Like death and taxes, unannounced, periodic cyclic inspections of controlled substance manufacturers, distributors, importers, exporters, and narcotic treatment programs, by Drug Enforcement Administration (“DEA”) diversion investigators every three to five years is inevitable.  “Practitioner” registrants, that include hospitals, pharmacies, and practitioners, are also subject to random unannounced DEA inspections.  An accountability audit of selected controlled substances, and a review of required records, reports, and security comprise most DEA cyclic and other inspections.

DEA diversion investigators appearing unannounced, though not totally unexpected, can be nerve racking for employees given the great importance that rides on whether the inspection finds find that registrants are in compliance with the Controlled Substances Act (“CSA”) and DEA regulations.  A negative inspection can result in a Corrective Action Letter (formerly a Letter of Admonition), an informal hearing, an Order to Show Cause, a Memorandum of Agreement, and civil monetary penalties.  Over the years we have posted recommendations on how registrants can proactively prepare for and manage DEA inspections.  See, for example, here, here, and here.

First as a DEA diversion investigator and later in private practice, I have witnessed countless inspections over the years where employees scrambled to gather and provide requested information and documents.  The investigators’ first impression can be crucial in how an inspection progresses and whether they conclude that a registrant is compliant.  Certainly the best preparation for the inevitable DEA inspections is to comply with the CSA and regulations by maintaining complete and accurate records and reports that are readily accessible, and ensure that security components are operational.  Registrants should designate a specific responsible employee to act as liaison with the investigators.  Registrants should also conduct periodic DEA-style mock random internal accountability audits and record, report and security reviews.

Investigators always ask for certain basic information and documents upon their arrival.  This information is crucial to the inspection and for the files that DEA maintains on the registrant.  The initial portion of an inspection after investigators have made their requests is typically an anxious time for employees as they scramble to locate the requested information and documents.  One way to alleviate some of the anxiety for employees is for registrants to create and prepare a DEA inspection binder that organizes and contains what investigators typically ask for.

Registrants should remove and provide information and documents from the binder when requested.  A typical DEA inspection binder should contain:

1. Current federal and state license, permit, and registration certificates;
2. Corporate structure with ownership including incorporation documents;
3. Executive and corporate officers with their title, date of birth, Social Security number, and home address;
4. For employees who access controlled substances and listed chemicals, their title, date of birth, Social Security number, and home address; (DEA protects and safeguards all information, including Personal Identifiable Information obtained as required by the Privacy Act of 1974);
5. Powers of Attorney pertaining to controlled substances and listed chemicals;
6. Controlled Substances Biennial Inventory;
7. List of controlled substances/listed chemicals handled for prior two years;
8. Suppliers with their address and DEA registration numbers;
9. Customers with their address, DEA registration numbers, and/or unique ID numbers;
10. Operations information including hours and full- and part-time employee numbers and hours;
11. Controlled substance/listed chemical Policies and Procedures; (neither the CSA nor DEA regulations require written SOPs, but investigators view them as relevant for assessing compliance);
12. Central recordkeeping authorization letter if applicable;
13. Facility interior and exterior security including:
    • Building plans and diagrams
    • Alarm:
      • 1.  Description,
      • 2.  Specifications with literature,
      • 3.  Contracts,
      • 4.  Central monitoring system contract; and,
      • 5.  Test results
    • Safe/vault/container:
      • 1. Literature with specifications; and
      • 2.  Contracts; and
    • Security guard contract if applicable.

Registrants must update the binder when changes occur, such as when responsible employees leave or new licenses/registrations are issued.  Registrants can maintain the materials in a three-ring binder or electronically.

****

Look for additional DEA inspection recommendations here in the coming weeks.

FDA recently released a CDER Center for Clinical Trial Innovation (C3TI) White Paper on Selective Safety Data Collection (SSDC), a subject about which there is little awareness. Selective Safety Data Collection (SSDC) describes the prospectively planned curtailment of safety data collection in studies where the safety profile of the drug has been well characterized. Although some information should always be collected from a clinical trial, e.g., serious adverse events, adverse dropouts, adverse events of special interest, other information may be unnecessary. Consider an approved drug, studied in 1200 subjects, with a table in Section 6 of labeling that lists nausea as an adverse reaction, e.g., 24% with drug and 13% with placebo. If subjects in the planned study are similar to those in registrational studies, how important would it be to query subjects about non-serious adverse events of nausea in a subsequent study? And given that routine laboratory data were collected and analyzed in these 1200 subjects, how important would it be to collect tens of thousands of additional laboratory values in the planned study? In this situation, FDA and other regulatory authorities recognize that such information would not add importantly to the safety knowledge about the drug. Collection of such data increases the burden of the study, first and foremost to participants, and also to investigators, sponsors, and regulatory authorities. Why worry about the burden? If clinical studies are less burdensome, more will be conducted, and more questions will be answered—the main goal of clinical research.

FDA expressed its willingness to adopt SSDC when it released its 2016 Guidance for Industry, “Determining the Extent of Safety Data Collection Needed in Late-Stage Premarket and Postapproval Clinical Investigations.” When I was an Office Director in CDER, we would encourage sponsors to use this approach in studies they were planning. Executives would smile and nod their heads in agreement, but no one took us up on the offer! Our thinking was that we needed international buy-in of this approach for it to be viable, given that these were multinational studies that involved regulators from around the world.

