FDA in Flux — September 2026 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 Seeks Input on Potential Regulatory Framework for Generative AI-Enabled Medical Devices

What is happening: In August, FDA’s Center for Devices and Radiological Health (CDRH), through its Digital Health Center of Excellence, published a discussion paper titled “Considerations for the Regulation of Generative AI-Enabled Medical Devices.” The paper seeks early input from stakeholders on risk assessment, premarket evaluation, postmarket monitoring, and other topics relevant to the regulation of generative AI (GenAI)-enabled medical devices. 

CDRH notes that GenAI-enabled devices hold “transformative promise for patient care and the broader health ecosystem” but acknowledges that such devices may introduce unique risks compared to traditional software and AI-enabled medical devices, including confabulations (or hallucinations) that may appear authentic to users, uncertainty in the bounds of a device’s intended use, limited visibility into underlying third-party foundation models, and performance degradation across the total product life cycle. Public feedback on the issues raised in the discussion paper should be submitted by October 19, 2026 (Docket No. FDA-2026-N-7874).

Why it matters: The discussion paper outlines several significant regulatory concepts that warrant close attention from medical device manufacturers, AI developers, and other stakeholders: 

1. CDRH describes a two-axis risk framework for GenAI-enabled device software functions that assesses risk based on the degree and independence of device activity (ranging from providing nondirective information to autonomously taking clinical action) and the consequences of relying on an incorrect output. 
2. Because traditional evaluation approaches that rely on exhaustive testing of bounded inputs and outputs may not be practical for GenAI-enabled devices, CDRH is considering a competency-based approach to premarket evaluation inspired by how human clinicians are evaluated and credentialed. This approach would consist of nonclinical device benchmarking, evaluating clinical knowledge, safety behavior, communication quality, generalizability, and, for agentic AI systems (i.e., GenAI-enabled systems that autonomously plan and execute multistep tasks, use external tools, and take multistep actions), additional competencies related to autonomous multistep task execution. Such an evaluation would be followed by clinical confirmation under real-world or clinically representative conditions. 
3. CDRH is also considering the appropriateness of accepting greater premarket uncertainty in exchange for greater reliance on postmarket monitoring, including periodic re-benchmarking, sample-based clinician review, and performance degradation monitoring. 

The discussion paper is a strong signal of how CDRH views the regulatory environment for GenAI-enabled devices, and it arrives at a time when FDA as a whole is increasing its scrutiny of AI across the drug and device product life cycles. In the paper, CDRH presents 26 detailed discussion questions, spanning each major topic, for stakeholders to engage with and to help shape what will likely become a foundational regulatory framework for GenAI in medicine. 

Manufacturers and developers building GenAI-enabled medical devices should begin mapping their products against the proposed risk framework, evaluating their ability to support competency-based benchmarking and robust postmarket monitoring, and establishing contractual and technical mechanisms to manage risks associated with third-party foundation models. Interested parties should also consider responding to some or all of the agency’s discussion paper questions by the October 19 deadline. 

Medical Product User Fee Reauthorizations Are Advancing, with Meaningful Changes for Industry

What is happening: After months of negotiations with industry stakeholders, FDA has released near-final “commitment letters” for the next iterations of its three largest user fee programs, which operate under PDUFA (the Prescription Drug User Fee Act), GDUFA (the Generic Drug User Fee Amendments), and MDUFA (the Medical Device User Fee Amendments). Negotiations related to another large human medical product program, BsUFA (the Biosimilar User Fee Act), remain ongoing but must be completed by the end of this year. 

Following public meetings, an opportunity for the public to provide feedback to agency dockets, and a review of any comments made in those public forums, FDA will finalize each commitment letter and then transmit them to Congress by mid-January to be considered during the 2027 legislative session, along with the agency’s recommendations for improvements to each program. (For more on the typical reauthorization process, see this previous Mintz/ML Strategies post outlining how FDA user fees work.) Congressional reauthorizations of these programs occur in five-year cycles; next year’s legislative action would extend PDUFA, MDUFA, and GDUFA for federal fiscal years 2028–2032. User fee legislation must be signed into law before October 1, 2027 to avoid potential operational disruptions for both industry and the agency.

Why it matters: The three commitment letters, if adopted as proposed, would introduce significant changes to the long-standing drug and device user fee programs that may affect medical product companies’ forward-looking development plans or regulatory strategies. Collectively, they also contain multiple provisions aimed at incentivizing domestic manufacturing of prescription drugs, generic drugs, and medical devices, consistent with the Trump administration’s broader “America First” agenda.

