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.

Last September, we blogged about FDA’s release of Complete Response Letters (“CRLs”) for unapproved NDAs and BLAs, which since then have continued at a steady clip.  We observed that the policy marked a significant change from FDA’s longstanding position that such CRLs were exempt from disclosure under FOIA and FDA’s own regulations, that this shift in policy was accomplished without undertaking expected administrative processes, such as a Federal Register Notice or a docket to solicit public comment, and that litigation may well follow.

We have not seen an industry vs. FDA litigation war break out yet, but along the lines we predicted, a new Citizen Petition (“CP”) is loudly beating the drums.  As just about anyone can submit a CP to FDA on just about anything (see 21 C.F.R. §§ 10.25, 10.30), the mere fact that one has been submitted does not often rise to the level of blogworthiness.  This one is different.  Below we break down this new CP’s request, its extensive supporting rationale, and what might follow it.

The Citizen Petition’s Outward Ask

On April 20, 2026, a major Washington, DC law firm submitted a Citizen Petition to FDA on behalf of “an individual pharmaceutical company,” nominally asking that FDA “establish a clear process that provides applicants with notice and an opportunity to respond to proposed disclosures of CRLs associated with unapproved” NDAs, ANDAs, BLAs, and their supplements and amendments.  Since last September, FDA has decided on its own, without applicant input, what information to redact from a CRL as confidential commercial information/trade secret information (“CCI/TS”) and when to post it on its openFDA website.  The process the CP requests would “mirror” the pre-disclosure notification process (“PDN,” as FDA sometimes calls it) that FDA already provides under 21 C.F.R. § 20.61(e) when it receives FOIA requests for records containing potentially confidential information.  In short, PDN involves providing an applicant with an opportunity to object on CCI/TS grounds to FDA’s proposed disclosure prior to the records’ release, and if the applicant and FDA do not agree on the scope of disclosure, allowing the applicant a few days before release to seek any emergency relief in court to block it.  See id.

The CP picks up steam as it goes on though, and by its end, it argues that FDA’s “recent release of CRLs for unapproved applications is unlawful and contravenes decades of agency practice with no adequate explanation,” and that “FDA should immediately cease publishing CRLs,” and “at a minimum,” “expeditiously take the steps described herein,” i.e., institute a PDN process.  Tellingly, it “reserv[es] all other rights.”

The Arguments Behind It

The CP makes many legal arguments along the lines we flagged in our earlier blog post, explaining how these CRL releases marked a departure from the agency’s longstanding position and arguing that aspects of them run contrary to disclosure statutes and FDA’s own governing regulations.  We won’t rehash all of that; instead, we’ll provide the top lines on what the CP added beyond what we wrote in our post:

• It squarely argues that these CRL releases violate federal law, including the FOIA, the Trade Secrets Act, and FDA’s regulations. Though it does not specifically accuse FDA of releasing trade secret information in a CRL thus far, it pointedly argues that such a disclosure would also amount to an unconstitutional Taking.
• It asserts that the decision to release these CRLs was “arbitrary and capricious” under the Administrative Procedure Act, because FDA did not acknowledge its change in position, adequately explain it, or consider reliance interests of industry that had come to expect that their information would remain confidential.
• It shares results of the firm’s own research that present a damning picture of FDA’s CRL releases. Most pointedly, it says that out of 127 CRLs for unapproved applications in FDA’s database, there were at least 36 for which the applications had not been previously publicly disclosed or acknowledged, in direct conflict with 21 C.F.R. §§ 314.430(b) and 601.51(b). It then calls out the scope of FDA’s CCI/TS redactions, stating that in almost half of all CRLs released, “FDA did not redact substantive deficiency information,” and explaining in further detail how in 4 of them, “FDA left unredacted detailed and confidential clinical deficiency information that is highly competitively sensitive.”
• It also raises “policy concerns,” arguing that the CRL releases allow competitors to freeride on information that it took the applicant many months or more, at significant cost, to get. Under this view, the benefits FDA touted of helping companies “‘avoid blind alleys and common missteps to accelerate development’” are in fact an admission “that disclosed CRL information will help the applicant’s competitors develop shortcuts.”  The CP also argues that negative publicity from a released CRL could reduce a drug company’s likelihood of continuing to pursue an application if public and/or private support for it wanes, based on a perhaps artificially grim picture the CRL portrays to the outside reader.  (We too previously observed the “one-sided” nature of CRLs.)  All of this, the CP argues, may stifle innovation.
• Finally, it asserts the benefits of PDN in this context, including that it would provide applicants “due process.” It is on shakier ground, however, in arguing that PDN would “reduce burdens for agency employees.”  Because FDA would still be doing the work of proposing redactions in the first instance, and then undergoing PDN’s back-and-forth with applicants who are “familiar with the confidentiality of the information that they generate” and thus “may identify key disclosure issues for the agency to resolve,” these authors don’t see how administrative burdens would be lessened by the exchange.  That said, if the goal here is to help FDA get to the right answer, and not just the fastest or least “burdensome” one, we see their point.

