FDA is moving with notable speed.  Less than a month after announcing its inaugural class of Commissioner’s National Priority Voucher (CNPV) winners (see our previous post), the agency has already named its second cohort.

The CNPV program, designed to accelerate the review of products that advance key national priorities, from improving affordability to addressing unmet public health needs, has captured the attention of industry.  While we have yet to see a voucher’s effect on a review timeline, a voucher may materially change a product’s path to market.

Announced on November 6, the six new awardees reflect some of the most closely watched products in development today, spanning gene editing, oncology, metabolic disease, and global public health.  Five of the six products selected are already approved for at least one indication.  While the basis for some of the selections is clear, others are less clear.  For two of the products (Wegovy and orforglipron, both identified as “for obesity and related health conditions”), their selection was concurrent with pricing agreements, including Most-Favored-Nation (MFN) pricing agreements:

• Wegovy (semaglutide) – Since Wegovy’s initial approval in 2021 for chronic weight management, Wegovy’s labeling has expanded to include adolescents (2022), cardiovascular risk reduction (March 2024), and non-cirrhotic MASH (August 2025). Its selection likely reflects alignment with the CNPV program’s affordability and national health priority goals – potentially tied to the forthcoming 25 mg oral formulation and recently announced pricing commitments for GLP-1s.
• Orforglipron – As the only non-approved product on the list, orforglipron is a once-daily, oral, non-peptide GLP-1 receptor agonist, which would be positioned to offer a more accessible alternative to injectable GLP-1 therapies, if approved. Its inclusion signals FDA’s recognition of obesity as a national health priority, and the selection comes in the context of Eli Lilly’s recent drug-pricing announcement, aligning with the CNPV program’s goals of improving affordability and patient access.

The remaining four products selected for vouchers appear to be for potential expansions of existing indications or new indications:

• Casgevy (exagamglogene autotemcel) – Casgevy was approved by the FDA in December 2023 as the first FDA-approved CRISPR-based gene-editing therapy for patients ≥12 years with Sickle Cell Disease. Ongoing clinical development may further expand its use to younger patients (ages 5-11).
• Jemperli (dostarlimab-gxly) – Although Jemperli was already approved for certain endometrial cancer indications beginning in 2021, the product’s December 2024 Breakthrough Therapy Designation for locally advanced mismatch repair deficiency (dMMR)/microsatellite instability-high (MSI-H) rectal cancer was likely a key driver. Data to date showing a 100% clinical complete response rate suggest a potential shift in the treatment paradigm.
• Hernexeos (zongertinib) – Hernexeos was granted accelerated approval in August 2025 as a second-line, first-in-class oral HER2-directed tyrosine kinase inhibitor for HER2-mutated NSCLC. Hernexeos has provided a targeted option for a population with historically limited choices and poorer outcomes.  Ongoing Phase 3 development is evaluating Hernexeos as a first-line therapy in combination with Keytruda, with preliminary data expected late next year.
• Sirturo (bedaquiline) – Sirturo was initially granted accelerated approval in 2012 for the treatment of pulmonary multidrug-resistant tuberculosis (MDR-TB) in adults, followed by traditional approval in July 2024 with expanded use in pediatric patients > 2 years of age. The voucher is identified as being for “drug-resistant tuberculosis in young children.”  It is not clear what expansion to the labeling is anticipated.

This second CNPV cohort reinforces that FDA intends to deploy this program to reward products that are in line with the Commissioner’s priorities.  We will be watching to see how these vouchers play out.

On November 6, 2025, the Centers for Medicare & Medicaid Services (CMS), through its Center for Medicare and Medicaid Innovation, announced the upcoming launch of the voluntary GENEROUS (GENErating cost Reductions fOr U.S. Medicaid) model, through which participating drug manufacturers can offer “most favored nation” (MFN) pricing on their covered outpatient drugs (CODs) to Medicaid through supplemental rebates to state Medicaid programs.  Set to launch on January 1, 2026 and continue for five years until December 31, 2030, the GENEROUS model will allow CMS to enter into negotiated agreements with manufacturers to set standard coverage criteria and effectuate MFN pricing for their CODs, which participating states may then adopt through a supplemental rebate agreement with the participating manufacturer.  This initiative marks the Trump administration’s latest action regarding MFN pricing, which follows several recent MFN agreement announcements (e.g., here, here, and here) and the May 12, 2025 Executive Order on MFN pricing (see our prior coverage on the Executive Order here and here).

Under the Medicaid Drug Rebate Program (MDRP), state Medicaid agencies obtain rebates from manufacturers in return for coverage of the manufacturer’s covered outpatient drugs (CODs).  The required rebate amount is set by statute, but most states also negotiate voluntary supplemental rebates with manufacturers, typically offering placement on the state’s preferred drug list in exchange for the rebates.  Recognizing the potential for substantial savings on some CODs if states’ net costs for single source or innovator multiple source CODs were set at MFN pricing, CMS stated that the GENEROUS model aims to facilitate a process whereby an interested manufacturer may voluntarily offer states MFN pricing by means of supplemental rebates.  In addition, CMS noted that any supplemental rebates provided by manufacturers under the model will not affect Medicaid Best Price and thus will not affect the ceiling prices required under the 340B drug discount program.

In terms of process, eligible manufacturers (i.e., those with an active Medicaid National Drug Rebate Agreement) that apply for and are accepted to participate in the model will enter into negotiations with CMS to set the key terms of supplemental rebate agreements that the manufacturer will offer to states to effectuate MFN pricing for their single source and innovator multiple source drugs.  These key terms include standard coverage criteria and utilization management policies, such as prior authorization criteria and Preferred Drug List placement.  The MFN price will be based on the average price for the drug’s NDC-9 in each of the selected countries (specifically, the United Kingdom, France, Germany, Italy, Canada, Japan, Denmark, and Switzerland) over the 12-month period reported to CMS by participating manufacturers, net of all rebates, discounts, and price concessions, and adjusted by the selected country’s gross domestic product (GDP), based on purchasing power parity.

After this negotiation phase, the manufacturer will enter into a participation agreement (PA) with CMS and formally become a participant in the GENEROUS model.  CMS will then communicate these agreed upon, standardized key terms to all states, who may choose to execute a state PA with CMS, thereby also becoming participants in the model.  Such participating states will adopt the Key Terms through a supplemental rebate agreement (SRA) with a participating manufacturer, although CMS stated that participating states may create their own criteria and policies as part of their SRAs as long as they are no more restrictive than the standardized access policy negotiated by CMS.  CMS also stated that participating states can determine which CODs they would like to obtain a price similar to what other countries pay with respect to that participating manufacturer.

CMS will share in the supplemental rebates with states via a reduction in the federal share of Medicaid payments, and will conduct monitoring activities to ensure states’ and manufacturers’ compliance with all aspects of the model, such as monitoring the accuracy of payments made under these SRAs.  In addition, CMS will engage an independent contractor to evaluate the model’s impact on drug spending, quality of care, access to medications, and healthcare costs.

Eligible manufacturers may submit applications until March 31, 2026.  CMS has released a Request for Applications (RFA) for drug manufacturers interested in participating in the GENEROUS Model, which outlines eligibility criteria and additional details on the model. CMS will negotiate and enter into PAs with manufacturers from December 2025 through June 30, 2026.  CMS is also seeking letters of intent from state Medicaid agencies interested in participating.  Interested states will have the ability to review pricing information and Key Terms before committing to join the GENEROUS model.  Next month CMS anticipates issuing an RFA for interested states, which will be able to apply for participation in the model on a rolling basis through August 31, 2026.

Donald Trump’s May 12, 2025, Executive Order on MFN pricing threatened that, If significant progress toward most-favored-nation pricing for American patients was not achieved through voluntary measures, “the Secretary [of HHS] shall propose a rulemaking plan to impose most-favored-nation pricing.”   We wonder if the GENEROUS program is a substitute for the rulemaking.  If so, it is a much milder outcome than the threatened rule, since it is not a regulation, does not impose any pricing, is temporary, and is limited to Medicaid.  Whether manufacturers choose to participate will likely depend on what coverage advantages and exceptions from utilization controls they can negotiate in exchange for MFN pricing.

We will continue to follow this and other MFN developments as they arise.