In 2016, I advanced SSDC as a topic for the International Council on Harmonisation (ICH). The matter was taken up as a topic by the ICH E19 Expert Working Group, and I was appointed as one of the FDA leads. In the working group, it became apparent that the resistance to SSDC was not so much from regulators outside the US, but rather from the companies, who felt like they needed to obtain every shred of information from their trials! They worried that a regulator—somewhere, sometime—would request the information, and thought that, rarely, the availability of comprehensive safety information might help explain the etiology of unusual serious adverse events. Moreover, such decisions could be driven by the most conservative member of leadership at each company!

ICH finalized the Guideline, “E19, A Selective Approach to Safety Data Collection in Specific Late-Stage Pre-Approval or Post-Approval Clinical Trials,” almost 3 years ago; however, the concept still draws little attention from industry. FDA is now increasing awareness of the concept with their new White Paper. The White Paper does an excellent job in explaining the concept of SSCD, its utility, past and present experience, and opportunities for future use, all with excellent examples. It is something we hope many of you will read.

The authors of this post are both avid bibliophiles, and keenly appreciate the hook of a good title or first sentence that draws you right in. Usually the titles of government press releases do not share this allure, but there was one recently that caught our attention. On July 31, 2025, the Department of Justice (DOJ) issued a press release titled: “Illumina Inc. to Pay $9.8M to Resolve False Claims Act Allegations Arising from Cybersecurity Vulnerabilities in Genomic Sequencing Systems.”  Since most settlements with the government stem from actual harm caused, we found the word “vulnerabilities” of particular interest, and knew we needed to settle in to read more.

The allegations, brought to DOJ’s attention by a qui tam relator, state that from February 2016 through September 2023 Illumina submitted or caused to be submitted false claims to a variety of federal government agencies, including DOJ, Department of Health and Human Services, Department of Veterans Affairs, and others, for payment for the purchase of certain of Illumina’s genomic sequencing systems. The punchline of the settlement may be the following: “The United States contends that the claims to the Agencies were false, regardless of whether any actual cybersecurity breaches occurred, because the [genomic sequencing systems’] software had cybersecurity vulnerabilities, and Illumina did not have an adequate product security program and sufficient quality systems to identify and address cybersecurity vulnerabilities affecting the [] software.” (Emphasis added.)

Like a line out of a good Stephen King novel, this sentence should put fear in the heart of any company that manufactures software-reliant medical devices sold to the government. And just like that Stephen King novel, you need to keep reading to find out more.

It turns out that DOJ’s position was not merely based on the presence of potential “vulnerabilities,” but rather on its finding that “Illumina knowingly failed to incorporate product cybersecurity in its software design, development, installation, and on-market monitoring; failed to properly support and resource personnel, systems, and processes tasked with product security; failed to adequately correct design features that introduced cybersecurity vulnerabilities in the genomic sequencing systems; and  falsely represented that the software on the genomic sequencing systems adhered to cybersecurity standards, including standards of the International Organization for Standardization and National Institute of Standards and Technology.”

Even with all that, and even assuming some part of the allegations are true, it is still startling that these actions, which appear to be violations of FDA’s Quality System Regulation, led to a seven-figure settlement. Notably, there is no discussion of FDA requirements, quality system or otherwise, just general references to “cybersecurity standards” and “cybersecurity obligations.”

So what does this mean for medical device companies moving forward? Perhaps not much, beyond additional focus on complying with the already-existing cybersecurity requirements. While not explicitly stated, it stands to reason that, given this administration’s focus on national security, this particular settlement may stem from potential threats to national security that could be presented by cybersecurity “vulnerabilities” and really has very little, if anything, to do with FDA requirements more broadly. As DOJ states in its press release, the concerns here related to protecting “sensitive information from cyber threats,” “combat[ing] cybersecurity risks,” and the consequences that may stem “from a failure to adhere to required cybersecurity standards, especially when the systems involved include sensitive genomic data.”

It is worth comparing this settlement with earlier cases involving alleged violations of drug good manufacturing practices, like United States ex rel. Rostholder v. Omnicare, Inc., No. 12-2431 (4^th Circ. Feb. 21, 2014).  Courts have rejected False Claims Act theories based solely on alleged regulatory violations, noting that the FCA is not “a sweeping mechanism to promote regulatory compliance.”   The focus in those cases was that compliance with the current good manufacturing practice (cGMP) regulations was not material to payment by Medicare and Medicaid.  Although “the correction of regulatory problems is a worthy goal,” such a theory is “not actionable under the FCA in the absence of actual fraudulent conduct.”

While the Illumina settlement is not necessarily an indicator that DOJ is interested in going after medical device companies simply for QSR violations, a company’s quality management system and its cybersecurity are inextricably linked. The one thing that is certain from this settlement is that if you have a medical device with software (and let’s be honest, these days, that describes most of them), you should review your cybersecurity risk management plan, assess any potential vulnerabilities, and implement necessary mitigations. You don’t want to be the lead character of the sequel.

* Credit to Helen Exley for the quote, “Books can be dangerous. The best ones should be labeled ‘This could change your life.’”

CDER’s Office of Pharmaceutical Quality (OPQ) recently published a white paper called Quality Management Initiatives in the Pharmaceutical Industry: An Economic Perspective. Not entirely a financial analysis, OPQ is making what amounts to a two-part sales pitch to pharma execs that investment in manufacturing quality systems will return profit and economic savings while also serving broader public health interests. This white paper is the latest release in what OPQ calls their initiative towards “mature quality systems management.” The timing of this release follows other, related papers that endorse the idea that going beyond bare-minimum compliance actually pays dividends.

