Recent FDA Actions Create New Uncertainties for Cell and Gene Therapy Developers

What is happening: Several developments at FDA in June garnered widespread attention from cell and gene therapy (CGT) developers as well as patient advocates and other supporters of biomedical innovation. 

1. FDA announced that it would be halting new clinical trials involving the transfer of genetic material to foreign countries, including China, due to concerns about trial participants’ full informed consent. The June 18 press release is simultaneously vague and sweeping in its breadth, generating concerns about whether trials of investigational gene therapies that may require manufacturing contributions from any ex-US facility will continue to be authorized by the agency. 
2. During the same week, surprise news that both the director and deputy director of the Office of Therapeutic Products (OTP) — the so-called super office that supervises review divisions responsible for gene therapy, cellular therapy, tumor vaccines, and plasma protein therapeutics (among others) — had been terminated shocked external stakeholders, many of whom had praised the OTP leadership team for recent modernization activities just days before at the cell and gene therapy roundtable discussion described in our last newsletter. FDA has not publicly shared the official reasons for removing Dr. Nicole Verdun (director) and Dr. Rachael Anatol (deputy director) from their positions.

Why it matters: Regulatory stability and scientific certainty are critical components of complex medical product innovation, which typically involves long timelines and multiple nonclinical studies. Changing applicable US federal policies in the middle of a CGT development program could adversely impact not only future patient access to the product candidate but also the developer’s financial prospects and valuation. The uncertainties created by both the June 18 press release and the dismissal of Drs. Verdun and Anatol risk a loss of consistency in the agency’s CGT policies as well as a productivity decrease with respect to application reviews, even as five CGT products are pending regulatory decisions in 2025.

Who may be affected: CGT developers and their investors are most directly impacted by these recent FDA actions, although patients and health care providers may be affected if anticipated curative or long-lasting CGT products are no longer able to come to market. How the agency handles upcoming 2025 product approval decisions may be an indicator of how concerned this industry should be following the OTP leadership shake-up. More information about the steps FDA will be taking after its review of “all relevant clinical trials” under the recent export-related announcement will inform how developers may need to adjust manufacturing or other aspects of potentially affected programs. Such changes have the potential to increase development costs if foreign laboratories or contract manufacturers must be replaced by US-based services. 

FDA’s New Voucher Program to Promote National Priorities Offers Some Marginal Efficiencies, Many More Questions

What is happening: FDA will begin issuing vouchers under a new program called the Commissioner’s National Priority Voucher (CNPV) as part of a limited-scale pilot starting sometime in the second half of 2025. The agency may designate a voucher for use with a specific drug or biological product candidate or grant an undesignated voucher that can be used with any candidate to companies aligned with certain national priorities. Based on the limited information available at this time, companies seeking a voucher must show that the product candidate, or the company itself, is aligned with one of the following “national health priorities”: 

• addressing a US health crisis; 
• delivering innovative cures for Americans; 
• addressing “unmet public health needs”; or 
• “significantly increasing the national security of the US” through domestic manufacturing.

FDA has not yet defined the specific criteria to demonstrate alignment, but considering the broader Trump administration’s priorities, it is likely that a commitment to, and taking definitive measures toward, manufacturing drug products domestically will figure prominently in the agency’s decision to award a CNPV. Concerns about the fairness of this approach may make it more likely that industry or public interest stakeholders could challenge the program’s legality in court or otherwise.

Using a voucher enables the applicant to submit chemistry, manufacturing, and control (CMC) information and proposed product labeling for the product candidate 60 days before the rest of the marketing application. FDA predicts that a decision on a CNPV-enabled application will be rendered in one to two months, compared with 10 to 12 months for a nonpriority drug or biologic application. As currently envisioned, the CNPV is not available for medical devices or drug-device combination products. Vouchers must be used within two years and are not transferrable (but can be retained after corporate ownership changes).

