This is the second in our series analyzing the riders attached to the FY 2026 Labor-HHS Appropriations Bill. This installment examines the drug-related provisions, which cover a wide range of topics from accelerated approval and rare disease therapies to biosimilars and opioid regulation. The Committee’s report reflects ongoing congressional priorities while also addressing persistent industry frustrations and emerging regulatory challenges. Below, we summarize the key drug-related provisions and offer our analysis of what they may mean for sponsors, manufacturers, and the broader pharmaceutical landscape.

Accelerated Approval

The Committee encourages FDA to continue the use of accelerated approval where there is unmet medical need. However, it has identified inconsistencies regarding accelerated approval between CDER and CBER and requests a report within 120 days describing the steps FDA can take to ensure equal treatment is given to an accelerated approval application regardless of Center.  While each application is unique, these inconsistencies have been a common frustration for sponsors.  We strongly applaud these efforts to ensure the greatest consistency possible to provide much needed predictability for sponsors relying on accelerated approval.

Cell and Gene Therapies

The Committee also encourages FDA to support the development of genetically modified cell-based therapies, including with increased predictability and efficiencies in the IND process as well as scalable delivery on the manufacturing side. These are common obstacles for complex biologic products, and although the language here makes it sound as if this is a simple fix, we hope this leads to progress in an area where these development programs are often stalled.

Genetically Targeted Technologies

The report also contains an interesting rider directing FDA to reconsider product classifications for genetically targeted technologies, including siRNAs and ASOs, which are currently approved under the NDA process under the Federal Food, Drug, and Cosmetic Act (“FDCA”). The report suggests that these products share more in common with products approved as BLAs under the Public Health Service Act (“PHS Act”) and that this may be the more appropriate pathway to account for their more complex characteristics, including manufacturing.  Although there are many similarities between how these products are regulated, there are some specific distinctions including approaches to characterize and control product quality.  Reclassification would also be a shift away from the Hatch-Waxman/generic drug framework, with its 5 years of new chemical entity exclusivity (among other exclusivity periods) and 505(b)(2) applications, to the biosimilar framework with 12 years of reference product exclusivity and no comparable 505(b)(2) pathway.  If this reclassification were to occur, it would have a significant impact on the regulation and approval of follow-on products for the product types affected, similar to the shift made in 2020 to approve insulin and other similar products under BLAs.

Rare Diseases

There are a number of provisions aimed to encourage the development of rare diseases.  This includes specific provisions to encourage the development of acceptable endpoints for Angelman syndrome, congenital myotonic dystrophy, and hypoxic ischemic encephalopathy.  Additionally, the Committee acknowledges the increased challenges of designing clinical trials for Duchenne Muscular Dystrophy (“DMD”), particularly given the growing number of approved therapies that have improved the natural history.  However, the Committee urges FDA to explore ways to continue to use natural history controls for DMD trials rather than requiring placebo controls.

More broadly, the Committee also expresses concern that sponsors of rare disease therapies are often required to conduct traditional clinical trial designs, which can be ethically and practically problematic.  The Committee urges FDA to consider these issues and to explore alternatives, including single-arm studies, when randomization to placebo is infeasible or unethical.  The report expresses the urgency of the Committee that FDA ensure there are no undue delays in the development and review of rare disease therapies, including cell and gene therapies.  Additionally, the report stresses the importance of regulatory consistency that takes into account the inherent challenges of rare disease drug development.  The Committee also cites the Rare Disease Innovation Hub as having a positive impact on FDA internal processes regarding rare disease regulation (and we agree)!

Medical Countermeasure Priority Review Voucher

The report also describes the importance of the Material Threat Medical Countermeasure (“MCM”) Priority Review Voucher (“PRV”) program, which provides a transferable voucher on approval to qualifying products intended for use to prevent or treat harm from a biological, chemical, radiological, or nuclear agent identified as a material threat, or harm resulting from the administration of a product against such agent.  FDA’s authority to issue new MCM PRVs expired in 2023 with little subsequent movement toward reauthorization (unlike FDA’s authority to issue Rare Pediatric Disease (“RPD”) PRVs, which was ultimately renewed in 2026 following its expiry in 2024).  However, the report states that “[t]he Committee anticipates reauthorization of this program,” and directs FDA to continue supporting the MCM PRV framework until then.  During the period of time when FDA’s authority to issue RPD PRVs had expired, it continued to grant RPD designations to help ensure a smooth transition when it was reauthorized.  As there is no similar MCM designation in the statute, we wonder what FDA’s continued support of the MCM PRV framework will look like until reauthorization.  Regardless, we are glad to see some movement toward renewal of this important program after years of quiet, although we will have to wait and see what ultimately happens.

Illegal Import of Unapproved Drugs

The Committee is tackling illegal imports of unapproved new drugs in the rider, expressing “deep concern” about the health risks posed.  The Committee indicates it is awaiting a “comprehensive report addressing this issue, including safety risks, verification challenges, enforcement actions, and recommendations for strengthening oversight.”

The Committee’s concerns come after FDA’s recent denial of a Citizen Petition requesting FDA provide a clear position statement on importation activities by alternative funding programs, which are typically employer-sponsored health plans that rely on the import of unapproved, lower cost, foreign-sourced versions of FDA-approved drugs.  An investigative news report previously exposed these programs and their risks.  FDA has stated that imports of unapproved drugs are generally prohibited, and maintains an Import Alert (IA 66-57) to prevent these importations.  FDA has also issued Warning Letters to companies that have facilitated the import of these drugs (see, here and here).  That said, these alternative funding programs now leverage FDA’s personal use import policy to help facilitate access to lower cost drugs and rely on FDA’s case-by-case import enforcement discretion. While FDA’s personal use import policy (as articulated on its website and in the Regulatory Procedures Manual Ch 9) does not apply if treatment is otherwise available domestically, and FDA has stated that its policy “does not state that the cost of an FDA-approved prescription drug is a consideration for FDA personnel,” there is clearly a disconnect, as these alternative funding programs have been wildly successful at facilitating the import of unapproved, foreign-sourced versions of FDA-approved drugs.

Perhaps in response to these concerns, on June 15 FDA authorized Colorado’s drug importation program under section 804 of the FDCA, which would permit Colorado’s importation of 20 prescription drugs from Canada.  Colorado is the second state to have a section 804 import program authorized by FDA; Florida’s program was authorized in early 2024.  Despite authorization, Florida has not been able to successfully import any drugs from Canada through the program and has repeatedly requested (and been granted) authorization extensions.  We are interested to see whether the Committee’s interest in illegal imports spurs a greater crackdown by FDA on personal use imports as well as new section 804 import program authorizations.

Electronic Prescribing Information

Two riders address dissemination of electronic prescription drug information: 1) a rider addressing patient prescribing information encourages FDA to finalize the proposed rule for Patient Medication Information (“PMI”)with the option to deliver electronically; and 2) a rider directing FDA to develop an electronic prescribing information (“PI”) framework within 12 months of enactment of the Act.  These provisions stand in stark contrast to language included in appropriations bills passed by Congress since 2015 prohibiting FDA from taking any action that would allow or require PIs to be distributed electronically.

The pharmaceutical industry has long advocated for FDA to permit electronic distribution of PI; Pharma companies argue that electronic PIs would allow for more timely updates to safety information, reduce printing and distribution costs, improve accessibility for healthcare providers who increasingly rely on digital resources, and align U.S. practices with those in other major markets that have embraced electronic labeling.

The paper industry has vigorously opposed any move away from paper PIs. This standoff has persisted for nearly a decade, frustrating FDA’s efforts to modernize drug labeling. FDA has expressed interest in electronic labeling solutions, noting that paper inserts are often discarded unread, printed in small font that is difficult to read, and may contain outdated information if labeling has been updated since the batch was manufactured. The agency has pointed to pilot programs and stakeholder feedback supporting electronic alternatives.

The current appropriations riders represent a potential turning point. Whether these provisions survive conference and final enactment—and whether the paper industry mounts another lobbying effort to reinstate the prohibition—remains to be seen.

OTC Drug Monographs

The Committee calls out FDA for the continued lack of weight-based dosing instructions for children 6 months to 2 years in OTC single-ingredient acetaminophen despite the recommendations of the Advisory Committee in 2011.  One of our bloggers had this on her bingo card for an early action following OTC Monograph Reform but it still has not happened.  Noting that action on this issue is listed on FDA’s nonbinding annual forecast of planned monograph activities, the Committee directs FDA to provide an update within 90 days of enactment on timing on amending this monograph.

With respect to the sunscreen monograph, the Committee urges FDA to expeditiously finalize the proposed order issued earlier this month for the first new sunscreen ingredient in decades and also directs FDA to update its data requirements for sunscreen ingredients to allow for consideration of “modern testing methodologies,” such as real world evidence and nonanimal testing alternatives.  These are issues that industry has struggled with FDA about for more than 15 years.

Homeopathy

FDA is directed to provide a briefing within 120 days of enactment on its enforcement policies and statutory interpretation related to homeopathic products.  Although homeopathic drugs do not appear to have been a priority for FDA for quite some time, and the language of the FDCA seems to us straightforward, the Committee takes issue with FDA’s position that all homeopathic medicines are drugs subject to drug-specific requirements.

Opioid Abuse Generally

The Committee continues to support FDA’s role in addressing opioid abuse through the Opioids Action Plan, the Opioid Policy Steering Committee, and significant regulatory actions.  The Committee expects FDA to support development of alternative and non-addictive alternatives to opioid analgesics and, where opioids are medically necessary, to continue incentivizing abuse-deterrent formulations.  The Committee also broadly states that the federal government should promote the full suite of treatment options, including abstinence-based models and non-opioid medications, and continue to support naloxone distribution among trained, licensed healthcare professionals and emergency responders.

OA REMS

For the Opioid Analgesic (“OA”) REMS, the Committee directs FDA to study and evaluate data to develop appropriate specifications for in-home disposal systems that may be required under the OA REMS.  If FDA determines that the OA REMS should be modified to add in-home disposal system requirements, the Committee expects FDA to communicate that determination promptly to opioid analgesic manufacturers.  This does not come as any surprise, as FDA stated it was “continuing to explore other innovative in-home drug disposal methods” when it approved a modification to the OA REMS to provide for prepaid drug mail-back envelopes in October 2024.

Biosimilar Interchangeability

FDA, in June 2024, issued a draft guidance proposing that switching studies may no longer be necessary to demonstrate interchangeability of biosimilars, as comparative analytical and clinical data may be sufficient when applicants can provide adequate justification.  Because that guidance remains in draft form, the Committee directs FDA to finalize the recommendations in the guidance to allow for an interchangeability designation without switching studies.  The hope in implementing this approach to interchangeability is to increase patient access to medications, to bolster innovation by reducing development costs, and to encourage manufacturer investment in biosimilar production.

Biosimilar Single, Shared System REMS

The FDCA has required the exploration of a Single, Shared System Risk Evaluation and Mitigation Strategy (“SSS REMS”) for small molecules for years to increase efficiencies for stakeholders and applicants through shared development and implementation costs; however, there is no corresponding provision in the PHS Act requiring biosimilar manufacturers to attempt to negotiate a SSS REMS with their reference product sponsors.  The Committee urges FDA to consider implementing SSS REMS for biosimilars and their reference products to drive increased biosimilar development, expanded patient access, and savings for patients and the healthcare system.

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As with all appropriations riders, the real impact will depend on whether these provisions survive conference negotiations and whether FDA follows through on the Committee’s directives.

Stay tuned for Part 3 of our series, which will address additional provisions affecting devices, food, and compounding.

On May 1, 2026, the House Committee on Appropriations submitted House Report 119-632 to accompany H.R. 8646—the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act for Fiscal Year 2027, which passed on June 4, 2026. The report serves as the Committee’s explanation of the accompanying bill, setting forth funding levels, programmatic directives, and policy priorities across the U.S. Department of Agriculture (USDA), the Food and Drug Administration (FDA), the Commodity Futures Trading Commission (CFTC), and the Farm Credit Administration (FCA). Given that of these acronyms our blog has only FDA in the title, it should come as no surprise that we are focused only on the FDA provisions, of which there are plenty—so many that we needed to split the post into three parts.  The first, published today, will cover a few key provisions from the Act and the cross-product riders. Post 2 will look at the drug-specific provisions (including biosimilars). And Post 3 will look at everything else, including devices and compounding.

To start, the Act itself includes several provisions that preclude the use of funds in various ways.  Relevant to FDA, the bill specifically calls out animal research and human embryo research:

Animal Research

Two provisions reflect the continuing emphasis on moving away from animal testing with Section 781 prohibiting use of funds by FDA to issue or finalize guidance recommending or requiring testing in dogs and Section 782 prohibiting use of funds by the National Institute of Food and Agriculture within the Department of Agriculture to conduct or fund certain research involving a dog or cat.  Presumably cats were omitted from the FDA provision because they aren’t typically used in research for FDA regulated products.