What May Come Next

In our view, the CP raises important considerations that it would be irresponsible for FDA to ignore.  Whether or not these CRL releases ultimately make for good policy, federal agencies must obey federal statutes and their own binding regulations, of course, and at a minimum are not expected to make major shifts in policy without soliciting prior public input.  While this CP comes seven months after FDA began releasing unapproved drug CRLs, it draws from the real world experience of the CRL releases in the intervening time. For example, it provides concrete data on CRLs that marked the first disclosure of an application’s existence and identifies specific instances in which FDA allegedly did not sufficiently redact out CCI/TS in line with governing law (discussions of specific study design deficiencies, endpoints, etc.).  These arguments were foreseeable to us and others back in September, but they now have flesh on the bones.  Finally, the CP (for the most part) offers a modest proposal for the problem: just provide applicants with PDN.

FDA takes a notoriously long time to respond to CPs, as we’ve noted before, and so it may take a while before the agency does anything with this CP.  Still, here are a few possible avenues FDA, and others in turn, might take in response:

• FDA could open a public docket to solicit further input on how to approach this important issue going forward. (Of course, if FDA were to explicitly amend its regulations, it would need to go through notice and comment rulemaking.)  Whether it does that or not, FDA is wholly in control of how and when it releases these CRLs going forward and could simply decide to “immediately” suspend that practice as requested by the CP while it considers the issues it raises — or not.
• Alternatively, other stakeholders may seek to use this already open CP docket to provide their views on the CRL releases now that the can has been opened — for and against. As we mentioned before, many drug companies are likely concerned about the information their competitors could glean from their CRLs, which previously would have been kept confidential prior to approval; but others may consider themselves benefiting on the whole from the increased disclosure by assisting them with their own drug development.  Outside interest groups could be similarly aligned in favor of greater government transparency (and less sympathetic to drug companies’ assertions of the confidential nature of the information).  So it will be interesting to see if this CP itself spurs a more robust public debate on this subject.
• FDA could implement the requested PDN procedures. Not only would this allow an applicant a say in the scope of disclosure before a CRL goes out (and potentially whether it should be published at all), but with prior notice, it would also open a very clear avenue for a company to go to court in a “reverse-FOIA” suit, i.e., one seeking that the agency be enjoined from releasing information before it happens. (We can’t help but note, though, that an applicant who sues to keep the existence of their application hidden would have a trickier go of that through a public lawsuit.)
• And if FDA does nothing, or drags its feet too long, the CP is a clear shot across the bow, containing many arguments that easily could be repurposed into a Complaint suing the agency — whether by this Petitioner or others following its roadmap. Indeed, the CP argues that implementing its proposals “could also help reduce the agency’s litigation risk as well as the risk that FDA employees violate the law — including laws with criminal penalties — in their disclosure practices.” Point made.

We will be keeping a close eye on whether FDA continues along its current path of releasing CRLs notwithstanding this CP; if so, whether a litigation war breaks out; and if so, who will be the first to enter the breach.

Parallel review. Medicare Coverage of Innovative Technology (MCIT). Transitional Coverage for Emerging Technologies (TCET). Each of these initiatives promised to close the persistent gap between FDA marketing authorization and CMS coverage for medical devices. None has fully delivered. Some were formally withdrawn; others simply faded from relevance.

Now comes the Regulatory Alignment for Predictable and Immediate Device (RAPID) Coverage Pathway, announced on April 23, 2026, by FDA and CMS. The agencies promise a program that will deliver “life-saving Breakthrough Devices to American patients as soon as we know they work.” On its face, that is exactly what industry and patients have been waiting for.

But as with all proposals, the details matter—and here, they significantly narrow the promise.

RAPID is not a broadly applicable solution for Breakthrough Devices. Instead, eligibility is tightly constrained. For Class II devices, Breakthrough Device Designation (BDD) alone is not enough—participation in the Total Product Life Cycle Advisory Program (TAP) is also required. Class III Breakthrough Devices are not required to participate in TAP, but all devices must be subject to an Investigational Device Exemption (IDE). That requirement alone excludes non-significant risk devices, which make up the vast majority of devices on the market—particularly within Class II.

The result is a pathway that is, by design, available to only a small subset of sponsors.

