Here’s a puzzle:

1. You can sue FDA to challenge a decision on a Citizen Petition, because it is final agency action. See 21 C.F.R. § 10.45(d).
2. Courts have held that you ordinarily cannot sue FDA to challenge Warning Letters, because they generally do not rise to the level of final agency action. g., Holistic Candlers & Consumers Ass’n v. FDA, 664 F.3d 940 (D.C. Cir. 2012).
3. But can you sue FDA to challenge a Warning Letter once FDA denies a Citizen Petition that asked FDA to rescind it?

The Southern District of Florida says yes, in a first-time decision.  Hybrid Pharma LLC v. FDA, No. 24-62413-CIV-DAMIAN (S.D. Fla. Jan. 29, 2026).

The legal issues presented in this case are both simple and complex, depending on how you look at it.  We dive into them below, but first, why it all matters: FDA issues thousands of Warning Letters a year across the food, drug, cosmetic, and tobacco industries it regulates.  FDA views Warning Letters as an essential tool for communicating its positions to regulated industry and inducing corrective action without having to undergo potentially burdensome or unnecessary enforcement action.  But industry members on the receiving end often suffer significant reputational and financial harm from these letters (they’re all published on FDA’s website, for one); and associated regulatory delays often bog companies down after receiving such a letter, especially when firms find themselves under one for years.  Even so, FDA Warning Letters generally have been deemed to be immune from judicial review— at least until now.

The (Relatively) Simple Part

FDA issued two Warning Letters (WLs) to Hybrid. Hybrid filed a Citizen Petition (CP) asking FDA to rescind them, which FDA denied.  Hybrid sued in court, and FDA moved to dismiss. The court found Hybrid had standing.  As to final agency action, the parties generally agreed on Points 1 and 2 above.

FDA focused its arguments on the fact that Hybrid’s Complaint could, at most, only be attacking the CP decision, yet had alleged nothing about what was wrong or unlawful about that decision, as necessary to state a claim.  (Indeed, from our own review, the Complaint did not purport to directly challenge the CP decision itself under the Administrative Procedure Act at all).  Rather, the Complaint mainly just alleged that the WLs were improperly issued in the first place — and notwithstanding the fact of the CP response, said FDA, those remained nonreviewable, nonfinal agency actions. In other words, “FDA’s citizen petition response did not transform the warning letters into reviewable final agency action,” nor “imbue” them with finality otherwise lacking, so Point 2 trumps. FDA MTD Br. at 10. For its part, Hybrid didn’t much disagree on the nature of its claim: it doubled down on its claim that “the 2018 and 2022 warning letters are at issue,” and “not the process of issuance of a response to a citizen[] petition.” Hybrid MTD Resp. at 7-8.

The court didn’t buy FDA’s distinction, and took Hybrid’s view.  It rejected FDA’s argument “that Hybrid Pharma cannot seek judicial review of the warning letters by way of the FDA’s response to the Citizen Petition.” Hybrid Pharma LLC, at 12-13 (the court’s words). After all, it reasoned, (1) the WLs “are the reason why Hybrid Pharma initiated a citizen petition in the first place,” and (2) “FDA made its final determination, with respect to the issuance of the warning letters, in response to the citizen petition.” Id. (emphasis added).

Taking all of this at surface level, the ruling is both simple and clear, as are its ramifications. Point 1 always trumps Point 2, and the answer to 3 is a clean yes: as long as you get an adverse decision on a CP about a WL, presto, you have final agency action, and you may now challenge the WL itself on its own merits in court.  Put differently, a WL becomes final agency action when FDA denies a CP about it.  (An alternative reading of the ruling is that the court was really saying that by challenging the CP decision, you get to ‘look through’ it to challenge the original decision to issue a WL — but that reading is hard to square with the absence of a direct APA challenge to the CP decision itself in Hybrid’s Complaint, and Hybrid’s further disclaiming in its briefs that it was doing so.  More on that theory below though.)