Most notably:

• The PDUFA VIII Commitment Letter would create a new 50% fee reduction for drug and biological product applications when they include data from at least one Phase 1 clinical trial “anchored” in the US after October 1, 2027. Additionally, companies that are not based in the United States would not be eligible for existing small-business waivers of the PDUFA application fee. In its notice announcing the public meeting, FDA explained that “based in the US” means that the applicant must be “created or organized under the laws of any State.” Another interesting proposal, although one without any domestic/foreign distinctions, is a 50% application fee reduction for a sponsor’s first supplement requesting approval of a non-orphan indication for a drug/biologic that previously had received only orphan-drug approvals. 
• One of the embedded policies in the GDUFA IV Commitment Letter provides for an increase in the facility fee differential between domestic and foreign manufacturing facilities (from $15,000 to $25,000). Novel GDUFA proposals that favor domestic companies include: (1) a marketing application fee waiver that would be available to US-based sponsors using only US-based facilities to produce both the active pharmaceutical ingredients and finished dosage forms of their generic drug products; and (2) a new process that would allow domestic facilities to request an FDA inspection ahead of the submission of a generic drug marketing application in order to assess the facility’s compliance status and get ahead of potential issues that could delay the application’s approval. 
  
  Although not related to domestic manufacturing, the GDUFA negotiators also agreed to lower application fees while raising annual program fees, which are charged based on the number of FDA-approved and marketed drugs. This key change is expected to give FDA a more predictable stream of revenue for the generic drug program. 
• The MDUFA VI Commitment Letter also includes certain “America First” proposals that parallel its prescription and generic drug siblings: foreign device facilities would be assessed higher fees than domestic facilities for the first time (a differential of approximately $5,000) and companies that do not file a US tax return would not be eligible for existing small-business reductions or waivers to device application fees.
  
  In another first, FDA would require sponsors to pay user fees to have pre-submission meetings with the agency. Although this pre-submission fee would be credited toward the device’s future marketing application fee and is expected to be relatively modest ($2,000), this early-stage user fee could discourage regulatory interactions by device developers who may not be as committed to a particular device design or business plan and may not want to risk the potential loss of those funds.

Stakeholders should become familiar with the upcoming changes and evaluate their potential effects on individual businesses. Although the public consultation procedures for MDUFA have already concluded, final public comment periods for PDUFA and GDUFA end in mid-October; entities interested in providing further feedback to FDA should ensure they do so by the respective deadlines. Comments on the PDUFA and GDUFA agreements are due by October 16 (Docket No. FDA-2026-N-8163) and October 17 (Docket No. FDA-2025-N-0873), respectively. The next opportunity for meaningful feedback will become elevated to the level of congressional committees and staffers that will oversee the legislative reauthorization process in 2027.

FDA and SEC Strengthen Their Collaboration as Clinical Trial and Manufacturing, Inspectional Disclosures Increase in Complexity 

What is happening: FDA and the Securities and Exchange Commission (SEC) have executed a Memorandum of Understanding (MOU) that formalizes their collaborative relationship and creates a framework to facilitate information sharing between the two agencies. 

The FDA-SEC MOU applies to nonpublic information about “FDA-regulated products and activities” and about companies that manufacture, distribute, or sell FDA-regulated products of any kind, whether medical products, veterinary products, foods, cosmetics, radiological products, or tobacco products. Such information can include not only medical product development or clinical trial updates, but also information about the outcome of an FDA inspection of a manufacturing facility, import-related activities, or US distribution and supply chain matters. FDA-related information that SEC officers determine to be material but that the firm did not disclose to investors could give rise to allegations of securities law violations. 

Why it matters: FDA and SEC regulators and compliance officers have partnered for decades to enhance their shared oversight of FDA-regulated public companies, so in some ways the MOU does not represent a departure from the agencies’ historical coordination efforts. An inter-agency collaboration was announced in 2004 and although the relationship had not been formalized since that time, enforcement and prosecution activities over the intervening years clearly indicate that FDA and SEC are in regular communication with one another. 

However, the MOU now requires each agency to create institutional mechanisms for the sharing of covered information and specific points of contact. These formalized agency systems may result in more efficient interactions between FDA and SEC, including the ability for FDA’s chief legal counsel to make direct referrals to SEC if a company’s public statements do not appear to align with how FDA views a situation. This new landscape heightens potential investigative risks for regulated businesses, their boards, and their investors and calls for sharpening internal systems to ensure timely, accurate, and precise disclosures about FDA-related developments. 

Fifth Circuit Upholds FDA’s Procedures for National Drug Shortage Declarations

What is happening: The US Court of Appeals for the Fifth Circuit recently affirmed FDA’s late 2024 and early 2025 decisions to remove certain tirzepatide and semaglutide drug products from the agency’s drug shortage list, in response to challenges filed by the Outsourcing Facilities Association (OFA) and one of its members in a federal district court in Texas. The plaintiffs appealed after the district court sided with FDA last year. Now, a three-judge panel of the Court of Appeals has concluded that: 

• any failure by FDA to use formal notice-and-comment rulemaking procedures to decide that the national shortages were over was harmless because compounders had received actual notice, an opportunity to comment, and sufficient time to adjust to the agency’s orders (i.e., 60 or 90 days, depending on the type of compounder); and 
• FDA’s national drug shortage determinations were not arbitrary or capricious because the agency had engaged in “reasoned decision-making” and adequately explained why it relied on manufacturer-provided supply and demand data while giving less weight to other evidence in the record, such as individual consumer reports of accessibility challenges.