Hyman, Phelps & McNamara, P.C. (“HPM”) Director Larry Houck will moderate “New Rules, New Risks: Inside the Changing World of Federal Inspections” at the Food and Drug Law Institute’s Enforcement, Litigation, and Compliance Conference in Washington, D.C., December 4-5, 2025.  The session will explore the ever-evolving landscape of federal inspections, including the Food and Drug Administration’s use of unannounced foreign inspections, changes in domestic inspection priorities, and the effects of reduced staffing.  The session will explore how the Drug Enforcement Administration’s regulatory oversight and inspection activity impacts manufacturers, distributors, pharmacies, practitioners and other registrants amid growing scrutiny of controlled substances.  Panelists will also examine how federal agencies are rebalancing inspection strategies across borders, sectors, and products.  The session will occur Friday, December 5th.

Mr. Houck was a diversion investigator with DEA in the field and at agency headquarters for 15 years prior to joining HPM in 2001.

Some of the topics in other conference sessions will include:

• FDA’s Compliance Challenges and Enforcement Priorities
• Criminal Liability and Enforcement Trends
• AI in Industry and at FDA
• Dietary Supplements and Labeling
• Significant Class Action Trends Impacting Food, Dietary Supplements and Drug Manufacturers
• FDA Tobacco Enforcement
• Drug Shortages
• False Claims
• Medical Device Enforcement
• State-Level Challenges and Initiatives
• Compounding Litigation and Enforcement
• Recent Court Decisions Impacting FDA’s Authority

Further conference information, including registration, can be found here.

As we previously reported, nearly four years ago, the Natural Grocers, Citizens for GMO Labeling, Label GMOs, Rural Vermont, Good Earth Natural Foods, Puget Consumers Co-op, and the Center for Food Safety (Plaintiffs) filed a complaint against AMS challenging the final rule implementing the National Bioengineered Food Disclosure Standard (NBFDS), also known as the BE labeling rule.  Plaintiffs challenged the rule’s use of the term “bioengineered” (rather than “GMO” or “genetically engineered”), the rule’s limitation of the mandatory disclosure being required only if the food contains detectable modified genetic material, and the rule’s options of using a QR code disclosure or a text message for the disclosure statement.  In 2022, the U.S. District Court of the Northern District of California largely upheld the standard but remanded (without vacatur) the text and QR disclosure options.  Plaintiffs appealed.

On October 31, 2025, the Ninth Circuit reversed several aspects of the district court’s ruling, sending AMS back to the drawing board, i.e., it determined that the district court erred in the definition of bioengineered food, and it abused discretion in declining to vacate the two disclosure format provisions.  It did affirm the district court’s determination regarding the use of the term “bioengineered,” however.

First, the Ninth Circuit reversed the district court’s ruling that AMS could exempt highly refined foods from the definition of “bioengineered foods.”  The Ninth Circuit agreed with the plaintiffs that the current rule not requiring a disclosure statement, if the manufacturer concludes the BE ingredients are not detectable, is not the legal “equivalent to saying that the food does not  ‘contain’ such material.”  The court determined that a food contains modified genetic material “if it actually has modified genetic material within it.”  The crucial issue is that undetectable is not the same as non-presence; it may contain genetic material even if that is not detectable.  That said, the court acknowledged that AMS has the authority to adopt a detectability exception as the statute requires that AMS determine “the amount[] of a bioengineered substance that may be present in food, . . .  in order for the food to be a bioengineered food.”  In other words, AMS could, for example, adopt a limit of detection setting the amount of a BE substance that may be present.  If the bioengineered substance is not detectable within the limit, the food would be considered non-BE.  The food “would not count as a ‘bioengineered food’ under the regulatory standard only because it was excluded under a limit-of-detection-based standard” set by AMS.  The Ninth Circuit remanded the case to the district court, with instructions to remand the relevant regulations to the AMS and to determine whether any part of the regulation should be vacated in connection with that remand.

The Ninth Circuit also disagreed with the district court’s decision to not vacate the regulations allowing the disclosure statement via text or QR code, while AMS is going through the administrative process of reconsidering these options.  It reversed the district court’s decision to deny vacatur; the district court erred when it allowed the use of disclosure options that were found to be inadequate and unlawful, and remanded with instructions to grant an appropriate prospective vacatur, after receiving input from the parties on that specific point.

AMS did not lose on all fronts.  The Ninth Circuit affirmed the district court’s decision that AMS had not been arbitrary and capricious in requiring the term “bioengineered” rather than genetically engineered or GMO.

We will be monitoring future actions by AMS related to the threshold setting for detectable modified genetic material and possible actions regarding an electronic option for the disclosure statement.

Last Friday, October 31, the Centers for Medicare & Medicaid Services (CMS) released the Calendar Year (CY) 2026 Medicare Physician Fee Schedule (PFS) Final Rule, which contained important changes in regulations governing the calculation of average sales price (ASP) for drugs covered under Medicare Part B.  The most significant of these are new policies regarding bundled sales arrangements and new documentation and submission requirements related to bona fide service fees (BFSFs).  Although some of these provisions impose new burdens, manufacturers were given a reprieve on some of the most intrusive requirements in the July 2025 proposed rule (see our prior blog post on the proposed rule here).

The rule will become effective on January 1, 2026, despite numerous comments raising concerns about the proposed rule’s compliance timeline.  Below we summarize the key provisions that CMS finalized (and point out those that CMS chose not to finalize).

I.  Average Sales Price

Currently, manufacturers are required to report ASP to CMS quarterly and calculate ASP for each NDC in accordance with the methodology specified by statute and CMS regulations.  Among other requirements, ASP must reflect sales to all U.S. purchasers, except sales exempt from Medicaid best price and sales that are merely nominal in amount.  In addition, price concessions must be deducted from the ASP calculation, while BFSFs are not considered price concessions and are not deducted from the ASP calculation.  In other words, excluding BFSFs increases the ASP and therefore the Part B payment limit, which is generally 106% of the ASP.

Bundled Arrangements

Manufacturers may offer certain price concessions as part of a “bundled arrangement,” in which the price concessions are conditioned upon the purchase of the same drug or biological or other drugs or biologicals or another product.  ASP calculations must account for such bundled price concessions.

In the proposed rule, CMS proposed to add a definition of “bundled arrangement” to the existing ASP regulations at 42 C.F.R. § 414.802, which the final rule adopted with slight modifications:

Bundled arrangement means an arrangement regardless of physical packaging under which the rebate, discount, or other price concession is conditioned upon the purchase of the same drug or biological or other drugs or biologicals or another product or some other performance requirement (for example, the achievement of market share, inclusion of tier placement on a formulary) or where the resulting discounts or other price concessions are greater than those which would have been available had the bundled drugs or biologicals been purchased separately or outside the bundled arrangement.”

This definition tracks the definition that has appeared in the Medicaid Drug Rebate Program (MDRP) regulations since 2007.  See 42 C.F.R. § 447.502.  However, unlike the Medicaid definition of “bundled arrangement,” which states that value-based purchasing arrangements may qualify as a bundled sale, CMS refrained from expressly including value-based purchasing arrangements in the ASP definition in order to “provide[] the agency the opportunity to monitor and assess how such a definition may affect ASP . . . .

In addition, CMS finalized regulations similar to the Medicaid counterpart regarding how to allocate discounts under bundled arrangements.  Specifically, under the final rule, discounts in a bundled sale, including those resulting from a contingent arrangement, are allocated proportionally to the total dollar value of the units of all drugs or products sold under the bundled arrangement.  However, CMS has apparently reversed its guidance regarding agreements that contain both contingent and non-contingent discounts.  Whereas prior CMS guidance under the MDRP appeared to indicate that only contingent discounts need be proportionally allocated, CMS stated in the final rule preamble that “the ‘unbundling’ of both contingent and non-contingent discounts is appropriate because ‘all the discounts’ in the bundled arrangement should be proportionally allocated.”

Bona Fide Service Fees

Bona fide service fees have historically been excluded from ASP because, as noted above, ASP excludes prices excluded from Medicaid best price, and BFSFs, as defined in the MDRP regulations, are excluded from best price.  CMS proposed to add a definition of BFSF to the ASP regulations, which would have tracked the MDRP definition:  fees paid by a manufacturer to an entity, that (1) represent FMV (2) for a bona fide, itemized service actually performed on behalf of the manufacturer (3) that the manufacturer would otherwise perform (or contract for) in the absence of the service arrangement, and (4) that are not passed on in whole or in part to a client or customer of an entity, whether or not the entity takes title to the drug.  CMS also proposed a number of significant changes to the policies regarding BFSFs, which would have imposed substantial new obligations on manufacturers.

