As some of you know, tucked inside the Consolidated Appropriations Act of 2026, was some legislation that FDA has been pushing for quite some time.  In addition to the incredibly important renewal of the Rare Pediatric Disease Priority Review Voucher program (blog on that forthcoming), the Appropriations Act included two provisions that the Agency has been clamoring for and that directly affect drug competition.

First up, as part of the Mikaela Naylon Give Kids a Chance Act is a legislative fix to the Catalyst decision (and its progeny) that FDA has been pushing for since 2021.  In Catalyst, the Eleventh Circuit concluded that the “same disease or condition” text in the Orphan Drug Act must mean the designated “rare disease or condition” and could not be interpreted by the Agency to mean the “indication or use.”  Accordingly, because the orphan drug exclusivity provisions preclude FDA from approving another application “for the same drug for the same disease or condition,” the Court found that orphan drug exclusivity inherently applies to the entire designated disease or condition rather than the “indication or use.”  In other words, the orphan drug exclusivity blocks competition from the same molecule for the entire disease or condition rather than just the indication approved.  At the conclusion of the Catalyst case, FDA decided that this decision should apply only narrowly, announcing in the Federal Register that the Agency would “continue to apply its regulations tying the scope of orphan-drug exclusivity to the uses or indications for which a drug is approved . . .” with the exception of the specific product at issue in the Catalyst case.  And the Agency did just that.  But, of course, that led to additional litigation.

Enter the legislative fix.  The newly-enacted legislation replaces “same disease or condition” with “same approved use or indication within such rare disease or condition.”  It is now plain, therefore, that orphan drug exclusivity blocks the approval of the same molecule only for the same indication.  It applies retroactively, as the legislation states that the amended statutory provision applies “regardless of the date on which the drug was so designated, and regardless of the date on which the drug was approved . . . .”  Accordingly, FDA is going to need to go through its database of active orphan drug exclusivities and determine what is actually blocked by the scope of that exclusivity.  Given how many drugs have active orphan drug exclusivity, that could take a while.  Regardless, FDA must be happy, as the Agency has been trying relentlessly to get Congress to adopt this fix for the last 5 years.

Also included in the Consolidated Appropriations Act of 2026 is a measure addressing requirements for qualitative and quantitative similarity for generic drugs with the objective of “[i]ncreasing transparency in generic drug applications.”  That provision amends section 505(j)(3) of the FDC Act to allow FDA to inform potential ANDA applicants whether a drug is qualitatively and/or quantitively the same as its listed drug.

This is important because FDA regulations require that some generic drugs not only have the same active ingredient(s), but quantitatively and qualitatively the same inactive ingredients (with some specified exceptions) as their reference listed drug—or, in other words, are “Q1/Q2 the same” as their reference listed drug.  Until now, the only way for an applicant to know if its proposed generic actually is Q1/Q2 to its listed drug is to submit a controlled correspondence guessing as to the amount (and sometimes type) of inactive ingredients.  FDA could tell an applicant that the guess is wrong, but it couldn’t say why or give an applicant the correct amount.  Applicants continued to submit controlled correspondence on the topic until they happened to guess correctly.  Now, this Q1/Q2 provision of the Appropriations Act allows FDA to “identify and disclose” to the applicant why and how a drug is not Q1/Q2 to its listed drug and allows FDA to disclose the amount of deviation.  No more guessing!

Equally important is that FDA is now bound by its controlled correspondence Q1/Q2 determination.  This addresses a common issue in which ANDA applicants submitted controlled correspondence to FDA and were assured the formulation is Q1/Q2 the same as the listed drug, but FDA ultimately refused to receive the ANDA because it is not, in fact, Q1/Q2 the same as the listed drug.  In other words, ANDA applicants were informed of mistakes in FDA’s Q1/Q2 controlled correspondence only after submission, leaving them no choice but to go back to the drawing board.  By binding FDA to its previous Q1/Q2 determinations, applicants can now trust Q1/Q2 correspondence from the Agency.  We note, however, that there is an exception for changes to the formulation of the listed drug where the previous formulation is withdrawn for reasons of safety or effectiveness.  There’s also an exception if FDA issues a written determination that its prior Q1/Q2 determination must be changed due to an identified error.  But this means that FDA cannot just pull the rug out from applicants, as it has done in the past.

While these provisions may be a little in the weeds for an appropriations bill, they reflect years of FDA lobbying and effort to bring a little certainty where issues have repeatedly arisen.  FDA has finally gotten its fix.

Monday was an eventful day for the parties and practitioners alike who are closely following the ongoing legal challenges to FDA’s attempt to impose civil penalties on businesses alleged to be selling unauthorized e-liquid tobacco products.  The day included oral arguments at the Fifth Circuit and another federal court decision weighing in on the issue.