This ruling will be of high interest to other companies who find themselves reputationally, financially, or otherwise aggrieved by a WL, for the reasons we laid out at the top.  Of course, to follow Hybrid’s workaround, those firms would first have to be willing to endure the agency’s notorious delays in responding to a CP, and might even — like Hybrid did here earlier — have to sue the agency for unreasonable delay to get FDA to respond to the CP in the first place.  (They’d also have to separately establish standing, like Hybrid did here.)  But once they get their likely CP denial, those firms might well seek to have their day in court too.  And FDA may have to face the prospect that, one way or another, its Warning Letters might not remain forever unreviewable.

Lastly, factoring into everyone’s future calculus may be what happens next with the WLs in this case — that is, whether after all the procedural skirmishing, there is juice that’s worth the squeeze.

The Complicated Parts

In addition to finding this case’s bottom-line ruling and implications noteworthy, we are fascinated by the other complicated questions lying under its surface.

Let’s start with exhaustion of remedies. The Hybrid decision relied on a handful of cases where plaintiffs had not filed a CP before suing on a WL, and courts, in addition to finding the challenges unreviewable because WLs were not final agency action, found the plaintiffs had failed to exhaust their administrative remedies by not filing a CP first.  See Hybrid Pharma LLC, at 12 (citing Holistic Candlers I, Cody Laboratories I, and Estee Lauder). In so doing, those courts observed that FDA’s responses to CPs are final agency action, and that determinations made in them could or would provide a basis for judicial review (citing 21 C.F.R. § 10.45).  The Hybrid decision did not discuss those cases in the context of exhaustion, though, and appeared to instead rely on them more broadly (though it did mention exhaustion in an earlier ruling).

In our view, those cases did not need to decide, and therefore left open, a key question the Hybrid court may have assumed the answer to: is the exhaustion requirement a separate, independent barrier to challenging a WL apart from finality — or instead, once you’ve exhausted, does that make the WLs final?  FDA’s briefs did not address exhaustion or § 10.45 directly, but pointed out that under 21 C.F.R. Part 10, CP decisions are distinct proceedings of their own— so it says the regs just mean that you get to challenge at most a CP decision, and nothing more.  In other words, they don’t “transform” the original nonfinal decision into a final one.

The court again disagreed, with its conclusion (on top of its reliance on the cases above) essentially boiling down to the more commonsense point that, if you have already asked the agency to reconsider a decision to issue a WL and it gives you a hard no, why shouldn’t that make the original issuing decision “final” in any real sense?  After all, the original decision was “the reason why” the CP was filed “in the first place,” and FDA told you its answer on that.  (Also perhaps animating this ruling was the notion that it’s a little rich for FDA to insist on exhaustion when a WL has been attacked in court without a CP first, but then if a CP has been filed, argue it’s still not good enough to attack a WL).

Future cases may further grapple with the million-dollar question addressed somewhat obliquely here: can a CP decision imbue a Warning Letter with enough finality to warrant judicial review?  In doing that, they may look to apply the traditional Bennett v. Spear test for final agency action under the APA to the updated context of a WL, post-CP denial — that is, after a CP response is given, does the WL now mark the consummation of the agency’s decisionmaking, and does it now determine rights or obligations, or have legal consequences? And do 21 C.F.R. § 10.45, and exhaustion of remedies concepts, properly factor into that analysis? Why or why not?

Another juicy question for a future case: what would happen if, unlike Hybrid, a plaintiff does purport to challenge the CP denial itself, instead of or in addition to the original WL decision?  The “transforming” question might have less importance there, but others would take its place.  The main one being whether such a CP denial opens the door/ allows you to “look through” to the original WL decision to fully challenge it as wrong from the get-go, as opposed to just challenging the reasons the agency gave in declining to rescind it. Is the answer always, never, or it depends? Related to that:

• Does the nature of the WL matter, like whether it speaks to the violative status of a product or class of products, versus a situation like the cGMP compliance status of a manufacturing facility?
• Does the nature of the CP decision matter, like whether it purports to address the merits of the original decision, or instead dispatches with the CP on other grounds?

