Recent communications from CDRH indicate that impacts to resources from Reductions-In-Force are causing some Offices in CDRH to delay granting a request for a pre-submission (or Q-Submission) meeting until after written feedback is provided. In a pre-submission, the Sponsor can request written feedback only, but in most cases the Sponsor requests either an in-person or teleconference meeting, both of which are preceded by written feedback. The normal process is for FDA to schedule the meeting soon after receipt of the request in order to provide adequate time to coordinate schedules. Per the Q-Submission Guidance, these meetings are usually held 70-75 days after receipt of the submission. Written feedback is generally provided around day 70, or five days before a scheduled meeting, whichever is sooner.

We recently learned that at least one Office is responding to pre-submission requests stating that while it aims to provide written feedback within 70 days, the Office will not schedule a meeting until the Sponsor receives the written feedback and determines it would like a meeting to clarify any points in the feedback. (It is worth noting that a meeting will be automatically set at day 75 due to the database system’s programming, but this is not a real meeting date.)

On the surface, this is reasonable. If feedback is clear, there is no need for a meeting. In fact, the guidance document specifically says the Sponsor may cancel a meeting if they are satisfied with the written feedback. It is, of course, always easier to cancel a meeting than to schedule one, and our experience has shown that even scheduling a meeting two months in advance can at times prove challenging. The reality is that if the Sponsor is not allowed to formally request a meeting until after receipt of written feedback at day 70, it is not clear how long it could be until a meeting could be scheduled, given the challenges in doing so-but it would certainly be at least three, and likely more, months from the time of submission of the Q-Sub to the meeting with FDA. This can cause a significant delay for companies who are working towards aggressive timelines and need FDA feedback to move forward with next steps. Delayed meetings could also jeopardize the ability of companies to raise capital as FDA feedback can inform investor confidence and potentially impact funding. Most companies simply cannot afford to wait that long to resolve critical matters.

As Sponsors who have met with FDA know, meeting with the review team about its responses to a Q-Submission is incredibly helpful. For companies engaging with FDA for the first time, it allows the company and agency to begin building a relationship that will hopefully take them through a successful product authorization. Furthermore, there is always information that comes up during the course of the discussion that was not captured in the written feedback. These live interactions allow the Sponsor to better understand FDA’s position and how to work through any concerns expressed by the agency.

Pre-submissions are the best opportunity to align with CDRH. It is the time when Sponsors intensely prepare and make the most out of their meeting, whether by showcasing their expertise on their product and the field or asking clear, objective questions. CDRH’s delays in meeting with Sponsors will call into question the predictability of the review process and potentially exacerbate the availability of novel technology.

At the end of June, HHS Secretary Robert F. Kennedy told a House congressional committee that he would like to see all Americans make use of wearable products, such as Apple Watch, Oura Rings, Fitbits, and WHOOP, to “take control of their health.” Less than a month later, on July 14, 2025, FDA issued a Warning Letter to WHOOP, Inc., (“WHOOP”), stating that its wearable product, Blood Pressure Insights (“BPI”), is adulterated and misbranded because it is a regulated medical device that is being marketed without FDA clearance or approval. WHOOP’s position is that BPI, intended to provide “daily systolic and diastolic blood pressure estimations, offering members a new way to understand how blood pressure affects their performance and well-being,” is a general wellness product consistent with FDA’s guidance, General Wellness: Policy for Low Risk Devices, and not subject to FDA’s regulatory oversight. The publication of this Warning Letter, only one day after it was issued to the company, therefore raises questions not only about how FDA will think about general wellness products moving forward, but how its thinking will align (or not) with that of the current administration.

Whether a product is a medical device has long been tied to the claims made by the marketer of the device, also referred to as the product’s “intended use.” The WHOOP Warning Letter turns this well-established precedent on its head. FDA’s position that BPI is a medical device seems to be based almost exclusively on FDA’s position that measurement or estimation of blood pressure (“BP”) is “inherently associated with the diagnosis of hypo- and hypertension and is therefore intended for use in the diagnosis of a disease or other condition, or in the cure, mitigation, treatment, or prevention of disease” (emphasis added).  FDA states not once, not twice, but five times that measurement of BP is “inherently” associated with a disease or condition, which is enough to bring the product within FDA’s jurisdiction, even in the absence of a specific medical or clinical claim.