Why it matters: As we discussed in our June 2025 newsletter, FDA’s declarations that these particular GLP-1 drug product shortages had been resolved triggered the statutory prohibition on compounding copies of commercially available FDA-approved drugs (which is waived when an individual drug is deemed to be in shortage). The Fifth Circuit’s ruling in favor of the agency thus closes off a key avenue pursued by compounders to retain legal authority to produce “copies” of popular and highly effective tirzepatide and semaglutide drug products. It also reinforces FDA’s authority over drug shortage determinations, which had not previously been tested in litigation, and affirms the agency’s role as the primary decision maker on national prescription drug availability and the applicability of shortage-based compounding exceptions. 

Notably, the panel endorsed FDA’s reasoning that supply chain dynamics, insurance coverage, and individual pharmacy operations could explain localized access difficulties for patients without indicating that a national shortage existed. The decision also strengthens the stability of the traditional pharmaceutical development model because it recognizes FDA’s ability to enforce the narrow compounding exceptions Congress established for specific clinical needs and temporary supply disruptions, while maintaining the distinction between FDA-approved and compounded products. With the judicial challenge resolved, attention turns to whether FDA will act against compounders that continue producing such GLP-1 drug “copies” in the absence of a declared national shortage.

IVDs Obtaining FDA Authorization for Complex Conditions May Take Market Share from LDTs

The Big Picture: Now that a federal district court has ruled that laboratory developed tests (LDTs) are laboratory services and not medical devices (see our previous post here), different legal frameworks apply to LDTs and in vitro diagnostic (IVD) devices, which are regulated by FDA under the Food, Drug, and Cosmetic Act. 

The legal separation between LDTs and IVDs has created two viable pathways to commercialize clinical diagnostic tests: (1) develop an assay and testing protocol for a clinical laboratory certified and operating under Clinical Laboratory Improvement Amendments (CLIA), and limit the test offering to that lab; and (2) obtain FDA authorization for test equipment or a kit that can be sold and distributed for diagnostic use by laboratories, at the point of care, or at home. In many cases, developers initially commercialize a new test as an LDT to build evidence for an eventual FDA submission seeking marketing authorization of that test as an IVD device.

In recent years, manufacturers and clinical laboratories have been rapidly developing complex tests for serious conditions such as Alzheimer’s disease and numerous cancers. For example:

• Alzheimer’s disease
  • Since May 2025, FDA has cleared through the 510(k) pathway four IVD tests, each of which measure levels of a certain subset of biomarkers β amyloid (1-40 or 1-42), tau protein (phosphorylated/non-phosphorylated at amino acid 181 or 217) for the purpose of identifying certain pathologies as part of a clinician’s diagnostic process.
  • Clinical laboratories continue to offer LDTs measuring numerous biomarkers that have scientific correlations with Alzheimer’s disease pathologies, including the β amyloid and tau protein biomarker referenced above, plus others like neurofilament light chain or glial fibrillary acidic protein.
• Muti-cancer screening tests
  • Certain IVD manufacturers are developing screening tests to enable early detection of multiple types of cancer in a patient. The farthest along in FDA’s regulatory process is Grail’s Galleri test, which uses next-generation sequencing to detect genetic signatures of multiple cancers through cell-free DNA, and which is currently being reviewed by FDA under a premarket approval (PMA) application. The Molecular and Clinical Genetics Panel of the Medical Devices Advisory Committee is meeting on September 23 to discuss the Grail test and make recommendations.
  • Multiple CLIA-certified laboratories currently offer multi-cancer detection screening tests that measure various biomarkers and use complex techniques like next-generation sequencing.

Go Deeper: Although the availability of both IVD and LDT tests gives physicians options when deciding what tools will be most helpful to diagnose a patient or assess their overall clinical risk profile, there is substantial variability in accuracy, utility, coverage, and reimbursement. For example, FDA reviews the analytical and clinical validity of diagnostic tests through the device marketing authorization process, while the Centers for Medicare and Medicaid Services (CMS), responsible for enforcing CLIA, assesses the analytical and technical abilities of a CLIA-certified laboratory, but does not evaluate the accuracy or validity of each LDT developed and offered by the lab. And although there are some options to secure reimbursement for LDTs, FDA authorization carries significant weight with both government and private payors because of the agency’s rigorous scientific requirements, which often include clinical trials or extensive clinical performance testing. 

The Bottom Line: Because FDA-authorized IVDs are often considered to be more reliable than unapproved LDTs when the two products are targeting the same indications for use, and device manufacturers tend to have greater marketing expertise and capacity, the diagnostic testing market may see a shift toward cleared or approved IVDs for complex conditions, such as Alzheimer’s disease and multi-cancer detection, as manufacturers obtain authorization for such tests. This shift would be consistent with the recent historical pattern whereby LDTs are commercialized quickly to offer clinicians access to an expanded menu of biomarker tests, albeit with varying levels of accuracy, diagnostic utility, and insurance coverage, while IVDs come to market more slowly but become flagship tests for their respective indications due to FDA’s assurance on analytical and clinical utility. Such market maturation forecasts should play a key role in strategic business and investment planning for stakeholders involved in either (or both) the LDT and IVD industries.

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