In part one of the paper, entitled The Economic Return on Investment for Quality Management Initiatives, OPQ makes the case that investment in quality will not merely minimize regulatory headaches but will also advance real savings and profits. Instead of the usual regulatory finger-wagging about compliance, here OPQ is trying to speak the language of CFOs. A central principle here is that companies don’t need to affect massive quality overhauls to see financial benefits. Their research claims that targeted quality investments can lead to cuts in product defects by more than half and reductions in waste of 75%, while allowing companies to redeploy a quarter of their staff from quality troubleshooting to other work. To realize these kinds of benefits, OPQ uses economic modeling that aspires to show that there’s an optimal sweet spot for quality investments where companies can expect measurable returns on their spending. The paper shows this relationship as a curve where total costs decrease with quality investments until reaching an optimal point, after which additional spending produces diminishing returns.

See Table here – Source: OPQ White Paper, Quality Management Initiatives in the Pharmaceutical Industry: An Economic Perspective, page 5.

The agency presents this as a stepwise approach where companies can make incremental investments rather than committing large amounts of capital upfront. According to their model, companies can choose an investment level based on their current situation and business needs, with each step theoretically delivering additional returns even without reaching the optimal investment point.

FDA’s approach here has pros and cons. We appreciate FDA’s allowance that the approach is company specific. It’s certainly true that not all manufacturing facilities nor quality management systems are created equal. We note, however, that FDA’s economic model relies heavily on case studies and anecdotal evidence rather than rigorous econometric analysis, which makes it difficult to verify their claimed returns or determine how applicable they are across different types of pharmaceutical operations.

Additionally, while FDA does provide a mathematical framework for finding the optimal investment level, it appears to us as more theoretical than practical. The key here is that companies should incrementally invest in quality up to the point until the cost of additional spending equals the savings it generates. This is a pretty standard economic optimization theory for finding a “sweet spot” for Return on Investment (ROI). But FDA’s model admittedly doesn’t add in the realities of the “external complexities of the pharmaceutical market.” Thus, manufacturers are left with a model that doesn’t factor in any market-driven externalities. As a theoretical exercise, FDA’s economic model is interesting. But the jury is still out on how helpful it will be for quality managers, CFO’s, and C-Suite executives.

In part two, The Public Health Return on Investment for Quality Management Initiatives, focus shifts from company ROI to the broader public health benefits of mature quality systems, arguing that they help preserve patient safety, prevent drug shortages, and maintain supply chain stability. Here, FDA leans more into its traditional position that frames quality as a public health imperative, noting that functioning, compliant quality systems reduce the risk of treatment delays and adverse patient outcomes that ripple through healthcare systems during shortages.

Section Two’s public health arguments are compelling in principle, albeit not entirely connected to the economic ROI focus of the first part of the paper. FDA acknowledges some of the associated indirect costs with their public health concerns but doesn’t quantify how much companies should spend on quality systems to achieve these public health goals, assuming that the public benefits justify the private costs. And there’s no clear link here to FDA’s earlier theme that even small investments can lead to substantial rewards. This potentially leaves pharmaceutical executives in an awkward position of being asked to optimize for two different objectives without clear regulatory instruction on how to balance profit-driven quality investments against broader public health responsibilities.

The report concludes that whether “companies are implementing their first quality culture initiatives or embracing new technologies, there are opportunities for companies at every stage of quality management implementation.” These incremental opportunities, OPQ writes, are something “that pharmaceutical companies cannot afford to lose.” Time will tell if OPQ merges these economic principles into their inspection and classification assessments, space that is already inhabited by the public health philosophies this report also includes. While there’s a lot of interesting material here, this is a white paper, not a formal guidance document, so it’s not clear how or if this analysis might impact enforcement decisions going forward. We’ll report on any further advancements in the agency’s view on mature quality management as they develop.

News coverage of the citizen petition submitted by Dr. David Kessler has been somewhat breathless, so it was nice to read the document first hand when it was posted yesterday in the docket at regulations.gov – and you should do the same. Spoiler alert! In essence, the petition asks FDA to revoke the generally recognized as safe (GRAS) status of a number of substances categorized as “processed refined carbohydrates” because there no longer exists a consensus among qualified experts that current uses of those substances are safe within the meaning of section 409 of the FD&C Act (i.e., that there exists a reasonable certainty of no harm). Whether those substances could continue to be used in food in the long term would depend on the success of food additive petitions that industry would be required to submit to FDA. The Kessler petition thus presses FDA to follow the path trod by the agency when it revoked the GRAS status of partially hydrogenated oils ten years ago, thereby prompting  submission of a food additive petition that was subsequently denied. (Has it really been 10 years?)