In August 2025, we blogged on a first-of-its-kind decision by the U.S. District Court for the Northern District of Texas that held that FDA’s civil monetary penalty (CMP) provision for tobacco products was unconstitutional.  See Wulferic, LLC v. FDA, 793 F. Supp. 3d 830 (N.D. Tex. 2025).  In short, applying the Supreme Court’s reasoning in SEC v. Jarkesy, 603 U.S. 109 (2024) (see our analysis of the decision), the court ruled that the Seventh Amendment right to a jury trial applies to civil monetary penalties like those applied by the FD&C Act, and that the enforcement of these penalties by administrative law judges is unconstitutional.

We followed up with an update in December 2025, noting that FDA had appealed the Wulferic decision to the Fifth Circuit where it joined another case, Texas Tobacco Barn.  We also noted that the issue was on review by the D.C. Circuit (link to D.C. Circuit oral argument recording here).

On Monday, the Fifth Circuit heard oral arguments in Texas Tobacco Barn (link to oral argument recording here) (the Wulferic appeal has been stayed pending a decision).  It’s too early to make a call on how the Fifth Circuit will rule, but it’s fair to say that the judges put FDA through its paces.  We will be watching closely for decisions from both the Fifth Circuit and the D.C. Circuit in the near future.

But the big hit to FDA’s CMP provision for tobacco was another decision on Monday, Vaping Dragon LLC v. FDA, No. 1:25-cv-081-H (N.D. Tex. Feb. 2, 2026), out of the Northern District of Texas that, similar to Wulferic, ruled that the CMP provision violates the Seventh Amendment’s right to trial by jury.  As in other district court decisions on this subject, the court spent significant time analyzing whether the district court has jurisdiction to hear a constitutional challenge to FDA’s CMP proceedings.  It ruled here that because the claim involved a “structural constitutional issue” (i.e., Vaping Dragon sought injunctive relief “preventing it from having to incur time and expense of an allegedly unconstitutional proceeding”) the analysis favored jurisdiction.

After sorting through these jurisdictional issues, the district court found that because the CMP provision imposes a remedy designed to push or deter the wrongdoer, it was similar to a common law remedy that could only be enforced by courts of law, thus implicating the Seventh Amendment.  Just like in Wulferic, the court rejected FDA’s argument that the public rights exception applied because the CMP provision implicates public health.  The court granted Vaping Dragon’s request for a ruling enjoining FDA from adjudicating civil monetary penalties against Vaping Dragon and further enjoining the agency to dismiss the pending administrative complaint against the company.  The court rejected the company’s request for a universal injunction against FDA or to enter declaratory relief.

One other note: looming large in the Vaping Dragon decision, and in the Texas Tobacco Barn oral argument, was the Fifth’s Circuit’s decision in AT&T,

Inc. v. FCC, 149 F.4th 491, 503 (5th Cir. 2025), holding that the FCC’s civil money penalties were unconstitutional under Jarkesy.  Just last month, the Supreme Court granted certiorari from that case (along with a contrary ruling out of the Second Circuit).  Although the Court’s ruling might not address the issues most central to FDA’s CMP scheme, any future Supreme Court pronouncements on the meaning and breadth of Jarkesy will be closely watched.

Stay tuned for more developments.

Controlled substances are necessary for the medical care of patients, but recent diversion by pharmacists, physicians, nurses and other healthcare professionals illustrates the vulnerability of hospitals.  Hospitals that fail to provide effective controls and procedures to guard against theft and diversion of controlled substances pose risks to their patients for undertreatment and worse, and to their employees for overdose and death.  Employee diversion from hospitals has also resulted in large civil monetary settlements, costly compliance remediation programs, and unwanted local and national publicity.

Hyman, Phelps & McNamara, P.C. Director Larry Houck is speaking on “Hospital/Healthcare Facility Controlled Substance Diversion: Recent Case Studies,” focusing on this timely topic, at the World Conference Forum’s 2026 Opioid & Fentanyl Abuse Management Congress in Nashville on February 23th-24th.

Mr. Houck will present on:

• How employees in several high-profile cases diverted significant controlled substance quantities;
• Red flags that hospitals missed;Safeguards for minimizing internal diversion risks; and

• Best practices for maximizing diversion detection.

Click here for information about WCF’s Opioid & Abuse Management Congress.

Over the past year, FDA has placed pressure on foreign drugmakers to bring their manufacturing into the U.S. FDA Commissioner Marty Makary posted his Top 10 accomplishments recently, and promoting domestic production was among them. This followed similar remarks at the 2026 J.P. Morgan Healthcare Conference. FDA’s regulatory policies here are in service of a merger of drug quality, international trade, and national security to address concerns that foreign drug manufacturing poses threats to American consumers.

FDA is using foreign manufacture as a proxy for lower quality standards. An initiative to increase surprise foreign inspections is meant to “level the playing field” for domestic manufacturers. The Agency posited in its May announcement that even with advanced warning, inspections at foreign firms reveal “serious deficiencies more than twice as often than during domestic inspections.” We’ve discussed the practical difficulties of this initiative here. FDA has also initiated a PreCheck Program with goals of “increasing regulatory predictability, facilitating the construction of manufacturing sites in the U.S., and streamlining aspects of pharmaceutical manufacturing facility assessments in advance of a specific product application..”