Public reporting suggests that CMS estimates approximately 40 currently eligible devices, with perhaps 20 more that could become eligible. CMS has not publicly detailed how it arrived at that estimate, but given RAPID’s criteria, the pool likely consists of:

1. Class II Breakthrough Devices already in TAP that require IDE studies;
2. Class II Breakthrough Devices that could enter TAP and require IDE studies; and
3. Class III Breakthrough Devices that require IDE studies.

Even accepting that estimate at face value, the scale mismatch is striking.

As of December 30, 2025, FDA had granted 1,246 BDDs, with 185 devices having received marketing authorization. That leaves 1,061 devices with BDD that have not yet received marketing authorization. If only 40 to 60 of those ultimately qualify for RAPID, then roughly 1,001 Breakthrough Devices remain without any meaningful acceleration of the coverage pathway.

The numbers underscore a broader concern: RAPID may be less a systemic solution than a targeted pilot for a narrow slice of the market.

To be sure, the program will be valuable for sponsors that qualify. Earlier alignment with CMS and a clearer path to coverage could meaningfully reduce time to patient access for those devices. But tying eligibility to both TAP participation and IDE studies raises an important question—whether the program is built around the devices that most need coverage acceleration, or simply those that are easiest for agencies to coordinate around.

If the goal is to close the FDA–CMS gap at scale, anchoring eligibility to the Breakthrough Device program itself—rather than layering additional prerequisites—would likely have a far greater impact.

CMS is expected to issue a proposed notice in the Federal Register, triggering a 60-day public comment period. Notably, both CMS and FDA have indicated that CMS will respond to comments in the final notice, while FDA’s role in that process remains unclear.

RAPID is a step forward—but a modest one. Whether it becomes more than that will depend on how the agencies respond to stakeholder feedback in the months ahead.

FDA has, once again, reminded sponsors that ClinicalTrials.gov results reporting is not optional.

In a March 30, 2026 outreach, the Agency contacted 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 or have not cleared the National Library of Medicine’s quality control process. As FDA put it, these communications were intended to prompt “voluntary compliance” with long-standing statutory and regulatory requirements.

This is not a new obligation, and FDA’s expectations are not ambiguous. Applicable clinical trials—generally interventional studies of FDA-regulated products with a U.S. nexus—must submit results information to ClinicalTrials.gov within one year of primary completion, absent a limited exception. Yet, FDA’s internal analysis indicates that roughly 30% of trials likely subject to these requirements have no results posted.

FDA Commissioner Makary suggested that some sponsors may be intentionally withholding unfavorable results. That may be true in a limited number of cases. But in our experience, reporting delays and failures typically reflect breakdowns in process rather than a nefarious strategy—missed deadlines, personnel turnover, unclear delegation of responsibility for reporting, or even situations in which the original sponsor no longer exists and no clear “responsible party” remains to complete the submission.

That does not make the issue insignificant. Failure to submit required results contributes to an incomplete public record and can skew the available evidence base. That concern is not new, but FDA’s latest outreach suggests that the Agency is taking a more active approach to addressing it.

Procedurally, FDA has several well-established enforcement tools available. The Agency may issue Pre-Notices of Noncompliance (as of the date of this blog, FDA has issued 232 such notices since 2013) and, if necessary, formal Notices of Noncompliance (of which FDA has issued 8 since 2021)  as part of its risk-based compliance efforts related to ClinicalTrials.gov reporting requirements. These actions can lead to additional enforcement consequences, including civil monetary penalties.

What is notable here is that FDA has taken an additional step before initiating those formal processes. The March 30 communications were directed to responsible parties whose trials appear to be out of compliance or delayed in quality control, providing an opportunity to come into compliance before the Agency considers whether to pursue further regulatory action.

This is not the first time FDA has signaled increased attention to ClinicalTrials.gov compliance. As discussed in our prior posts (see FDA Cracks Down on ClinicalTrials.gov Reporting Failures and Court Determines That Decades Worth of Missing Data Must Be Published on ClinicalTrials.gov), both FDA and the courts have, at various points, pushed to address persistent gaps in results reporting—though enforcement has historically been uneven and, at times, dependent on Agency discretion.

The latest outreach suggests that FDA may be taking a more active approach, at least at the front end of the compliance process.

So, what’s the takeaway? FDA seems to be signaling that it is actively reviewing ClinicalTrials.gov compliance and is willing to follow up. If you are listed as the “responsible party,” now is the time to confirm that results have been submitted, that any quality control comments have been addressed, and that responsibility for ongoing compliance is clearly assigned.