There is also language in the report regarding New Approach Methodologies (NAMs), focused on limiting the use of animal testing. Much of this language backs FDA’s existing direction on NAMs, for example, the General Considerations for the Use of New Approach Methodologies in Drug Development draft guidance (CDER, March 2026). The Committee praises the Roadmap to Reducing Animal Testing and endorses the view that in vitro tests and computational models can, in appropriate contexts, provide reliable and human-relevant evidence. It then directs FDA to revise its regulations within a year to make clear, where applicable, that animal toxicology tests are not required to support clinical testing in humans, and recommends that the agency prioritize human or existing animal data and limit new animal testing to cases where comparing a method against animals is scientifically necessary and no other data will serve. Implicit in the instruction to “make clear” when animal testing is not required is a recognition that sponsors need transparency and predictability.

Research on Human Embryos

The other notable provision of the Act is Section 734, which prohibits the use of funds to receive a submission seeking an IND for a drug or biologic for research in which a human embryo is intentionally created or modified to include a heritable genetic modification and provides that no such investigational new drug application (IND) may go into effect.  While this type of research may not be widespread or typically involve an IND, it may represent a step into more prohibitive constraints in the future.

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Additionally, the House Report includes 143 FDA-related riders ranging from support for research and product approvals for specific diseases, to clinical trial recommendations, international inspection requirements, and animal testing prohibitions. While the whole report is worth a read, we are including below a discussion of the provisions we believe to be most significant and/or interesting.

As a starting point, there are a few themes that permeate the riders that are worth calling out:

What it means for the FDA. The report issues dozens of directive paragraphs ordering FDA to submit reports, conduct briefings, and take specific regulatory and enforcement actions across drugs, biologics, food, tobacco, and devices—often within specified deadlines (e.g., 60, 90, 120, or 180 days of enactment). While this language does not have the force and effect of law, “report language plays an essential role in the congressional consideration of appropriations measures and affects how federal agencies interpret and obligate the funds provided in those measures” and “agencies are generally expected to comply with a report’s directives.”

Alignment with administration policy. The report’s emphasis on deregulatory priorities, AI-driven efficiency in the approval process, and streamlining review pathways is broadly consistent with the current administration’s stated goals of accelerating access to safe products and leveraging technology to modernize federal operations. The Committee explicitly encourages FDA to utilize AI “to the fullest extent appropriate” for streamlined review and approval, and encourages coordination with the President’s U.S. Tech Force Team. However, dissenting views note that the bill includes “funding cuts to the Food and Drug Administration” and criticizes the bill’s “utter failure to address the bizarre and unscientific policies the administration has advanced on vaccines and other critical products.” The Committee also expresses concern about whether FDA has adequate staffing to accomplish its missions and references GAO reports, including one issued in early 2026, recommending improvements to staff retention and hiring; this is of course notable given the administration’s active role in significantly reducing FDA’s workforce over the last year and a half. The report also prohibits FDA from accepting certain clinical trial data generated from sites in covered nations (e.g., China), reflecting a supply-chain security and decoupling posture consistent with administration trade policy, but signaling the possibility of a significant new restriction on FDA’s regulatory authority in the future, which we discuss further below.

Tension with administration DEI rollbacks. Notably, several provisions in this report reflect regulatory priorities centered on diversity in clinical research and the health impacts of medical products on women and minorities—priorities that exist in tension with the current administration’s broad rollback of federal diversity, equity, and inclusion (DEI) initiatives. For example, the Committee commends FDA’s initiatives to increase the representation of women and minorities in clinical trials and directs FDA to continue implementing legislation requiring diversity action plans for Phase 3 studies and to provide guidance on overcoming barriers to participation in rural or underserved areas; this is particularly interesting given that FDA removed, and has not yet restored, its June 2024 draft guidance, Diversity Action Plans to Improve Enrollment of Participants from Underrepresented Populations in Clinical Studies, from its website. The Committee also directs FDA to report within 180 days on steps taken to avoid adverse drug events for women and minorities and urges the FDA Commissioner to explore a Women’s Health Innovation pilot program to ensure clinical trial design reflects the disease impact across the broader population and to accelerate bringing medical product innovations to women. These directives presuppose an FDA that is actively staffing, funding, and prioritizing diversity-focused regulatory programs. However, executive orders and agency-level policy changes curtailing DEI activities across the federal government may constrain FDA’s practical ability or institutional willingness to implement these provisions with full vigor. The result is a potential disconnect: Congressional appropriators are directing FDA to advance diversity and inclusion in clinical development and regulatory review, while executive branch policy pulls in the opposite direction. Healthcare and life sciences stakeholders should monitor whether these provisions are meaningfully enforced or effectively deprioritized in the current political environment, as the outcome will affect clinical trial design expectations, regulatory review timelines for products with diverse-population data, and the trajectory of women’s health innovation pathways at FDA. We note that despite the removal of the guidance on Diversity Action Plans, some sponsors have continued to submit them, and issues of diversity in clinical trials continue to be important in terms of ensuring that a clinical trial population is representative of and generalizable to the intended population for the product if approved.

Consequences of non-compliance. As noted above, appropriations committee reports do not, as a general matter, carry the force of law, and the directives therein typically rely on the “power of the purse” as an enforcement mechanism. However, the bill itself contains binding general provisions, and the Committee’s reporting requirements are backed by the implicit threat of reduced future funding, heightened oversight, and potential legislative riders in subsequent fiscal years.

With the above broad-brush strokes in mind, we discuss in greater detail seemingly significant provisions that affect multiple product types.

Cross-Product Provisions

Artificial Intelligence

During his tenure at the helm of FDA, Dr. Marty Makary spoke often about use of AI tools to aid reviewers in a variety of tasks, from summarizing meetings and locating studies to reviewing applications in record time. The Committee supports use of AI “to improve the efficiency, consistency, and transparency of regulatory review processes” and “encourages FDA to evaluate appropriate uses of artificial intelligence to streamline administrative functions, enhance data analysis, and support timely review of applications, including the redaction of confidential information from regulatory documents to increase public transparency.” Of particular interest, while the Committee encourages the use of AI to “clarify data requirements for approval,” it also states that FDA must maintain “that all regulatory decisions remain grounded in sound science and statutory authority.” As noted in the introduction above, the dissenting views in the report express concern with the “bizarre and unscientific policies” undertaken by the agency under this administration. While the Committee’s mandate to ground decisions in sound science and statutory authority is to be lauded, it remains to be seen who determines what constitutes “sound science and statutory authority” and whether the agency will have a different approach under Acting Commissioner Kyle Diamantis.

In a related provision, the Committee “encourages FDA to utilize AI to the fullest extent appropriate to ensure the most streamlined review and approval process, leading to faster access to safe products for Americans.” It also urges FDA “to formalize a dedicated, cross-center team of experts in AI-enabled drug development.” It is not clear why this should relate only to drug development; presumably FDA AI initiatives will pertain to all products over which FDA has oversight. It is also worth noting that Dr. Makary had a Chief AI Officer who departed along with Dr. Makary. To date, to our knowledge the role has not been filled.

The Committee directs FDA to provide a briefing update 180 days after enactment of the funding bill.

Foreign Inspections

One provision is titled “Foreign Medical Device Inspections,” but the language itself indicates a broader application to both drugs and devices. The Committee starts by expressing its concern specifically about medical device recalls from foreign facilities and directs FDA to strengthen its foreign inspection pilot programs to include medical device inspections, and then states that FDA should identify what, if anything, is needed to increase unannounced inspections of overseas drug and device manufacturers, with emphasis on facilities in China and India where quality issues are most prevalent. In particular, the Committee notes that FDA should enhance inspector language capabilities, technological resources, and staffing levels, and expects FDA to report within 180 days of enactment on concrete steps to integrate and improve these inspection programs, including unified metrics on inspection frequency, violation rates, and progress in eliminating the backlog of uninspected facilities. The report must detail specific measures available if efforts to conceal violations during inspections are discovered, and ensure imported devices consistently meet U.S. safety standards.

In a separate but related provision, the Committee encourages FDA to increase the frequency and rigor of international drug and device manufacturer inspections to be consistent with domestic manufacturer inspections.

China

Three riders highlight concerns with the growing role of China in biotechnology and clinical research. The most aggressive expresses concern about the growing influence of China over U.S. pharmaceutical supply chain and drug development, noting that in 2025 48% of “novel medicines licensed globally came from China” compared to 5% only 5 years ago and that clinical trial sites located in China operate in jurisdictions where patient “safety standards, human rights, and independence from state interference” cannot be verified and are not inspected by FDA.  Specifically, the Committee registers concern about FDA allowing this data to support INDs incentivizing the conduct of Phase I/II trials in China. In this rider, the Committee prohibits FDA from considering clinical data generated in support of an IND or a supplement by a clinical site located in a “covered nation” which currently includes North Korea, China, the Russian Federation and Iran.  The provision is to apply to applications submitted on or after one year from enactment of the Act.  Interestingly, while it is not entirely clear what it means to be “in support of an IND,” it does not appear intended to affect the conduct of Phase III studies in support of a new drug application (NDA) or biologics license application (BLA).  Although most companies do not plan to rely on a clinical study program with Phase III studies conducted entirely in China due to potential risks associated with the generalizability of data to the U.S. population, this signals an expanding risk associated with Phase I/II studies.

The second rider is in response to trends in early phase studies being conducted increasingly in China and Australia and directs FDA to revise its IND processes and data requirements for initial human trials to streamline administrative requirements, reduce filing burdens, and make them phase- and risk-appropriate and to consider developing a pilot program for lower-risk INDs more akin to Australia’s notification system.  FDA under former Commissioner Makary has already identified cutting the time to being able to initiate clinical trials as a goal.

The third laments the U.S.’s decreasing participation in standards setting bodies such as the International Council for Harmonization (ICH) while China’s participation has significantly increased and encourages FDA to continue working with ICH and other international standards setting bodies.

Clinical Trials

Accountability for Unsafe Drug Products and Medical Devices

The Committee is concerned with reports of companies knowingly withholding research showing their drug products or medical devices had adverse health outcomes. The Committee requests a briefing updating the Committee on “all investigations underway” to hold these companies accountable and an action plan to prevent future cover-ups of pertinent information in the approval process. It is not clear what the “reports” are that make this showing, and if this relates to FDA’s March 30, 2026, outreach to more than 2,200 sponsors and investigators associated with over 3,000 clinical trials that appear to be missing required results submissions to ClinicalTrials.gov. As noted in our blog post on that announcement, it is not clear that these companies are intentionally withholding results, or if the absence of results simply reflects a breakdown in process. It is also not clear how FDA could reasonably provide an update on “all investigations underway” to the Committee, given the large number of studies underway at any given time.

Alzheimer’s Clinical Trials

As a disease currently affecting approximately 7.4 million Americans, Alzheimer’s disease garners attention from both drug and device companies expending significant efforts to improve diagnostics and treatment of the condition. One challenge to their success is clinical trial design and enrollment. The Committee report recognizes this challenge and notes the “need to advance innovative and flexible clinical trial designs for Alzheimer’s disease and related dementias.” The Committee also discusses the need for diversity in Alzheimer’s clinical trials, particularly “to improve trial representation and ensure that study populations better reflect the individuals most affected by the disease.”

Real-World Data and Evidence

Over the last few years, FDA has repeatedly emphasized the importance of real-world data (RWD) and real-world evidence (RWE) and has published on its website drug, device and biologic product authorizations that used RWE. The Committee encourages FDA to expand the use of RWD and RWE—including electronic health records, claims data, registries, and digital health information—in the evaluation and approval of drugs, biologics, and medical devices. The Committee further encourages the agency to consider RWD and RWE as capable of supporting adequate and well-controlled studies and constituting substantial evidence of effectiveness, where appropriate.

Women’s Health

The Committee report includes several provisions that emphasize the importance of researching, studying, and developing products for women’s health, recognizing “that women’s health includes conditions and diseases that differently, disproportionately and/or solely impact the health of women” and that these differences “should be considered in bringing medical innovations to market.”

Specifically, one provision emphasizes the importance of advancing knowledge and research on ovarian health as a way to reduce the risk of developing certain chronic conditions. Another encourages FDA to “expedite innovation related to at-home self-collection tests that could increase and expand access to [cervical cancer] screenings for women.”

Perhaps most significantly, the Committee “urges the FDA Commissioner to explore operating a Women’s Health Innovation pilot program where professional expertise in women’s biology and innovation is applied to enhance efficiency in the approval process, ensure clinical trial design reflects the disease impact across the broader population, and accelerate bringing medical product innovations to women.” We are certain there are many companies at critical product development stages that would welcome the opportunity to participate in this pilot program.

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The FY2027 Appropriations Report reflects a Congress eager to shape FDA’s regulatory priorities—from promoting AI-driven efficiencies and strengthening foreign inspection programs to restricting clinical trial data from covered nations and advancing women’s health innovation. While these cross-product provisions set the stage for how FDA may operate across all product categories, the report also contains a significant number of riders specific to drugs and biologics. In our next installment, Riders on the Storm Part 2, we will dive into the drug-specific provisions, including those addressing biosimilars, accelerated approval, and other key areas of pharmaceutical regulation. Stay tuned.

On June 15, 2026, the U.S. Food and Drug Administration (FDA) issued a Warning Letter to Happiest Baby, Inc., the manufacturer of the SNOO Smart Sleeper bassinet system, following a July 2025 inspection of the company’s Los Angeles facility. The Warning Letter highlights several key points related to complaint handling, premarket notification requirements, field correction reporting, design changes, and unauthorized changes to the device’s intended use environment, with important lessons for device manufacturers of all sizes.

