A 20-Minute Speech Provides the Clearest Road Map Yet for FDA Policy

Key Points

• Who is impacted: Manufacturers of pharmaceutical, biotechnology, medical device and food products.
• What is changing: The agency is prioritizing user fee reauthorization, the MAHA initiative and a push for domestic drug development, as outlined by Deputy Commissioner Grace Graham. The agency is also focusing on streamlining regulations and supporting innovation, including faster development of new drugs as well as generics and biosimilars.
• Why it matters: These developments may affect regulatory strategy and user fee programs, with a particular emphasis on domestic manufacturing and streamlined development programs. Companies may see increased scrutiny of global clinical trials. FDA may also increase use of existing authorities to update outdated drug labels and facilitate greater access to nonprescription drugs.

On May 16, 2025, Grace Graham, deputy commissioner for policy, legislation and international affairs at the Food and Drug Administration (FDA), delivered a keynote address at the Food and Drug Law Institute Annual Conference. Ms. Graham’s speech, while only 20 minutes long, provided a clear road map for FDA’s policy priorities.

Perhaps the most significant takeaway is that FDA does intend to allow the reauthorization of user fees, although they may look a little different.

Ms. Graham also outlined other policy priorities for FDA that fell into three buckets:

1. The Make America Healthy Again (MAHA) initiative.
2. FDA’s response to globalization.
3. Supporting innovation.

Ms. Graham also stressed the importance to FDA of working with Congress and ensuring that the agency maintains an important role in the global supply chain.

Below is our summary of the key policy priorities Ms. Graham laid out and what we think the near-term impact may be for industry.

Make America Healthy Again

Ms. Graham stressed the importance of the MAHA initiative at FDA and called FDA the “tip of the spear” in working to improve Americans’ nutrition, address chemicals used in the U.S. food supply and reduce food borne illness. She noted that there currently is a focus on food the “likes of which I haven’t seen” since she started working on FDA issues. She also highlighted Operation Stork Speed and the comprehensive review of the nutritional requirements for infant formula, which has not been done since 1998.

Ms. Graham stressed that “MAHA is broader than just foods,” noting two other issues that may be addressed under MAHA.

1. Updating the labels of generic drugs that have become outdated and are no longer in line with clinical practice. The MODERN Labeling Act of 2020 gave FDA the authority to update generic labels when new scientific evidence or clinical practice is not reflected in the labeling. FDA has already begun using this authority with Project Renewal, an effort by FDA’s Oncology Center of Excellence to update prescribing information for older oncology drugs. Ms. Graham’s specific call-out on this front may signal that FDA intends to use this authority more broadly.
2. Medical devices that are able to track health trends more closely. Such advances could, in turn, support use of more products without a prescription. We may see an emphasis under MAHA on the use of FDA’s final rule on over-the-counter (OTC) drugs with an Additional Condition for Nonprescription Use, which will become final on May 27, 2025. The administration has signaled in other contexts that it sees OTC use as another tool to improve access to certain classes of drugs.

FDA in the Global Context

Ms. Graham’s remarks made clear that, in the context of addressing the globalization of the pharmaceutical industry, FDA:

• Wants to reduce reliance on China for drug development.
• May more closely scrutinize global clinical trials that do not have a significant portion of U.S. patients.
• Intends to use its authorities to bring more drug development activities to the U.S.

Ms. Graham was open in her remarks that FDA has concerns related to drugs that are being developed in China first. She discussed a clear trend in biotech where Chinese companies are rapidly developing molecules and first testing them in China, under China’s more streamlined development regime, before licensing them to U.S.- and EU-based pharmaceutical companies.

FDA would like to “reverse the trend” of drugs being first developed overseas, she noted, adding that some of the global studies that innovators want to rely on “may not be representative of the U.S. population.” FDA regulations require that, to use foreign data as the sole basis for marketing approval, it must be “appliable to the U.S. population.” Ms. Graham’s remarks may signal a more stringent application of this regulatory requirement by FDA going forward.

Ms. Graham also cited the May 5, 2025, executive order (EO) “Regulatory Relief To Promote Domestic Production of Critical Medicines” and FDA’s role in reducing regulatory hurdles to getting new domestic manufacturing sites online. As explained in the EO, the Trump administration’s goal is to bring not only finished dosage form production back to the U.S. but also manufacturing of key starting materials and active pharmaceutical ingredients.

In addition to the concepts described in the EO, Ms. Graham noted that:

• A provision may be added to the Prescription Drug User Fee Act (PDUFA) that is similar to the current Generic Drug User Fee Act (GDUFA) treatment of foreign facilities. Specifically, under GDUFA, foreign manufacturing facilities pay an additional $15,000 for each facility.
• The concepts already advanced in the Quality Management Maturity program may be expanded, with the goal of creating additional incentives to award good quality.
• It is an FDA priority to leverage the America First trade agenda to harmonize regulatory requirements in order to reduce duplicative or extraneous regulatory requirements. To that end, Ms. Graham specifically called out reducing nontariff and regulatory barriers to foreign markets for American companies. Earlier in her remarks, Ms. Graham noted that FDA’s Good Laboratory Practice regulations had not been updated since the 1970s. If FDA is serious about increased harmonization, we may see FDA taking on an even more prominent role and adopting International Council for Harmonisation (ICH) guidelines even faster.

Supporting Innovation

With respect to supporting innovation, Ms. Graham made two notable policy points.

1. In an echo of earlier remarks from FDA Commissioner Martin Makary, Ms. Graham said that FDA needs to shorten the time it takes to develop new medicines, especially for rare diseases. Ms. Graham touted FDA’s announcement about moving away from animal testing as an example of how the agency is trying to use technology to streamline drug development. She also emphasized that FDA wants to speed development of generics and biosmilars as a means to help bring down drug costs and increase access to treatment.
2. Perhaps most importantly, Ms. Graham emphasized that PDUFA plays a significant role in helping brings drugs to market. There has been some concern within industry that the Department of Health and Human Services (HHS) may oppose user fee reauthorization altogether given past suggestions by HHS Secretary Robert F. Kennedy Jr. that the user fee program creates conflicts of interest between industry and FDA. Ms. Graham, however, made clear that FDA intends to pursue user fee reauthorization, saying the “user fee programs have grown to provide key funding for the FDA, without which it could not achieve its mission for American patients. But as we look toward the next reauthorization, it is time to take a step back and think about if the fee structures and amounts have any unintended consequences.”

Ms. Graham went on to say that “restructuring and simplifying the user fee programs may help rebuild trust in the FDA and its decisions.” PDUFA VII is up for reauthorization in September 2027, but the OTC monograph user fee program is set to expire this September. The reauthorization of that program may foreshadow HHS’ approach to user fees more generally. Regardless, we can expect to see a more streamlined user fee program moving forward, perhaps focused on rare diseases and predictability of review.

Ms. Graham ended her talk by addressing FDA’s recent Federal Register notice about reducing unnecessary regulations. She posited that overregulation can distract from true public health priorities and deregulation can free up time for FDA’s key areas of focus. She also made clear that FDA will adhere to the “10-for-1” rule imposed by the Trump administration for all new regulations or guidances.

This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.