Similar questions have popped up in the context of the statute of limitations, another instance in which a challenge to an agency decision that may be otherwise barred is then run though a CP.  There, questions like the “reopening doctrine” come in, as well as related ones around the extent to which the scope of the CP response defines or narrows the scope of judicial review.  (See generally the slew of Alliance for Hippocratic Medicine v. FDA decisions and briefs).  We’re curious to see if similar considerations start to enter into this new context.

Finally, we wonder if the Hybrid court and others begin to review Warning Letters on their own terms, and especially if they start overturning them, all of this could even start to chip away at the foundations of Point 2 and Holistic Candlers itself.

In the end, any way around it, Hybrid Pharma could open up a new avenue to plaintiffs that was widely believed to be closed, in an area where a lot is on the line.  And we’re highly interested in seeing what future litigants and courts will make of it all.

The American Conference Institute’s (ACI’s) Annual Paragraph IV Disputes Conference is scheduled to take place from April 21-22, 2026 at The Times Center, New York, NY.  Join the nation’s most respected forum for pharmaceutical patent litigation as it returns for its 22nd edition. This is the must-attend event where brand-name and generic drug stakeholders converge to shape litigation strategies, navigate regulatory shifts, and connect with the judiciary.

Don’t miss your chance to join the conversation that’s shaping the future of Hatch-Waxman litigation and:

• Benchmark with top ANDA litigators, in-house counsel, and regulators
• Stay ahead of landmark case developments and evolving PTAB practices
• Network with the leading minds in pharmaceutical IP law

Hyman, Phelps & McNamara, P.C.’s Kurt R. Karst will be speaking at the conference in a session titled “FDA Focus: Round-up of Regulatory Developments for PIV Practitioners to Watch” along with Morgan Lewis LLP Partner Maarika Kimbrell.

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 Drug Enforcement Administration (“DEA”) has welcomed a new category of registrant: emergency medical services (“EMS”) agencies.  DEA has finalized its regulations to conform with the Protecting Patient Access to Emergency Medications Act of 2017 (“the Act”), establishing a new registrant category, registration standards and controlled substance delivery, storage, and recordkeeping requirements for EMS agencies.  Registering Emergency Medical Services Agencies Under the Protecting Patient Access to Emergency Medications Act of 2017, 91 Fed. Reg. 5216 (Feb. 5, 2026).  The agency’s October 2020 notice of proposed rulemaking elicited 81 public comments.  The new registration and controlled substance requirements for EMS agencies are dense and nuanced; we can only scratch the surface in this post.

The Act

The Act amended the Controlled Substances Act (“CSA”), establishing EMS agency requirements for controlled substances “while ensuring adequate safeguards against theft and diversion” by:

• Creating a new registration category for EMS agencies directing the Attorney General (delegated to the DEA Administrator) to register EMS agencies that submit an application demonstrating their authorization to conduct emergency medical services under state law where the agency practices but denying an application if registration is inconsistent with registration requirements or with the public interest factors.
• Directing the Attorney General (again delegated to the DEA Administrator) to allow an EMS agency to obtain a single registration for each state in which the agency administers controlled substances rather than requiring it obtain a separate registration for each location where it operates within that state. A DEA-registered, hospital-based EMS may use the registration of the hospital to administer controlled substances without a separate registration.
• Authorizing EMS professionals of a registered EMS agency to administer controlled substances outside the physical presence of a medical director or authorizing medical professional while providing emergency medical services if authorized by state law and standing or verbal orders.
• Establishing requirements for how registered EMS agencies deliver controlled substances to unregistered locations, store controlled substances, restock EMS vehicles, maintain records, and otherwise handle controlled substances.
• Authorizing the Attorney General (delegated to the DEA Administrator) to issue regulations governing the delivery and storage of controlled substances by EMS agencies.