1. Bundling of Complaints: Why Grouping Multiple Complaints Undermines MDR Compliance

FDA cited Happiest Baby for failure to adequately establish and maintain procedures for receiving, reviewing, and evaluating complaints and for failure to maintain adequate records of complaint investigations. The core deficiency was the firm’s practice of “bundling”—grouping several distinct customer complaints related to the same overarching topic, e.g., the sleep sack being too large, together in the complaint system as a single complaint record. FDA reviewed 17 complaints during the inspection and found that 9 of 17 reflected this bundling practice, with the firm performing complaint handling activities (including complaint investigations and Medical Device Report (MDR) determinations) under a single complaint entry for multiple distinct events.

Bundling complaints can be problematic for several reasons. It can limit the extent of the investigation for each individual case, potentially masking safety signals that would be apparent if complaints were evaluated independently, thereby risking a single non-reportability determination being applied to events that, if individually assessed, might meet the threshold for mandatory MDR reporting. Bundling can also obscure the frequency and severity of particular failure modes, which are critical inputs to both MDR determinations and Corrective and Preventive Action (CAPA) evaluations, and undermine trending analyses that quality systems rely on to identify emerging risks.

2. Product Modifications After De Novo Authorization: Evaluating When a New Premarket Submission Is Required and Implementing Design Controls

Under 21 CFR 807.81(a)(3), a manufacturer must submit a new premarket notification (510(k)) before commercially distributing a device that has been changed or modified in a manner that could significantly affect its safety or effectiveness, or that constitutes a major change or modification in its intended use. FDA’s guidance document, Deciding When to Submit a 510(k) for a Change to an Existing Device, provides a decision framework for this assessment.

The SNOO Smart Sleeper was authorized under De Novo classification request DEN210039 with an indication specifying three sizes of sleep sacks: Small (5–12 lbs), Medium (12–18 lbs), and Large (18–25 lbs). FDA found that Happiest Baby had introduced two additional sizes—an X-Small Sleep Sack (4–8 lbs) and an X-Large Sleep Sack (23–25 lbs)—without submitting a premarket notification. FDA concluded that the X-Small Sleep Sack constituted both a change that could significantly affect safety or effectiveness and a major change in intended use. Notably, the firm first distributed the X-Small Sleep Sack in a beta program in direct response to customer complaints that the Small Sleep Sack was too large—the very same complaints it had bundled and found non-reportable. The X-Large Sleep Sack also constituted a change that could significantly affect safety or effectiveness, because babies in the weight range for the X-Large Sleep Sack also are within the bounds of the weight for the Large Sleep Sack, so the larger size may make it easier for an infant to break free from the sleep sack and assume an unsafe position in the bassinet.

FDA also cited Happiest Baby for failure to adequately establish and maintain procedures for the identification, documentation, validation or, where appropriate, verification, review, and approval of design changes before implementation. FDA viewed the sleep sack size changes and related product iterations as design changes that should have moved through formal design-control procedures—not merely customer service resolution, beta testing, or commercial rollout “based on equivalency to prior testing” and reliance on prior validation protocols, reports, and justifications.

The lesson for manufacturers is that complaint-driven modifications can trigger multiple, overlapping regulatory workstreams: complaint investigation, MDR assessment, CAPA evaluation, design-change control, and premarket submission analysis. A change intended to resolve a safety-related complaint should be documented through the design history file and supported by verification or validation before implementation or distribution.

3. Reporting Obligations Under 21 CFR Part 806: Corrections and Removals

Under 21 CFR Part 806, manufacturers and importers must report to FDA any correction or removal of a medical device initiated to reduce a risk to health posed by the device, or to remedy a violation of the Federal Food, Drug, and Cosmetic Act (FD&C Act) caused by the device that may present a risk to health. Such reports must be submitted within 10 working days of initiating the correction or removal.

FDA found that Happiest Baby had been sending replacement SNOO Smart Sleeper devices to customers who returned stained, soiled, or otherwise unsanitary units. FDA determined that this action constituted a correction or removal within the meaning of the regulation—it was initiated to reduce a risk to health posed by the device or to remedy a violation of the FD&C Act—and that the firm failed to file the required report.

This citation is a reminder that Part 806 reporting obligations can be triggered by activities that a manufacturer might not reflexively classify as a “recall.” Product replacement programs, refurbishment exchanges, and field service actions that address customer complaints may satisfy the regulatory definition of a correction or removal if they are undertaken to reduce a risk to health. Manufacturers should ensure that product replacements are evaluated under Part 806 to determine whether the replacements meet the definition of a correction or removal.

4. Change of Intended Use Location: From Home to Hospital

When FDA granted the De Novo request for the SNOO Smart Sleeper under DEN210039, it authorized the device “for home use by caregivers.” FDA found that Happiest Baby was marketing and distributing a “SNOO Hospital Bundle” to hospitals—a package that included the SNOO Smart Sleeper bassinet, a mobility cart, a reusable sealed mattress, mesh covers, sleep sacks, fitted sheets, and disposable cover sets. The Hospital Bundle was marketed with claims that it keeps sleeping babies safely on their backs—an intended use very similar to the authorized home-use indication.

FDA concluded that marketing the SNOO Smart Sleeper for use in hospital settings constituted a major change or modification in intended use and a change or modification that could significantly affect safety or effectiveness—for example, the mobility cart introduced new risks not evaluated in the original authorization, including reliance on wheel locks to prevent unintended movement and the potential for the cart to roll or tip over while an infant is in the bassinet.

Happiest Baby argued that the SNOO, when used in the hospital, was not a medical device because it was marketed exclusively as a soothing tool. FDA rejected this characterization, finding that the Hospital Bundle is a device, that its intended use is not a general wellness use, and that CDRH’s general wellness policy did not apply because the bundle did not present a low risk to safety.

This finding illustrates that the environment of use is a critical element of a device’s authorized intended use. Moving a device from home to clinical settings can fundamentally change the risk profile and require premarket evaluation. This also demonstrates that recharacterizing an authorized medical device as a “wellness” or “non-medical” product for a new market segment is unlikely to succeed when the product’s claims and function remain substantially the same as the authorized intended use.

***************

This Warning Letter identifies systemic vulnerabilities that can emerge in any medical device company. We are available to help ensure that your processes and systems are designed to mitigate the risk of a similar outcome.

Listing patent information in the Orange Book is one of the most important things you can do as an innovator sponsor to ensure that your property rights are respected.  And, of course, it’s statutorily required.  So that makes the new guidance FDA just issued on how to list your patents in the Orange Book—or rather how to properly fill out Forms 3542a and 3542—pretty important.  It’s not groundbreaking stuff if you’re familiar with the forms, but the submission is complicated when you’re not experienced with it.  This guidance serves to simplify it.

With the familiar Question and Answer format, the 3542 guidance begins by outlining the statutory requirement to submit drug product, drug substance, and method-of-use patent information both as part of an NDA or supplement and after approval.   Form 3542a should be used for applications in progress while Form 3542 is used for approved applications and can be submitted no later than 30 days after approval unless the patent issues after approval.  If a patent issues after approval of the NDA, the sponsor must submit a Form 3542 no later than 30 days after patent issuance.

If FDA identifies errors in a timely filed Form 3542, the NDA sponsor has 15 days from FDA notice to remedy the issues.  And if a sponsor is changing the description to an approved use code, the sponsor must submit Form 3542 within 30 days of the corresponding change to product labeling or within 30 days of a decision by the court or PTO that alters the construction of the patent’s method-of-use claim.

The guidance further reminds sponsors that the correct form must be used and filed within the 30-day window, with one issued patent per form.  The forms must be filed through the Electronic Submission Gateway and should not be sent any other way.  Nor should copies of patents be submitted.

There is little in the way of substantive advice in the new guidance, but it does highlight several recurring deficiencies that sponsors should watch out for:

• Failure to identify any applicable U.S. agent for either the patent owner or NDA holder;
• Failure to describe and clearly explain all changes made by the NDA holder to a use code listed for its drug product in the Orange Book.
• Failure to identify the specific subsections of the approved product labeling that describe the approved method of use claimed by the patent submitted.
• Failure to ensure the use code description matches the corresponding use code description in the Orange Book where the sponsor intends to use a use code identical to one already published in the Orange Book.

Remember that only listable patents can be included (drug substance, drug product, and method-of-use patents) and that FDA has strict timing rules for 3542 submissions.

Again, this guidance isn’t novel, but it is important because it gives sponsors a roadmap for timely and accurate Orange Book submissions.  Just don’t forget to use the correct form!

On June 2, 2026, FDA (specifically, CBER) issued a new draft guidance titled “Leveraging Prior Knowledge in the Development of Human Gene Therapy Products Incorporating Genome Editing” (the “Draft Guidance”).  As suggested by the title, the Draft Guidance is primarily intended for sponsors developing gene editing products, either ex vivo or in vivo; however, it explains that some of the recommendations may be applicable to other cell and gene therapy products, including AAV vector-based gene therapy products that do not incorporate gene editing.

The Draft Guidance begins with some helpful definitions, summarized below:

• Leveraged: Used to fully or partially alleviate the need to generate new information/data.
• Prior Knowledge: Public knowledge and/or platform knowledge.
• Public knowledge, or “generally accepted scientific knowledge” (“GASK”): “Medical or scientific information that is generally accepted by experts qualified by scientific training and experience in the relevant field including FDA experts.”
• Platform knowledge: “[K]nowledge gained from developing and manufacturing similar products and processes.” (Note: this is distinct from the definition “platform technology” as used in the designation of “designated platform technology,” and the Draft Guidance is clear that such designation is not required to leverage prior knowledge). Platform knowledge may be public knowledge (e.g., GASK), or it may be proprietary and require permission to leverage.

Broadly, the scientific soundness of leveraging prior knowledge depends on the context of use.  Knowledge pertaining to attributes that are independent of the component or product itself may be easier to leverage than knowledge that pertains to dependent attributes of a specific product (e.g., product potency).

This expansive Draft Guidance covers several areas for potential leveraging across CMC, nonclinical, and clinical knowledge.  This post focuses only on the latter two, but we strongly recommend sponsors review the CMC portion closely to understand how they can make use of prior knowledge.

Nonclinical

Prior knowledge can be leveraged to inform the kind, duration, and scope of nonclinical testing needed to enter into clinical testing.  When nonclinical data from other relevant product(s) are leveraged, the Draft Guidance recommends that detailed information on similarities and differences between the products should be included (e.g., manufacturing process, final formulation, key lot release specifications).  Additionally, as appropriate, a justification with supporting data should be provided to explain why additional nonclinical evaluation is unnecessary.

Ex Vivo Gene Editing Products

In general, for ex vivo gene editing products, the Draft Guidance states that data regarding the biological activity associated with specific genomic edits could potentially be leveraged between products containing the same on-target genomic edits using the same editor; however, the biological activity of each editor and gRNA combination should be assessed.  Additionally, independent attributes of the editing component may be considered for leveraging; for example, safety and activity data related to the specificity and affinity/avidity of the binding domain of a genome edited CAR-T product may potentially be leveraged.

In Vivo Gene Editing Products

When considering the appropriateness of leveraging nonclinical information for in vivo gene editing products, it is important to consider similarities such as those related to the editor, vector, manufacturing process, final formulation, the empty/full capsid ratio, route of administration, dose levels, and dosing regimen.

Proof of concept data demonstrating editing and biological activity in a single animal model of a monogenic disease may potentially be leveraged for the purposes of understanding editing feasibility, demonstrating predicted biological response, and supporting the scientific rationale.  However, as with ex vivo products, studies should be conducted for each editor and gRNA combination to evaluate on-target editing efficiency and corresponding biological activity in relevant human cells.

Biodistribution data may also be leveraged when delivery vectors are sufficiently similar and any differences are not expected to impact the biodistribution profile (e.g., across different lipid nanoparticle (“LNP”) products if the physicochemical properties are similar and not expected to be impacted by the differences in cargo; or for viral vectors, if a similar capsid is used and any differences in the expression cassette are not anticipated to significantly impact the gene expression profile).  Such leveraged biodistribution data may assist in identifying tissues/cell types that should be assessed further for on- and off-target editing.

Other Considerations

If the biodistribution profile and relevant product characteristics are sufficiently similar, this leveraging can apply to certain toxicology studies.  For example, leveraging can be used to forgo developmental and reproductive toxicities (“DART”) and germline transmission studies for a product if a product with a similar vector shows no distribution to the gonads.

The Draft Guidance also highlights the potential value of clinical data from relevant products to help inform certain safety risks and dose selection (including for pediatric dosing based on adult data) for the proposed clinical trial, provided sufficient similarity exists between the products; however, fundamental differences in transgene expression and functionality may make leveraging challenging between different transgenes even with an identical vector backbone and expression cassette.