From a national security perspective, Makary has said that the U.S.’s “overreliance on foreign drug manufacturing has created national security risks.” Makary’s not wrong that the potential exists for China or even India to choke off supply of crucial API and other drug components for critical medications like antibiotics. And using quality as a filter to decide which partners to trade with makes sense. But when the administration merges national security, drug quality, and trade, foreign manufacturers that aren’t included in trade deals are under the threat of paying a “quality tax” through tariffs, based on the presumption that foreign products inherently bear more risks than those made domestically.

While FDA doesn’t specifically use tariffs to push onshoring, it has a role in the administration’s push to do so. Section 232 of the Trade Expansion Act of 1962 broadly gives the President the power to limit imports that threaten national security. The section allows for action based on the “circumstances” of importation, and that language gives the administration latitude to define national security broadly, including arguing that alleged offshore quality deficiencies themselves constitute a security threat. FDA’s role is providing the regulatory predicate that supports that national security argument.

From there, the President can then invoke tariffs on imports or set limits on how much of the product at issue can enter the country. On April 1, 2025, the Department of Commerce launched a Section 232 investigation into the pharmaceutical industry that covered finished branded and generic medicines and their raw ingredients, which aligned with Commissioner Makary’s stance. The final report on its investigation isn’t public yet, but earlier this week Commerce boasted that it used Section 232 tariffs to leverage its trade deal that ensure “multi-billion dollar investments in U.S.-based manufacturing and reshoring.” The administration announced 100 percent tariffs on the pharmaceutical industry in September 2025. These have not been implemented yet, and recent deals to avoid them have included guarantees to bring more manufacturing to U.S. sites.

And it’s important to note that Section 232 tariffs are different from those at issue in the much-publicized case before the U.S. Supreme Court. The tariffs at issue there are under the International Economic Emergency Powers Act (IEEPA). If the Court overturns the “emergency” tariffs under IEEPA, Section 232 levies would survive as they are issued under a different statute, have been congressionally delegated, and judicially affirmed.

The links between domestic production, national security, and manufacturing quality were also on display at a November hearing before the Senate Special Committee on Aging. Witnesses there testified about the potential impacts of Section 232 tariffs on foreign-made generic drugs and active pharmaceutical ingredients (APIs). One generic drug CEO took the opportunity to decry what he believed was lower quality standards in the absence of surprise foreign inspections and other regulatory oversight.

It seems as though FDA is intent to justify its pressure on foreign drugmakers and encourage onshoring, on the basis of either quality, trade fairness, or national security, or by combining all three.

On January 27, 2026, the Department of Health and Human Services (“HHS”) Office of Inspector General (“OIG”) issued a Special Advisory Bulletin addressing direct-to-consumer (“DTC”) prescription drug programs.  These DTC programs allow cash-paying patients, including those enrolled in Federal health care programs such as Medicare and Medicaid, to purchase prescription drugs directly from pharmaceutical manufacturers, often at lower prices than those available through traditional pharmacy benefit channels.

While OIG supports efforts to improve affordability and patient access, the Bulletin emphasizes that such arrangements must be carefully structured to avoid violating the Federal Anti-Kickback Statute (“AKS”).

Mitigating AKS Risks: The “Seeding” Concerns

OIG identified two primary risk areas associated with DTC models:

• “Seeding” Programs: Using initial discounts to induce a patient to initiate therapy with the expectation that a Federal health care program will be billed for that same drug in the future.
• Marketing Inducements: Offering discounted DTC drugs as a marketing tool to induce the purchase of other federally reimbursable items or services.

OIG’s Compliance Roadmap

To minimize these risks, OIG outlined several “low-risk” characteristics that manufacturers should adopt:

• The “Full Plan Year” Requirement: To prevent Medicare Part D enrollees from “program hopping” – using DTC pricing only during high-cost periods (such as the deductible phase) and then reverting to Federal benefits – manufacturers must make the DTC pricing available for at least one full plan year. This requirement ensures that the program is a genuine alternative rather than a mechanism for benefit manipulation.
• Financial Separation from Federal Programs: DTC transactions must be strictly cash-pay. No claims may be submitted to any Federal health care program.  Importantly, these payments do not count toward a Medicare Part D enrollee’s true out-of-pocket costs or total Part D spending.
• No Conditioning on Future Purchases: Manufacturers may not condition DTC pricing on the current or future purchase of any other items or services.
• Independent Third-Party Prescribers: A valid prescription must be issued by an independent, third-party prescriber unaffiliated with the manufacturer.