If an “inherent association” were enough to bring a product within FDA’s ambit, it would be the undoing of a large swath of general wellness products, many of which were on the market well before the statutory exemption for general wellness products and FDA’s guidance on general wellness even existed. FDA has long taken the position that a product with wellness claims in one context is not a regulated medical device, whereas the same product with a clinical claim would be subject to FDA’s oversight. Two clear examples of this are SpO2 and heart rate monitoring. FDA has created two product codes for “general wellness” versions of SpO2 monitors: OCH, which is defined as an oximeter intended “solely for use with sporting and aviation activities. Intended to monitor heart rate during exercise,” and PGJ, a “pulse oximeter intended for wellness use.” The same SpO2 monitor intended for use in a hospital would be regulated as a Class II device and require a 510(k) clearance. SpO2 rates certainly are “inherently associated” with a disease or condition, namely, how well the user’s lungs are functioning. Similarly, heart rate monitors on wearable products are commonplace these days and provide alerts to users indicating when the heart rate is abnormally high or low, based upon user pre-specified settings. A high or low heart rate is also “inherently associated” with a disease, but these products have been marketed without FDA oversight for years.

FDA stated in the Warning Letter that, in addition to being “inherently associated” with a disease or condition, BPI is not a “low risk” product because “[a]n erroneously low or high blood pressure reading can have significant consequences for the user.” The same is true of erroneously high or low SpO2 or heart rate readings. The failure of those products to correctly identify high or low SpO2 or heart rate could result in “significant consequences for the user.”

Not only is the position taken by FDA inconsistent with decades of regulatory oversight and enforcement discretion, but it is also inconsistent with language in the general wellness guidance itself. In the guidance, FDA explicitly relies on the absence of medical or clinical claims to permit products to be deemed general wellness products. For example, FDA states that a software function “that solely monitors and records daily energy expenditure and cardiovascular workout activities to ‘allow awareness of one’s exercise activities to improve or maintain good cardiovascular health’” is not a device function because the claim that relates to a specific organ does so “only in the context of general health and does not refer to a disease or medical condition. In addition, although the monitoring or recording of exercise activities present risks (such as inaccuracy), when made in the absence of disease or medical condition claims, the technology does not pose a risk to the safety of users and other persons if specific regulatory controls are not applied.” (Emphasis added.) According to FDA’s own language, the absence of disease or medical condition claims is critical to determining whether a product is or is not a regulated medical device.

The Warning Letter makes clear that FDA and WHOOP have been in discussions about the status of BPI for some time, throughout which WHOOP has maintained its position that the BPI is a general wellness product and does not meet the definition of a medical device. FDA, however, has repeatedly disagreed, and the Warning Letter is the escalation of that disagreement. In response to the Warning Letter, WHOOP’s CEO, Will Ahmed, calls FDA’s actions “misguided” and emphasizes that BPI is not intended to diagnose any condition and is clearly labeled for non-medical use. Indeed, the Warning Letter acknowledges that the company included disclaimers on its BPI labeling that the product is not a medical device and cannot diagnose or manage medical conditions, but concludes they are insufficient to outweigh the fact that BP monitoring is “inherently associated” with the diagnosis of a disease or condition.

Given Secretary Kennedy’s statement specifically supporting use of WHOOP’s wearable, it is unclear how far FDA will go to try to regulate BPI. What happens next will undoubtedly be fodder for a future post, so stay tuned.

The Calendar Year 2026 Medicare Physician Fee Schedule (PFS) proposed rule (here), which was issued yesterday by CMS, contained important amendments to the regulations on Medicare Part B average sales price (ASP) reporting.   One amendment would add provisions for bundled sales that are consistent with those under the Medicaid Drug Rebate Program (MDRP), with which manufacturers are familiar.  However, the other amendment, which addresses bona fide service fees (BFSFs) that are excluded from the ASP calculation, would impose substantial new obligations on manufacturers.