Emergency Medical Services (“EMS”) Agencies

EMS agencies are defined as organizations providing emergency medical services, including organizations that:

1. Are governmental (including fire-based and hospital-based agencies); non-governmental (including hospital-based agencies), private, or volunteer-based;
2. Provide emergency medical services by ground, air, or otherwise; and
3. Are authorized by the state where the organizations provide emergency medical care, including administering controlled substances to general public members on an emergency basis.

EMS Registrations

Historically, EMS agency vehicles obtained needed controlled substances by operating under a hospital’s registration via one of two scenarios.  First, the EMS vehicle owned and operated by a hospital handled controlled substances under the hospital’s registration as an extension of the hospital pharmacy.  Secondly, an EMS agency was registered under a hospital registration by formal agreement with the hospital to act as the hospital’s agent.

EMS registrants may now obtain a single registration for multiple locations in each state where they operate.  (An EMS agency that operates facilities in multiple states must continue to have a separate registration in each state where the agency operates.)  Hospital-based EMS agencies may continue to operate under the registration of a hospital to administer controlled substances without obtaining a separate registration.  Controlled substances must be delivered to the registered location of the EMS agency or the hospital, if the EMS agency operates under the hospital’s registration.  EMS agencies may then distribute the controlled substances to designated unregistered locations.

DEA recommends three alternatives for EMS agencies to transition their own registrations:

1. Transition immediately on March 9, 2025, the final rule’s effective date;
2. Transition when the current registration expires; or
3. Transition 3 to 6 months prior to the renewal date.

Registrants should contact their local DEA field office to complete the registration transition.

Designated Locations

A registered EMS agency may deliver controlled substances from an agency’s registered location to a designated unregistered location of the agency.  The agency must designate the unregistered location as a “stationhouse” and notify DEA through its website at least 30 days prior to the first delivery.  Direct deliveries from distributors to designated unregistered locations are prohibited.  (DEA defines “stationhouse” as an enclosed structure, in a state where the EMS agency is registered, that may house EMS vehicles and that is actively and primarily being used by that EMS agency.)  An unregistered location becomes a designated location 30 days after notifying DEA, unless the agency objects.

Emergency Medical Service Vehicles

An emergency vehicle is an ambulance, fire apparatus, supervisor truck, or other vehicle used by an EMS agency to provide or facilitate emergency medical care and transport or the transporting of controlled substances to and from registered and designated locations.  EMS agencies may store controlled substances in an EMS vehicle located at a registered location, a designated location, or in an EMS vehicle used by the agency that is traveling from, or returning to, a registered or designated location of the agency in the course of responding to an emergency or otherwise is in use by the agency.

Restocking Meds

Non-hospital-based EMS agencies may receive controlled substances from a hospital for restocking an EMS vehicle following an emergency response.  Hospital-based EMS agency vehicles operating away from the hospital where they are registered can be restocked by non-affiliated hospitals.

EMS Agency Personnel Records

EMS agencies are required to maintain records of EMS personnel whose state licenses or certifications enable them to administer controlled substances in compliance with state law.

Maintenance of Records

Records must be maintained electronically or otherwise at each registered and designated location of the agency where the controlled substances are received, administered, or disposed of in the course of providing emergency medical services.  EMS personnel who dispose of or administer controlled substances in providing emergency medical care must document the name of the controlled substance(s), date, and identification of the patient.

EMS agencies must maintain records of controlled substances delivered between registered and designated locations.  EMS agencies that restock at the hospital under which they are operating are not required to maintain records because the hospital maintains restocking records.  Such records must include:

• Name of the controlled substance;
• Finished dosage form;
• Number of units in each commercial container;
• Date delivered; and
• Address of the EMS agency location where the controlled substances were delivered.