Responding to commenters’ objections, CMS finalized only some of these policies.  CMS was persuaded not to finalize its proposed BFSF definition, which would have mandated a specific methodology for evaluating fair market value and would have required manufacturers to retain an independent firm to evaluate fair market value for every new or renewed percentage-based fee agreement.  CMS also decided not to finalize a proposed list of examples of fees that are not considered BFSFs (e.g., credit card fees, certain data fees, certain percentage-based distribution fees, and tissue procurement fees).

However, CMS did finalize several other proposed policies that have significant implications for BFSFs.  CMS finalized its proposed requirement that manufacturers must obtain letters from the recipient of a BFSF certifying that the fee is not passed on in whole or in part to a client or customer of the recipient of the fee, regardless of whether the entity takes title to the drug.  Letters must be obtained for all new agreements entered into prospectively on or after January 1, 2026, and must be submitted to CMS along with the ASP submission for the relevant quarter.  This is an unusual requirement given that CMS did not finalize an ASP definition of BFSF, so there is no prohibition on pass-through of fees in the first place.

Perhaps most notably, CMS finalized its proposal to require manufacturers to submit reasonable assumptions as part of manufacturers’ quarterly ASP data submissions to CMS.  Previously, submission of reasonable assumptions was optional.  These reasonable assumptions must include summary information on FMV assessments, including documentation of the methodology used to determine FMV for current, new, and renewed BFSF contracts, and periodic reviews of FMV.  CMS advised that summaries should be “well-detailed summaries of FMV methodologies that clearly describe the data sources, assumptions, and rationale supporting the determination.”   CMS noted that it will provide a template for manufacturers to use to document their FMV analysis summaries.  CMS expects manufacturers to document and submit the FMV summaries for all current BFSF arrangements by the April 30, 2026 deadline for ASP data submissions for the first quarter of 2026.  After that, FMV summaries must be submitted if there were new or renewed BFSF agreements during the quarter.

Units Sold at Maximum Fair Price

The Inflation Reduction Act of 2022 established the Medicare Drug Price Negotiation Program, which requires the Secretary of Health and Human Services (HHS) to negotiate a maximum fair price (MFP) with drug companies for certain high expenditure, single source drugs covered under Medicare Part D (starting in 2026) and Part B (starting in 2028).   Beginning in initial price applicability year 2028, for selected drugs payable under Part B, the Medicare Part B payment limit during the price applicability period is 106% of MFP.  In the final rule, CMS confirmed that it will publish only the actual MFP-based payment limit for selected drugs, and no ASP information will be displayed.  Although the payment limit for selected drugs will be based on the MFP rather than ASP, manufacturers of such drugs will still be required to calculate and submit ASP.

As described above, manufacturers of drugs payable under Part B are required by statute to include in ASP sales to all U.S. purchasers, with two exempted categories of sales: (1) sales exempt from best price; and (2) sales that are merely nominal in amount.  Units of drugs sold at MFP are included in the determination of best price.  Because the statutory language does not expressly or implicitly exempt units of drugs sold at MFP from the manufacturer’s ASP calculation, CMS clarified that units of selected drugs sold at MFP are included in the ASP calculation.  As a result, manufacturers’ ASP calculations will be required to include units of selected drugs sold at MFP on or after January 1, 2026, as applicable.

II.  Changes to Medicare Inflation Rebate Programs

In addition to the changes in ASP regulations, the CY 2026 PFS final rule revised the regulations implementing the Medicare inflation rebate program established under the Inflation Reduction Act.

Medicare Part B inflation rebates

The changes to the Medicare Part B inflation rebate program are relatively minor fixes, which include the following.

• Under pre-existing regulations, the benchmark quarter is defined as 3Q 2021 for a drug with a first marketed date on or before December 1, 2020, and for a drug with a first marketed date after that date, the benchmark quarter is the third full quarter after the first marketed date. Under the final rule, if data needed to calculate the payment amount in those quarters are not available, the benchmark quarter will become the third full quarter after the drug is assigned a billing and payment code.
• Under pre-existing regulations, if a published payment limit is not available for a benchmark quarter, CMS will use the lower of 106% of the manufacturer reported ASP or WAC (or, if those are not available, 106% of WAC reported in other sources). To avoid the use of a negative ASP reported by a manufacturer, CMS revised the rule to state that, in the absence of a published payment limit for the benchmark quarter, CMS will use positive ASP or WAC reported by manufacturers to CMS (and WAC from other sources if these are not available).

Medicare Part D inflation rebates

CMS’s revisions to the Medicare Part D inflation rebate regulations are more significant, and relate to the statutory exclusion of sales under the 340B drug discount program from Part D inflation rebates beginning with plan year 2026.  See 42 U.S.C. § 1395-114b(b)(1)(B).  The problem in implementing this exclusion is that a Part D drug’s status as having been purchased under the 340B program is generally not known at the time of dispensing, so that covered entities can only identify the drug’s Part D status retrospectively.  Accordingly, CMS has finalized a “claims-based methodology” to remove 340B units from its Part D inflation rebate calculations.  Under this methodology, CMS will start with the prescriber NPI number from the Prescription Drug Event (PDE) record (i.e., the Part D dispensing record); then find the provider’s Medicare Provider Number (MPN) by crosswalking the NPI number with Medicare Part A and B claims; then filter the NPI and MPN numbers using the 340B Office of Pharmacy Affairs Information System (OPAIS) database, which identifies the MPN numbers for 340B covered entities.  Another process will be used to link NPIs of 340B contract pharmacies in the PDE record to contract pharmacies listed in the OPAIS database.  These processes will result in a file of 340B-affiliated NPIs, which will be used to exclude unit dispensed by entities with these NPIs from the inflation rebates.

CMS estimates that approximately 10-35% of total units will be removed from the rebate calculation.  Under the statute, the exclusion of 340B units is not subject to administrative or judicial review, and CMS has decided not to permit disputes regarding excluded 340B units under the Suggestion of Error process, explaining that this process is limited to mathematical errors.

In the hope of improving the accuracy of 340B unit exclusions, CMS is establishing a voluntary 340B claims repository as of January 1, 2026, initially for usability testing.  The repository will receive voluntary submissions each quarter from 340B covered entities of several simple data elements (e.g., NPI, date of service, fill number) from all of their claims submitted to Medicare Part D plans.  CMS would match these data to PDE records for each drug during a period to identify which units to exclude from inflation rebate calculations.  The preamble explained that CMS is considering mandatory reporting in the near future, but declined to give a timeline for such requirement.  During the initial usability test period, the repository will not be used to actually exclude any units, and it will not be used for that purpose until a policy to do so is proposed and finalized.

III.  Autologous Cell-Based Immunotherapy and Gene Therapy

The rule finalized the continuation of the existing bundled payment policy for CAR T-cell therapies (which was initially finalized in the CY 2025 PFS final rule) and extended the policy to autologous cell-based immunotherapies and gene therapies.  As a result, under the final rule, preparatory procedures for patient-specific cell or tissue procurement and processing required for manufacturing are bundled into the product payment and are not paid separately.

Prior to the final rule, payment for procedures required for manufacturing other autologous cell-based immunotherapies and gene therapies (other than CAR T-cell therapies) had not been explicitly addressed by CMS.  In the final rule, CMS acknowledged that the tissue procurement step for all autologous cell-based therapies is “a pivotal part” of the manufacturing process and the overall cost of the product (i.e., COGS), and therefore should not be paid separately.

Consistent with this policy to include preparatory procedures for manufacturing an autologous cell-based immunotherapy or gene therapy in the payment of the product itself, CMS had initially proposed that such payments not be considered a BFSF for purposes of calculating the manufacturer’s ASP, and proposed to require their inclusion in ASP starting January 1, 2026.  However, CMS decided not to finalize either of these proposals based on public comments.  Instead, under the final rule, manufacturer-paid preparatory services may be treated as BFSFs—and thus be excluded from ASP—when they are itemized, represent fair market value, are performed on behalf of the manufacturer, and are not passed through to a purchaser.