Leveraging Bioinformatics Knowledge

Certain bioinformatics information may potentially be leveraged for similar drug products, including off-target assessment strategies for editors with an identical mechanism of action, certain assay parameters (e.g., amount of starting material) when intended on-target edit rates of different drug products are similar; next-generation sequencing (“NGS”) strategies; or bioinformatics pipelines including several bioinformatics tools, or a specific bioinformatics tool, analyzing similar data obtained from different gene editing products.

It may not be appropriate to leverage bioinformatics data where the data are product-specific.  However, for example, if a proposed product uses the same gRNA and genome editor in a specific cell type as another clinical program, off-target data may be considered for leveraging between ex vivo genome edited cell-based products with identical genome edits.  Similarly, data from genomic integrity studies may also be considered for leveraging, but additional assessment may be needed if the intended edits are known to have altered DNA repair processes due to an underlying disease.

Clinical

Data from prior clinical experience may potentially be leveraged to inform certain aspects of clinical trial design, including for dose-limiting toxicity definitions, monitoring, dose selection, appropriateness of re-dosing, exposure-response evaluations, the type and timing of biomarker and clinical outcome assessments, and clinical pharmacology assessments.  Clinical data can also potentially be leveraged to abbreviate the safety and/or efficacy database or for PK and drug-drug interaction concerns.

The Draft Guidance also describes an openness to “reconsider” long-term follow-up requirements, including duration, based on leveraged cumulative safety data “to reduce unnecessary burden.” This is noteworthy because the FDA Guidance Long Term Follow-Up After Administration of Human Gene Therapy Products includes lengthy follow-up recommendations.  As relevant here, the recommendation in that guidance for genome editing products is up to fifteen years, which is not only burdensome for both patients and sponsors, but also practically challenging given the constantly changing corporate landscape.  If this provides a path to reducing these requirements where appropriate, it would be welcomed.

How to Submit Information for Proposed Leveraging

To leverage public knowledge, the referenced material should be provided for FDA evaluation, and sponsors should provide a summary of literature sources and justify the applicability to their specific product, which may require bridging data.  Platform data may be included in the IND submission or may be submitted as a reference to a different IND or Master File (with letter of authorization, if needed).

The Draft Guidance states that BLAs may not incorporate by reference without authorization information or data that applies to drug substances, drug substance intermediates, and drug products; however, such information may still be considered for leveraging if it is provided directly in the BLA.

In general, the Draft Guidance recommends engaging with FDA as early as possible on these topics, including through INTERACT or pre-IND meetings.

Analysis

We strongly applaud FDA for publishing this Draft Guidance.  The safest regulatory route for a sponsor developing a product, particularly a biologic where there is no such thing as a 505(b)(2) pathway to rely on previous FDA conclusions of safety and/or efficacy, is to recreate the wheel with each product so that there is no question that an application is supported by specific data from that product, even where there is knowledge that could potentially be leveraged to substitute for unnecessary and burdensome testing.  FDA’s signaling of openness to this will hopefully lead to productive discussions.  We were also pleased to see that although the Draft Guidance is focused on gene editing products, the recommendations are not necessarily so limited.

The Draft Guidance did not answer one vexing question that has persistently risen in the context of leveraging evidence, which is: when does “knowledge” become “public” or GASK?  This is a crucial question, because this may be the only way for a sponsor to leverage prior knowledge that it did not itself develop, as authorizations from competitors can be challenging to acquire.  As such, the scope of what information is available for leveraging is not entirely clear.  FDA’s GASK guidance also does not specifically answer this question.  Sponsors may seek to support their results with evidence that a particular well-understood mechanism of action provides plausibility for such results, but we have seen resistance to acceptance of such evidence in the biologic context.  The Draft Guidance here only repeats that such knowledge must be generally accepted by experts; however, without clear articulation of how that process is actualized, we have seen FDA reviewers default to “no,” and thus resulting in another re-creation of the wheel.

Additionally, in describing how prior clinical data may be leveraged to inform trial design and analysis, it is somewhat notable that there is no reference to FDA’s recent guidance on using Bayesian methodologies.  It would be interesting to understand FDA’s position on acceptability of priors from products with the same or highly similar features for leveraging in the manner described elsewhere herein (is this included in how clinical data could be “leveraged” to “abbreviat[e] the…efficacy database”?).  The Bayesian guidance touches on this regarding skeptical priors for failed trials involving closely related drugs, but how could the opposite situation be leveraged?

Another fundamental question here is what will “leveraging” really mean in practice?  It’s a wide range from some amount of “partial alleviation” to “full alleviation.”  This will certainly be case-specific, but we suspect, at least at first, there will be less appetite to allow for “full” alleviation of the need to generate new information/data as compared to “partial” alleviation.  Ultimately, the success of the principles espoused in this Draft Guidance will depend on the acceptance by FDA review staff.  A different product may never quite be similar enough to justify leveraging and streamlining.  But hopefully, with increased encouragement from such efforts as this Draft Guidance, we can see progress.  We encourage sponsors to think expansively, and early, about this.

Many sponsors in the gene editing space, or gene therapy more broadly, use a limited number of delivery platform types (if more than just one); for example, sponsors that are developing multiple products with the same vector and route of administration.  As such, sponsors tend to accumulate substantial knowledge relevant to their specific delivery platform(s).  This Draft Guidance therefore has the potential to be truly impactful.  We strongly encourage sponsors to reach out to FDA about taking advantage of the Draft Guidance early in development, because when you can use the wheels you’ve already built, you get to the finish line faster.

On June 8, 2026, the Department of Defense published its updated list of “Chinese military companies” under Section 1260H of the National Defense Authorization Act for Fiscal Year 2021. Among the entities newly added: WuXi AppTec Co., Ltd., the China-based contract development and manufacturing organization (CDMO) whose name has been at the center of the BIOSECURE Act debate since 2024. The designation, set out in a Federal Register notice scheduled for publication on June 10, 2026, states that WuXi AppTec “is indirectly owned by [the State-Owned Assets Supervision and Administration Commission of the State Council] and is indirectly affiliated with [State Administration of Science, Technology and Industry for National Defense] and the [People’s Liberation Army].”

The inclusion of WuXi AppTec on the 1260H list triggers one of the two statutory pathways to “biotechnology company of concern” (BCOC) status under the BIOSECURE Act—a law that, when fully implemented, will prohibit federal agencies from contracting with or funding companies that use a BCOC’s biotechnology equipment or services. This is a significant development for the life sciences industry, even though its most consequential effects remain months—possibly years—away.

Background: From Named Entity to 1260H Pathway

Industry observers will recall that earlier iterations of the BIOSECURE Act—including the version that passed the House in 2024—expressly named WuXi AppTec, WuXi Biologics, BGI, MGI, and Complete Genomics as biotechnology companies of concern. That named-entity approach was a major source of industry pushback, particularly with respect to WuXi, given its outsize role as a CDMO to U.S. biopharmaceutical companies.

When the BIOSECURE Act was signed into law on December 18, 2025 as part of the FY2026 NDAA, the named-entity list was gone. Instead, the enacted statute establishes two mechanisms by which a company can be deemed a BCOC:

• 1260H Pathway: An entity that appears on DoD’s annual Section 1260H list of “Chinese military companies” and is involved in the manufacturing, distribution, provision, or procurement of biotechnology equipment or services.
• OMB Pathway: The Office of Management and Budget may publish a separate list of additional BCOCs meeting statutory criteria related to foreign adversary control and national security risk. OMB can also designate subsidiaries, parents, affiliates, or successors.

At the time of enactment, the 1260H list included BGI and MGI but did not include WuXi AppTec or WuXi Biologics. As we and others noted at the time, this represented a limited win for the industry—but with the clear caveat that WuXi could be added in a subsequent 1260H update. That scenario has now materialized.

What Does This Mean in Practice?

The 1260H listing carries both immediate effects on DoD contracting and downstream BIOSECURE Act implications.

Immediate effect: 1260H designation. As of publication of the Federal Register notice, WuXi AppTec is a designated “Chinese military company” for purposes of Section 1260H. This designation carries its own DoD contracting restrictions and reputational consequences, but it does not, by itself, impose the broader procurement prohibitions of the BIOSECURE Act.

Downstream effect: BIOSECURE Act prohibitions. Because WuXi AppTec is now on the 1260H list, it will satisfy the statutory criteria for BCOC status once OMB establishes and implements a process to make a finding that WuXi AppTec is involved in providing biotechnology equipment or services (which it almost certainly will). However, the Act’s prohibitions do not take effect for 1260H BCOCs until 60 days after the FAR Council revises the Federal Acquisition Regulation to implement them. Under the statutory timeline, OMB must publish its BCOC list by December 2026, issue implementing guidance within 180 days, and the FAR Council then has one year to revise the FAR. If the government uses all allotted time, it could be nearly three years before the Act takes effect.

Scope: Federal Contracts and Exclusions

A note of caution on scope: the BIOSECURE Act’s prohibitions apply only where there is a nexus to federal procurement, grants, or loans. Specifically, federal agencies are prohibited from (1) procuring biotechnology equipment or services from a BCOC, (2) entering into contracts with entities that use a BCOC’s equipment or services to perform the federal contract (including through subcontractors), or (3) making loans or grants for the purpose of procuring such equipment or services. The Act applies to contracts subject to the FAR. Critically, Medicare and Medicaid agreements are not contracts subject to the FAR and are therefore excluded from the scope of the Act’s prohibitions.

Five-Year Grandfathering Period

The Act includes a five-year grandfathering period for contracts (or contract options) that are in place before the effective date of the BIOSECURE prohibitions with respect to a given BCOC. The five-year clock runs from the date the FAR is revised. During this period, the Act’s prohibitions do not apply to those pre-existing contractual arrangements.

For companies currently engaged with WuXi AppTec under federal contracts or funding mechanisms, this means existing arrangements are not immediately at risk. Companies should be evaluating the duration of their existing contractual commitments, assessing whether services will extend beyond the five-year grandfathering window, and closely watching WuXi’s request for reconsideration or other appeals to be removed from the list to determine whether alternative suppliers will be needed. Depending on the services WuXi provides, tech transfer runways can be long and expensive.

Reconsideration and WuXi’s Response

Entities added to the 1260H list are not without recourse. The Federal Register notice outlines a formal reconsideration process whereby listed entities can argue that they do not meet the criteria for inclusion on the list.

WuXi AppTec has already signaled its intent to pursue that avenue. In a public statement issued on June 8, 2026, the company characterized the designation as “mistaken and baseless,” stating that it is “an independent, publicly traded company” and denying any ownership, control, or affiliation with any government or military organization. WuXi AppTec stated it “will pursue all available remedies to correct this designation,” although the outcome of any reconsideration request is uncertain.

Looking Ahead

We expect significant interest from trade groups and industry stakeholders, as well as continued congressional discussion. The House Select Committee on the Chinese Communist Party issued a statement on June 8 characterizing the updated 1260H list as “a warning to American businesses” and referencing the bipartisan BIOSECURE Act.

We will continue to monitor developments, including OMB’s publication of the formal BCOC list (due no later than December 2026), any reconsideration proceedings, and the FAR rulemaking process. If you have any questions about what this means for your business, do not hesitate to reach out.

The skinny label is back from the dead.  While back in 2021, it seemed like the skinny label was effectively dead after the Federal Circuit twice held Teva liable for induced infringement of GSK’s labeling in GSK v. Teva, the Supreme Court breathed new life into it last week—and just as the House Judiciary Subcommittee on Courts, Intellectual Property, Artificial Intelligence, and the Internet was starting a hearing on “Medicines and IP: Balancing Innovation and Access,”, with a focus on skinny labeling—with its unanimous decision in Hikma v. Amarin.  In Hikma v. Amarin, the Supreme Court made clear that an innovator must plausibly allege that a generic actively encouraged infringing uses; allegations that a physician could read a statement to induce infringement is not sufficient to survive a Motion to Dismiss.

A quick refresher on the background of the case: Hikma received approval of a skinny labeled version of Amarin’s Vascepa (icosapent ethyl) carving out the use “as an adjunct statin therapy in patients with elevated triglyceride levels and established or risk factors for cardiovascular disease” (the “CV indication”).  The indication remaining in the Hikma labeling was as adjunct to diet to reduce triglyceride levels in adult patients with severe hypertriglyceridemia (the “SH indication”).  Hikma, in marketing its skinny labeled generic Vascepa, stated that its product is the “generic equivalent to Vascepa” and that Vascepa “is indicated, in part” for the SH indication while citing to sales numbers for Vascepa in all indications.  Hikma also stated that its generic icosapent ethyl is “AB rated” in the “Therapeutic Category: Hypertriglyceridemia.”

Amarin sued Hikma for induced infringement, arguing that Hikma’s labeling “teaches CV risk reduction” due to “a notice regarding side effects for patients with CV disease” and an absence of a statement that the generic “should not be used for the CV indication….”   Amarin further argued that the totality of Hikma’s statements across several doc­uments encouraged infringing uses.  Hikma filed a Motion to Dismiss under Fed­eral Rule of Civil Procedure 12(b)(6) for failure to state a claim for induced infringement, and the District Court dismissed the case, holding that Amarin did not sufficiently plead that Hikma “took affirmative steps to induce” infringement.  (In an interesting twist, Amarin also sued an insurer, HealthNet, for including Hikma’s product on its formulary for the CV indication.  While that part of the case survived the Motion to Dismiss, HealthNet ultimately settled with Amarin, meaning that we still don’t have clarity into liability for induced infringement for inclusion of a skinny-labeled generic on a formulary).