It’s been a month since DOJ announced the “first-ever Department-wide corporate enforcement policy” for criminal matters.  Touted as a means of “promoting uniformity, predictability, and fairness” in how DOJ pursues white-collar cases against corporate defendants, the new “Corporate Enforcement and Voluntary Self-Disclosure Policy” (CEP) sets a framework for prosecutors deciding whether to bring, and a roadmap for corporate defendants on how to avoid, federal charges.  Like the other voluntary self-disclosure policies from various DOJ offices and U.S. Attorney’s Offices throughout the country, the Department-wide CEP seeks to incentivize corporate behavior, voluntary self-reporting of potential misconduct, cooperation with law enforcement, and good faith efforts to rectify wrongdoing.

To date, we are aware of just one case in which DOJ applied its new CEP and declined to prosecute a corporation after its voluntary self-disclosure of bribery conduct, which the company had identified during an internal investigation.  While the impact of having a single CEP governing corporate criminal matters is yet to be seen, FDA- and DEA-regulated companies under criminal investigations should seriously consider the benefits of a self-disclosure when it comes to discovery and potential reporting of misconduct.

What Does the CEP Do?

The policy provides a path for declination of a criminal case if the company meets the following factors:

1. Voluntary self-disclosure of the misconduct to an appropriate criminal component of DOJ;
2. Full cooperation with DOJ’s investigation;
3. Timely and appropriate remediation of the misconduct; and
4. There are no aggravating circumstances (e.g. severe harm, recidivism, etc.).

Prosecutors may still recommend a declination in the face of aggravating circumstances, depending on the severity of those circumstances weighed against the other factors.  A company, however, will still be required to pay all applicable disgorgement/forfeiture and restitution to victims resulting from the misconduct.

For those companies that don’t quite meet the criteria for a declination, they still may obtain a non-prosecution agreement (NPA) for a number of years, which is an out-of-court agreement with DOJ to refrain from filing charges, typically in exchange for financial penalties and a tolling agreement.  The CEP states that an NPA may be appropriate where a company’s self-disclosure did not qualify as “voluntary” or where prosecutors determined that the aggravating factors did not warrant a declination.  Full cooperation and timely remediation are still expected, and DOJ may still decide that an NPA is not appropriate if there are “particularly egregious or multiple aggravating circumstances.”

Under an NPA resolution, DOJ may allow a term of less than three years, not require an independent compliance monitor, and provide a 50-75% reduction in the low end of the Sentencing Guidelines fine range.

If a company is ineligible for a declination or NPA under the above framework, prosecutors maintain discretion to otherwise determine an appropriate resolution.  The CEP, however, limits prosecutors’ ability to resolve the monetary penalty of any resolution for less than 50% of the Sentencing Guidelines fine range.

What Do These Terms Mean?

Most of the CEP is really a defining of certain key terms (found in Appendix B of the policy).  These are the details that matter.  The CEP provides the following definitions:

A voluntary self-disclosure is defined as follows:

1. The company makes a good faith disclosure of the misconduct to the appropriate DOJ component;
2. The misconduct is not previously known to DOJ;
3. The company had no preexisting obligation to disclose the misconduct to DOJ;
4. The disclosure occurs “prior to an imminent threat of disclosure or government investigation”; and
5. The company discloses the conduct to DOJ within a “reasonably prompt time” after becoming aware of the misconduct (the burden rests on the company to demonstrate timeliness).

The CEP deems that a company has fully cooperated when it:

1. Timely, truthfully, and accurately discloses all facts and non-privileged evidence relevant to the conduct at issue;
2. Proactively cooperates (i.e., disclosing relevant facts not specifically requested or identifying opportunities for DOJ to obtain evidence not in the company’s possession);
3. Timely and voluntarily preserving, collecting, and disclosing relevant documents;
4. De-conflicting witness interviews and other investigative steps that a company intends to take as part of its internal investigation to prevent conflicting or interfering with DOJ’s investigation; and
5. Makes company officers, employees, and agents available for interviews by DOJ.

Considerations for Industry

The CEP attempts to provide certainty to companies when deciding whether to self-disclose misconduct to the federal government.  But the CEP affords federal prosecutors significant subjectivity in determining whether a corporation has satisfied the factors of “full cooperation” and “timely and appropriate remediation.” Thus it remains unpredictable whether the end result of a self-disclosure will be a declination, a non-prosecution agreement, or subject to prosecutorial discretion.

Further, the CEP is more rigid on whether a disclosure is deemed voluntary.  As noted above, the CEP sets forth five elements in the definition of a “voluntary self-disclosure.”  In contrast, under the Southern District of New York’s policy, which is now superseded by the CEP, a company would have been credited for a voluntary disclosure so long as it had not previously received notice from the government that it was being investigated (e.g., a grand jury subpoena, HIPAA subpoena, or interview request).