Key Caveats and Limitations

A critical limitation of the Bulletin is what it expressly does not address:

• Telehealth or Telemedicine Vendors: Despite the ubiquity of integrated DTC-telehealth models, OIG explicitly stated that this guidance does not cover telehealth arrangements. Manufacturers relying on telemedicine platforms for prescribing or drug delivery should remain vigilant.  Compliance with the Bulletin’s pricing guidelines alone does not insulate telehealth-linked programs from AKS scrutiny, particularly with respect to prescriber compensation or selection.
• Controlled Substances: Prescription drugs offered by manufacturers through DTC programs must not include controlled substances.

Overall, the Bulletin provides a narrowly tailored compliance roadmap for manufacturers and Federal healthcare program enrollees focused on pricing and cash-pay mechanics.  Because the AKS is a criminal statute, OIG reiterates that compliance ultimately depends on a case-by-case assessment of the relevant facts and circumstances, including the parties’ intent.

The American Conference Institute’s (“ACI”) milestone 10th Anniversary edition of its Advanced Summit on Food Law, Compliance and Regulation is scheduled to take place from April 28–29, 2026 at the Hilton Chicago/Magnificent Mile Suites in Chicago, IL.

Since ACI’s last summit, the food industry continues to navigate legal and regulatory uncertainty marked by shifting federal priorities, state-level activism, and global trade disruptions.  With FDA and USDA reorganizations underway, pending rulemaking on GRAS reform, ultra-processed foods, and labeling mandates, plus heightened state activity affecting food, and new litigation risks, this year’s program will deliver critical insights to help you stay ahead.

Key topics to be discussed at this year’s event include:

• Reconcile state and federal food laws amid federal regulatory pendency
• Prepare for potential GRAS reform and elimination of self-GRAS
• Assess how state and federal initiatives are converging to define “processed” vs “ultra-processed” in food production
• Anticipate the MAHA Report’s impact on dietary guidelines and industry priorities
• Navigate the legal fallout of tariffs and immigration enforcement on the food industry
• Align packaging and recycling practices to comply with state EPR packaging laws and PFAS restrictions
• Develop practical crisis management protocols through a mock recall and inspection

This is your exclusive opportunity to connect with leading legal and regulatory minds in the food industry as they address the most urgent challenges of 2026 and beyond. Attend and gain invaluable insights to shape actionable strategies, benchmark with industry peers, and prepare for the upcoming wave of regulatory and legal hurdles that will impact the food sector.

Hyman, Phelps & McNamara, P.C.’s Riëtte van Laack will be speaking at the conference.  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 look forward to seeing you at the conference.

On January 12th, FDA approved Zycubo (copper histidinate) injection as the first treatment for Menkes disease in pediatric patients.  Menkes disease is a rare, congenital X-linked genetic disorder characterized by impaired copper absorption, leading to severe copper deficiency, progressive neurologic deterioration, and death in early childhood.  The estimated incidence of Menkes disease is approximately 1 in 100,000 live births.

Zycubo is a bioavailable copper replacement therapy that is administered as a subcutaneous injection to deliver copper in a form that bypasses the impaired gastrointestinal absorption in patients with Menkes disease.  FDA approved Zycubo based on evidence from single-arm clinical trials compared to external control groups.

Hyman, Phelps & McNamara, P.C.’s Mark Schwartz, Richard Lewis and Frank Sasinowski were honored to have assisted on the path to approval of this therapy.

On December 23, 2025, FDA approved Omeros’s Yartemlea (narsoplimab-wuug) for the treatment of adult and pediatric patients 2 years of age and older with hematopoietic stem cell transplant-associated thrombotic microangiopathy (TA-TMA), another example of reliance on single-arm evidence of effectiveness for an ultra-rare condition.

TA-TMA is a life-threatening complication of transplantation caused by endothelial injury, which leads to a microangiopathic hemolytic anemia, thrombocytopenia, and renal damage, which can lead to death.

Until now, there had been no specific treatment options for TA-TMA.  Clinical management had largely been supportive, focusing on controlling hypertension, providing transfusion support, modulating immunosuppressants, and dialysis.

Yartemlea is a monoclonal antibody that targets mannan-binding lectin-associated serine protease-2 (MASP-2), a key enzyme in the lectin pathway of the complement system.  By inhibiting MASP-2, Yartemlea blocks downstream lectin pathway activation without affecting the classical or alternative complement pathways.  Prior to Yartemlea’s approval, FDA had not approved any inhibitor of the lectin pathway, so this represented a challenging first-in-class approval for a drug with a novel mechanism of action.

Yartemlea was approved on the basis of a single-arm, open-label study involving 28 adult patients with TA-TMA following hematopoietic stem cell transplantation, as well as patient-level data from 19 adult and pediatric patients with TA-TMA enrolled in an expanded access program (EAP).

The primary efficacy endpoint was TMA response, defined as improvement in two laboratory TMA markers—lactate dehydrogenase (LDH) levels and platelet counts—together with either improvement in organ function or achievement of transfusion independence.  All patients met internationally harmonized criteria for high-risk TA-TMA, which is associated with poor prognosis and high mortality.  For the primary endpoint, response rates were 61% and 68% in the TA-TMA Study and EAP, respectively, and 100-day survival was approximately 73% in both groups.