But the Federal Circuit reversed.  It held that Hikma’s label, standing alone, does not induce in­fringement but it was “‘at least plausible that a phy­sician could read’ the label, website, and press releases ‘as an instruction or encouragement to prescribe [Hikma’s ge­neric] for any of the approved uses of icosapent ethyl.’”

Hikma appealed to the Supreme Court, and in a surprising but exciting turn of events, the Supreme Court agreed to hear the case.  In yet another surprising turn of events, the Supreme Court issued a unanimous 9-0 decision finding that Amarin failed to state a claim for active inducement in violation of 35 U.S.C. § 271(b)—so its complaint cannot withstand Hikma’s Rule 12(b)(6) Motion to Dismiss—and reversed the Federal Circuit decision.

The Court took a pretty simple approach to deciding this case, applying the “well-established federal pleading standards” under Twombly and Iqbal that require a plaintiff to “state a claim to relief that is plausible on its face” with “more than a sheer possibility that a defendant has acted unlawfully.”  Looking to the third element of an induced infringement claim—the inducer took “active steps” to “encourage direct infringement”—the Court required affirmative steps rather than passive steps to promote infringement and rejected Amarin’s argument that it merely needs to allege “a plausible chain of events through which statements made by Hikma could lead a healthcare provider . . . to prescribe or dispense Hikma’s drug to reduce a patient’s cardiovascular risk.”  This is because, the Court held, Amarin failed to allege “more than sheer possibility” that Hikma actively induced Amarin’s method of use patents.  “So the question is not merely whether the statements could be ‘plausibly underst[oo]d’ to induce infringement, but whether they plausibly constitute ‘affirmative steps to bring about the desired result’ of infringement.”

Looking to Hikma’s actual conduct, the Court explained that “it’s not plausible that Hikma ‘designed’ [its] statements to ‘stimulate others to commit’ infringement.”   Claiming that the product is “equivalent” to its Reference Listed Drug, a warning and disclaimer in product leaflets, and vague statements of sales figures were “implausibly roundabout ways to induce medical providers to infringe.”  The Court was concerned that “[t]reating them otherwise,” could turn any statement—even warning against the patented method of use—into active inducement of infringement.

The Court poignantly “decline[d] to put generic manufacturers between a rock and a hard place by turning adherence to the law and industry standards into building blocks for illegal conduct.”  Relatively innocuous statements (like that the product is AB-rated or generic) are not sufficient to allege induced infringement, nor are “mere omissions, inactions, or nonfeasance.”  Case law, said the Court, “leaves generic manufacturers more breathing room than that.”

That the case was dismissed (after being dismissed and reinstated) at the pleading stage is significant: Litigating a case is expensive and the threat of induced infringement may be sufficient to reduce reliance on the skinny label.  If these cases can be dismissed at the pleading stage based on  whether a defendant actively encouraged infringement through its statements (rather than how others may understand those statements), generic companies will not be undertaking as big of a risk as if they are forced to litigate the entire claim.  Indeed, generic companies are breathing a sigh a relief, as the skinny label lives to see another day.

Hyman, Phelps & McNamara, P.C. is proud to announce that the Firm and five of the Firm’s attorneys have been selected for the 2026 Chambers USA Guide.

Recognitions include:

Firm Rankings

• Healthcare: Pharmaceutical/Medical Products Regulatory (District of Columbia) – Band 3
• Food & Beverages: Regulatory & Litigation (USA – Nationwide) – Band 2
• Life Sciences: Regulatory/Compliance (USA – Nationwide) – Band 2

Individual Rankings

Food & Beverages: Regulatory & Litigation (USA – Nationwide)

• Ricardo Carvajal – Band 1

Healthcare: Pharmaceutical/Medical Products Regulatory (District of Columbia)

• Kurt Karst – Band 2
• Josephine Torrente – Band 4
• Anne Walsh – Band 5
• Jeffrey N. Gibbs – Senior Statespeople

Litigation: White-Collar Crime & Government Investigations (District of Columbia)

• Anne Walsh – Band 6

Chambers USA is the world’s leading legal data and analytics provider, highlighting the top lawyers and law firms across the USA for over two decades. Their legal rankings are unrivaled in accuracy, depth and quality and are conducted by a dedicated team of independent researchers, ensuring that the outcomes are trusted and credible across the globe.

On May 29, 2026, FDA issued a final guidance, Content of Human Factors Information in Medical Device Marketing Submissions (Final Guidance), replacing the draft version issued in December 2022 (Draft Guidance).  FDA has requested human factors (HF) information in some premarket submissions for years, but it has not always been clear, especially for 510(k)s, which device types would require HF testing as part of the submission.

At first blush, the guidance has expanded significantly in size.  However, much of the expansion is the result of several appendices providing example reports and outlines.  There is, however, one notable substantive revision: in the flowchart provided to help determine the correct HF Submission Category, FDA added Decision Point D, which sets forth considerations to undertake in determining whether HF validation testing should be included in the submission.

As in the Draft Guidance, the Final Guidance provides a flowchart illustrating a risk-based approach to determine the HF Submission Category.  Also consistent with the draft are three HF Submission Categories with increasing levels of information recommended in a marketing application:

• HF Submission Category 1 submissions (applicable to modified devices only) should provide a conclusion and high-level summary of the HF evaluation,
• HF Submission Category 2 submissions should provide a rationale for why there are no critical tasks (new devices) or no new critical tasks and/or no changes that impact critical tasks (for modified devices),
• HF Submission Category 3 submissions should provide an HF Engineering/Usability Engineering report that includes HF validation testing.

As we noted in our previous post, the Draft Guidance appeared to expand the number of submissions for which HF data would be required.  FDA addresses this concern in the Final Guidance with the addition of a fourth decision point within the flowchart.

In both the Draft and Final Guidance:

• Decision Point A asks whether the submission is for a modification to an existing device,
• Decision Point B (answered when the submission is for a modification) asks if the change is to the user interface, intended device users, intended device uses, intended use environment(s), training, or labeling,
• Decision Point C identifies if, based on a Use-Related Risk Analysis (URRA), there are critical tasks (for new devices) or new or impacted critical tasks (for modified devices).

While in the Draft Guidance, a “Yes” response to Decision Point C led to an HF Submission Category 3, the Final Guidance adds another Decision Point (D) that evaluates whether HF validation test data should be submitted based on considerations related to the:

• User interface history of use for the intended use, users, and environment(s),
• User interface complexity,
• Adequacy of existing risk control measures.

The Final Guidance notes that Decision Point D is intended to “help submitters determine whether data from human factors validation testing should be submitted in a marketing submission.”  Final Guidance at 9.  This statement is footnoted with reference to the Quality Management System Regulation (QMSR), its requirements to verify and validate the device design, and a recommendation that “human factors information be maintained by the manufacturer regardless of whether it is submitted to FDA.”  Id. at 9 n.28.  So, while Decision Point D may ease the burden of providing HF testing in some premarket submissions, FDA seems to open the door for a closer look at HF information during QMSR inspections.

The Final Guidance describes a complex user interface to include “devices that involve management such as programming, monitoring, and/or maintenance, systems with many steps such as connections, disconnections, and/or selections that influence how the device operates.”  Id. at 10.  With a risk-based approach comes some subjectivity, and there may be different opinions between FDA and industry, especially with three points being considered.  For example, will every device with a complex user interface be required to provide data from an HF validation test, or could the history of safe use of similarly complex user interfaces for the same intended use, users, and environments provide a sufficient justification that an HF validation study is not necessary?

The appendices include useful examples of justifications to support the HF Submission Category selected.  If sponsors are not clear on the appropriate HF Submission Category, or whether HF validation testing will be expected in a marketing application, the Final Guidance recommends use of the pre-submission program.  In our experience, CDRH teams expect to review the results of HF studies, and even if a company believes that, pursuant to the new guidance, the results do not need to be submitted, it should be prepared to share those results with FDA during the course of review, likely in response to a request for additional information.

With the finalization of the guidance, FDA has also updated the eSTAR templates to allow the selection of the HF Submission Category and provide the supporting information.  This now makes HF a focus of every review and, even with the risk-based approach, may result in more devices being required to conduct an HF validation study.  FDA will hold a Town Hall discussion on July 22, 2026 to discuss the Final Guidance.

Don’t look now, but drug repurposing is having a moment.

On May 11, 2026, FDA announced a new public docket soliciting stakeholder input on its drug repurposing initiative—specifically, which chronic disease areas should be prioritized and which approved drugs have the most potential to treat conditions outside their existing labels.  The accompanying Federal Register notice (Docket No. FDA-2026-N-4492) has a comment deadline of June 11, 2026, which means the clock is already ticking.  In parallel, FDA launched a dedicated “Drug Repurposing” webpage.

The concept is straightforward: take a drug that is already approved—meaning its basic safety profile is well-characterized—and identify new therapeutic uses for it, particularly where compelling scientific evidence exists but there is no commercial incentive for a sponsor to seek label expansion.  This is not a new idea in drug development.  Aspirin started life as a pain reliever.  .  Bimatoprost was originally used to treat intraocular pressure. What is new here is FDA putting an institutional, structured framework around the idea—and actively soliciting the public to help build it.

We note that the U.S. is not alone in pursuing this initiative as the European Medicines Agency has already reported on a similar EU Repurposing pilot and there are at least two ongoing EU-funded repurposing initiatives (RePo4EU and REMEDi4ALL).

Let’s unpack what the initiative entails, what FDA is actually asking, what regulatory tools are on the table, and what interested stakeholders should be doing right now.

What Is FDA Actually Doing Here?

This initiative is best understood as the intersection of two things: an administrative labeling-update program and a public intelligence-gathering exercise.

On the labeling side, FDA has existing statutory tools and initiatives to support labeling updates, and that allow it—under defined circumstances—to update drug labeling without a voluntary supplemental NDA filing from the sponsor.  These include:

• The Best Pharmaceuticals for Children Act (BPCA), which incentivizes sponsors to study pediatric uses by offering exclusivity extensions when they submit data in response to a written request from FDA.
• The MODERN Labeling Act (section 503D of the FD&C Act), enacted under the 2021 Consolidated Appropriations Act, which allows FDA to require labeling updates for certain generic drugs when the reference listed drug (RLD) has been withdrawn from the market for reasons other than safety or efficacy, and no unexpired Orange Book exclusivities remain.
• Project Renewal, an initiative out of FDA’s Oncology Center of Excellence (OCE) that systematically reviews the published literature for older oncology drugs and facilitates labeling updates to reflect current clinical practice. Under this initiative, labeling for three oncology drugs—capecitabine, temozolomide, and fludarabine phosphate—has been updated to add or revise indications, dosing and administration, and safety information.
• Systematic literature review followed by Federal Register notices, a pathway FDA has used historically to encourage supplemental applications. This has historically been used for products that have uses as medical countermeasures—for example, doxycycline and penicillin G procaine for inhalational anthrax exposure, and calcium and zinc DTPA for radiation exposure treatment.
• ID (not mentioned in the Federal Register notice but mentioned on FDA’s dedicated webpage), a collaborative initiative between the FDA and NCATS (NIH) providing an internet-based repository for clinicians to crowdsource real-world case reports of approved drugs used off-label for new indications, patient populations, doses, or combinations—especially for difficult-to-treat infectious diseases.  Providers submit standardized case report forms documenting clinical outcomes, and the aggregated real-world evidence is used to identify drug-repurposing candidates and inform ongoing clinical trials.

The leucovorin calcium approval for cerebral folate transport deficiency (CFTD-FOLR1) is the most recent and highest-profile example of this approach in action.  FDA collaborated with an applicant, conducted a systematic literature review, and approved a supplemental application even though the original brand manufacturer no longer markets the drug.  See our previous blog post analyzing FDA’s announcement of the application’s re-submission for re-approval.

On the intelligence-gathering side, FDA is using this request for information (RFI) to ask the research, clinical, and patient communities: Where should we be looking, and what have you already found?

The Three Scenarios FDA Is Asking About

The Federal Register notice structures its request around three distinct categories of candidates, and this categorization matters for how you frame a comment:

• Scenario 1—Sufficient Evidence Already Exists. FDA is interested in candidates for which adequate and well-controlled evidence—published or unpublished—may already support approval of a new use without the need for additional clinical trials.  For practical purposes, this is FDA asking: where can we get from here to a labeling change quickly, using what is already on the shelf?
• Scenario 2—Preliminary Clinical Signals. This covers candidates with promising preliminary data from case reports or small pilot studies—data that does not yet rise to the level required for approval, but that warrants further study.  FDA is asking: what should be on our radar for investment, prioritization, and further research?
• Scenario 3—Preliminary Preclinical Signals. This is perhaps the most forward-looking category, covering candidates identified through high-throughput screening, in vitro models, AI/machine learning tools, and other preclinical approaches. For readers familiar with the Broad Institute’s Drug Repurposing Hub, which maintains a curated collection of clinical compounds and approved drugs for repurposing research, this is the kind of resource FDA is implicitly signaling as relevant.  FDA is asking: what pre-clinical hypotheses are worth elevating?