By way of background, payment limits for separately payable drugs covered under Medicare Part B are calculated on a quarterly basis by CMS.  The payment limit for most Part B drugs is ASP plus 6 percent.  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.  Essentially, ASP is calculated as a weighted average price to commercial customers in the U.S, with certain exceptions.  Among other requirements, price concessions must be deducted from the ASP calculation (thereby lowering the ASP and the payment limit).  BFSFs, on the other hand, are not deducted from the ASP calculation, and thus do not lower the ASP.  Inappropriately classifying a price concession as a BFSF, then, artificially increases the manufacturer’s ASP, which, in turn, results in Medicare overpayments and higher coinsurance amounts for Medicare beneficiaries.  According to CMS, the new proposed policies are intended to avoid inaccurate calculations of a manufacturer’s ASP and its effects on Medicare and its beneficiaries.

Bundled Arrangements

Bundled arrangements are one type of price concession common in the industry.   CMS proposes to add a definition of “bundled arrangement” to the existing ASP regulations at 42 C.F.R. § 414.802:

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 or tier placement on a formulary, purchasing patterns, prior purchases), 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 is familiar to drug manufacturers because it is substantially identical to the definition that has existed under the MDRP since 2007.   See 42 CFR 447.502.   To remain consistent with the MDRP, CMS also proposes to adopt the additional Medicaid language on how to allocate discounts under bundled arrangements:  “The discounts in a bundled arrangement . . . , including those discounts resulting from a contingent arrangement, are allocated proportionately to the dollar value of the units of all drugs or products sold under the bundled arrangement.”

Recognizing the range of potential structures of bundled arrangements, which may vary based on, inter alia, the number and type of products included in the arrangement and the timing of the price concessions, CMS is soliciting comments on methods of allocating discounts for bundled sales containing both Part B-covered and non-covered products.  CMS is also soliciting comments regarding how discounts associated with sales that may be considered bundled across time periods (e.g., outcomes-based arrangements or value-based purchasing arrangements) could be accounted for in ASP calculations.

BFSFs

Under the existing four-prong test in 42 C.F.R. § 414.802, BFSFs are defined as fees paid by a manufacturer to an entity that:

1. represent fair market value
2. for bona fide, itemized services 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.

The fee must meet all four criteria to be considered a BFSF rather than a price concession that is deducted from ASP.   In the proposed rule, CMS makes significant changes to criteria 1 (fair market value) and 4 (“not passed on”).

Fair Market Value

CMS has historically taken a hands-off approach to manufacturers’ determinations of fair market value, consistently declining to define the term.  For example, in 2016, CMS explained that, “[g]iven the continually changing pharmaceutical marketplace, we will  continue to allow manufacturers the flexibility to determine the fair market value of a  service when evaluating whether the service fee is bona fide or not.”  81 Fed. Reg. 5170, 5179 (Feb. 1, 2026).  Now, CMS proposes much more oversight.  To ensure that BFSFs are correctly identified and that the manufacturer’s ASP is not manipulated, the proposed rule would revise the definition of BFSFs to add the following requirements to the existing four-prong test in § 414.802:

1. For fees paid by a manufacturer to an entity that do not vary directly with the amount of drug sold or the price of a manufacturer’s drug, CMS would require the fair market value to be determined either based on comparable market transactions that generally reflect current market conditions or the cost of the service plus a reasonable markup to the total cost; and
2. For fees paid by a manufacturer to an entity that vary directly with the amount of drug sold or price of a manufacturer’s drug, CMS would require:
   • The fair market value to be determined by using the cost of the service and adding a reasonable markup to the total cost (or if any material portion of cost data is unavailable, by using a market-based approach based on verifiable market data until sufficient cost data are available), and
   • The fair market value assessment to be conducted by an independent third-party valuator and documented with a description of the methodology used.

The manufacturer’s documentation  of the methodology used to determine fair market value would have to be submitted, along with other reasonable assumptions, to CMS each quarter.

Service fees based on a percentage of sales are ubiquitous in the industry.  Wholesaler distribution fees are one common example.  Under the proposed rule, in order to exclude distribution service fees paid to a wholesaler, it would no longer be sufficient to compare one wholesaler’s fee percentage to other wholesalers’ fee percentages for similar services.  Instead, a manufacturer would have to use a cost-plus-markup approach to evaluate the fees paid to one wholesaler, even if other wholesalers charged the identical percentage of sales.  Further, a manufacturer must pay the expense of retaining an independent evaluator to conduct this analysis.  The more familiar and simpler market comparison approach may be used if cost data are unavailable, but cost data will typically be available from the third-party consulting firms that must be used.  In short, in order to exclude a wholesale distribution fee from ASP as a BFSF, a manufacturer would have to (1) retain an independent consulting firm; (2) have them determine fair market value using a cost-plus-markup approach; and (3) submit the resulting documentation to CMS.