The Kessler petition paints a dire picture of the health of the U.S. population, and draws on several lines of scientific argument to conclude that ultra-processed foods (UPFs) and “ultra-processed food technology” encourage food consumption patterns that contribute to a host of diet-related diseases. Rather than struggle over precisely defining UPFs and targeting their consumption directly, the petition argues in favor of targeting processed refined carbohydrates, which are “central to the widespread availability of” UPFs. To the extent that processed refined carbohydrates were previously determined to be GRAS, the petition argues that circumstances have changed such that there can no longer exist a consensus of safety under current conditions of use. The petition argues that those substances “act metabolically in a similar fashion to ‘added sugars’ and small chain saccharides.” Thus, they are “conducive to rapid eating, rapid digestion, fast gastrointestinal transit time, and rapid absorption,” and “stimulate blood insulin and glucose,” thereby resulting in several adverse health effects. Further, the petition argues that “metabolic damage can begin very early in life… as early as the first days of life.” Perhaps most strikingly, the petition argues that any evaluation of safety must take into consideration the already poor metabolic health of the U.S. population.

Some readers might recall that Dr. Kessler was Commissioner of FDA when the agency sought to regulate cigarettes under its then-existing statutory authority, in an effort that narrowly failed to persuade the Supreme Court in FDA v. Brown & Williamson Tobacco Corp. Thus, it comes as little surprise when the petition argues that, “[j]ust as nicotine was central to FDA regulation of tobacco products, processed refined carbohydrates used in industrial food processing are a key component of [UPFs] that the agency needs to address in order to protect the public health from the health risks of these products.”

To give credit where credit is due, this is not the first citizen petition to seek revocation of the GRAS status of substances widely used in processed foods. However, this petition considerably ups the ante by broadening the list of targets, folding in more recent evidence of alleged harm, and playing to a potentially sympathetic regulator by indirectly targeting UPFs. FDA now has 180 days to respond, but given the complexity of the petition, it would be surprising if that response says much beyond “we’re still reviewing your petition.” If a response is significantly delayed, then the petitioner will have to decide whether to sue the agency to compel a response. Here again, the prior fight over partially hydrogenated oils offers a potentially useful precedent.

On August 4, 2025, FDA hosted a public meeting related to the reauthorization of the Medical Device User Fee Act for fiscal years 2028 through 2032 (MDUFA VI).  The FDA invited public comment on the following questions and most speakers remarks provided perspectives related to these question (90 FR 24633).

• What is your assessment of the overall performance of MDUFA V thus far?
• What current features of MDUFA should be reduced or discontinued to ensure the continued efficiency and effectiveness of the medical device review process?
• What new features should FDA consider adding to the program to enhance the efficiency and effectiveness of the medical devices review process?
• What changes, if any, could be made to the current fee structures and amounts to better advance the goals of the agreement, including facilitating product development and timely access for consumers?

The meeting kicked off with remarks from FDA Commissioner Dr. Martin Makary who commented on the history of medical device user fees, improvements to FDA’s reviews since the first MDUFA was established, goals for modernization, use of common sense, and to make interactions with the agency a user-friendly process.  Next, CDRH Director Dr. Michelle Tarver spoke on the CDRH vision for patients in the US to have access to safe and effective medical devices of public health importance first in the world.  Dr. Tarver noted that the device center is strong and has met or exceeded review timelines established in MDUFA V.  Other topics touched on by Dr. Tarver include: the record use of pre-subs and proposal to further streamline the process, such as by submission type and evidence phase; use of real world evidence and the need for continued collaboration across the total product life cycle; digital health and the agency’s support of responsible innovation; expansion of the use and scope of the Accreditation Scheme for Conformity Assessment (ASCA); strengthening patient-centered development; and providing expanded dashboards with new metrics to improve visibility of the agency’s progress against the MDUFA V performance goals.  Dr. Tarver wrapped up stating that while CDRH has made progress in ensuring it has top talent, that they will need critical resources under MDUFA VI, and that CDRH staff will require leading edge scientific training.  This comment comes with some irony given the mass layoffs across FDA earlier this year.

The remainder of the meeting presented perspectives external to FDA, including panels from:  MedTech industry; patients and consumers; scientific, academic, and health care professionals; and the public.

Remarks from the MedTech panel focused on fine tuning the current FDA processes and highlighted the value of the pre-sub process and the importance of transparency and understanding of where user fees are spent.   This panel also noted that while not opposed to FDA’s use of medical device user fees to improve post-market activities, the program was intended for pre-market improvements.  Finally, this panel emphasized that user fees provide resources to FDA to support timeliness and predictability and are not and have never been a guarantee of approval.

Patient and consumer groups requested that patient advocacy groups be included as more formal partners in the MDUFA negotiations and also highlighted the need for MDUFA goals related to the quality of FDA reviews in addition to timeliness of reviews.  In contrast to the view of the MedTech panel, this panel recommended user fees support improvements to post-market initiatives within the Agency, noting that there have been higher numbers of adverse events in the last 10 years and questioning whether MDUFA pressure for premarket review speed has had an unintentional consequence of more adverse events.  One speaker on this panel noted that device user fees are a fraction of drug user fees, even for the biggest companies and commented that they believe user fees, especially for 510(k)s, are too low.

The scientific, academic, and healthcare professional panel noted that collaboration with FDA and developers is essential, especially with new technologies such as AI-enabled devices.  This panel also highlighted the need to ensure regulatory frameworks are inclusive of all populations, especially children.

The presenters from the public brought a variety of views.  Some felt FDA should be fully funded through appropriations, expressed concern with recent FDA reductions in force and recommended regulation of laboratory developed tests be considered as part of the MDUFA bill, such as the previous VALID act, which we have blogged on previously (link).  Others recommended user fees be increased, the program be expanded to provide robust postmarket safety information to the public, that MDUFA include a pilot program for use of digital twins and to reduce clinical trial requirements with in silico testing, and to make MDUFA performance goals more patient centric with a focus on quality and not just speed of review.