IV. Conclusions

Although the final rule may be seen as a partial win for the pharmaceutical industry and other concerned stakeholders who objected to a number of proposals that CMS decided not to finalize, the final rule still contains major policy changes with substantial impacts on manufacturers and their government pricing activities and obligations, with a fast-approaching deadline of January 1, 2026 for manufacturers to come into compliance with the new data submission requirements.

Looking to the future, CMS will soon be issuing a template for use in submitting “detailed summaries” of fair market value methodologies to be submitted with the ASP submission for 1Q 2026 and subsequent quarters.  Beyond the immediate future, CMS has expressly stated that it will continue to consider a number of its non-finalized proposals in a future rulemaking, including proposals related to FMV determinations and extending the no pass-through requirement to “affiliates” of the service provider.  We expect CMS eventually to finalize a definition of bona fide service fees for ASP purposes.  Moreover, regulations under the MDRP will almost certainly be revised so that the two definitions are consistent.

We will continue to monitor developments on this rule, including any legal challenges, as they arise.

Biosimilars, costing about 50% of their reference products, have generated $56 billion in healthcare savings since 2015, with $20 billion saved in 2024 alone.  Compared to the small molecule market though, that’s pocket change.  It should come as no surprise therefore that FDA is actively working on plans to increase the uptake of biosimilars.

HHS detailed a biologics-specific “Patient Affordability Crisis” in a recent Fact Sheet, expressing concerns about “treatment abandonment, with patients rationing doses, skipping treatments, or going without medication entirely, resulting in disease progression, hospitalizations, and worse health outcomes” arising from high costs of biologics and provider hesitancy to adopt biosimilars.  Recognizing the need to address this issue, HHS, on October 29, 2025 announced its plan to:

• Eliminate unnecessary clinical trials in favor of improved analytical testing methods;
• Facilitate pharmacy-level substitution by removing barriers to interchangeability designation; and
• Reduce barriers to market entry by providing clearer guidance and more efficient processes to speed up approvals and reduce development uncertainty.

Along with this Fact Sheet, FDA published a guidance on October 29, 2025 essentially calling for the end of comparative clinical studies for a large swath of biosimilars.  Previous guidance advised that a comparative clinical study “will be necessary to support a demonstration of biosimilarity if there is residual uncertainty about whether there are clinically meaningful differences between the proposed product and the reference product based on comparative analytical studies, an assessment of toxicity, comparative human PK and PD studies (if there is a relevant PD measure(s)), and a clinical immunogenicity assessment.”  This new guidance, however, explains that due to evolving scientific approaches and additional experience in evaluating biosimilarity, comparative clinical studies may no longer be necessary to support a demonstration of bioequivalence.  This is because a comparative analytical assessment is “generally more sensitive” than a comparative clinical study now that “currently available analytical technologies can structurally characterize highly purified therapeutic proteins and model in vivo functional effects with a high degree of specificity and sensitivity using in vitro biological and biochemical assays.”  Generally, FDA now believes that the comparative analytical analysis may be sufficient if an appropriately designed human pharmacokinetic similarity study and an assessment of immunogenicity is performed.

Essentially, FDA is opening the door to more approvals without comparative clinical efficacy studies.  But the Guidance does not offer much in the way of knowing whether a comparative analytical analysis will be sufficient.  It only directs sponsors to “carefully consider what clinical study(ies) would be necessary” and “consider a streamlined approach where” a comparative efficacy study may not be necessary.  The recommendations state that a streamlined approach should be considered when:

• The reference product and proposed biosimilar product are manufactured from clonal cell lines, are highly purified, and can be well-characterized analytically;
• The relationship between quality attributes and clinical efficacy is generally understood for the reference product, and these attributes can be evaluated by assays included in the comparative analytical analysis; and
• A human pharmacokinetic similarity study is feasible and clinically relevant.

The Guidance does not offer much more in assessing whether comparative efficacy studies remain necessary, as it is a case-by-case analysis, but it’s definitely a good start.

The Agency believes this move will facilitate the development of new biosimilar products by eliminating costly and time-consuming studies.  Indeed, an FDA analysis found that comparative efficacy studies usually take 1-3 years and cost $24 million on average but add “little scientific value compared with advanced analytical testing.”

This guidance builds on FDA’s apparent move to increase flexibility in the biosimilar space.  In the last few years, the Agency has signaled its intent to eliminate the interchangeability distinction for biosimilars, and this intent was reiterated in the HHS Press Release announcing this Guidance.  There, HHS states “The agency through a separate initiative also plans to make it easier for biosimilars to be developed as interchangeable with brand-name biologics, helping patients and pharmacists choose lower-cost options more easily.”  This has been long-spoken of, but no action has been taken yet.  For now, we wait with bated breath to see if this Guidance and any accompanying policy changes will facilitate the kind of entry we’ve seen on the small molecule generic side on the biosimilar side.

On October 13, 2025, Governor Gavin Newsom signed into law SB 68, titled “Allergen Disclosure for Dining Experiences Act,” officially creating a statewide requirement for certain restaurants to disclose major food allergens on their menus.

What SB 68 Requires

SB 68:

• Requires disclosure of the nine major food allergens:  milk, eggs, fish, crustacean shellfish, tree nuts, wheat, peanuts, soybeans, and sesame.
• Effective July 1, 2026, requires that any food facility that is subject to the federal menu-nutrient disclosure requirements (i.e., chains with 20+ locations offering substantially the same menu items) must provide written notification of the major food allergens they know or reasonably should know are present in each menu item.
• Permits restaurants to display the allergen information directly on the menu (e.g., “contains:  soybeans, wheat”) or via a digital format (for example, a QR code linking to a detailed allergen chart).  If the digital option is chosen, the restaurant must also provide an alternative non-digital method (print booklet, chart, separate allergen-specific menu, etc.) for customers without digital access.
• Excludes pre-packaged foods already subject to federal labeling law as well as compact mobile food operations or non-permanent food facilities.
• Classifies a violation of these provisions as a misdemeanor.

Why This Matters

According to proponents of this law, this new law constitutes a monumental change for consumers with food allergies (estimated at approximately 2-4 million Californians) and their families.  See here and here.  According to the Asthma and Allergy Foundation of America (AAFA), nearly half of food-allergy related deaths in the United States are tied to restaurants or other food-service providers.

The Food Allergy Research & Education and California Restaurant Association opposed the law and raised concerns that the law could impose a burden on the business side and open the door to predatory lawsuits.  Proponents referenced ex-U.S. laws that require disclosure of allergens as evidence that such concerns are misplaced.

A Roadmap for Future State Legislation?

California is the first state in the United States to require (major) chain restaurants to disclose major food allergens on their menus.

But this law may just be a starting point:

• The law currently covers only large chains.  Over time, advocacy groups like the AAFA hope the law will expand to smaller restaurants and food-service establishments.
• It remains to be seen how the rule is enforced, how restaurants adapt, and whether the intended safety outcomes are achieved—especially in reducing allergen-related incidents in food-service settings.
• Other states may look to California’s experience and adopt similar laws, leading toward broader national standardization of allergen disclosure in restaurants.

On September 30, 2025, FDA held a public meeting titled “Onshoring Manufacturing of Drugs & Biological Products.”  Driven by Executive Order 14293, “Regulatory Relief To Promote Domestic Production of Critical Medicines,” the meeting focused on reducing U.S. dependence on foreign pharmaceutical sources and promoting investment in domestic manufacturing.

FDA highlighted its new PreCheck Initiative as the primary mechanism to achieve this goal – streamlining and accelerating the establishment of high-priority U.S. facilities through early engagement between FDA and industry to address facility design, quality, and compliance issues before operations begin.  By increasing regulatory predictability and reducing delays, PreCheck aims to spur U.S. investment.  As multiple speakers emphasized, the greatest challenge is not science, but procedural and predictable regulatory execution.

The PreCheck Initiative: FDA’s Three-P Strategy

FDA, through the Center for Drug Evaluation and Research (CDER) and the Center for Biologics Evaluation and Research (CBER), introduced PreCheck as the core mechanism to streamline regulatory pathways for domestic manufacturing.  The initiative is built on two phases and three guiding principles – Partnership, Predictability, and Preparedness – intended to provide earlier and clearer guidance to reduce uncertainty for U.S. investment.