What Disease Areas Is FDA Prioritizing?

FDA’s current list of priority areas—subject to stakeholder comment—includes:

• Metabolic diseases
• Neurodegenerative conditions
• Women’s health conditions (e.g., menopause-related conditions)
• Men’s health conditions (e.g., testosterone deficiency)
• Substance use disorders
• Rare diseases

The notice explicitly asks stakeholders whether they agree with this list, and whether other areas should be added.  This is a genuine invitation, not a rhetorical one—and it is one of the more strategically important comment opportunities in the notice for patient advocates, professional societies, and research institutions.  Mental health strikes us as a notable absence from the list of priority areas.

The Barriers and Incentives Problem

One of the most candid aspects of this initiative is FDA’s acknowledgment of the elephant in the room: in many of the most compelling repurposing scenarios, there is no commercial incentive for a sponsor to file a supplemental NDA.  If a drug is off-patent, the brand has been discontinued, and generic manufacturers would share any regulatory exclusivity benefit across multiple competitors, the standard market-driven pathway for label expansion simply is not worth it.

FDA is asking for input on the barriers to repurposing in this environment—for sponsors, for prescribers, and for patients.  The Agency is also asking a pointed question about off-label use: what barriers do patients and clinicians face when using FDA-approved drugs for unapproved indications where a prescriber has determined it is medically appropriate?  The most obvious barrier likely being the difficulty of securing insurance coverage for off-label use.

The MAHA Connection

This RFI did not emerge in a vacuum.  The September 2025 “Make Our Children Healthy Again” strategy report directed FDA to jointly “investigate opportunities [with NIH] to strengthen the use of repurposed drugs for the treatment of chronic disease”—and specifically to harmonize authorization processes through collaborative clinical trial designs to ultimately secure FDA approval.  This initiative is FDA executing and expanding on that directive (the RFI is not limited to chronic disease). Additionally, FDA’s stated interest in collaboration with NIH (specifically, the National Center for Advancing Translational Sciences, NCATS, which has its own drug repurposing portfolio) reflects a broader interagency approach.

What is notable here is that this is one of the MAHA report’s more constructive, scientifically grounded recommendations—and the implementation by FDA is relatively careful and technically sound.  It fits within existing statutory authority, builds on established pathways like Project Renewal, and invites meaningful public input rather than moving unilaterally.

Honestly, it’s been refreshing.

What Should Stakeholders Be Doing Right Now?

A few practical considerations for those planning to engage:

Frame your position within FDA’s three scenarios.  FDA has been deliberate in structuring its request around evidentiary tiers.  A comment that clearly situates a drug candidate within one of those scenarios—and describes the nature and quality of the supporting evidence—will be far more useful to FDA, and far more likely to be acted upon, than a general endorsement of the concept.

Engage with the priority disease list.  If your organization believes a disease area with significant unmet need has been omitted, say so (I’m especially looking at you, rare disease folks!)—and explain why drug repurposing is a particularly viable approach for that area (e.g., existing mechanistic or clinical signals).

Articulate the barriers specifically.  FDA is asking about barriers in a fairly granular way: barriers to submitting supplemental applications, barriers to off-label prescribing, barriers to data collection.  Generic statements that “commercialization is challenging” will prove less persuasive than specific accounts of where in the pathway the process breaks down—and what regulatory or policy interventions might address those gaps.

Consider the MODERN Act angle.  If you are aware of a situation where a brand’s NDA has been withdrawn for non-safety reasons and generic labeling has not been updated to reflect current clinical practice, that is precisely the scenario section 503D was designed to address—and FDA may not have a complete picture of where those opportunities exist.

The Bigger Picture

FDA’s drug repurposing initiative is, in principle, a sound and long-overdue structural effort to address a real market failure.  The innovation system is quite good at generating new molecular entities, but it is structurally apathetic (and maybe even adverse) to whether existing approved drugs might be doing more work than their labels reflect.  Bringing those drugs’ labeling in line with current scientific understanding—particularly for indications where no commercial sponsor is motivated to file a supplemental NDA—is a genuine public health opportunity.

Whether this initiative produces durable, clinically meaningful labeling changes at scale will depend on whether FDA can build the institutional infrastructure, interagency partnerships, and evidentiary standards to sustain it beyond the current political moment.  Project Renewal has demonstrated that the labeling-update pathway works, at least in oncology.  Extending that model to metabolic disease, neurodegenerative conditions, substance use disorders, and rare disease—across a much more complex landscape of sponsors, generics manufacturers, and evidentiary standards—is a considerably heavier lift.

The comment period is a meaningful opportunity to shape how FDA defines that lift.  We recommend that affected stakeholders engage, and we stand ready to help draft and/or refine those comments.

Comments to Docket No. FDA-2026-N-4492 are due by 11:59 p.m. on June 11, 2026.

We have written on this blog about FDA’s modernization agenda from several angles lately—from the psychedelics Executive Order to the peptide compounding landscape (part 1, part 2)—but here is a storyline that cuts to the operational heart of regulated industry (or at least appears to): FDA has quietly been knocking on facility doors for single-day inspections, and this past Wednesday the Agency told the world about it.

On May 6, 2026, (now former) FDA Commissioner Marty Makary announced at the Food and Drug Law Institute’s (FDLI) annual conference that the Agency has launched a pilot program of one-day “inspectional assessments” for facilities that artificial intelligence (AI) has identified as lower-risk—both for domestic and overseas sites alike.  The announcement landed with a certain matter-of-factness that belied what is actually a meaningful shift in how FDA approaches inspection resource allocation.

Let’s unpack what we know, what we don’t, and what industry should be doing right now.

The Basics: What FDA Announced

The press release framed this as a “broader initiative to make its inspectional resources more targeted and efficient.”  The pilot is being conducted across multiple FDA inspectorates, including human and animal foods, biologics, medical products, and clinical research programs.  Facilities are selected using risk-based criteria: product type, prior inspection outcomes, and operational characteristics.

As of late April 2026, FDA had already completed approximately 46 of these one-day assessments.  So, what were the early returns?  Most one-day inspections resulted in “No Action Indicated” (NAI) outcomes—which is either reassuring about the quality of AI-based risk stratification, or a sign that, well, low-risk facilities really are low-risk.  Some assessments did extend beyond one day when investigators identified significant observations, which FDA described as built-in flexibility—not a flaw.  FDA investigators are not required to disclose on arrival that they’re planning for a one-day inspection, meaning firms may not know they’re receiving a one-day inspection until it’s done.

(Former) Commissioner Makary put it plainly at FDLI: “[I]f there are any safety issues on that one-day safety screening inspection, our inspectors reserve the right to extend it,” but for AI-identified low-risk facilities, “we are going to be doing more one-day inspections in the U.S. and abroad.”

The pilot will continue through the end of  fiscal year (FY) 2026, with FDA developing evaluation metrics focused on inspection duration, escalation rates, and the utility of findings in guiding risk-based decision-making.

One critical clarification from the outset: these assessments are not a replacement for standard FDA inspections, or for FDA’s existing alternative tools.  They are an additional, complementary tool.  However, unlike observations identified by FDA through the use of alternative tools, observations identified during a one-day inspection will be documented on an FDA Form 483.  One-day inspections are for facilities with a “strong compliance history” and are not intended for “complex or high-risk” products.  Higher-risk and more complex facilities and facilities with significant prior inspectional observations will continue to receive the full FDA inspectional treatment.

The AI Piece—and the Big Unanswered Question

Here is where things get interesting—and, candidly, where transparency remains thin.  FDA is using AI to identify which facilities are suitable candidates for one-day screenings.  (Former) Commissioner Makary confirmed as much at FDLI.  What he did not say—and what FDA has not published nor clarified—is which specific AI tools the Agency is using, what data inputs feed the risk-scoring model, or how the threshold between “low-risk” and “not low-risk” is determined.

This is important.  Facilities cannot optimize for a scoring system they cannot see.  And from a legal and due process standpoint, there is a reasonable question about transparency in how AI-driven risk stratification operates when it has direct regulatory consequences (i.e., whether your site receives a one-day screening vs. a multi-day full inspection).

On the same day as the announcement, FDA also released an update to its internal AI tool, Elsa—though the relationship between Elsa and the inspection risk-scoring function is not clearly articulated in public materials.

FDA Associate Commissioner for Inspections and Investigations Elizabeth Miller indicated that the agency is analyzing “trends in outcomes, risk signals, and investigator feedback” to refine its approach, and that data from the assessments—including compliance patterns, facility-specific risk scores, and discrepancies between registered and actual operations—will feed back into FDA’s broader risk models.  In other words, the AI gets smarter with every visit.  That is a meaningful feedback loop that industry should take seriously.

What Are Inspectors Actually Doing in a Single Day?

FDA has not released detailed inspection protocols for these assessments, so some inference and speculation are required.  Based on the program’s stated purpose and what has been reported, a few things are likely front-of-mind for investigators:

The registered vs. actual operations check. FDA explicitly flagged “discrepancies between registered and actual operations” as a risk signal feeding into site selection.  This is a fast, targeted confirmation: does the facility do what it says it does per its registration and listing?  If the answer is no—even on a one-day visit—that is the kind of observation that could convert a screening assessment into something longer.

Follow-up on prior 483 observations. If a facility had findings in its last inspection, investigators have reason to verify whether corrective actions were actually implemented.  That is a focused task that does not require starting from scratch on a full inspection.  This would presumably only be applicable if the prior inspectional observations are limited in both number and complexity, as only facilities with a “strong compliance history” are being targeted for one-day inspections.

A facility walkthrough and housekeeping. A visual assessment of cleanliness, equipment condition, and general facility status can identify obvious problems quickly.

Limited record review. Select batch records during a manufacturing inspection or Individual Case Safety Reports during a postmarketing surveillance inspection could be reviewed as representative examples of operations as a whole.

For context on what standard drug inspections entail: FDA’s internal inspector guidance provides that full drug manufacturing inspections must evaluate at least four of the manufacturer’s six systems—quality, facilities and equipment, materials, production, packaging and labeling, and laboratory controls.  Abbreviated site assessments must cover at least two.  One-day assessments, in the context of this pilot, are not formally classified against that framework, but investigators technically retain authority to examine anything relevant.

The Foreign Inspection Context

This pilot does not exist in a vacuum.  FDA has struggled for years with the logistical and resource challenges associated with foreign manufacturing facility inspections.  See our coverage of FDA’s anticipated expansion to the far east here.  The Agency has historically given foreign firms more advance notice of inspections than domestic manufacturers—a disparity that has drawn scrutiny from Congress and industry alike.  FDA announced plans to expand unannounced foreign inspections last year, but DOGE-related reductions in force complicated the logistics: inspector positions were not cut, but many support staff were—including the staff responsible for arranging foreign travel.

One-day assessments offer a partial workaround, assuming foreign facilities are eligible.  Planning to cover several one-day inspections  rather than a single multi-day full inspection would presumably minimize the chances that the trip will result in a “washout” in which the investigator is unable to complete an assigned inspection.  (Former) Commissioner Makary said it plainly: shorter screenings allow FDA to inspect more facilities overall, reserving deeper resources for sites that present greater safety or compliance risks.  “On a population level,” Makary said, this “increases the net level of safety.”  It is a resource optimization argument, and it is not unreasonable—at least theoretically.

What Should Industry Be Doing Right Now?

Nothing in this pilot changes the evidentiary standards FDA applies to compliance determinations.  But it does change the odds that any given facility will receive an inspection visit—and it raises the operational stakes for facilities that might have been lulled into comfort by long gaps between inspections.

A few practical takeaways:

Evaluate your facility’s prior inspection history. That record is one of the explicit criteria driving site selection.  If your facility has open 483 observations or prior Warning Letter history, it almost certainly affects your risk score—and your likelihood of receiving a visit.

Confirm that your registered operations mirror actual day-to-day activities.  FDA flagged operational discrepancies as a specific risk signal.  This is a quick compliance check that facilities should be doing regardless of any inspection program, but it bears renewed emphasis now.

Clearly document and evidence your corrective actions. If your facility had 483 observations in a prior inspection, thorough Corrective and Preventive Action (CAPA) documentation is the first line of defense when investigators arrive for a follow-up.

Treat a one-day screening as a potential on-ramp to a full inspection. A screening that surfaces significant observations will likely be extended.  That is a feature, not a bug, of this program’s design.  The safest assumption is that anything a standard inspection could catch is technically in play—the one-day format simply limits how far investigators can go before they decide to extend.

A Note on Modernization—and the Open Questions Ahead

(Former) Commissioner Makary consistently framed these initiatives as part of a broader “modernization agenda” for FDA.  One-day inspections, AI-informed risk stratification, and expanded remote assessments—these represent a genuine evolution in how the Agency intends to deploy its regulatory resources.  In principle, a risk-tiered inspection approach that concentrates resources on higher-risk facilities while providing lighter-touch feedback to compliant ones has intuitive appeal.

