FDA in Flux — December 2025 Newsletter

Welcome to FDA in Flux — A Mintz newsletter tracking rapid changes in policy and agency actions that impact medical, life sciences, and consumer product investment decisions and development strategies.

FDA Expands Internal AI Deployment but Quality Controls Remain Murky

What is happening: FDA recently announced its deployment of agentic artificial intelligence (AI), expanding employee access to AI models with enhanced functionality over the generative AI tool Elsa, which deployed agency-wide in May 2025 (see here). Agency officials predict that integration of agentic AI into regulatory workflows will lead to greater efficiency and reliability in complex tasks, including pre-market product reviews, post-market surveillance, inspections, and various administrative functions. This action by FDA aligns with the recently unveiled “One HHS” AI approach from its parent organization, the Department of Health and Human Services (HHS), which seeks to integrate AI systems throughout all departmental functions.

The announcement did not describe any official, prescribed uses of agentic AI, and FDA reinforced that use of the deployed AI capabilities is voluntary. In fact, FDA employees are being encouraged to develop and validate their own use cases for agentic AI as part of the agency’s Agentic AI Challenge, which will culminate in a demonstration day in January 2026.

Why it matters: FDA’s further deployment of AI capabilities demonstrates leadership’s commitment to embrace AI as a productivity multiplier and make AI tools available for agency staff. Without clear use-case development or validation parameters, however, which have not been mentioned in any FDA announcement, it is unclear whether the rapid deployment of agentic AI will lead to greater efficiency or reliability in any task. Potential concerns include:

• Proper procedures and governance are particularly critical for agentic AI systems that are intended to accomplish specific tasks without, or with limited, supervision. Agentic AI also typically uses decision-making processes that are difficult for humans to interpret and audit.
• FDA stated that the agentic AI models will not train on product or study data submitted by applicants, making it difficult to comprehend how the models will be validated to handle pre-market review or compliance tasks.
• The ability to deploy AI tools effectively within the agency is hampered by the FDA staffing crisis brought about by numerous departures of senior career officials and scientific review staff coupled with a failure to hire adequate replacements. If agency officials pressure current employees to develop and use AI solutions to fill the gaps in FDA’s scientific review and regulatory compliance functions without proper governance and oversight to monitor deployment and use, such efforts could lead to further delays and stress on the agency’s systems and remaining employees.

Who may be affected: All FDA-regulated industry stakeholders will be affected by the agency’s continued integration of AI tools for use in an expanding list of regulatory tasks. Any reliance on the newly deployed agentic AI models for pre-market review or compliance functions could lead to erroneous directions or confusing requests to applicants, which in turn could create substantial delays in pre-market and post-market compliance processes.

Stakeholders should carefully consider all FDA communications they receive, remain alert for possible AI-generated content that is inconsistent with previous interactions with or feedback from the agency, and be prepared to contact the review or compliance team to verify the advice or to provide clarifying information. If FDA doesn’t take adequate steps to validate and monitor its AI models for pre-market review and post-market regulatory matters, the growing use of AI may make agency decision-making less predictable and dampen life science investment activity.

Over-the-Counter Monograph Drug User Fee Program Reauthorized by Congress with More Emphasis on Rx-to-OTC Switches

What is happening: As with other FDA-related user fee programs, Congress must reauthorize the agency’s collection of funds from regulated entities every five years. Each program’s reauthorization cycle typically includes months of negotiations with industry stakeholders, culminating in updated “performance goals” for the agency and recommendations for legislative updates that are sent to Congress. Each five-year package can make notable changes to the fee structure or other operational aspects of a user fee program.

Tucked within the November 12, 2025 legislation signed by President Trump to end the longest US government shutdown and to enact FY2026 appropriations for FDA was the first reauthorization of OMUFA — also known as the Over-the-Counter Monograph Drug User Fee Program. OMUFA was created by Congress in 2020 and technically expired on September 30 with the end of the last federal fiscal year. Among other notable changes, the recently passed “OMUFA II” package requires FDA to create a process for industry to request meetings for developing prescription-to-nonprescription (Rx-to-OTC) switching plans. The agency has also been tasked with publishing guidance on the standards for approval of such Rx-to-OTC applications by May 2027.

Why it matters: The Trump administration has prioritized moving more drugs from prescription to OTC status as part of its drive to reduce pharmaceutical prices for consumers. The president’s first executive order related to drug pricing, issued in April 2025, specifically directed the FDA commissioner to improve the Rx-to-OTC switching process. Although the agency has approved high-profile switches in recent years, such as the OTC applications for naloxone nasal spray and for a hormonal birth control pill (see switch list here), ultimately drug developers and manufacturers control the pace of this activity. If there are greater financial benefits to keeping a drug prescription-only compared to moving it to OTC status, a company is unlikely to be willing to hurt future profits by switching it to non-Rx or to invest in the studies necessary for a switch application.

Who may be affected: Soon after the OMUFA II package was finalized, FDA formally requested input from stakeholders on how to increase access to OTC drugs (the comment period deadline is February 2, 2026). Responses will be used to inform the agenda for a public meeting that will take place in 2026. FDA also recently issued new procedural guidance for generic companies outlining what to do when the generic’s reference product moves from Rx to OTC status. Collectively, these actions signal an increased focus on communication and clarity from the agency to industry, aimed at boosting policymakers’ accelerating interest in leveraging Rx-to-OTC switches as a way to reduce health care costs for consumers. Both innovators and generic companies — along with all other stakeholders in the US health care system — stand to be impacted by increased RX-to-OTC switch activities. Without greater incentives for industry, however, OMUFA II and FDA’s commitments under it may not encourage a significant increase in switch applications.