FDA’s Total Product Lifecycle Advisory Program (TAP) pilot was discussed by many over the course of the meeting.  Dr. Tarver noted that TAP is designed to expedite patient access by making the path to market more efficient and predictable and that 100% of quantitative performance metrics had been met in the pilot with 93 devices currently enrolled.  The MedTech panel commented that while the goals of TAP are laudable, that they fall outside of FDA’s purview and recommended revisiting the Breakthrough Program to incorporate the elements of TAP that are in FDA’s control.  Conversely, the patient and consumer panel as well as the scientific, academic, and health care professionals panel praised TAP for the integrated approach and bringing the patient and payor voices to the table earlier in the development process, and recommended the program be maintained and grown.

Across all presenters, the common goal of timely patient access to safe and effective devices was reiterated.  Public input on the user fee reauthorization can be submitted at https://www.regulations.gov/, Docket No. FDA-2025-N-1157 until September 4, 2025.

Hyman, Phelps & McNamara, P.C.’s John Gilbert will be speaking at the Demand Forecasting for Controlled Substances Hybrid Public Meeting sponsored by the Reagan-Udall Foundation for the FDA, Washington, DC. on August 27, 2025. The meeting is from 2-5pm (eastern) and includes both in-person and virtual attendance. The conference will include discussions on the factors that are considered when estimating the medical, scientific, and reserve stock needs for Schedule I and Schedule II substances, such as opioids and stimulants. These estimates along with other factors are used by DEA to establish annual aggregate and individual manufacturing quotas.

On August 6, 2025, the Office of Information and Regulatory Affairs (OIRA) published a notice that FDA has rescinded the Laboratory Developed Test (LDT) Final Rule that was vacated earlier this year by the U.S. District Court for the Eastern District of Texas. The rescission is pending regulatory review by OIRA pursuant to EO 12866.

Although the OIRA notice provides few details on the nature of the rescission, it will almost certainly entail the removal of the nine words the LDT Final Rule added to the definition of “in vitro diagnostic products” in 21 C.F.R. § 809.3, which stated that IVD products are FDA-regulated devices “including when the manufacturer of these products is a laboratory.”

Because the government chose not to appeal the decision vacating the LDT Final Rule, the rescission is largely a formality, as the added regulatory language is already a dead letter. FDA could be trying to claim credit for rescinding the rule as part of the general deregulatory push of this administration (see e.g., EO 14192, which requires that Federal agencies eliminate 10 regulations, guidance or similar materials for each new regulation). Whatever the reason, rescinding the LDT Final Rule further punctuates the end of this chapter in FDA’s long sought effort to claim jurisdiction over LDTs.

Hyman, Phelps & McNamara, P.C. (HPM) is excited to announce a program that we are co-hosting with Freshfields geared toward early-stage biotech and medtech companies.

This program will be a half-day, in-person event at Freshfields’ Silicon Valley office on Wednesday September 10, 2025, and will feature a number of panels and speakers.  HPM’s Michelle Butler and Allyson Mullen will be representing the drug and device perspectives, respectively.

Agenda (final titles and speakers to come):

• 1:00 – 1:30 PM: Registration
• 1:30 – 2:30 PM: Regulatory matters in M&A and licensing transactions
• 2:30 – 3:30 PM: Moderated CFO panel
• 3:30 – 3:45 PM: Break
• 3:45 – 4:45 PM: Moderated CBO panel
• 4:45 – 5:15 PM: Lightning round of additional regulatory/data topics
• 5:15 – 6:15 PM: Reception

Event Details:

Wednesday, September 10, 2025
1:00 – 6:15 PM PT

Freshfields’ Silicon Valley office
855 Main Street Redwood City, CA 94063

Please click here to register your interest in attending.

Boston was once again the hub for female leadership in life sciences law this summer as attorneys, executives, and policymakers gathered for the 12th Annual American Conference Institute (“ACI”) Women Leaders in Life Sciences Law Summit on July 30–31, 2025. Hosted at the Seaport Hotel, the event brought together top women leaders from across the biotech, pharmaceutical, and medical device industries – including the authors of this blog – to discuss the pressing legal and regulatory issues shaping the sector (agenda).

The agenda featured timely discussions on several topics of interest including: recent Executive Orders and U.S. Department of Justice/Equal Employment Opportunity Commission guidance; new initiatives at the U.S. Food and Drug Administration (FDA), U.S. Department of Health and Human Services (HHS), and the National Institutes of Health (NIH); the use of artificial intelligence (AI) in drug discovery and evolving regulatory frameworks; patent reform and march-in rights; drug pricing under the Inflation Reduction Act; fraud and abuse enforcement trends; and European Union pharmaceutical legislation. One session also explored recent policy shifts and state laws and their impact on reproductive health, and any resulting implications on drug and device manufacturers including the potential for expanded liability. These sessions offered more than just policy updates—they highlighted the growing need for regulatory agility as life sciences companies navigate shifting federal priorities and court rulings. Speakers cautioned being reactionary in an ever-evolving U.S. regulatory atmosphere. Other panelists emphasized the complexity of cross-border compliance, particularly as global markets face diverging regulatory regimes. They also explored the opportunities and challenges of emerging technologies such as AI, stressing the importance of strong, proactive legal frameworks to foster innovation while protecting both patients and data integrity.