For a first-in-class therapeutic with a novel endpoint and no regulatory precedent, it can be challenging to assess the clinical meaningfulness of results of a single-arm trial.  Although not mentioned in the drug labeling (the review materials are not yet available), Omeros’s press release refers to an external control cohort, citing a publication that compares survival in narsoplimab-treated patients to those in a registry.  The extent to which FDA’s review relied on this external control to contextualize the data is unclear.  The publication notes that mortality in narsoplimab-treated patients was reduced by more than 60% compared to the external control; presumably, these data were important to FDA in their assessment of the applicant’s uncontrolled data.  The finding of improvement in survival is always of paramount importance, regardless of whether or not it is the primary endpoint.

Notably, the approval was in adult and pediatric patients despite the fact that the only pediatric patients evaluated were in the EAP, demonstrating the potential value of such a program to a sponsor.  It is rare to see data from an EAP in Section 14 of drug labeling; in this case, there were 19 patients with available patient-level data out of the 221 patients in the program (~9%).  Although this was a small fraction of the total number of patients in the EAP, it is notable.  FDA’s recent pronouncement may facilitate even greater acceptance of such real-world evidence in the future.

Several of us from Hyman, Phelps & McNamara, P.C. were honored to have assisted Omeros on Yartemlea over many years.  With appropriate exercise of FDA flexibility, we are glad to have contributed to treatment options for adult and pediatric patients with TA-TMA and their loved ones.

We applaud FDA on the flexibility applied in these disease settings where randomized controlled trials present substantial feasibility challenges.  We look forward to the publication of FDA’s Summary Basis for Approval for the Zycubo NDA and the Yartemlea BLA, which should provide valuable insight into how the Agency determined that these applications met the effectiveness standard.

The American Conference Institute’s (“ACI”) FDA Boot Camp returns March 25-26, 2026, at the New York City Bar, New York, NY.  This foundational training brings together life sciences attorneys, in-house counsel, and compliance professionals to dissect FDA law, policy, and enforcement trends.

What You’ll Gain:

• A clear understanding of FDA structure, approval pathways, and regulatory enforcement
• Legal insights into current issues: off-label communications, accelerated programs, cGMPs, and recalls
• Practical knowledge from case studies, hypotheticals, and expert-led sessions

What’s New in 2026:

• Analysis on how the second Trump administration and RFK Jr. are influencing FDA priorities.
• Breakdown of the impact of the Commissioner’s National Priority Voucher (CNPV) Pilot on development incentives.
• Reviewing FDA’s shifting approach to Complete Response Letters and disclosure standards.

Key Topics Include:

Drug and biologic approvals, Hatch-Waxman and BPCIA litigation, advertising and promotion law, clinical trial compliance, cGMPs, and sooooo much more.

Hyman, Phelps & McNamara, P.C.’s Kurt R. Karst will once again co-chair the conference, this year with Jones Day’s Melissa K. Mannion.

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 look forward to seeing you at the conference.

The skinny label has hit the big time.  Last week, the Supreme Court agreed to hear Hikma v. Amarin to address the burning question of whether a carve-out induces infringement.  As of now, the Federal Circuit has been very clear that a carve-out can induce infringement but whether it does is a fact-specific inquiry under basic patent law.  But that patent law conflicts with an FDA law that expressly permits a carve-out (also called a “skinny label”), leaving generic manufacturers in a bit of a quagmire as to whether the use of a carve-out in and of itself can constitute induced infringement.  Hikma v. Amarin gets to the heart of the question because it involves a Motion to Dismiss rather than a finding of induced infringement, rendering the relevant question how much is necessary to plead induced infringement rather than find induced infringement.  This is significant because the specter of going to court may be enough to dissuade generic companies from using the carve-out, regardless of whether a court finds that, on the specific facts, labeling or statements actually do induce infringement.

As a quick refresher, Amarin sued Hikma in 2022 alleging that Hikma’s generic of Amarin’s Vascepa induced infringement of Amarin’s method of use patents because Hikma’s labeling does not adequately carve out Amarin’s protected cardiovascular indication.    As we explained back in 2022, the District Court of Delaware rejected that suit, granting a Motion to Dismiss finding that Amarin’s failed to state a claim.  Though we didn’t blog on it at the time, this case was appealed, and the Federal Circuit reversed, concluding that Amarin’s allegations plausibly state a claim for induced infringement.

Hikma appealed, arguing that the Federal Circuit’s decision “effectively nullifies” the skinny label when it found that “accurately calling a generic drug the ‘generic version’ of a branded drug and citing public information about the brand (e.g., annual sales) now exposes a generic drugmaker to potential damages for inducing infringement of patents . . . [when] the generic drug is labeled only for an unpatented use.”   Hikma argued that the Supreme Court should grant certiorari because the Federal Circuit decision, in which the Court admitted that Hikma fully carved out the patented uses, creates a “very permissive pleading standard for induced infringement,” which would allow induced infringement allegations to apply to every generic drug with a carve-out, regardless of the claims the generic sponsor makes.  Amarin disagreed with this position, arguing instead that the Federal Circuit correctly decided the case because its “complaint gives rise to a disputed question of fact about whether Hikma’s statements communicated to healthcare providers that they should prescribe Hikma’s generic drug for a patented use.”  Amarin also disputed the impact of the case.