Designated locations of an EMS agency must notify the registered location of their EMS agency within 72 hours of receiving controlled substances from a hospital for restocking an EMS vehicle, following an emergency response.

Security

Controlled substances may be stored at EMS registered locations, designated locations, inside EMS vehicles stationed at registered or designated locations, and inside of EMS vehicles actively in use by the agency.  Controlled substances must be stored in a securely locked, substantially constructed cabinet or safe that cannot be removed if not being carried in a jump bag or on the person of EMS personnel responding to an emergency, whether within a vehicle or at a registered or designated location.

Controlled substances may also be stored in an automated dispensing machine at a registered or designated location.

An EMS agency may also store controlled substances in an automated dispensing system (“ADS”) machine.  An ADS is “a mechanical system that performs operations or activities, other than compounding or administration, relative to the storage, packing, counting, labeling, and dispensing of medications, and which collects, controls, and maintains all transaction information.”  For an EMS agency to use an ADS machine to store controlled substances:

1. The ADS machine must be located at an EMS registered location or designated location;
2. The EMS agency cannot permit any entity other than itself to install and operate the ADS machine;
3. The ADS machine cannot be used to directly dispense controlled substances to an ultimate user; and
4. The EMS agency must operate the ADS machine in compliance with state law.

An ADS machine cannot be used to provide secure storage on an EMS vehicle.

EMS vehicles storing controlled substances must be locked when parked outside of an enclosed registered or designated location or when actively in use, but unattended.  Thus, EMS vehicles storing controlled substances do not have to be locked if they are:

1. Parked within an enclosed registered or designated location;
2. At the scene of an emergency; or
3. EMS personnel are in attendance, though controlled substances must be stored in a securely locked, substantially constructed cabinet or safe that cannot be readily removed.

Carrying Controlled Substances

EMS personnel may carry controlled substances on their person or in a jump bag when responding to an emergency, instead of storing controlled substances in a safe during an emergency response.  They must return the controlled substances to a storage compartment that is either inside the EMS vehicle or designated location when EMS personnel are not engaged in responding to an emergency.

Delivery/Receipt

Only medical directors of the agency or a person designated in writing by the medical director may accept delivery of controlled substances at a registered or designated location.  The medical director or designated person accepting the controlled substances must maintain a record that provides the medical director or designated person’s signature, title, date received, quantity, and any additional information required.

Hospitals and EMS agencies may deliver controlled substances to one another during shortages, public health emergencies, or mass casualty events rather than relying on distributors or hospital restocking, but such transfers require written approval from the DEA Special Agent in Charge for the area or DEA headquarters.

Administration

Registered EMS agency professionals can administer controlled substances outside the physical presence of a medical director or authorizing medical professional when providing emergency medical services, if they have authority from their EMS agency and a proper standing or verbal order issued and adopted by one or more medical directors of the agency.  EMS professionals must also be authorized by their state to administer controlled substances.

Effective Date

The final rule becomes effective March 9th.

As prosecutions for manufacturing and distributing counterfeit drugs continue to rise with enhanced investigatory tools and federal statutes (see DEA’s recent announcement on “Operation Meltdown”), courts are grappling with how to fashion appropriate sentences.  Last week, the Sixth Circuit Court of Appeals affirmed the 90-month sentence of Omar Wala who pleaded guilty to conspiring to manufacture and sell counterfeit generic alprazolam pills on the dark web.  See United States v. Wala, No. 24-6021 (6th Cir. Feb. 4. 2026).  The Sixth Circuit’s decision provides a roadmap for how other federal courts may end up applying complex sentencing guidelines to future drug counterfeiting cases.