As the summit concluded, a key takeaway emerged: women leaders are driving change across every corner of life sciences law—from shaping policy to steering companies through regulatory complexity. The conversations underscored that success in this environment requires not just technical expertise, but adaptability, collaboration, and a willingness to share experiences and lessons learned within the broader legal community.

At Hyman, Phelps & McNamara, we are proud to partner with many clients whose organizations are driven by female leadership who work collaboratively to advance patient-focused solutions in this dynamic and evolving industry. We look forward to seeing how the ideas shared at this year’s summit will continue to inspire and empower women across the life sciences legal landscape.

Late last week, the U.S. District Court for the Northern District of Texas ruled that FDA’s civil monetary penalty (CMP) provision for tobacco products contained at 21 U.S.C. § 333(f)(9) is unconstitutional.  Relying on the Supreme Court’s recent decision in SEC v. Jarkesy, 603 U.S. 109 (2024), the Court held that the CMP provision violates the Seventh Amendment’s right to a jury trial.

By way of background, in Jarkesy, the Supreme Court ruled that the SEC could not use its administrative authority to impose civil penalties for securities fraud through an administrative law judge proceeding on the grounds that these proceedings violate the Seventh Amendment’s right to a jury trial for all suits in common law.  We posted on the Jarkesy decision and predicted that litigants would similarly challenge the FD&C Act’s CMP provisions.  (We’ve also written about Jarkesy’s impact on DEA ALJ proceedings and the proposed Preserve Access to Affordable Generics and Biosimilars Act).

In Wulferic, LLC v. FDA, No. 4:24-cv-1183-O (N.D. Tex. Aug. 1, 2025), Plaintiff Vapor Lab—a business that makes and sells tobacco products—challenged a CMP administrative proceeding brought by FDA seeking a monetary penalty against Vapor Lab for selling e-liquid products that had not been authorized for sale by FDA.  The case was pending before an HHS ALJ, and Vapor Lab argued that the CMP provision for tobacco products was unconstitutional because the administrative proceeding violated its Seventh Amendment right to a jury trial.

The Court agreed, explaining that the Seventh Amendment’s right to a jury trial in suits at common law applies to cases traditionally decided in English law courts, as opposed to cases tried in courts of equity or admiralty.  Id. at 20.  While the Court did not find any “common law analogues” to the FD&C Act’s CMP provision for tobacco products, it noted that the remedy is the “more important” consideration.  Id. (citing Jarkesy, 603 U.S. at 123).  Here, the Court found that the CMP provision’s penalties were a type of remedy that could only be enforced in courts of law, particularly because the penalty was designed to punish and deter, included enhanced penalties for intentional violations, and was not intended to “restore the status quo” by ordering restitution to victims.  Id. at 20-21.  Thus, the Court held that the Seventh Amendment applied and that Vapor Labs had a right to a jury trial unless the public rights exception applied.  Id. at 21.

The public rights exception is a recognized departure from Article III judicial power, acknowledging that Congress may assign certain matters to an agency for decision without a jury consistent with the Seventh Amendment.  Id. at 22.  FDA argued that the public rights exception applied because the FD&C Act serves a “public-health purpose” that has been assigned to the Executive Branch.  Id. at 24-25.  The Court rejected that any such public health exception existed as a public rights exception for the federal government, reasoning instead that “the power to promote public health is a police power retained by the states, through the Tenth Amendment, and has never been a distinctive prerogative of the federal government.”  Id. at 26.

Because it found that no public rights exception existed, the Court declared the CMP provision for tobacco products—and FDA’s proceeding against Vapor Lab—to be unconstitutional.  The Court further enjoined the government to dismiss with prejudice the administrative complaint against Vapor Lab and from adjudicating civil monetary penalties against Vapor Lab in an administrative proceeding.  The Court, however, rejected Vapor Lab’s request for a nationwide injunction.

The Wulferic decision is the first case to find that the FD&C Act’s CMP provision for tobacco products is unconstitutional — but the catch is that it didn’t actually order FDA to stop carrying on as usual with respect to anybody else.  Wulferic threatens to significantly dismantle FDA’s arsenal of actions to enforce compliance with the FD&C Act’s tobacco provisions, and we expect many more similar challenges to follow if FDA stays on its current course.

Indeed, for those keeping tabs, a prior District Court challenge that we reported on was rejected for lack of subject matter jurisdiction, as was one other, Vape Central Grp., LLC v. FDA, No. 1:24-cv-3354-RDM (D.D.C. Feb. 27, 2025).  One more is awaiting a decision from a different judge in the same District, The Vaping Dragon LLC v. FDA, No. 25-cv-81-H (N.D. Tex.)).  And there’s more still: at least two other cases are looking to tee up this same issue in the Circuit Courts of Appeals right now.  In Texas Tobacco Barn, LLC v. HHS, No. 25-60200 (5th Cir.), and D and A Business Investments, LLC v. FDA, No. 25-1074 (D.C. Cir), the petitioners directly challenge FDA’s imposition of $19,000 CMPs under Jarkesy, among other things.

It remains unclear whether FDA will appeal the Wulferic decision under the current administration, and what it will do with its current CMP docket in light of it.  Close eyes will now go to The Vaping Dragon in particular: whether and how that case gets decided in FDA’s appeal window could make a big difference. We will be closing monitoring the fallout from this case and other challenges to FDA’s CMP statutory provisions in this post-Jarkesy world.