1. Phase 1 – Facility Readiness (De-Risking): This phase involves pre-operational reviews during facility design and construction. A key tool is the Type V Drug Master File (DMF), a facility-specific dossier capturing site layout, Pharmaceutical Quality System (PQS) elements, and maturity practices that can be referenced across multiple product applications.
2. Phase 2 – Application Submission: Leveraging Phase 1 knowledge, this stage focuses on aligning Chemistry, Manufacturing, and Controls (CMC) expectations, streamlining quality assessments, and enable earlier, more targeted inspections.

Dr. George Tidmarsh (CDER) emphasized that the COVID-19 pandemic exposed serious supply-chain vulnerabilities: over 50% of U.S. drugs are manufactured abroad, and most of the 168 essential medicines rely solely on foreign manufactured Active Pharmaceutical Ingredients (APIs).

Industry’s Two Core Barriers: Logistical and Post-Approval Hurdles

While industry participants broadly supported PreCheck, they were candid about the most significant regulatory hurdles to establishing new U.S. API facilities.  Representatives from innovator, generic, biologic, and contract manufacturing organizations (CMOs) identified several key challenges that must be resolved to unlock domestic capacity:

• Inspection Predictability & Decoupling

Industry expressed frustration over the timing and variability of Pre-Approval Inspections (PAIs), which are often conducted just weeks before a PDUFA date, creating significant risk of Complete Response Letters (CRLs).  Smaller API developers asked who should initiate PreCheck (sponsor vs CDMO), when engagement should occur, and whether FDA can provide checklists or process diagrams to assist smaller regulatory teams.  Others recommended stage-gated engagement plans aligned with construction, commissioning, and validation milestones – shared across FDA review teams to prevent conflicting feedback.

Stakeholders also urged FDA to decouple facility inspections from product application reviews, adopting a more risk-based, earlier inspection model triggered by events like media fills and engineering runs, rather than waiting until post-submission.  This issue is particularly challenging for complex biologics, where short-run manufacturing campaigns make the “inspection-while-in-production” model impractical.

• Post-Approval Flexibility (Especially for Biologics)

For well-characterized modalities such as monoclonal antibodies, FDA’s “one-size-fits-all” approach often requires a Prior Approval Supplement (PAS) even where a Changes Being Effected in 30 Days (CBE-30) or annual report would be scientifically justified.  This rigidity delays routine changes, such as site transfers or scale-ups — that are critical to expanding domestic capacity.

Stakeholders called for a risk-based CMC framework that leverages prior knowledge and platform technologies to shorten the critical path.  Because onshoring often involves expanding existing sites or replicating established production lines, industry urged FDA to reduce redundant data requirements (for example, stability or comparability studies) when prior knowledge supports predictability.

Participants also encouraged FDA to more fully operationalize the tools under ICH Q12: Implementation Considerations for FDA-Regulated Products.  Doing so could allow many post-approval changes to be downgraded from PAS to CBE-30 or annual reports when scientifically appropriate.  Several speakers proposed an “innovation track” for emerging technologies such as continuous flow chemistry and single-use systems, which would accelerate the adoption of advanced manufacturing approaches.

Key PreCheck Elements Supported by Industry

• Making the Type V DMF Work in Practice

A central component of FDA’s PreCheck proposal that could significantly accelerate domestic manufacturing is the establishment of a Type V facility Drug Master File (DMF) as the backbone of regulatory review.  A Type V DMF — a mechanism for submitting information to FDA that does not fit within the traditional DMF categories — can serve as a facility-centric repository of detailed information on manufacturing capabilities, quality systems, and compliance history.  By allowing FDA to review and reference this information across multiple product applications, a facility DMF would enable earlier and more targeted PAIs and reduce redundant reviews of the same facility data for each submission.

However, participants emphasized the need for FDA to issue a clear operating framework for the DMF’s use, ownership, and maintenance.  They suggested that FDA:

• Define the boundaries between reusable DMF content and product-specific application content (Module 3).
• Clarify how a single facility review, and inspection outcome can be leveraged across multiple sponsors.
• Provide guidance on updating and maintaining the DMF throughout a facility’s lifecycle so that it remains a living document rather than an administrative burden.

Stakeholders further advised FDA to pair the DMF approach with targeted meetings and transparent expectations for updates, reuse, and confidentiality, particularly for CMO/CDMO-owned facilities.

• Early, Continuous — and Informal — Communication

Another recurring theme was the importance of early, continuous, and informal communication throughout the facility development process.  Industry participants stressed that real-time engagement — from initial design through Installation Qualification (IQ), Operational Qualification (OQ), and Performance Qualification (PQ) — is far more valuable than relying solely on formal meetings and information requests.

Companies requested a single FDA point of contact, consistent reviewer assignments approximately 30 days pre-filing, and a collaborative forum for technical discussions on topics such as airflow, microbial control, and aseptic operations.  They also called for a smarter inspection strategy that leverages the facility DMF to decouple PAIs from product review timelines and introduces early inspection triggers (e.g., media fills or engineering runs).

• Integration with Other FDA Programs

Stakeholders encouraged FDA to integrate PreCheck with existing regulatory programs, including CMC modernization efforts, advanced technology designations, and PDUFA review processes.  Industry also asked FDA to clarify how Phase 1 PreCheck engagement applies to non-CMO sponsors and whether the Type V DMF remains the preferred vehicle in all cases.

The API Focus: Predictability and Platform Recognition

The afternoon session, which centered on API manufacturing, confirmed that this sector faces similar, but often more acute challenges.  Participants highlighted three recurring priorities:

1. Predictability and Early Engagement: The lack of transparent timelines and early communication remains the greatest barrier to establishing new U.S. API facilities.
2. Modernized, Risk-Based Oversight: Sponsors reiterated the need to decouple facility assurance from product reviews, using earlier and risk-based inspection triggers to avoid production delays.
3. Platform Recognition and Data Reuse: Industry again called for clear rules governing data reuse between the facility DMF and Module 3, as well as an innovation track for advanced manufacturing platforms such as continuous flow chemistry.

Sponsor/CDMO Action Items: Mobilizing Now

Industry participants signaled strong readiness to engage early to share design, PQS, and validation data early, if FDA provides clear service levels, confidentiality protections, and a “Record of Decision” mechanism to make early feedback binding and portable across the facility lifecycle.

To prepare for participation in PreCheck, companies should consider the following steps:

1. Drafting a Facility DMF Architecture: Clearly separate stable facility/PQS content (for the Type V DMF) from product-specific, variable content (for individual applications).
2. Proposing an Engagement Plan: Map out timing for engineering run and media fills, and propose earlier or alternative inspection options (e.g., remote assessments).
3. Documenting Prior Knowledge: Compile evidence of “copy-paste” line similarity and established control strategies to support reduced data packages for stability or PPQ studies.
4. Nominating a Single-Point-of-Contact: Establish a continuous communication cadence and request FDA to mirror it with a dedicated liaison team.

Overall, the tone of the meeting was optimistic.  If FDA can rapidly implement a PreCheck program that formalizes early, durable engagement, modernizes post-approval change pathways, and alleviates late-cycle inspection bottleneck, the pharmaceutical industry appears poised to translate expertise into faster, more resilience domestic manufacturing capacity.

No company wants to be on the receiving end of a Warning Letter, which is FDA’s primary tool for communicating to a company that it has been found to be in significant violation of regulatory requirements.  Typically, a company who receives a Warning Letter must submit a comprehensive response within 15 business days for the Agency to consider it to be timely.  This time period goes quickly, as the days are filled with investigations into FDA’s cited violations and corrective actions to address them, reports to management, consultations with outside experts, drafting and revising the response, and preparing and pulling together supporting evidence of the company’s actions.  All of this effort is intended to show FDA that the company understands the Agency’s concerns, that they are fully addressed, and that no further enforcement action is needed.  Under all that stress, companies often wish they had an extra day or two to respond.