Adding fuel to the fire, the Solicitor General submitted a brief (at the Court’s invitation) urging the Court to take the case.   There, the Solicitor General explained that the Federal Circuit decision “subverts Congress’s balance between competing interests” and that the carve-out “cannot function as Congress intended if a generic manufacturer’s anodyne descriptions of its product create a serious risk of massive patent liability.”

Allegations of induced infringement arising from a carve-out are not new.  They’ve been kicking around for more than 10 years, when GSK brought suit against Teva for inducing infringement of Coreg.  The Supreme Court, however, declined to hear that case, leaving the Federal Circuit’s fact-specific inquiry for any allegation of induced infringement arising from a carve-out in place.

As we noted when the Federal Circuit issued its first decision in GSK v. Teva, these skinny label cases highlight “the delicate balance that Congress tried to walk between intellectual property rights and facilitating generic drug access when passing the Hatch-Waxman Amendments, and how that balance can be upset by a single court decision.”   This remains true.  That one single decision now, however, will come from the highest court rather than the Federal Circuit.

President Donald Trump’s Executive Order directed the Attorney General last month to expedite the completion of marijuana rescheduling, but also mandated that the Administration work with Congress to update the statutory definition of final hemp-derived cannabidiol (“CBD”) products for medical use of full spectrum CBD.  Increasing Medical Marijuana and Cannabidiol Research, Executive Order 14370, (Dec. 18, 2025).  The President’s Executive Order noted that hemp-derived cannabinoid products have shown potential to improve patients’ symptoms for common ailments, but some full-spectrum CBD products will once again be controlled as marijuana in November.  Id.

That is because, in case you missed it, the FY2026 Agriculture Appropriations Act, that also helped end the longest federal government shutdown in U.S. history, amended the statutory definition of hemp.  Agriculture, Rural Development, Food and Drug Administration, and Related Agency Appropriations Act, 2026 (“FY2026 Agricultural Act”, P.L. 119-37, Division B).  The revisions of the definition of hemp become effective on November 12, 2026.

From enactment of the federal Controlled Substances Act in 1970 until 2018, the definition of marijuana, regulated as a schedule I controlled substance, included hemp and its derivatives.  Cultivation, production, distribution, and possession were prohibited except for approved research.

Congress, with the Agriculture Improvement Act of 2018 (“Farm Bill,” P.L. 115-334) parsed out hemp from the definition of marijuana.  The Farm Bill defined hemp as the Cannabis sativa L. plant and any part of the plant, including the seeds “and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol (“delta-9 THC”) concentration of not more than 0.3 percent on a dry weight basis.” Id. § 10113; 7 U.S.C. § 1639o.  The definition distinguished non-controlled hemp from schedule I marijuana solely on the delta-9 THC concentration level.  The definition did not take into consideration other psychoactive cannabinoids including delta-8 THC and delta-10 THC.  Allowing cannabinoids other than delta-9 THC has been referred to as the “Farm Bill loophole” because it has seemingly allowed intoxicating products meeting the definition as hemp to be marketed as hemp.

With the Farm Bill, hemp was no longer subject to regulation by the Drug Enforcement Administration (“DEA”) but remained regulated by the U.S. Department of Agriculture and the Food and Drug Administration (“FDA”).

The FY2026 Agricultural Act significantly narrows the definition of non-controlled hemp and will once again include certain currently excluded hemp within the definition of marijuana, which remains a schedule I federally controlled substance at present.  Senator Mitch McConnell (R-KY) added the hemp redefinition provision to the appropriations bill because of the “intoxicating THC products” made legal by the Farm Bill, and the revised definition cracks down on synthetic products with intoxicating THC while preserving non-intoxicating CBD and industrial hemp products. Joe Sonka, McConnell, Paul clash over Senate provision that critics say will destroy US hemp industry, Louisville Public Media (Nov. 11, 2025) (link).

The FY2026 Agricultural Act statute explicitly continues to include non-controlled industrial hemp grown for producing products, including stalks, fibers, whole grains, oils, and edible greens, within the definition of hemp. P.L. 119-37, Division B, § 781(2).

However, the statute reduces the total THC concentration, not just delta-9 THC concentration, to less than 0.3% on a dry weight basis.  The new definition excludes:

• Viable seeds from a cannabis plant if the plant exceeds a total concentration of 0.3% on a dry weight basis;
• Hemp-derived cannabinoid products containing cannabinoids not capable of being naturally produced by a cannabis plant or that are capable of being produced by a plant but were synthesized or manufactured outside of the plant;
• Intermediate (not final) hemp-derived products containing more than 0.3% total THC concentration and “any other cannabinoids that have similar effects (or are marketed to have similar effects) on humans or animals . . . (as determined by Health and Human Services (“HHS”))”; and
• Final hemp-derived cannabinoid products containing more than 0.4 mgs combined total per container of total THC and “any other cannabinoids that have similar effects (or are marketed to have similar effects) on humans or animals . . . (as determined by HHS).” Id.