Since 2009, the term ultra-processed food (“UPF”) has gained recognition as there have been studies that suggest a relationship between consumption of UPFs and chronic diseases.  The term frequently focuses on processing and composition without consideration of food groups and nutritional composition.  At this time, there is great uncertainty about the explanation for the relationship between consumption of UPFs and adverse health outcomes.  A standardized definition may help shed light on the underlying causes.

In May 2025, the U.S. Food and Drug Administration (“FDA”) published its FY 2026 budget request which included $49 million to be “dedicated to combating the growing risks associated with ultra-processed foods . . . .”

On July 23, 2025, the Agency and the U.S. Department of Agriculture (“USDA”) took the first step towards addressing UPFs by jointly announcing a public request for information (“RFI”).  In the press release, U.S. Health and Human Services (“HHS”) Secretary, Robert F. Kennedy, Jr., asserted that “[u]ltra-processed foods are driving our chronic disease epidemic.”  Secretary Kennedy and his administration believe that establishing a clear federal definition is key to tackling obesity, diabetes, heart disease, cancer, and even neurological disorders.

The RFI is part of a wider effort spearheaded by Secretary Kennedy who has made food reform a central pillar of the Make America Healthy Again (“MAHA”) agenda.

Why a Clear Definition Matters

Currently, there is no single, authoritative, federally codified definition of what an UPF entails in the U.S. market.  The absence of a single clear definition generates inconsistencies in policymaking and consumer guidance and understanding.  For example, the RFI mentions several states that have proposed varying definitions for “ultra-processed” food—such disparate state efforts could lead to a patchwork regulatory scheme and consumer confusion throughout the country.  A uniform definition may:

• Enable consistent public health messaging
• Encourage more focused research
• Support clearer, more informative labeling
• Inform government programs and spending on food
• Provide a foundation for future regulation or standards

What Information is Being Requested?

Many questions need to be answered when considering a definition for UPFs and it remains to be seen whether a definition can be developed without further research.

The RFI lists many questions and requests that comments include explanations and supporting evidence.

Key questions include:

• Is the term “ultra-processed” the most apt terminology?
• What measurable factors (e.g., ingredients, processing techniques) should define an ultra-processed food?
• Should the definition consider the nutritional value of the product?
• How can such definitions be applied systematically across food products?
• What implications might this definition have for nutrition programs and labeling?

Any interested parties should submit comments by September 23, 2025 at 11:59 PM EDT.

One familiar with homeopathy might reasonably think that the practice would have a place in the Make America Healthy Again movement as an alternative to conventional pharmaceutical treatment. But after a recent court decision issued on July 15, 2025, the regulatory path for homeopathic medicine looks murkier than ever.

Homeopathy operates on the principle that “like cures like,” where practitioners use heavily diluted substances intended to cause the symptoms they are meant to treat. For decades, FDA largely ignored this $6 billion industry through a 1988 compliance policy guide (CPG) that essentially created a regulatory “safe harbor” for over-the-counter homeopathic products. Although they were unapproved new drugs, the CPG described the conditions under which FDA would allow these unapproved drugs to be on the market.

In 2015, FDA indicated that it increasingly was concerned about the safety of homeopathic drugs, and it claimed that the existence of the CPG limited its options to take enforcement action. In 2019, the agency withdrew that CPG and issued draft guidance describing its new risk-based enforcement policy to replace the CPG.  In 2022, it finalized this new enforcement guidance for homeopathic drug products.

In an effort to legitimize homeopathic drugs, the Americans for Homeopathic Choice Foundation (AHCF) submitted a petition requesting, among other things, recognition by FDA that homeopathic drugs, properly manufactured and labeled, and evaluated by appropriate standards, do not meet the legal definition of “new drugs,” and therefore were not subject to premarket review other than satisfying the requirements of current or likely inclusion in the HPUS. As we previously reported, FDA denied that petition one day before it issued the 2022 final guidance. As of that one-two punch, homeopathic remedies no longer enjoyed the benefits of FDA’s exercise of enforcement discretion from new drug approvals. As discussed in the 2022 guidance, FDA considers all homeopathic drugs to be new drugs, which can be taken off the market at any time for lack of approval. That said, enforcement actions against these unapproved drugs are generally based on safety considerations.

In 2024, the Alliance for Natural Health USA (ANH) and homeopathic drug distributor Meditrend , challenging the agency’s 2022 denial of the petition and arguing that FDA lacked authority to subject all homeopathic products to costly and lengthy new drug approval requirements. The CARES Act excluded homeopathic products from its reform of the OTC drug review process, and FDA and the homeopathic industry interpreted that absence from two opposing perspectives. FDA read the CARES Act exclusion to mean that Congress wanted to treat homeopathic drugs as unapproved new drugs. In contrast, the plaintiffs read the exclusion as evidence that Congress hoped to ease the path of homeopathic drugs to market.

Additionally, the plaintiffs challenged FDA’s guidance regarding enforcement priorities for (unapproved) homeopathic drugs as arbitrary and capricious.  Specifically, plaintiffs argued that the guidance violated their constitutional due process rights and was based on what the plaintiffs called “unsupported” safety concerns. Plaintiffs also claims that FDA’s concerns about safety of homeopathic drug product were insufficient reason to deny the AHCF petition.