A review of recently published Warning Letters reveals an interesting development; amidst a sea of 15-day response periods: the 30-business day response time.  On September 30 and October 7, FDA issued Warning Letters to FC Company and Dongguan Rainbow Tech alleging that the companies’ medical devices are adulterated under Section 501(h) of the Federal Food, Drug, and Cosmetic Act (FDCA) due to Quality System Regulation violations.  The underlying violations in the Warning Letter would not otherwise be blogworthy, but we find it notable that FDA offered these two companies 30 business days to respond to the Warning Letter.  In our firm’s decades of experience, the standard practice is for companies to have 15 business days to complete the activities necessary to submit an adequate original response to a Warning Letter.  Indeed, our experience is confirmed by our review of approximately 200 Warning Letters issued by FDA’s Center for Devices and Radiological Health (CDRH) over the past five years, which identified only the two instances identified above, issued just a week apart, in which FDA provided a 30-business day response period.

We recognize that the 15-business day response period is not a strict regulatory requirement. The Regulatory Procedures Manual (RPM) states:  “[a] request for correction and a written response within a specific period of time after the date of receipt of the letter, usually fifteen (15) working days.”  RPM, at 20 (emphasis added).   Accordingly, FDA is not acting contrary to its own procedures, but it is deviating from its standard protocol.

Also notable is that FDA is even more flexible with the response times it expects for Untitled Letters: “[t]he letter requests (rather than requires) a written response from the firm within a reasonable amount of time (e.g., “Please respond within 30 days”), unless more specific instructions are provided in a relevant Compliance Program.”  RPM, at 37.  Interestingly, a review of recently published Untitled Letters also reveals that FDA has often requested a 15-day response period, despite the more permissive framework.  See here, here, and here.

Is it a mistake?  On one hand, the RPM details a rigorous and structured process for Warning Letter submission and review.  On the other hand, like many government agencies, FDA has faced significant operational upheaval since January, including reductions-in-force (RIFs) and shifting internal expectations.  Many senior leaders and support staff in FDA’s inspection programs have departed over the past year, either by choice or as part of a RIF, with whispers (or shouts) of a draining morale.

Adding to this instability, FDA recently announced plans to merge all of its medical product and clinical research inspectorates – transitioning inspectors from specialized roles to generalized “medical product” inspectors – and to reverse a 2017 “program alignment” initiative that had ensured inspectors were experts in specific commodities.  While this so-called “Simple Reform” aims to enhance flexibility in deploying inspectional resources and to create surge capacity to meet fluctuating inspection demands, it has raised concerns among inspection experts about maintaining depth of knowledge and expertise.  Training inspectors to competently conduct a broader range of inspections, especially in technically complex areas, is resource-intensive and could risk diminishing inspection quality.

Finally, the federal government shutdown at the start of the new fiscal year may also have affected internal operations.  Although one of the two 30-business day Warning Letters was issued just before the shutdown (on September 30), FDA may have already been experiencing disruptions in the lead-up to the funding lapse.

We will keep an eye out for more response time variations.  In the meantime, we do not expect that the 30-business day response period will be routinely added to future Warning Letters.  At this point, they are still an anomaly!

With a nod to the immortal phrase, “Bring out your dead!  Bring out your dead!” uttered by body collector Eric Idle from the 1975 comedy romp, Monty Python and the Holy Grail, in calling attention to Drug Enforcement Administration’s 29^th National Prescription Drug Take Back Day, we say “Bring out your meds!  Bring out your meds!” to you.

Unwanted and expired controlled prescription medication languishing in medicine cabinets are prime candidates for theft, misuse and abuse.  DEA and its law enforcement partners will once again host local drop-off locations nationwide for safe disposal of unneeded medication on Saturday, October 25th, from 10:00 a.m. to 2:00 p.m. local time.

DEA holds the ever-popular drug take back event each spring and autumn.  Last April’s Take Back Day collected over 620,000 pounds, or 310 tons, of unneeded medication at almost 4,600 collection sites nationwide.  DEA has collected over 19.8 million pounds, or 9,900 tons, of unneeded medication since 2010.  Additional information about National Prescription Drug Take Back Day, including disposal locations, can be found at: https://www.deadiversion.usdoj.gov/drug_disposal/takeback/takeback.html.  DEA’s Diversion Control website also lists permanent year-round drug disposal locations and provides other disposal information.

So, gather the kids and tell the neighbors, “Bring out your meds!  Bring out your meds!”

While this author needs no excuse to listen to Van Halen, one surprising source of inspiration came while reviewing the body of guidance documents issued by CDRH in the last year. While CDRH issued between 38 and 48 new draft or final guidance documents in the last three years of the Biden administration, CDRH has only issued 15 guidance documents in the first year (to date) of the new Trump administration (see table here).

There are several possible reasons for this slowdown. First, immediately after the change in administration, the White House instituted a freeze on issuing any new regulations or guidance unless reviewed by an agency head appointed by the new President (which, for FDA, did not occur until April 1, 2025). Then, on January 31, 2025, the President issued an Executive Order implementing the so-called “ten-for-one rule” whereby for each rule, regulation, or guidance issued an agency must rescind ten rules, regulations, or guidance. We’ve seen FDA publish regulations that it classifies as “deregulatory” and, therefore, exempt from this rule (see e.g., Final Rule reclassifying Hepatitis B assay). FDA could do the same for guidance documents, but it’s possible that there is some guidance the agency is unable to issue until it rescinds additional rules or for which the agency does not find it worth the cost of recission. The high turnover at the agency and reductions in force that have eliminated subject matter experts and policy staff may also be contributing to the slowdown in guidance.

Although one might hope that CDRH starts to issue more guidance documents as things settle at the agency, CDRH’s published agenda of Proposed Guidances suggests this may not happen. In last year’s agenda for 2025, CDRH planned to issue up to 29 guidance documents and, as we’ve seen, has only issued 15 year-to-date (note: we’re being a bit sloppy with Fiscal Year vs. Administration to avoid complicating the numbers). However, because the recently published agenda for 2026 only plans for up to 21 guidance documents, we are unlikely to see a meaningful increase in actual guidance issued.

Now you might be thinking: “why should I care if FDA issues fewer guidance documents”? As much as our law firm and others in the industry may quibble with portions of FDA’s published guidance documents, having advance, public insight into FDA’s thinking is vastly preferable to the alternative. In the absence of generalized guidance on which to rely, companies will need to seek more individual pre-submission feedback (premarket), or risk adverse inspection findings or regulatory letters (postmarket).

This is especially important as CDRH has not seen a similar reduction in performing inspections of, or issuing warning letters to, device firms. As shown in the below graphs (here and here), the rates of device-related inspections and warning letters are roughly on pace with previous years (with some notable bumps related to the early pandemic years).

And as we highlighted in a previous blog post, FDA appears to be issuing more warning letters for lower risk consumer devices rather than focusing on higher risk devices. As a result, companies may not be able to rely as heavily on FDA’s historical record of working with companies to remedy low-risk regulatory violations before the agency issues regulatory letters; instead, companies may want to be more proactive and conservative when ensuring regulatory compliance during this administration.

We plan to keep a close eye on these trends to see whether they persist throughout the new administration or turn out to be statistical noise.

FDA recently released a draft guidance, titled “Postapproval Methods to Capture Safety and Efficacy Data for Cell and Gene Therapy Products,” that provides valuable direction and insight into how sponsors can (and should) approach long-term data collection once a cell and gene therapy (CGT) product is approved.

Postapproval monitoring of safety and effectiveness of CGT products is of critical importance due to the long-lasting effects and typically limited number of subjects treated in clinical trials.  Unlike most other treatments for chronic diseases, CGT products are designed to achieve very prolonged or permanent effects and can’t typically be discontinued once administered.  Additionally, some of these patients may be treated as children, and it is important to assess any developmental impacts as they age into adulthood.  Therefore, these products may need to be monitored over several years or, in some cases, the lifetime of the patient.  Monitoring of patients and collection of long-term safety and efficacy data will inform sponsors and FDA about treatment durability, delayed adverse events, and real-world safety/efficacy trends.

The draft guidance was born out of an April 27, 2023 virtual public listening meeting, which, in turn, was a Prescription Drug User Fee Act (VII) commitment.  The meeting sought to gather relevant datapoints and perspectives for CGT products relating to methods and strategies for capturing postapproval safety and efficacy data.