In addition, CMS would require manufacturers to conduct periodic updates of any fair market value analyses for service arrangements that are ongoing, at a frequency no less than the renewal frequency of the arrangement.

“Not passed on”

Recognizing that manufacturers may not know whether fees they pay to a service provider are passed through to another entity, CMS has, since 2007, permitted manufacturers to assume that service fees are not passed on, absent evidence to the contrary.  Under the proposed rule, that assumption would no longer be permitted.  Instead, manufacturers would be required to obtain from each service provider whose fees are treated as a BFSF a certification or warranty that the fees are not passed on in whole or in part to a client, customer, or affiliate of the service provider, whether or not the entity takes title to the drug.  Beginning with the April 30, 2026 quarterly ASP submission for 1Q 2026, these certification letters must be submitted to CMS every quarter, along with the documentation of fair market value described above and other reasonable assumptions.

CMS’s list of examples

Lastly, CMS offers guidance in the form of four examples of fees that are not, or may not be, BFSFs:

1. Arrangements whereby drug manufacturers make payments to drug distributors to subsidize credit card processing fees that would ordinarily be borne by the distributors’ customers are not BFSFs.
2. Any payment by a manufacturer to an entity for tissue procurement is not a BFSF.
3. Fees paid for data about the product may exceed fair market value for the service or may not be for bona fide services because the data is required for legal compliance and audit purposes under the service agreement (for example, data to validate that a rebate has been earned or is not duplicative ).  Therefore, data fees, like other service fees, should be assessed for fair market value and a certification obtained that the fees are not passed through.
4. Fees paid for distribution services should be assessed for fair market value.

The proposed BFSF amendments would reverse CMS’s decades-old approach to fair market value and passed through fees, and impose a significant new cost and time burden on manufacturers.  Another troubling problem is how the proposed ASP amendments would interact with inconsistent MDRP regulation on BFSFs, which CMS is not proposing to revise as yet.  For example, the proposed regulation would not change the rule that transactions excluded from Medicaid Rebate best price are exempt from ASP.   See 42 CFR 414.804(a)(4)(i).  BFSFs (as defined under the MDRP) are excluded from best price.  Unless the MDRP definition of BFSF is amended, the question arises whether, to be excluded from ASP, a fee must meet the MDRP definition or the new, more exacting ASP definition of a BFSF.

The proposed rule will be published in the Federal Register of July 16, and comments may be submitted here until September 12, 2025.

The American Conference Institute’s 3rd Annual West Coast Forum on Legal, Regulatory, and Compliance for Cosmetics & Personal Care Products is scheduled to take place from October 8-9, 2025 in Santa Monica, California.  The conference is the premier event on cosmetics and personal care products, where industry leaders will provide essential updates on compliance with Modernization of Cosmetics Regulation Act of 2022 (MoCRA), state legislative reforms, new FTC advertising guidelines, and FDA leadership changes.  Whether you’re navigating the impact of delayed MoCRA implementation or responding to increased scrutiny on marketing practices, this conference is your one-stop shop for industry perspectives and actionable compliance tools.

Key highlights for 2025 include:

• Litigation Trends
• FDA and FTC Enforcement Priorities
• Packaging and EPR laws
• Greenwashing Risks and Advertising Claims
• Global Trade and Tariff Concerns
• ESG and Clean Beauty Compliance
• IP and Privacy Protections
• Multi-state Regulatory Challenges
• Legal Hurdles in Scaling from Indie to Mid-size brands

Hyman, Phelps & McNamara, P.C.’s Riëtte van Laack will speak at a session titled “Cosmeceuticals, Medspas & Professional Products: Navigating the Legal Gray Zone,” where she will examine the unique regulatory and contractual considerations that arise when professional-use cosmetics and skincare products are marketed, labeled, and sold into medspas, massage clinics, and other treatment environments.

FDA Law Blog is a conference media partner. As such, we can offer our readers a special 10% discount. The discount code is: D10-999-FDA26.  You can access the conference brochure and sign up for the event here.  We’ll see you at the conference!

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 7^th 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.

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.

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.

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 23^rd 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.

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.

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:

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.

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.

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).

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 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.

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:

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.

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.