The court dismissed most of plaintiffs’ claims outright. It found that FDA’s 2022 guidance document was not legally enforceable as final agency action and therefore could not be challenged under the Administrative Procedure Act. The court also rejected the constitutional due process claims and the statutory arguments that the plaintiffs raised about the CARES Act, ruling that Congress never intended to exempt homeopathics from standard drug approval requirements.

However, the court held open the question about whether FDA’s safety concerns about homeopathic practice were sufficient to justify the denial of the 2022 petition. It could not make a determination without a full administrative record; the “agency’s safety concerns may well be warranted. But whether they justify increased enforcement is a factual, not legal, determination. Therefore, the Court cannot reach a decision without a full record.”

For FDA, the ruling validates its revised risk based approach regarding homeopathic drugs. Plaintiffs promise to challenge FDA’s “attempt to regulate homeopathic medicines as conventional drugs” to the extent the decision allows, and the survival of the question of whether FDA had sufficient safety concerns to deny the petition keeps the door open for meaningful judicial review of that issue. We will be monitoring further developments.

Earlier this week, we posted on the retirement of DEA Chief Administrative Law Judge Judge John J. Mulrooney, II, and the lack of appointed DEA ALJs to hear DEA cases upon his retirement, effective August 1.  On a related note, HPM wants to take a moment to recognize Chief Judge Mulrooney’s tenure on the bench.  After joining OALJ in 2009, (then) Judge Mulrooney was quickly appointed as the chief judge.  In that position, he oversaw the office’s busy tribunal docket and administrative staff.  Our HPM attorneys had the privilege of appearing before him in many cases and litigated hearings over the last 16 years.  While Chief Judge Mulrooney’s well-known trial standards, fastidiousness to procedure, and expectations for preparedness could put a knot in the stomachs of experienced counsel from all over the country, litigators also knew him for his fairness, his dedication to establishing clear agency precedent, his keen wit from the bench (and in the footnotes), and his commitment to the rule of law.  And as a former law clerk, one of us can attest that there was never a better mentor or advisor who sought the best for his law clerks and who modeled dedicated public service.

Chief Judge Mulrooney’s 42-year career in public service highlights his commitment to public health and safety, spanning positions as a Navy judge advocate, an assistant district attorney, an Assistant U.S. Attorney, a DOJ trial attorney prosecuting terrorism cases, a judge on the Navy-Marine Corps Court of Criminal Appeals, an administrative law judge at the Social Security Administration, and culminating with his appointment at the OALJ where he dedicated the last sixteen years within a branch of DEA dedicated to protecting the public against the harms of diversion and drug abuse.  Thank you for your service, Chief Judge Mulrooney.  Sláinte!

On July 24, 2025, FDA released the Regulatory Accelerator, an initiative to help digital health sponsors bring their technology to market. New developers may want to bookmark this link as the initiative neatly corrals information in one place. For those who have been working in the space, most of the information is familiar.

The Regulatory Accelerator includes:

• Resource Index for Innovators, which compiles tools, engagement opportunities, and guidance throughout all phases of the total product life cycle and identifies those with associated fees,
• Medical Device Software Guidance Navigator, which represents an efficient method for identifying pertinent FDA guidance documents for medical device software development and marketing submissions, and
• Early Orientation Meetings, which are opportunities for sponsors to provide device demonstrations and/or an overview of the marketing submission and respond to questions from the FDA review team.

The Resource Index for Innovators may be of particular value to digital health innovators who are just starting their journey and learning about the different FDA submissions and programs. The index is a nicely organized visual guide identifying the available resources to innovators, all of which are accessible via active hyperlinks. Given that guidance documents and other resources have been removed from FDA’s website without warning (sometimes reinstated and sometimes not), we suggest you download any useful resources now.

While much of the Navigator organizes already existing information into an easy to find format, there was one new piece of information that caught our attention:  the introduction of Early Orientation Meetings. FDA recommends these interactions shortly after a submission has been accepted for review. The meetings are best for novel devices as they are intended to allow sponsors of marketing submissions to provide device demonstrations and/or an overview of the submission. Explanations, especially in the context of digital health products, have increasingly grown more important to demonstrate how the product will work in the intended use environment, and how, if it all, it will affect existing clinical workflows. Demonstration of software products can be a far more effective way to showcase novel features or functions as compared to still screenshots of the user interface that are included in a submission. Explaining early on how the technology works (e.g., how the device functions or achieves its intended use via inputs and outputs) to FDA reduces any gaps in knowledge that may hamper submission review,  and allows FDA to ask questions and receive clarification on any initial sticking points.

Early orientation meetings are appropriate for any traditional 510(k)s, De Novo requests, and PMAs. A sponsor can request an early orientation meeting in the cover letter of their marketing submission. However, as our recent blog post highlighted, sponsors are already experiencing delays scheduling meetings within the paradigm of existing initiatives. It is therefore unclear how FDA will be able to accommodate potentially additional requests for meetings. As FDA states on the website about early orientation meetings, it “will try to accommodate meeting requests, resources permitting.” Sponsors may want to consider their resources and return on value on these interactions if “[t]he FDA review team does not generally provide specific feedback on the submission during the meetings.” As we have opportunities to engage in these meetings in the future, we will report back on what we are seeing, and the extent to which having, or not having an early interaction meeting, has any impact on the ultimate submission review.