This draft guidance references a 2020 guidance, “Long Term Follow-Up After Administration of Human Gene Therapy Products,” throughout.  This guidance describes a range of follow-up periods recommended by the Agency based on the specific type of gene therapy and its general potential to cause delayed adverse events.  This ranges from “up to five years” for AAV vectors to fifteen years for integrating vectors; this long-term follow-up is important to capture in informed consent forms.  However, this length of follow-up has proven challenging in practice for a variety of reasons, including for companies that cease operating in that timeframe (a lot can happen in 15 years).  As such, this new draft guidance recommends that “sponsors should provide a plan for follow-up, including funding, in the event the sponsor ceases to operate the study before completion.”  The postapproval collection of data described in this draft guidance is, in large part, intended to augment the long-term follow-up from the clinical trials.

Focal Points from the Draft Guidance

The draft guidance highlights some general methods, including concerns and limitations, for collecting postapproval data.

• General real-world data (RWD) and real-world evidence (RWE) principles

As this data collection depends heavily on the use of RWD and RWE, the draft guidance refers companies to its numerous resources regarding the use of RWE.  The guidance suggests using existing data sources (e.g., electronic health records, claims data, registries) to generate RWE supporting ongoing safety and effectiveness monitoring.  When using RWE, important data governance practices include ensuring data quality and confidentiality, as well as transparent, auditable, and compliant processes (e.g., HIPAA, Part 11).  Sponsors are encouraged to engage FDA (CBER) early when designing studies using RWD to support submissions.

• RWD sources

EHRs, claims data, registries, and vital statistics are commonly used sources for RWD (FDA recently published a handy list of approvals and other labeling changes based on RWE, and the data sources in this list reflect this).  The draft guidance describes a variety of potential uses for these RWD sources, including conducting utilization studies to assess exposure and characteristics of patients or prescribers, assessment of rates of clinical outcomes, determinations of background rates of outcomes of interest (e.g., malignancies, cardiovascular complications) occurring in the absence of CGT exposure, and training AI and Natural Language Processing machine-learning models to develop computable phenotypes for safety or efficacy outcomes.

As these data sources were not originally created for regulatory safety/effectiveness studies, sponsors must carefully evaluate their design and suitability.  Key challenges include absence of evidence regarding important covariates, missing or unstructured data, coding lag or inconsistency, fragmented patient records (due to changes in provider or insurer), and statistical limitations in rare disease settings.  Due to these challenges, the draft guidance recommends that sponsors perform feasibility assessments, collect as much uninterrupted data as possible, deal transparently with missing data, and consider linking multiple data sources.

In contrast to the above sources, the draft guidance notes that registries are often “highly curated RWE resources that may be able to overcome common RWD limitations.”  Registries can collect longitudinal, structured, disease-specific data including lab/imaging, patient-reported outcomes, adherence data, biomarkers, etc.  However, there are limitations of registries as well, including potential selection bias (e.g., patients more engaged or with more severe disease might enroll) resulting in a data source that may not be representative of the broader patient population.  Sponsors should address these in their design, including by encouraging all patients to participate and reducing burdens to participants.

FDA highlights four situations that are particularly relevant for postapproval data collection with registries: (1) assessment of long-term durability of response; (2) growth and developmental milestone data for pediatric patients; (3) surveillance for malignancies; and (4) fertility and pregnancy outcomes-related data.

• Decentralized data collection

Borrowing practices from decentralized clinical trials, postapproval data collection can also be done remotely (e.g., in patients’ homes, local clinics, via telehealth).  Benefits include reduced administrative/logistical burden, increased enrollment, better retention, and broader patient access.  These should improve generalizability of study results.

Protocols should, among other things, specify how to collect safety/efficacy outcomes remotely, the role of local providers, how to track and document effectiveness outcomes, and how care will be provided for adverse events requiring urgent care.

Best Practices for Industry and Parting Thoughts

We are still in the early days of commercial cell and gene therapies, and there is much still unknown.  Additionally, there continue to be new innovations and new treatment modalities.  There are some unique considerations to these products that require a different regulatory approach in a variety of ways.  Clinical trials are very useful in collecting important information in a shorter-term context, but these products have simply not been around long enough to fully understand any longer-term effects, if any.  This draft guidance is FDA seeking as much information as possible to inform its understanding of how best to regulate these products, which we very much encourage.

Patient safety is the paramount concern, and it is crucially important to understand whether there are any potential delayed adverse events from such products.  Relatedly, the draft guidance reminds sponsors that IRB/informed consent requirements apply in a postapproval context to ensure patients are protected.

However, as time goes by, we hope to learn that these concerns are overblown and that such delayed adverse events occur very rarely, if at all.  We hope sponsors pay close attention to these FDA recommendations.   The draft guidance emphasizes that sponsors should reach out to CBER and work with the Agency to make the best use of data possible.  If we accumulate enough experience to gain this understanding, perhaps the burdensome (for both patients and industry) long-term follow-up requirements can be relaxed, as appropriate.

We previously blogged about the Commissioner’s National Priority Voucher (CNPV), FDA’s new pilot program to expedite the reviews of selected programs that meet certain national priorities.  As a reminder, these national priorities were described as including (but not limited to):

• Addressing a U.S. public health crisis
• Delivering more innovative cures for the American people
• Addressing a large unmet medical need
• Onshoring drug development and manufacturing to advance the health interests of Americans and strengthen U.S. supply chain resiliency
• Increasing affordability

The initial press release and other announcements stated that five pilot participants would be selected during the first year, which may be increased in future years.  On October 16, FDA announced not five, but nine recipients for the first class of CNPVs. The press release listed the products as below:

• Pergoveris for infertility
• Teplizumab for Type I diabetes
• Cytisinicline for nicotine vaping addiction
• DB-OTO for deafness
• Cenegermin-bkbj for blindness
• RMC-6236 for pancreatic cancer
• Bitopertin for porphyria
• Ketamine for domestic manufacturing of a critical drug for general anesthesia
• Augmentin XR for domestic manufacturing of a common antibiotic

The FDA press release describes the nomination process as two-fold: the sponsor application process that we previously blogged about and nominations by the review divisions, which were each charged with nominating a product they believe qualifies for the program.  This latter process means that it is possible that some recipients may not have applied for the CNPV.  Even with this larger than expected class of recipients, the press release notes that “[t]he agency anticipates announcing another group of CNPV recipients in the coming months.”

We find the indications for the selected products interesting.  While a number have broad descriptions (e.g., infertility, deafness, and blindness), the actual indications are likely to be more narrow.  For example, cenegermin-bkbj, the “blindness” drug, is approved as Oxervate to treat neurotrophic keratitis.  The sponsor’s pipeline shows that this drug is also in development to treat Persistent Corneal Epithelial Defect (PCED) and optic neuropathies.  It’s not entirely clear which of these is “blindness,” but we always support the prioritization of ophthalmologic diseases, with the substantial unmet medical need, by FDA.

The selection of bitopertin for porphyria also stands out; the drug is being investigated for erythropoietic protoporphyria (EPP), an ultra-rare dermatologic condition.  As advocates for rare disease patients, we are thrilled to see this inclusion in the inaugural class, as there had been fears that drugs for rare diseases would be overlooked.  Rare diseases can occur in any therapeutic area, but dermatology is not where most ultra-rare work takes place.

Another interesting inclusion is teplizumab for Type I diabetes.  Teplizumab is already approved within this indication (“to delay the onset of Stage 3 type 1 diabetes in adults and pediatric patients 8 years of age and older with Stage 2 type 1 diabetes”).  Presumably this voucher is for a potential indication expansion, as teplizumab is being evaluated in newly diagnosed Stage 3 Type 1 diabetes subjects.

The press release also specifically quotes President Trump about the Pergoveris selection, which appears to be the lone selection related to affordability.  As part of an event at the White House on the same day as the CNPV announcement, the maker of Pergoveris, EMD Serono, announced a multifaceted agreement with the U.S. government in which EMD Serono will provide its “complete portfolio of IVF therapies . . . to eligible patients with prescriptions at significantly reduced prices” (referred to in trade press as Most Favored Nation prices).  EMD Serono will also participate in the TrumpRx.gov direct purchasing platform when it goes live; additionally, EMD Serono pharmaceutical products and ingredients will be excluded from tariffs, provided it meets certain goals related to onshoring manufacturing and research.  This same press release mentions the CNPV receipt to expedite the review of the drug, which is already approved outside the U.S.  This outcome is consistent with our speculation that a CNPV based on increasing affordability of drugs would depend on cost-lowering for other, already-approved, drugs because of FDA’s lack of legal authority to make approval decisions based on cost.  However, other national priorities may certainly have been implicated here as well.

