice of proposed rulemaking on June 3rd, following its October 12, 2023, advanced notice of proposed rulemaking (“ANPRM”) to regulate propionyl chloride as a List I chemical.  Designation of Propionyl Chloride as a List I Chemical, 90 Fed. Reg. 23,483 (June 3, 2025).  DEA found that propionyl chloride is being used and is important in the illicit manufacture of fentanyl, fentanyl analogues and fentanyl-related substances.  DEA found that propionyl chloride is a replacement for other List I and precursor chemicals in several illicit fentanyl manufacturing methods.  Id. at 23,485, 23,486.  DEA states that without regulations, propionyl chloride is readily available from 43 chemical suppliers.  Id. at 23,486.

    Six respondents submitted comments to DEA’s ANPRM: three in support of controlling propionic chloride as a List I chemical, and three opposed.  Three commenters noted that propionyl chloride has legitimate potential use as a reagent for chemical synthesis processes  including in the natural product syntheses of N-deoxymilitarinone A and torrubiellone B, potential pharmaceutical development, resin/materials development, and agricultural chemicals.  One commenter, without providing details, asserted that the chemical may have uses in the medical field.  Id. at 23,486.

    DEA does not propose to establish a regulated transaction threshold for propionyl chloride, therefore all transactions would be regulated and subject to DEA registration, recordkeeping, reporting and security requirements.  DEA also does not propose to exempt chemical mixtures containing concentrations of propionyl chloride, though manufacturers may submit an application for exemption from control of their specific product.  Id. at 23,483.  DEA explained that an exemption can be granted if the agency determines that the mixture is formulated such that “it cannot be easily used in the illicit production of a controlled substance and the listed chemical cannot be readily recovered.”  Id. at 23,486.

    The proposed placing of propionyl chloride in List I is not subject to Executive Order 14192 requiring the elimination of ten regulations for each new regulation.  Public comments must be submitted electronically or postmarked on or before July 3, 2025.

    4-Fluoroamphetamine, A Proposed Schedule I Substance

    On June 3rd DEA also issued a notice of proposed rulemaking to control 4-fluoroamphetamine (“4-FA;” 1-(4-fluorophenyl)propan-2-amine), including it salts, isomers, and salts of isomers, in schedule I.  Schedules of Controlled Substances: Placement of 4-Fluoroamphetamine in Schedule I, 90 Fed. Reg. 23,477 (June 3, 2025).

    4-FA is a central nervous system stimulant sharing structural and pharmacological similarities with the schedule II stimulants amphetamine and methamphetamine, and the schedule I stimulant 3,4-methylenedioxymethamphetamine, “MDMA”.  In March 2018 the Commission on Narcotic Drugs voted to add 4-FA to schedule II of the 1971 Convention on Psychotropic Substances, requiring signatories including the U.S. to schedule the substance to meet minimum requirements of the treaty.  The treaty requires signatories to implement licensing (registration) requirements to manufacture, distribute, import and export 4-FA, impose 4-FA importing and exporting requirements, and submit reports on 4-FA quantities manufactured, exported and imported as well as stocks to the International Narcotics Control Board.  Scheduling 4-FA in schedule I will enable the U.S. to fulfill its treaty obligations.  Id. at 23,478-79.

    In response to a September 2019 DEA request to the Assistant Secretary for Health and Human Services (“HHS”) to conduct a scientific and medical evaluation of 4-FA, HHS recommended that it be placed in schedule I.  Id. at 23,479.  DEA conducted its own eight-factor analysis of 4-FA and found “that the facts and all relevant data constitute substantial evidence of the potential of abuse of 4-FA…[a]s such, DEA hereby proposes to permanently schedule 4-FA as a schedule I controlled substance.”  Id. at 23,481.  DEA also found that 4-FA has a high potential for abuse, no currently accepted medical use in treatment in the U.S. and lacks accepted safety for use under medical supervision, the criteria for schedule I placement.  Id. at 23,482.

    Similar to DEA’s ANPRM for propionyl chloride, comments on DEA’s proposed scheduling of 4-FA must be submitted electronically or postmarked on or before July 3, 2025.  And, DEA scheduling actions are not subject to Executive Order 14192.