First Use of OMUFA’s Industry-Initiated Monograph Update Process Should Inspire Confidence and Additional Requests

What is happening: In addition to creating a new user fee program for the OTC drug industry, the 2020 OMUFA law introduced a modernized framework for OTC monographs (see our previous summary here). Specifically, the law created a new pathway for industry to request that FDA take certain actions to update an OTC drug monograph, such as asking the agency to recognize a new active drug ingredient as generally safe and effective for its intended nonprescription use. This kind of industry request is called an OTC monograph order request (OMOR).

On December 12, 2025, FDA issued a proposed order to add bemotrizinol to the Sunscreen Drug Products Monograph as a new active ingredient. Bemotrizinol is a widely used sunscreen ingredient in Europe and in other countries, and FDA’s review was triggered by an industry participant’s OMOR. If the order is finalized, bemotrizinol will be the first new sunscreen ingredient to be authorized in the US in over 25 years. Public comments will be accepted through January 26, 2026, following which FDA will consider any objections or other comments on the proposed order and, barring any major issues, publish a final order to amend the Sunscreen Drug Products Monograph.

Why it matters: Until this month, it was unclear whether any companies had taken advantage of this new option to bring nonprescription drug ingredients to market, or whether FDA would meet its performance deadlines for a submitted new-ingredient OMOR. All other prior proposed monograph orders under the modernized OTC legal framework address changes initiated by the agency and/or promised under the first OMUFA agreement with industry.

According to the bemotrizinol proposed order:

• the requestor initially submitted its OMOR on September 23, 2024 after engaging substantively with the agency on data requirements via interactive meetings;
• FDA filed the OMOR on December 4, 2024 after determining that it was properly formatted and sufficiently complete; and
• the requestor submitted “a major amendment consisting of two new human clinical efficacy studies” on May 19, 2025, thereby extending FDA’s goal date for taking action on the OMOR by three months.

Based on those key dates, the agency’s goal date for taking action on the OMOR was December 23, 2025 and, as noted above, the actual date of the proposed order was December 12, a few days before that goal.

Who may be affected: The recent bemotrizinol announcement represents a milestone for both FDA and regulated industry, and for American consumers who will benefit from an anticipated renaissance in OTC product innovation. Companies should now have more confidence in the OMOR administrative process and the timeliness of agency decision-making following a complete submission supporting nonprescription uses of a new ingredient, which may lead to more proposed order announcements. Additionally, the OMOR requestor for bemotrizinol will receive 18 months of market exclusivity for the new ingredient, which will be described by the agency in any final order. As a brand new and yet-to-be-tested regulatory exclusivity system created by OMUFA, stakeholders should closely watch how FDA implements it in practice.

Ongoing PDUFA Negotiations Suggest Major Changes May Come in Eighth Iteration of Program

What is happening: While OMUFA was just renewed for another five years, its older siblings — the Prescription Drug User Fee Amendments (PDUFA), Biosimilar User Fee Amendments (BsUFA), Generic Drug User Fee Amendments (GDUFA), and Medical Device User Fee Amendments (MDUFA) — are on a different but aligned legislative cycle, with each set to expire at the end of September 2027. Stakeholder consultations and negotiations for the next iterations of these large medical product programs recently kicked off; summaries from such meetings are published and can be found on FDA’s website through the individual program pages, collected here.

Newly released PDUFA meeting summaries suggest that the FY2028 – FY2032 reauthorization may include substantial changes to the relationship between FDA and drug and biological product developers that pay prescription drug user fees. Notably, the agency has raised the following proposals for discussion among PDUFA negotiators:

• an annual fee charged to certain investigational new drug (IND) sponsors;
• higher new drug / biologic application fees for sponsors who conduct their Phase 1 clinical trials outside of the US;
• different review goals for manufacturing-related supplemental applications depending on whether the facility is domestic or foreign; and
• limiting the existing small business fee waiver to companies based in the US (without much clarity around how this would be determined).

Why it matters: Each of these proposals, if codified into the final PDUFA package in 2027, would represent a sea change for the program, which currently does not include any form of IND-related user fee or differentiate between domestic versus foreign activities for the purpose of determining fee amounts or performance deadlines. Under current user fee laws, many drug developers initiate clinical development of a new drug or biologic in other jurisdictions such as Australia, New Zealand, or lower-cost eastern European countries for efficiency and to maximize resources, without adversely affecting their regulatory positions in the United States. Future FDA policies that effectively discourage ex-US clinical development activities would create new challenges for companies and investors, while injecting additional risks in long-term cost-benefit calculations for a given clinical program.

Who may be affected: Industry stakeholders and the investment entities that support them should be concerned about the possibility of such “penalty” fees under PDUFA leading to a clinical development ecosystem that makes decisions based on financial considerations to the detriment of scientific, resource-conserving, or operational considerations. Reporting on the ongoing negotiations indicates that industry representatives are pushing back strongly on these kinds of proposals from FDA and instead are encouraging the creation of new incentives that could increase clinical research efficiency in the US, thereby inducing more early-stage domestic clinical trials.

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