There are also two selections related to the national priority of onshoring manufacturing: one for a “critical drug” (ketamine) and one for a “common” drug (Augmentin XR).  At least one of these was granted to a CDMO; presumably the CDMO would need to submit the marketing application itself, as a CNPV cannot be transferred (unless that changes as well).

For other selections, it is not quite as easy to identify just one national priority, as there is substantial overlap between concepts such as addressing a public health crisis, delivering more innovative cures, and addressing a large unmet medical need.  It is possible that all of the selections had arguments to meet multiple priorities.

Regardless, we will be paying close attention to see if this inaugural class graduates on time, and we look forward to seeing what comes next!

As we previously discussed, FDA recently held two meetings that, while separate, provided a cohesive discussion of the use of Real World Evidence (RWE) and Artificial Intelligence (AI) in regulatory decision making.  The discussions during the Artificial Intelligence in Drug & Biological Product Development meeting (AI Meeting) are also relevant to device programs and it was noted that FDA leadership is pushing for a coordinated approach to AI across the centers.

The AI Meeting included panels on the current state of AI in development programs; data quality, reliability, representativeness, and access; model performance, explainability, transparency, and interpretability; and navigating the future.  AI was described as a means to allow for reinvention – not just a faster horse, but a car – and pairing of AI with RWE came up frequently across the panels.

In opening remarks, FDA noted that it takes a risk-based approach when considering AI, not just in looking at safety and efficacy, but in promoting innovation, and also highlighted that innovation doesn’t automatically mean increased risk.  CDER discussed its January 2025 draft guidance, Considerations for the Use of Artificial Intelligence to Support Regulatory Decision Making for Drug and Biological Products, and noted that it is processing over 1400 comments from a variety of perspectives.  FDA also recognized the rapidly changing technology and noted internal and external training being provided to ensure that review staff are familiar with new technology when it is used.  FDA also recognized the need for infrastructure to enable better data sharing between sponsors and the Agency.

The panels noted that AI can be used in many ways across the total product lifecycle.  Examples of areas where AI is used now and can be expected in the future included:

• Indication selection
• Portfolio positioning
• Dose finding
• Protocol design
• Comparator arms for standard of care and disease evolution
• Inclusion/exclusion criteria
• Endpoint optimization
• Digital biomarkers
• Recruiting for studies
• Adaptive trial design
• Digital twins (in silico representations of a complex system, which can include an individual person)
• Agentic AI acting as a Clinical Research Associate (CRA) agent for tactical tasks, allowing humans to focus on strategic work
• Maximizing yield in manufacturing
• Personal use of an app utilizing AI to help a patient titrate dose when there are no data and no studies.

Discussion of data recognized four pillars:   data quality (as the saying goes, garbage in garbage out); data reliability (ensuring data are accurate, complete, consistent); data representativeness (to prevent bias and promote fairness); and data access (data can’t be used if siloed).  Foundation models were identified as a means to address many issues seen in narrow AI models that don’t generalize well across diverse populations.

There was also discussion of data sharing, with recognition of challenges due to the competitive nature of industry and intellectual property concerns.  The importance for both RWE and AI to share not only the successes, but also the failures, so that others can learn from them, was also a frequent point of discussion.

Big promise for AI was seen in collaboration and being able to bring together information that is in isolation across many systems today.  Another area of promise was noted to be in rare disease, where AI can have a big advantage since it is an area without a lot of training data, and AI is increasingly good and getting better where disease is not well characterized.  Speakers noted that in order for these promises to be achieved, the use of AI needs to be transparent, interpretable, and explainable.

In addition to the promise, speakers also cautioned against AI hype and noted many hurdles that need to be cleared in its use.  Throughout the sessions, the need for data standardization, especially for RWD, was discussed as a means of improving AI. Establishing guardrails to prevent misinforming the models was also noted as essential for building trustworthy AI.  Several speakers also mentioned establishing ground truth measures for comparison, especially with generative AI, as an area for thoughtful consideration.  Another hurdle is people themselves, with many being cautious to use AI or accept information generated by AI.  While some of the caution is warranted, the field is moving so quickly that in many cases issues that were bigger concerns in the past have been addressed with more recent technology.  For example, speakers noted that rates of hallucinations in AI models are much lower today than they were two years ago.

For FDA, speakers noted that technology is moving much too quickly for the standard process for release of guidance documents and encouraged more interactive collaboration between the Agency and sponsors to ensure up to date information on acceptance of AI models in applications is available.  It was also emphasized that FDA should consider the patient perspective and ensure policies do not penalize RWE.  Speakers encouraged FDA to not expect perfect data, but transparency and early engagement, to move forward.

As one who is cautious with use of AI, this blogger decided to test the waters.  While an initial draft of these posts, based on notes from the RWE Meeting and AI Meeting, was unclear, and none of the AI-generated text was used, the following concluding paragraph didn’t seem too bad:

As FDA continues to embrace the evolving landscape of RWE and AI, the message from both meetings is clear: collaboration, transparency, and adaptability are essential. These tools are not just technical innovations—they are catalysts for smarter, more inclusive, and more responsive regulatory decision making. By fostering early engagement, prioritizing data fitness, and encouraging shared learning across sectors, FDA is laying the groundwork for a future where RWE and AI work hand in hand to deliver better outcomes for patients and more efficient pathways for innovation.

On October 9, 2025, the U.S. Senate voted in favor of including a revised version of the BIOSECURE Act as an amendment to the National Defense Authorization Act (NDAA). The bill was not included in the version of the NDAA passed by the U.S. House of Representatives and will be subject to the reconciliation process. The last version of the BIOSECURE Act narrowly failed to pass during last year’s Congress due in part to fervent opposition by the biopharma industry, which would have seen enormous disruption of development and manufacturing operations if the bill was enacted.

Readers can revisit our blog post from last year for detailed background on the Act, but in short, the Act prohibits the government from procuring or funding, or contracting with entities that perform government contracts through the use of, certain “biotechnology equipment or services” from a “biotechnology company of concern.”

Previously, the companies of concern included a specific list of Chinese companies—BGI (formerly Beijing Genomics Institute), MGI, Complete Genomics, WuXi Apptec, and affiliates—and there was a process for the government to add new companies to the list that met certain criteria having to do with control of those companies by “foreign adversaries” (China, Iran, Cuba, North Korea, and Russia) and associated national security risks. This list of companies was the subject of much of the pushback from industry, most acutely the inclusion of WuXi and affiliates, which provide an outsize volume of CDMO services to U.S. biopharma companies.

The new version of the Act that passed the Senate removes this specific list of companies and instead establishes that any entity included in the annual list published by the U.S. Department of Defense (DoD) as a Chinese military company operating in the United States (known as the “1260H List”) qualifies as a biotechnology company of concern. Although the 1260H List published by DoD on January 7, 2025 includes BGI and MGI, it does not include any WuXi entities at this time. This could be viewed as a limited win for some in the biopharma industry, but a note of caution that in February 2024 a bipartisan group of House and Senate members sent a letter to the Biden administration requesting that WuXi be investigated and potentially added to the 1260H list. Additionally, the revised bill maintains the original process for OMB to designate additional biotechnology companies of concern that meet the criteria under the Act.

Another notable change in the new bill is the narrowing of the “biotechnology equipment or service” that are subject to the Act’s prohibition to include any equipment. While the general definition is still equipment or service “that is designed for use in the research, development, production, or analysis of biological materials,” the updated draft now omits the specific reference to combined mass spectrometry technologies and polymerase chain reaction machines from the prior definition. Carving out these two technologies was a high priority for the biopharma industry due to their ubiquity in product development and manufacturing. For example, in our experience something like 90% of manufacturers use mass spectrometry during the manufacture of small molecule drugs.

The exact effective date of the Act’s prohibitions can vary widely (a few months to a few years) depending on whether the company of concern is currently on the 1260H list, added later to the 1260H list or is added through the OMB process defined in the Act. Additionally, the time can vary depending on how quickly the federal government meets its obligation to issue revised Federal Acquisition Regulations.

We are monitoring whether the BIOSECURE Act makes it through the reconciliation process with the House and any changes to the bill if it is enacted.