Riders on the Storm Part 1: What the FY2027 Appropriations Report Means for FDA

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

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

Animal Research

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

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on NAMs, for example, the General Considerations for the Use of New Approach Methodologies in Drug Development draft guidance (CDER, March 2026).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

Research on Human Embryos

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

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

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

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

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

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

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

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

Cross-Product Provisions

Artificial Intelligence

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

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

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

Foreign Inspections

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

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

China

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

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

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

Clinical Trials

Accountability for Unsafe Drug Products and Medical Devices

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

Alzheimer’s Clinical Trials

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

Real-World Data and Evidence

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

Women’s Health

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

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

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

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