Intermediate hemp-derived cannabinoid products are defined as products derived from hemp and intended for human or animal use not in final form. Id. By contrast, final hemp-derived cannabinoid products would appear to be those in final form marketed for human or animal use.

The statute requires FDA within 90 days (February 10, 2026) to publish lists of:

• All cannabinoids that can be naturally produced by a cannabis plant;
• All THC class cannabinoids known to occur naturally in the plant;
• All other known cannabinoids with similar effects, or are marketed to have similar effects, to THC class cannabinoids. Id. § 781(3)(C).

FDA must also define “container” as applied to final hemp-derived cannabinoid products.  Id.

The definitional change will recriminalize certain hemp and hemp-derived products that once again are pulled within the definition of marijuana.  It remains to be seen how marijuana will be controlled when November rolls around.  If marijuana remains controlled after November, the question will become how DEA and other federal authorities will enforce cultivation, manufacturing, and distribution of prior uncontrolled hemp-derived products.  This at a time when numerous states have decriminalized and authorized marijuana for medical and/or recreational use.

The American Conference Institute’s (“ACI”) 13th Annual Legal, Regulatory & Compliance Forum on Cosmetics & Personal Care Products returns March 12-13, 2026 at the New York City Bar, New York, NY.  The forum once again brings together the legal and regulatory leaders of the cosmetics and personal care industries for another year of learning, benchmarking, collaborating, and connecting with industry peers.  From MoCRA and state-driven rulemaking, to class actions, to the challenges surrounding packaging EPR, to working with influencers or generative AI, this forum will allow you to get the insights you need to stay compliant and competitive.

2026 Forum Highlights include:

• Two Tracks – Regulatory & Legal: Choose sessions most relevant to your role, from Chemical Contamination, Ingredient Safety, Testing, and Adverse Event Reporting to Class Actions, Product Liability, and M&A Trends
• Hands-On Workshops: Deep dives on Global Compliance Outlook (LATAM, EU, Asia), Working with Influencers, and Packaging EPR Compliance
• E-Commerce Corner: Exploring Generative AI, Data Privacy, IP Protections, and strategies for Safeguarding Consumer Trust
• Roundtable Discussions: Practical benchmarking on Licensing & Partnerships, Retailer Requirements, and Pop Culture & IP Challenges
• Highlight Sessions: Claims Substantiation, Risk Management & Insurance, and the latest State & Federal Developments

Hyman, Phelps & McNamara, P.C.’s Ricardo Carvajal will be speaking at a session titled “From Alert to Action: Mastering Recalls and Adverse Event Reporting.”

FDA Law Blog is a forum 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 look forward to seeing you at the forum.

Hyman, Phelps & McNamara, P.C. Director Kalie E. Richardson will be moderating a Food and Drug Law Institute webinar this coming Wednesday on Ensuring Effective Responses to FDA 483s and Warning Letters.  This webinar will cover fundamental considerations for responding to FDA 483s and Warning Letters, discussion of real-world case studies, and actionable strategies to help life sciences companies avoid regulatory escalation.  Time will also be reserved for participant questions.  The webinar is on Wednesday, January 21 at 12 PM ET and will also be recorded.  Registration information is available here: Got Observations?: Ensuring Effective Responses to FDA 483s and Warning Letters.

In light of the fast-approaching compliance date of February 2, 2026, FDA convened a town hall discussing last-minute issues governing its priorities for the Quality Management System Regulation (QMSR), which incorporates by reference ISO 13485: 2016 Medical devices — Quality management systems — Requirements for regulatory purposes, and specifically the requirements related to risk management and design and development.  The town hall included an overview of the QMSR requirements around risk and design and development, followed by a moderated panel discussion where frequently asked questions were asked and answered.  FDA reinforced its emphasis on applying risk management to each aspect of the quality system, and of management building a culture of quality from the top.

FDA noted that risk management provides a framework for regulatory decision making in the design and development of medical devices, and also for other company processes, including planning, purchasing, production and service, monitoring and measuring equipment, monitoring and measuring, control of nonconforming product, and improvement.

Quality culture was not something specifically discussed in the context of the current Quality System Regulation (QSR), but has been discussed in various pilot programs, which we blogged on here and here.  FDA brought in this concept in the town hall stating that a culture of quality starts at the top, and reviewed one of their responses to comments to the proposed rule that states “FDA expects medical device manufacturers, led by individuals with executive responsibilities to embrace a culture of quality as a key component in ensuring the manufacture of safe and effective medical devices…” and “a culture of quality meets regulatory requirements through a set of behaviors, attitudes, activities, and processes.”  FDA emphasized that it is not just about what is documented, but how quality is embedded in decision making, accountability, and operations throughout the organization.