Why it matters: The CNPV program joins a lengthy list of tools FDA can use to expedite the review and approval of drugs and biologics, accelerating patients’ and providers’ access to new treatments. However, the requirements to obtain one of these “vouchers” and the benefits of the CNPV program are uncertain given how few details have been shared so far. For instance: 

• What happens when the agency needs to extend the review period if additional information is necessary or if the review is complex (both are common situations for novel products)? What if advisory committee feedback is required for the product candidate? 
• FDA review teams generally are not used to evaluating applications in a one-day “tumor board” style meeting, as proposed by Commissioner Makary for this program, so initial reviews may be less efficient than predicted. 
• Adding more accelerated reviews to existing workloads could overburden FDA’s already strained resources, and the compressed review time could lead to mistakes. 
• The small number of vouchers expected each year risks the agency not awarding them to truly innovative product candidates.

In addition, unlike FDA’s other expedited review programs, the CNPV program will award vouchers to specific investigational products or to drug companies before any marketing application is submitted. By comparison, traditional voucher programs (e.g., the Rare Pediatric Disease Priority Review Voucher) award tangible vouchers to companies that obtain approval for a product to treat a designated disease, and such vouchers may be used to expedite the review process of any future product or sold to another company, which can then “cash it in” with FDA. Moreover, existing voucher programs are open to any qualified product candidates, and the number of possible awards is not capped annually.

Who may be affected: The addition of a new expedited review pathway certainly benefits drug and biological product manufacturers seeking faster market access. Companies that obtain a CNPV and are able to launch a novel product sooner than expected will be able to grow revenue faster and maximize advantages from patent exclusivity periods. Because FDA plans to initiate the CNPV program as a pilot, companies may want to wait and see whether the voucher awards lead to actual review efficiencies and faster market access. As the program grows, any company interested in obtaining a CNPV should evaluate its alignment with the national priorities selected by FDA and ensure that product development timelines will allow it to use the voucher within two years. 

FDA’s Approach to Device Regulation Appears Largely Unchanged, a Big Plus for the Industry

What is happening: Amidst the fast pace of changes throughout FDA and the Department of Health and Human Services (HHS) more generally, the regulation of medical devices appears to be relatively stable. Although there has been some upheaval in the device space (e.g., Troy Tazbaz resigning as director of the Digital Health Center of Excellence in late January; the US District Court for the Eastern District of Texas striking down FDA’s final rule on laboratory developed tests (LDTs)), the agency’s Center for Devices and Radiological Health (CDRH) continues to pursue long-standing priorities, such as advancing device technologies intended for at-home use. In addition, the House Appropriations Committee recently directed FDA to “suspend its efforts to implement the rule and continue working with Congress to modernize the regulatory approach for LDTs,” which could signal a definitive end to the agency’s unilateral enforcement efforts while LDT legislative efforts may return.           

Why it matters: The consistency seen since January 2025 in the device sector provides a level of market predictability that differs from the drug and biologic centers within FDA, where constant policy and personnel changes have kept companies and investors guessing about broader implications for businesses. Dr. Michelle Tarver, the current CDRH director, who took over from the previous longtime director in 2024, has been with the agency for more than 15 years and does not appear to be seeking any immediate major changes in the device regulatory framework or the Center’s process for evaluating new devices.

Recently, both Commissioner Makary and Director Tarver have mentioned greater access to at-home device technologies (something industry stakeholders have focused on for years) as a continued policy priority. Companies developing new digital health products for home use should find reliable support from FDA and relative stability with respect to regulatory compliance requirements.

In the area of diagnostic testing, the elimination of the LDT final rule reestablishes the historical status quo in which FDA does not actively regulate tests developed in licensed clinical laboratories. Persistence of lower regulatory burdens on laboratories in the absence of FDA regulation may lead to short-term stability in the diagnostics sector, as well as greater test proliferation and innovation, but the recent court decision emphasizes the regulatory requirement differences between clinical laboratories and in vitro diagnostic product manufacturers. The House Appropriations Committee’s directive to FDA indicates that legislation to establish a more comprehensive regulatory framework for LDTs may be forthcoming, which could again disrupt the diagnostics industry. But it appears certain that both Congress and the agency will continue to support the expansion of diagnostic testing, especially tests designed for at-home performance or individual specimen collection (indeed, CDRH has authorized the marketing of several such tests in recent months — see here and here).

Who may be affected: The continuation of normal operations at CDRH will have a positive effect on device industry stakeholders as well as any investors in public or private device companies. Those developing medical products for home use may be uniquely positioned to benefit from the increasing focus on moving more medical products into at-home settings. Maintaining predictability in regulatory processes and FDA’s enforcement priorities allows companies to focus on innovation rather than scrambling to assess and maintain compliance with shifting agency policies. 