But intuitive appeal is not the same as validated, in-force, or long-term policy.  The pilot runs through the end of FY2026, and FDA is still developing its evaluation metrics.  The key questions that will determine whether this approach earns permanence are: Do one-day assessments reliably identify compliance gaps, or do they miss things that longer inspections would catch?  Is the AI risk model accurate enough to be the gatekeeper for which facilities receive lighter scrutiny?  And will FDA publish enough about the model’s inputs and logic to allow meaningful industry and public comment?

We will continue to monitor the development of this pilot and report back as evaluation metrics are published and the program evolves beyond FY2026.  In the meantime, if you have questions about your facility’s inspection readiness or compliance status, please do not hesitate to reach out.

We have covered a lot of ground on this blog over the years:  Hatch-Waxman disputes, REMS programs, and everything in between.  Rarely have we had occasion to write a sentence like this one:  A podcast host texted the President of the United States about a Schedule I drug, the President responded, “Sounds great.  Do you want FDA approval?  Let’s do it,” and FDA is now fast-tracking review of psychedelics.

Pardonnez-moi?  Let’s unpack.

And Yet, Here We Are

On Saturday, April 18, 2026, President Trump signed an Executive Order (EO) directing FDA to prioritize review of certain psychedelic compounds for the treatment of serious mental illness.  See also here, here, and here.  The signing ceremony in the Oval Office featured HHS Secretary Robert F. Kennedy Jr., CMS Administrator Dr. Mehmet Oz, former Navy SEAL Marcus Luttrell . . . and Joe Rogan, who by his own telling had texted Trump information on ibogaine and received the previously quoted/titular response.  FDA Commissioner Marty Makary has since elaborated on the policy implications in interviews (see also here and here).  If you would have told us in law school this is how federal drug policy would be made, we may have studied something else.  Maybe Harvard Law needs to reach out to Alix Earle, or at the very least Elle Woods.  We lawyers here at HPM should consider reaching out to Joe Rogan as well; he seems to get things done at HHS and FDA these days. (**cough** Check out our two-part peptide blog post (part 1, part 2) **cough**)

What Does the EO Actually Do?

Setting aside the theatrics—and there were theatrics—the substantive regulatory provisions of the EO are worth taking seriously.

Among the key directives, the EO directs FDA Commissioner Makary to issue Priority Review Vouchers to psychedelic drugs that have already received Breakthrough Therapy designation and meet the criteria of the National Priority Voucher Program.  Commissioner Makary has stated that FDA will issue vouchers for three psychedelics currently under review as soon as this week (see coverage of this here)—this move represents the potential to expedite review to a matter of weeks rather than the standard 10 months (or 6 months for priority review).  This is the first time FDA has offered to expedite any psychedelic compound.  For reference, Breakthrough Therapy designation already signals that a drug has shown “preliminary clinical evidence” of substantial improvement over existing therapies—so these are not fringe substances without evidentiary footing.

Expanding the “Right to Try” Pathway

The EO directs FDA and DEA to establish a pathway for eligible patients to access investigational psychedelic drugs—explicitly naming ibogaine compounds—that are under FDA review and have met basic safety requirements under the Right to Try Act.  FDA’s existing Expanded Access pathway already provides one route for pre-approval access, and MAPS/Lykos utilized it for MDMA.  An application must be submitted to FDA and approved by an institutional review board before a patient can receive an investigational drug under Expanded Access.  However, the Right to Try framing here effectively bypasses FDA entirely, as FDA does not review or approve Right to Try requests.  Note that DEA will need to determine how to issue DEA registrations to physicians that allow for the prescribing of Schedule I drugs.  By definition, drugs in Schedule I have “no currently accepted medical use in treatment in the United States” and DEA practitioner registrations only include Schedules II-V.

The EO also directs the Attorney General to initiate rescheduling reviews following successful completion of Phase 3 trials, so DEA action can proceed as quickly as possible upon FDA approval.  By statute, DEA has 90 days from the date of FDA approval to act on a scheduling recommendation.  Psilocybin and ibogaine remain Schedule I drugs, meaning the federal government’s official position is still that they have “no currently accepted medical use and a high potential for abuse.”  The EO is an unmistakable signal that this administration intends to change that, for at least some compounds.  Note the EO mentions ibogaine twice by name.

Woof—$50 Million in Federal Matching Funds

The EO also directs HHS to allocate “at least” $50 million through the Advanced Research Projects Agency for Health (ARPA-H) to match state government investments in psychedelic research programs.  This provision appears to have been at least partially motivated by Texas, which recently enacted a law funding ibogaine research and sought a private match of equal size (here, here, and here).  HHS and FDA are also directed to collaborate with the Department of Veterans Affairs and the private sector to increase clinical trial participation, data sharing, and real-world evidence generation regarding psychedelic drugs—with priority given to products that have received Breakthrough Therapy designation.

The Ibogaine Wrinkle

The EO’s explicit and repeated focus on ibogaine is worth a pause because it’s also the provision most likely to generate scientific and regulatory friction.  Ibogaine—derived from the root of an African shrub—has attracted intense advocacy, particularly from the veteran community, as a potential treatment for PTSD and traumatic brain injuries.

The regulatory reality is more complicated.  Last week, FDA announced that it is allowing an early phase clinical study of noribogaine hydrochloride to proceed following submission of an investigational new drug application.  This is the first time FDA has allowed a clinical study in the United States of an ibogaine derivative.  For a product to be eligible as an “experimental drug” under the Right to Try Act, the drug must have successfully completed a Phase I clinical trial and remain under investigation in a clinical trial approved by FDA.  FDA has historically resisted ibogaine research partly because of certain cardiovascular safety concerns, meaning robust U.S. Phase I data have been difficult to generate.  In other words, the EO instructs that ibogaine should have a Right to Try pathway available—for a compound that may not yet have cleared the eligibility threshold the Act otherwise requires.

None of this is to say the promise is not real.  Stakeholders and some researchers believe ibogaine’s potential for hard-to-treat PTSD is significant, and there is genuine unmet medical need.  But the gap between the EO and approved therapy involves clinical trials, safety data, and DEA scheduling action—none of which a presidential signature can precipitate . . . yet.

What It Means for FDA and Industry

Let’s be clear about what the EO does not do:  It does not change the evidentiary standards FDA applies to drug approvals.  As Commissioner Makary himself has stated, the gold standard of safety and efficacy still governs.  What the EO does make clear is that the Trump administration is tired of the bureaucratic delays:  The President wants accelerated timelines where discretion allows, and—perhaps most significantly—to send an unmistakable political signal to FDA, DEA, and the research community about administration priorities.

For those of us who actively participate as members of the FDA regulatory bar and these bloggers who have spent their (very long or somewhat shorter) careers watching promising therapies stall at the intersection of stigma and scheduling, this EO is worth taking seriously—even if some of the optics of the signing ceremony might give pause (i.e., Rogan’s involvement, which deserves its own blog about podcasters influencing therapeutic approvals).  The clinical path remains demanding; the DEA’s role in rescheduling adds another variable; and ibogaine’s safety profile is a genuine open question.

But, the administration’s trajectory is clear, and the downstream regulatory and compliance implications for sponsors, investors, and practitioners in this space are significant.

We will be watching closely and reporting back to you—perhaps in reliance on Joe Rogan once again.

On Tuesday, April 28, FDA issued a press release announcing two major steps it is taking to advance the implementation of real-time clinical trials (“RTCTs”), including two proof-of-concept RTCTs, both in oncology, and a Request for Information (“RFI”) for a proposed pilot program.

The goal of this initiative is to address the “lag time” of data being reported “from sites to sponsors, who analyze and subsequently submit data to the FDA.”  In contrast, in an RTCT, FDA “can view safety signals and endpoints in real time as a trial progresses.”  Commissioner Makary stated that this could potentially enable FDA to make regulatory decisions without having to wait for a trial to conclude.  To begin with, FDA’s real-time review will be limited to safety and efficacy endpoints that are agreed upon with sponsors in advance.  FDA’s Chief AI Officer Jeremy Walsh, who was also on the announcement call with Commissioner Makary, stated that while this will not immediately replace formal meetings with the FDA, it could ultimately result in moving away from those interactions, as these touchpoints may not be needed.

The RFI is intended to assess how “AI-enabled technologies can improve efficiency, speed, and quality of decision-making in early phase clinical trials.”  The pilot seeks to explore how AI and data science advances can “improve trial efficiency, enhance safety monitoring, facilitate dose selection decisions, and enable more informed early go/no-go decisions.”  Sponsors conducting early phase clinical trials will be recruited into the pilot, which is planned to begin after the proof-of-concept phase later in 2026.

The RFI also described the potential of AI to address challenges of early-phase trials by:

• Improving recruitment
• Optimizing dose escalation
• Enhancing safety monitoring
• Enabling adaptive designs
• Supporting earlier Phase 1 to 2 decisions
• Improving biomarker assessment
• Improving biomarker-based patient selection/stratification
• Validating endpoints

As part of the RFI, FDA seeks input regarding a variety of aspects related to the potential use of AI in FDA regulatory decision-making as well as aspects (eligibility, duration, metrics, etc.) of the pilot program.  We encourage sponsors to review the RFI closely and to submit comments, as this is an important potential opportunity to inform FDA’s decision-making regarding RTCTs and the use of AI more broadly.  Comments on the RFI may be submitted until May 29, 2026.

We applaud FDA for identifying delays in clinical development as a major issue worth addressing.  Regulatory decision-making based on clear signals is an approach that could be tremendously beneficial for drug development.

What Tradeoffs and Risks Might RTCT Introduce to Already Risky Drug Development?

There are also many questions left unanswered by these announcements and what it would mean practically to run an RTCT.  For example, it is not entirely clear how FDA can communicate with the sponsor about safety or efficacy signals while the sponsor remains blinded to results prior to completion.

There would also seemingly be a risk of a Type 1 or 2 error (i.e., a false positive or false negative conclusion) when relying on data in a rolling fashion, including as related to multiplicity control for real-time data collection.  It is also not clear if, or how, FDA’s analyses would be conducted in accordance with a study’s statistical analysis plan (“SAP”). As we see from FDA reviews, Agency staff often conduct their own, post-hoc analyses of data from completed studies using methods they deem appropriate. What would stop FDA reviewers from taking a similar approach at a time when study conduct is still at risk?

Additionally, this appears to place FDA in a role similar to a DSMB, or other such oversight bodies.  When safety signals are identified, it is not clear how DSMB recommendations may intersect with FDA decision making.

Finally, what exactly is the role of the sponsor when sites or CROs are sending data directly to FDA? How does this impact the sponsor’s regulatory obligations, particularly where FDA may be better informed than the sponsor?  Although this initiative is in early stages, we encourage FDA to consider these and other such pragmatic questions to enable effective implementation of such a program.

Is Shorter Time to Data Analysis Really the Issue We Need to Address in Expediting Drug Development?

Given these risks, it is worth considering whether RTCTs are the best means to address the issue of delays in clinical development in all cases.  FDA’s announcement points to the sequence of data collection, cleaning data, and analyzing the data prior to submission as the cause of delays, as well as the formal meeting structure.  However, these steps are crucial to ensuring that the best quality data are prepared, organized, and analyzed.  We have seen many situations where raw data simply did not tell the most accurate story, whether it is because errors were made in data collection or whether there were intercurrent events or other confounders that impacted outcomes, which may not have been initially captured.  Also, clinical trial data is infrequently “black and white” to interpret – especially in rare disease settings where we typically work – and so the time it takes to meet with FDA is not so much a result of process but of having scientific experts evaluate the results.  This is time well spent when needing to contextualize the data and, as FDA typically requests, explain how a sponsor proposes regulatory standards (e.g., substantial evidence of effectiveness) are being met.  RTCTs may get data to FDA faster, but as we say often, you only get one chance to make a first impression.

Beyond RTCTs, there are certainly many opportunities to expedite clinical development.  This includes initiatives taken recently by the Agency, such as encouraging the use of seamless clinical trials, utilization of AI, addressing the default requirement of two (or more) clinical trials, and encouraging the acceptance of Bayesian statistics.  Additional opportunities lie in encouraging the acceptance of earlier endpoints for slowly progressive diseases; considering trial designs beyond the traditional randomized, controlled trial; and regulatory decision-making based on smaller datasets from earlier phase studies, where warranted.

Most strongly, we would urge against downplaying the importance of FDA meetings.  Real-time submission of data cannot replace opportunities for true engagement between FDA, industry, and the experts that join them around the table for robust scientific exchange.  We have assisted clients in countless situations where the submission of data (even if not real-time) led to an adverse FDA response that was subsequently resolved with the opportunity to have a dialogue with FDA staff.  These meetings are not a source of delays in clinical development, but in our experience facilitate a more expedited development process.  In this sense, data cannot replace dialogue.

On March 31, 2026, the FDA published a list of companies that have not submitted required drug amount reports for calendar year 2024. For stakeholders involved in drug manufacturing, this update highlights both a critical regulatory requirement and a compliance gap across the industry.

Background: Why This Requirement Exists

The reporting requirement originates from the Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, 2020. While widely known for its role in addressing the COVID-19 crisis, the CARES Act also introduced measures to strengthen the resilience of the drug supply chain.