Importantly, the CEP does nothing to define timing for the declination decision, unlike the aspirational deadlines set forth in previous voluntary disclosure policies from other offices. While those internal deadlines were not enforceable, companies could point to a written policy requiring at least a provisional response within a certain time period.  As we know, companies (particularly those that are publicly traded) value clarity and transparency, which is one of the missions for the nationwide CEP.

Lastly, companies already operating in an environment that requires reporting certain issues to FDA (e.g., adverse events, recalls) or DEA (e.g., suspicious orders), should be asking themselves whether they should escalate the issue to a voluntary self-disclosure to DOJ.  There can be significant benefit to preemptively reporting an issue before DOJ hears from a whistleblower or is served with a False Claims Act complaint.  And of course there are reasons a company may not want to self-disclose certain issues.  We have advised companies on the pros and cons of self-disclosure, and would be happy to work with you on this analysis if and when it is needed.

As promised and teased in yesterday’s blog post, we discuss other practical implications of and compliance concerns surrounding the ongoing shift in peptide policy below.

Supply Chain Complications

There is also a supply chain issue that sits upstream of any FDA regulatory authorization of their use in compounding.  Pursuant to Section 503A, the bulk API used in the compounding of peptide products must be manufactured at an FDA-registered drug establishment, and accompanied by a Certificate of Analysis.  Similarly, because they are likely sterile injectable products, they should be pharmaceutical-grade.

As the Alliance for Pharmacy Compounding’s (APC) CEO Scott Brunner put it:  Even if FDA acted tomorrow, pharmacies would still have to turn away those prescriptions because they couldn’t acquire the compliant API to prepare the drugs.  Compounding industry representatives have argued that the Agency must provide clearer forward-looking regulatory signals to incentivize the investment in pharmaceutical-grade supply chains.  Without that signal, manufacturers have little economic reason to build the infrastructure the market will need.

The Advertising Question

We bloggers believe one aspect of the potential peptide onslaught deserves mention here.  Even if peptides are finally placed in Category 1, and thus permissible for use in compounding, the advertising landscape will remain significantly constrained.  More specifically, pharmacies, practitioners, and online platforms may not promote compounded drugs using claims of safety or efficacy that otherwise imply FDA approval.  FDA has been unambiguous on this point in the GLP-1 context—issuing over eighty Warning Letters to telehealth companies for allegedly misleading marketing of compounded GLP-1 products in the twelve months ending March 2026—and there is every reason to expect the Agency to apply the same or similar framework to peptide marketing and promotion.  See, for example, FDA’s press release about the issuance of 30 Warning Letters to telehealth companies in early March 2026.  Companies positioning themselves for the anticipated booming peptide market should factor aggressive enforcement of promotional restrictions into their compliance planning from day one.

Industry Is Looking Ahead

APC has publicly supported authorizing production of certain peptides, while emphasizing the need for a pharmaceutical-grade and GMP-compliant API infrastructure first.  And stakeholders planning to weigh in have until July 9, 2026, to submit written comments to the docket (FDA–2025–N–6895); those interested in making oral presentations must notify FDA by June 30, 2026.

The Bottom Line

The peptide compounding policy environment is shifting—but deliberately and incrementally, not overnight—and likely too incrementally for those compounders ready to start dispensing peptides now.  The Category 2 removals and the ensuing July 2026 and early 2027 Pharmacy Compounding Advisory Committee (PCAC) meetings are seemingly meaningful procedural steps, and the political momentum behind this shift is real.  That said, compounders and industry participants should plan around a realistic timeline:  While there may be an interim period of enforcement discretion that may be announced by FDA around the time of the PCAC meetings, final rulemaking, if it proceeds smoothly, is still likely more than a year away; pharmaceutical-grade API supply chains need to be developed in parallel; and promotional restrictions will remain stringent regardless of what happens to the 503A list.

For companies with commercial interests in this space—whether compounding pharmacies, telehealth platforms, API manufacturers, or investors—this is a moment to evaluate the shifting regulatory landscape, and engage carefully and thoughtfully.  That may mean submitting comments to the docket, fostering supply chain and laboratory testing relationships, and/or designing marketing strategies with FDA’s promotional framework squarely in view.  The window for unregulated gray-market peptides may be closing, but the window for regulated compounded peptides is not yet fully open—and getting there likely will require navigating a more complex regulatory process than the current headlines or political/public fervor may suggest.

We will continue to monitor and report on developments in the peptide compounding space.