Specific to design and development, FDA noted that the design and development process should begin when research is ending, after feasibility and proof of concept have been demonstrated, and before any clinical evaluations are started.  As with design controls in the QSR, design and development under QMSR included stages and control for planning, input, output, review, verification, validation, transfer, and design changes.

For Class I devices exempt from design and development requirements as well as contract manufacturers or initial importers that do not perform design and development activities, FDA confirmed that risk management should still be used for other aspects of product realization, such as purchasing, production, or complaint handling.

With respect to design review, FDA confirmed that the ISO 13485 standard does not explicitly require an independent reviewer as was required in the QSR and that FDA expects appropriate personnel who can provide meaningful oversight of the design process to participate in design reviews.

FDA noted that there are no requirements in the QMSR or ISO 13485 to follow ISO 14971 Medical devices — Application of risk management to medical devices, to utilize any specific risk management tools, or to use quantitative descriptions of risk.  However, FDA noted that if not following ISO 14971, that an appropriately validated risk management process should be used to conduct risk management activities and that if data are available, it is useful to quantify risk of device.

For devices designed previously, FDA recognizes that the requirements of the QMSR are substantively similar to those of the QSR and noted that manufacturers do not need to retrospectively reference the QMSR in previous files.  FDA recommended that a gap analysis be performed to ensure requirements of ISO 13485 and the QMSR are met.

For postmarket surveillance, FDA recommended connecting analysis of processes and data, such as production data, nonconformities, complaints, adverse events, and customer feedback to the risk management process to ensure that emerging risk information is captured and evaluated in a timely manner.

FDA’s final thoughts included making sure manufacturers document risk management activities thoroughly and revisit them frequently, using risk management as a framework for sound decision making and using the design and development process to design quality, safety, and effectiveness into medical devices.

The QMSR town hall offered clarity on FDA’s expectations as industry transitions from the longstanding QSR to a framework aligned with ISO 13485. FDA’s emphasis on risk management reinforces its role as the backbone of sound regulatory decision‑making. Equally notable was FDA’s renewed focus on cultivating a culture of quality, signaling that compliance under the QMSR will extend beyond documentation.  However, in the final days before the QMSR is effective, FDA has still not released its new inspection process to provide clarity in just how inspectors will evaluate compliance under the QMSR.  If you have any questions about implementation of QMSR before the compliance deadline, please do not hesitate to call on us.

Artificial Intelligence (“AI”) in the life sciences has moved from pilot to production, across discovery, trials, and post-market.  With the EU AI Act taking effect, evolving FDA expectations, and looming litigation and enforcement risk, getting it right has never mattered more.

Join the American Conference Institute (“ACI”) for two days of practical, case-based guidance on the legal and regulatory realities of AI in life sciences on February 24-25, 2026 at the New York City Bar Association, New York, NY.   Learn how to deploy AI in discovery and trials – and manage the risks – with clear playbooks for FDA/EU compliance, defensible documentation, contracting, data/privacy controls, and IP protection, delivered by agency leaders, in-house counsel, and top practitioners. Leave with tools you can use immediately to implement AI responsibly and at scale.

Conference highlights to be discussed at this year’s event include:

• Adapting risk and compliance frameworks for next-generation, agentic AI
• Navigating data, privacy, and transparency in drug development and clinical trials
• Contracting for AI-enabled systems and services
• Implementing IP strategies to protect innovation in AI-driven life sciences
• Understanding the impact of the EU AI Act and patchwork U.S. state laws
• Emerging litigation trends and governance structures shaping the AI landscape

Hyman, Phelps & McNamara, P.C.’s Jennifer D. Newberger will be speaking at a session titled “AI Use Cases in MedTech: Stress-Testing Legal and Compliance Challenges Through Case Studies.”

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 look forward to seeing you at the conference.

Yesterday, FDA announced “Flexible Requirements for Cell and Gene Therapies to Advance Innovation.”  This regulatory flexibility, FDA hopes, will be “helpful in expediting product development and will help guide the FDA’s evaluation of development strategies in preparation for a Biologics License Application (BLA) submission.”

The announcement covers three broad areas: Clinical Development, Commercial Specifications, and Process Validation.  It is important to note that this announcement is not the signaling of a new program or regulatory paradigm. The very general potential regulatory flexibilities are not new and have been extended to companies on an individual basis for years.

It is encouraging that CBER is appearing to make these potential flexibilities public and therefore increase the uniformity in which they are available to companies in the Cell and Gene Therapy space.

Hopefully, CBER will take a page out of CDER’s playbook and issue a public facing SOPP akin to the MAPP CDER has issued for expedited products under their purview “MAPP 5015.13 Quality Assessment for Products in Expedited Programs” (this author’s favorite MAPP).

We must wait and see if CBER follows-up on this announcement with specific guidance or direction that can expedite clinical development programs for this product area.