June 2025 Warning Letter Signals a Coming Wave of DSCSA Enforcement

What is happening: FDA issued a warning letter to a Florida-based wholesale drug distributor on June 5, 2025, citing numerous significant violations of the Drug Supply Chain Security Act (DSCSA). The letter followed an FDA inspection of the facility that had taken place a mere two months prior, highlighting the seriousness of the agency’s concerns about the distributor’s noncompliant business activities. Among other problems flagged by FDA, the facility did not: 

• hold required licenses from Florida (its resident state) or from Arkansas or Mississippi, where prescription drugs were shipped; 
• verify the licensure status of trading partners from which it purchased drugs; 
• respond timely or cooperate with multiple state or federal requests for information about suspect products; 
• have required systems in place or maintain necessary transaction information; and 
• perform required internal investigations after receiving notices from customers about potential suspect drug products. 
   

Why it matters: Although this is not the first DSCSA-related warning letter issued by FDA, the last one (from June 2023) came over a year after the facility inspection, and the violations cited, while problematic, did not reflect the same extensive failure to comply with the prescription drug security law. The speed with which the agency sent its written warnings to the Florida wholesale distributor almost certainly relates to the fact that Arkansas and Mississippi (through their Boards of Pharmacy) were investigating the company and had notified FDA of various security failures. As the last-remaining exemptions to full compliance with the DSCSA expire this year, entities subject to the law should ensure their systems, practices, and employee trainings are consistent with the applicable requirements and that business partners up and down the prescription drug supply chain are complying fully with the law. Because the law is finally coming into full force (although many of its requirements, such as trading partner verification, have been in effect for multiple years and were not altered by the current exemptions put in place last year), the June 2025 warning letter may be the first among a coming wave of similar actions.

Who may be affected: Prescription drug manufacturers, wholesale drug distributors, repackagers, and dispensers (e.g., pharmacies, hospitals) each have their own requirements under the DSCSA, but certain requirements — such as ensuring trading partners are appropriately licensed to ship or dispense prescription drugs — apply across the board. If they have not done so already, covered entities and their management teams should prioritize DSCSA-related compliance programs to avoid a similar public warning letter from FDA, state disciplinary actions to suspend or revoke licenses, and the foreseeable downstream risks from such government enforcement, such as shareholder lawsuits and commercial breach of contract actions. From this latest warning letter, it appears that the “new FDA” under Commissioner Makary will be prioritizing domestic prescription drug integrity and safety even as the agency focuses the public more on compliance activities related to foreign sources of such products. 

Psychedelic Drug Development Likely to Experience a Regulatory Boost

What is happening: Almost concurrently with the retirement announcement by the acting director of FDA’s Center for Drug Evaluation and Research (CDER), Jacqueline Corrigan-Curay, we learned that Dr. Mike Davis had been hired as CDER deputy director. Dr. Davis has significant prior experience working at the agency and has a specialized medical practice in the areas of psychiatry and psychopharmacology, making him well suited to execute on Secretary Kennedy and Commissioner Makary’s shared goal of getting more psychedelic therapies through the FDA review and approval process.

Why it matters: Psychedelic drug development to address difficult-to-treat conditions such as post-traumatic stress disorder, traumatic brain injury, and treatment-resistant depression holds substantial promise and has created hope for patients and practitioners alike, although the highly controlled nature of those compounds (e.g., psilocybin, ibogaine, MDMA, ketamine) makes them more complicated to research than drugs without known abuse and misuse potentials. In addition to Dr. Davis’s recent CDER appointment, HHS has hired as deputy general counsel an attorney who is active in psychedelic drug regulatory issues, further suggesting an increased focus from policy makers on this space. There may also be more collaboration between HHS and the Department of Veterans Affairs, given the disproportionate burden of such conditions on military veterans.

Who may be affected: Clinical researchers, patients, and drug developers that have been clamoring for more simplified and flexible regulatory pathways for psychedelic compounds to get to FDA approval and into more mainstream medical practice are excited by the Trump administration’s willingness to prioritize this category of products. Expect to see more guidance documents, regulatory tools (such as agency recognition of validated biomarkers), and tailored informed consent or ethical guidelines for clinical trials involving the use of mind-altering substances.