For years, Wala designed and sold counterfeit pills that were meant to replicate the appearance and effect of alprazolam.  Using imprint marks that copied the designs of the generic alprazolam pills of real manufacturers, Wala manufactured these dummy pills through a mixture of benzodiazepine-class drugs other than alprazolam to replicate alprazolam’s effect (note: the counterfeit pills were not controlled substances, unlike real alprazolam).  Wala then sold these drugs to buyers (he called them “drug dealers”) on the dark web, marketing the pills as “identical to pharma in [s]ize/[t]aste/[c]olor” and as the “best replicas on the market.”  The pills were then sold to individuals at the street level.  Wala eventually pleaded guilty to conspiracy to manufacture, hold for sale, and sell counterfeit drugs in violation of 21 U.S.C. §§ 331(i), 333(b)(8).

While federal criminal statutes can set minimum and maximum sentences—here, the 10-year maximum (rather than the FDC Act’s typical 3-year maximum for felonies) applied because of the enhanced penalties for counterfeit drugs—federal courts refer to the U.S. Sentencing Commission Guidelines to craft an appropriate sentence.  A Guidelines analysis is often complex, including when the court must apply the fraud guideline calculations in § 2B1.1 as the district court did with Wala.  Wala challenged the district court’s application of the total fraud loss calculation and some of the Guidelines enhancements used to calculate his 90-month sentence, but the Sixth Circuit affirmed the district court’s analysis.

Without going too into the weeds, the following points demonstrate how, at least in the Sixth Circuit, federal courts will apply the Guidelines in future drug counterfeiting cases, at least in cases involving ultimate purchases within the black market.

First, the Sixth Circuit upheld the district court’s fraud loss calculation—typically the most significant factor in the calculation—which used a conservative estimate of the price the victims paid for the counterfeit pills on the street.  Wala argued that the fraud loss should be calculated according to what the price of generic alprazolam would be if sold to customers with valid prescriptions.  The district court rejected that approach, holding that the true victims (for fraud loss purposes) were the ultimate purchasers at the street level who paid approximately $2 per counterfeit pill.  Noting the efforts Wala and his co-conspirators took to make the counterfeit pills look real, the district court “reasonably concluded” that fraud against the street-level buyer “was the plain object” of the conspiracy.  The court then multiplied that price by the number of counterfeit pills distributed (approximately 16.1 million pills) for a total fraud loss of approximately $32 million.  The Sixth Circuit also noted that while reliance on the street value of a drug may be more common in controlled substance cases, there was no reason that the district court could not use the street value in a non-controlled substance counterfeit case.

Second, the Sixth Circuit upheld the district court’s application of an enhancement for ten or more victims (USSG § 2B1.1(b)(2)(A)), ruling that a victim included “any” person who bought the counterfeit pills “under the wrongful impression that they were purchasing legitimate alprazolam pills.”  Of note to some of our readers, the generic drug manufacturers whose pills were counterfeited were also counted as victims in this case.  However, the district court did not order restitution to those manufacturers.

Third, the Sixth Circuit affirmed the application of an enhancement that the offense involved the conscious or reckless risk of death or serious bodily injury (USSG § 2B1.1(b)(16)(A)).  While Wala contended that the evidence did not show actual knowledge of harm to anyone who used his counterfeit pills, the district court argued that the evidence supported his knowledge of the risk of harm.  This included awareness of the epidemic of drug abuse (including benzodiazepines), attempts to mirror alprazolam in both effect and behavior when manufacturing the counterfeits, and the recognition of the potency of the materials used to manufacture the illicit pills and the inconsistency in the product and danger in the supply of raw materials.

There are multiple types of counterfeiting cases, including ones where the counterfeit drugs are introduced into the legitimate supply chain, unlike this case where the counterfeit drugs were sold within the black market.  As more of these cases are investigated and prosecuted, it will be important for FDC Act criminal defense attorneys to test whether these Guidelines calculations are applied the same based on whether the ultimate purchaser obtains the counterfeit drugs within the legitimate supply chain or through illicit avenues.  Legitimate pharmaceutical manufacturers may also consider seeking restitution in these cases, though whether a court will consider the legitimate manufacturers to have a legitimate restitution claim is a separate analysis.

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.