A key goal of the reporting requirements is to improve the FDA’s understanding of drug supply chains. Drug shortages can arise from manufacturing issues, quality problems, delays, or discontinuations. Because the FDA relies heavily on information provided by manufacturers, timely and accurate reporting is essential for the Agency to anticipate and mitigate potential drug shortages.

The Requirement: Annual Drug Amount Reporting

As per the CARES Act amendment to the Federal Food, Drug, and Cosmetic (FD&C) Act, all registered drug manufacturers—including repackers and relabelers—must report annually to the FDA the amount of each listed drug they manufacture, prepare, propagate, compound, or process for commercial distribution.

As per the February 2024 FDA guidance, this requirement applies to:

• Human drug products (including non-exempt biological products) marketed under an approved application
• Animal drug products marketed under an approved application
• Animal drug products not approved, conditionally approved, or indexed under sections 512 (NADA/ANADA), 571 (CNADA), and 572 (the Index) of the FD&C Act
• Medical gases
• Homeopathic products
• Over-the-counter monograph drugs

Manufacturers submit this data through the FDA’s NextGen Portal, following technical and procedural guidance provided by the Agency. Additional educational resources on drug reporting requirements are also available via the FDA public meetings site.

In addition to annual reporting, registrants are required to:

• Review and verify their drug listing data twice per year (June and December)
• Update listings twice per year or annually certify that no changes have occurred

Purpose: Strengthening Supply Chain Oversight

The intent of this reporting requirement is straightforward, namely give the FDA an enhanced understanding of drug supply chain issues and drug shortages. With this visibility, the Agency can:

• Conduct a risk-based inspection prioritization
• Assess supply chain vulnerabilities
• Respond to potential drug shortages in emergencies
• Coordinate more effectively with manufacturers to prevent or mitigate disruptions

Overall, drug amount reporting data helps FDA identify how reliant the drug supply is on individual manufacturing facilities and where disruptions could have the greatest impact.

Current Compliance Gap

According to the FDA’s March 31, 2026 posting, a significant number of manufacturers appear not to have complied with the 2024 reporting requirement:

• 1,254 companies with active drug listings
• 6,480 companies with inactive drug listings

These figures suggest that more than 7,700 registrants may not have fulfilled their reporting obligations.

The distinction between the two groups is important:

• Active listings. This list includes registrants with an active drug listing. This means the registrant has either certified that no changes need to be made to its drug listing or submitted an update to its drug listing.
• Inactive listings. This list includes registrants with inactivated drug listings. This means the registrant did not fulfill the requirement to review its drug listing data and either certify its data are current or update the drug listing.

Consequences of Non-Compliance

While the FDA posting does not detail specific enforcement actions tied to this list, the requirement itself is mandated under section 510(j)(3) of the FD&C Act. Failure to comply signals regulatory risk and may draw increased scrutiny from the Agency.

More broadly, non-compliance undermines the FDA’s ability to monitor the drug supply chain effectively—potentially contributing to delayed identification of shortages and reduced system-wide preparedness.

What This Means for Stakeholders

For companies involved in drug manufacturing and distribution, this update serves as a clear reminder:

• Annual drug amount reporting is not optional—it is a statutory requirement
• Accurate and timely submissions support drug supply stability
• Internal processes for data collection, reporting, and listing maintenance should be reviewed and reinforced

As the FDA continues to emphasize supply chain transparency, ensuring compliance with CARES Act–driven requirements remains important—not only for regulatory alignment, but also for the Agency to monitor supply chain stability and prevent shortages.

President Donald Trump signed an Executive Order in December directing the Attorney General to expedite completion of marijuana rescheduling to facilitate medical research begun in October 2022.  The President opined that federal officials were “slow-walking” marijuana rescheduling during the signing of an Executive Order expanding the review of psychedelic drugs last week.  Then on Thursday, Acting Attorney General Todd Blanche and the Drug Enforcement Administration (“DEA”) issued a final rule rescheduling FDA-approved products containing marijuana and marijuana products regulated by state medical marijuana licenses from schedule I to schedule III of the Controlled Substances Act (“CSA”).  Schedules of Controlled Substances: Rescheduling of Food and Drug Administration Approved Products Containing Marijuana From Schedule I to Schedule III; Corresponding Change to Permit Requirements, 91 Fed. Reg. 22,714 (Apr. 28, 2026).  DEA also under Blanche’s signature issued a notice withdrawing the May 2024 Notice of Proposed Rulemaking for the prior rescheduling hearing and issued a separate Notice of Hearing for an expedited rescheduling hearing to begin June 29^th.  Schedules of Controlled Substances: Rescheduling of Marijuana; Withdrawal,  91 Fed. Reg. 22,778 (Apr. 28, 2026); Schedules of Controlled Substances: Rescheduling of Marijuana, 91 Fed. Reg. 22,777 (Apr. 28, 2026).

Rescheduling became effective immediately.

Setting the Stage

In August 2023, the Department of Health and Human Services (“HHS”) recommended rescheduling marijuana to schedule III after conducting an Eight Factor Analysis under the CSA.  HHS found that 30,000 licensed healthcare practitioners were authorized to recommend marijuana for medical use to over six million patients to treat pain, anorexia related to certain medical conditions, and nausea and vomiting from chemotherapy.  DOJ conducted its own Eight Factor Analysis and concurred with HHS’ recommendation.  Then-Attorney General Merrick Garland signed a Notice of Proposed Rulemaking in May 2024 proposing to reschedule marijuana to schedule III that elicited over 43,500 public comments.  In January 2025, the presiding Administrative Law Judge stayed the DEA public rescheduling hearing pending an interlocutory appeal by several parties.

Final Rule for Approved/Regulated Marijuana Products

Rescheduling and the Treaties:

The final rule limits rescheduling to FDA-approved drug products containing delta-9-tetrahydrocannabinol (“THC”) that meet the CSA’s definition of marijuana derived from the plant Cannabis sativa L., and marijuana products regulated by state-issued licenses to manufacture, distribute, and/or dispense for medical purposes.  The rule notes that forty states have legalized marijuana for medical purposes and have established regimes that incorporate inspections and licensing, recordkeeping and reporting requirements.

The United States, as a signatory to the United Nations Single Convention on Narcotic Drugs, 1961, as amended by the 1972 Protocol, and the Convention on Psychotropic Substances, 1971, is required to comply with obligations imposed by those treaties.  Among controls required by the Single Convention for signatories on cannabis, cannabis resin and other Schedule I under the treaty are:

• Limiting the production, manufacture, export, import, distribution of, trade in, use and possession exclusively to medical and scientific purposes;
• Requiring manufacturers and distributors to be licensed;
• Requiring medical prescriptions for dispensing to patients;
• Requiring importers and exporters to be licensed with each import or export requiring a permit;
• Prohibiting possession except under legal authority; and
• Requiring those in the legitimate distribution chain to keep transaction records for two years. Rescheduling of Food and Drug Administration Approved Products at 22,715.

To adhere to the Single Convention’s import/export requirements, the rule amends 21 C.F.R. § 1312.30 to add FDA-approved drug products containing marijuana and state-licensed medical marijuana to the list of nonnarcotic schedule III-V substances requiring import and export permits.

For growing marijuana, the Single Convention requires signatories to:

• Register and regulate growers;
• Limit growing to legitimate domestic scientific, medical, and industrial needs, and for legitimate exports;
• Establish the upper limit of marijuana that each grower may grow in a calendar year and the total amount that can be grown in the U.S. annually for legitimate needs; and
• Purchase all harvested crops of marijuana and monopolize the wholesale trade in harvested marijuana. at 22,716.

To comply with the Single Convention, the rule requires DEA to acquire and resell marijuana crops from registered manufacturers.  Registered manufacturers must store crops in a facility that DEA maintains access to until the transaction is completed.  DEA can require recordkeeping and reporting to comply with the Single Convention and must take into account Single Convention requirements.

The final rule notes that DOJ’s Office of Legal Counsel’s 2024 opinion concluded that if marijuana were rescheduled to schedule III, the U.S. would continue to meet “most” of the obligations imposed by the Single Convention and the Convention on Psychotropic Substances.  The rule also refers to HHS’ August 2023 evaluation and recommendation that DEA reschedule marijuana in schedule III.  Specifically, HHS found that marijuana has a potential for abuse less than drugs and substances in schedule I and II, and that its abuse may lead to moderate or low physical dependence or high psychological dependence.

Title 21 of the U.S. Code, § 811(d)(1) requires the Attorney General to issue an order controlling drugs “under the schedule he deems most appropriate” to carry out treaty obligations.  Id. at 22,715.  The Acting Attorney General states that while he is not required to consider HHS’ rescheduling recommendation “because I believe there are several legally viable scheduling options that would satisfy… obligations under the Single Convention based on OLC’s 2024 opinion… I exercise my discretion in determining the most appropriate schedule by choosing the option that most closely aligns to HHS’s findings and best positions the United States to carry out its obligations under the Single Convention. . . [with respect to] an FDA-approved product or subject to a state medical marijuana license.”  Id. at 22,718.  Blanche ordered FDA-approved drugs products containing marijuana and marijuana in any form covered by a state medical marijuana license rescheduled to schedule III.

All forms of marijuana other than in FDA-approved drug products or marijuana products subject to state medical licenses continue to be regulated as schedule I controlled substances.  The rule does not change the status of bulk marijuana, noting that unlicensed bulk marijuana remaining in schedule I allows the U.S. to meet its obligations under the Single Convention by requiring licensed manufacturers to obtain manufacturing quotas and by DEA buying marijuana crops from registered manufacturers, selling those crops and establishing prices for purchase and sale.  The rule does not impact synthetically-derived THC that is outside of the CSA’s definition of marijuana and not subject to HHS’ scientific and medical evaluation.  It does not impact hemp.  Nor does the rule reschedule any drug product containing marijuana or THC previously rescheduled out of schedule I, which includes Marinol, Syndros and previously scheduled synthetic cannabinoids.

Regulatory Requirements:

Rescheduled FDA-approved drug products containing marijuana and marijuana products subject to a state medical license will require manufacturers, distributors, dispensers and other handlers to comply with federal schedule III regulatory requirements.  Requirements include registering with DEA, taking and maintaining initial and biennial inventories, creating and maintaining transaction records, filing theft and significant loss reports, labeling, and maintaining prescribed security.  Dispensing marijuana to patients requires prescriptions issued for legitimate medical purposes by a DEA-registered and state licensed practitioner.

The rule expressly notes that state licensees will no longer be subject to the Internal Revenue Code’s Section 280E deduction disallowance for businesses engaged in “trafficking in controlled substances… in a schedule I or II.”  Id. at 22,719.

State Regimens:

Noting the robust infrastructure developed by state medical marijuana regulatory systems for preventing diversion, maintaining records and conducting inspections, the final rule found that “incorporating state licensing systems into the federal registration framework represents the most effective and efficient means of achieving the CSA’s objectives with respect to medical marijuana while promoting the medical benefits of marijuana and causing the least disruption for patients and existing state systems.”  Id. at 22,720.  The order mandates an expedited DEA review process whereby state-licensed medical marijuana entities seeking federal manufacturer, distributor and dispenser registrations may submit state credentials as evidence of state law authorization.  The rule requires DEA to issue registrations unless doing so would be inconsistent with the public interest under 21 U.S.C. § 823 or with Single Convention requirements.  The rule directs the agency to process registration applications within 60 days of publication of the rule within six months, and allows early applicants to lawfully operate under their state licenses during the pendency of DEA’s review.

To reduce the regulatory burden on “compliant state-licensed entities,” the rule limits reporting, recordkeeping and order form requirements to those necessary to satisfy federal statutory and treaty obligations, with state-required records accepted to the extent possible.  “State-authorized medical marijuana certifications or similar documents are sufficient to permit the dispensing of medical marijuana to users, provided they include the user’s name and address, are dated and signed on the day of issuance, and identify the issuing practitioner.”  Id.  Further, registrants may comply with state labeling, packaging, disposal, and physical security requirements in lieu of the applicable federal requirements, but subject to inclusion of the statutory warning label required by 21 C.F.R. § 825(c).

The Prior Rescheduling Hearing

DEA determined that the most expeditious manner of completing current rescheduling is to terminate the hearing initiated by the August 29, 2024, notice that began and was stayed in January 2025.  Withdrawal at 22,778.  The agency withdrew the notice of the prior hearing.

A New Hearing

DEA issued a Notice of Hearing on the Proposed Rulemaking for rescheduling marijuana to schedule III to commence June 29 and conclude by July 15th.  Rescheduling of Marijuana at 22,777.  “[T]he purpose of the hearing,” in accord with 21 U.S.C. §§ 811 and 812, “is to ‘receiv[e] factual evidence and expert opinion regarding’ whether marijuana should be transferred to schedule III.”  Id. at 22,778.  Comments or objections to the proposed rule will be offered as evidence at the hearing.  Interested persons are invited to provide written notice of their desire to participate: mailed requests must be postmarked on or before May 20th, electronic requests must be emailed by 11:59 p.m. on May 24th.  The Acting Attorney General will notify those selected to participate in the hearing on June 22nd.

Medical Marijuana Applications

DEA will accept applications for medical marijuana business applications on a dedicated registration portal.  The agency began accepting applications for medical marijuana dispensary registrations on Wednesday.