The Trump Transition Explainer: Everything you need to know about how the election of Donald Trump could affect FDA

Life Sciences | By Alexander Gaffney, Laura DiAngelo and Rachel Coe

[Updated on 11/15/2024]

The election of DONALD TRUMP as the next President of the United States is likely to have major impacts on the FDA and the life sciences industry. In this ongoing series of explanatory analyses, AgencyIQ answers some of the most common questions from our subscribers about what Trump and a newly elected Congress could mean for the FDA and specific areas of regulation.

What does Trump’s election mean for the reauthorization of FDA’s user fee programs?

By Alexander Gaffney, MS, RAC and Rachel Coe, MSC

Nearly half of the FDA’s budget is funded through application and registration user fees paid by industry. And ROBERT KENNEDY JR., a member of DONALD TRUMP’S transition team, has said that “user fees introduce potential conflicts of interest into the FDA’s regulatory process.”

User fee programs are incredibly important to the FDA’s funding stream. The FDA pulls resources from several sources each year, with user fees from industry being a primary source. Across the board, at $3.5 billion, user fees account for just under half of the FDA’s FY2025 $7.2 billion budget proposal. However, user fees are calculated based on a formula approved when the legislation authorizing the collection of these fees is passed. In each year that follows the five-year authorization of a specific user fee program, the previously agreed upon formula is used—along with any government-wide adjustments—to set the collection fees for that year. For the FDA’s largest and first user fee program, the Prescription Drug User Fee program (PDUFA), about 80% of collected user fee revenue comes from annual program fees charged against currently marketed products, while 20% comes from application fees for new products. The FDA has additional user fees for generic drugs, medical devices, biosimilars, nonprescription drugs, veterinary drugs, generic veterinary drugs, tobacco products and more.

All user fee programs could be at some degree of risk during a Trump administration. ROBERT KENNEDY JR., a member of Trump’s transition team, said this week that President Trump instructed him to root “the corruption and the conflicts out of the regulatory agencies” and to “return the agencies to the gold standard empirically based, evidence-based science and medicine that they were once famous for.” But there’s reason to believe that Kennedy believes that the agency’s user fee programs are evidence of corruption and conflict. Children’s Health Defense, where Kennedy has been Board Chair and Chief Litigation Counsel, states that “user fees introduce potential conflicts of interest into the FDA’s regulatory process.” And “Reform Pharma,” an initiative of the group, has developed a 10-point plan to “restore healthcare integrity.” The group means to “reform regulatory oversight agencies,” including the FDA, which it says currently serves as an extended arm of the pharmaceutical industry by way of its user fee funding mechanisms. Kennedy also said he wants to bring in “people who can run FDA, NIH and CDC in a way that restores public health.” Continued Kennedy: “I’ll bring in people to run those agencies like CALLEY MEANS and CASEY MEANS,” referring to siblings within the Make America Healthy Again (MAHA) movement. Calley Means told former Fox News host Tucker Carlson in an Aug. 2024 interview that he favors an executive order directing that the FDA “should stop being funded by pharma[ceutical companies],” referring to user fees, and also favors limits on FDA staff leaving federal employment to work for pharmaceutical companies – thereby closing the so-called “revolving door.”

Of course, stopping FDA user fee collection is easier said than done. Interrupting the inflow of this major source of FDA funding would result in the need to furlough significant numbers of FDA staff – or to increase taxes to make up the difference, a path that’s unlikely under the Trump administration or a Republican-controlled Congress. Because user fee programs are signed into law, it’s unclear whether an executive order would be a sufficient legal mechanism to reform the programs.

But FDA leaders and executives selected by Kennedy could wreak havoc on the user fee programs in other ways. Efforts to reauthorize the programs start years before the five-year span of the programs runs out. The PDUFA reauthorization process begins in July 2025, with a September 2025 kickoff meeting launching a negotiating process that typically lasts several months. By that time, we expect to see the appointment and confirmation of an FDA Commissioner and the appointment of several new senior policy advisors and leaders. The commissioner could elect to disrupt these negotiations, play hardball with industry, or even walk away from negotiations entirely, leaving the PDUFA program to collapse and end. [ For an explanation of how the PDUFA program will be reauthorized this next cycle, please read AgencyIQ’s analysis here.]

The pharmaceutical industry will likely get an early look at how FDA and Congress are looking at user fee programs in 2025. Timing means that the first user fee program set to be reauthorized during the Trump administration isn’t PDUFA – it’s OMUFA, the Over-the-Counter Drug Monograph User Fee program used to support the review of nonprescription drugs. FDA and industry recently concluded their negotiations over the program and released the text of the OMUFA II commitment letter detailing all the changes the FDA has committed to making to the program over the next five years in return for increased funding from the OTC drug industry. The program is set to expire on Sept. 30, 2025, and the Trump administration will be charged with shepherding the program through Congress next year.

PDUFA and MDUFA aren’t the only programs set to expire soon. The Generic Drug User Fee program (GDUFA), Medical Device User Fee program (MDUFA), and Biosimilar User Fee program (BsUFA) are all set to expire at the same time as PDUFA (on Sept. 30, 2027). All three programs make use of a program structure that is conceptually the same as PDUFA (industry pays FDA program and application fees; in return, FDA hires staff to review those products and commits to meeting timelines for review efficiency), and so issues passing OMUFA or PDUFA could quickly cascade to MDUFA, GDUFA and BsUFA, which typically begin their negotiations several months after those for PDUFA begin.

Disruption to the user fee system would be massively problematic for the pharmaceutical industry and the FDA. User fees aren’t just about funding – they’re also about efficiency and predictability. Prior to the advent of user fees, the FDA had such a lack of federal funding that many companies first sought drug approval in Europe before seeking approval in the U.S. – a problem referred to as “drug lag.” [ For an in-depth history of PDUFA, read this archived FDA report here.] Since the 1992 passage of the first PDUFA program, FDA has gone from a second-choice regulator to being oft-lauded as the global “gold standard” for drug review rigor and efficiency. FDA consistently approves products more quickly than its global counterparts, and nearly twice as fast as European regulators. If FDA were to lose access to user fees, its capacity for quick and thorough review would largely evaporate. Further, Industry stakeholders could no longer have expectations that products would be reviewed along specific timelines, that meetings would be held when expected, that pilot programs would roll out as anticipated, and more.

This regulatory uncertainty presents substantial risk for companies. Many life sciences companies, especially small ones, rely on predictable regulatory milestones to plan their expenditures, cash runways, and investments. For a smaller company with an 18-month cash runway, for example, any uncertainty about the timing of FDA’s drug review will throw off its go-to-market plan. For these firms, there’s no longer any assurance they will still have funding by the time FDA finishes its review – because there is no agreed-upon timeline.

Could HHS overrule FDA decision making or compel it to take certain actions?

By Alexander Gaffney, MS, RAC

The FDA is not an independent agency, and its actions may be overruled or superceded by the Department of Health and Human Services. AgencyIQ has a deep look at how HHS has previously interfered with FDA decision making and how it might exercise this authority in the future.

While the FDA is often seen as acting independently, it is actually not an independent agency in the way that the Federal Trade Commission or Environmental Protection Agency are. Rather, it is an agency under the Department of Health and Human Services (HHS) along with other major health agencies like the Centers for Disease Control and Prevention (CDC) and the Centers for Medicare and Medicaid Services (CMS).

Because of this, all FDA actions are technically able to be reviewed, approved and even reversed by HHS leaders. In fact, some FDA functions are technically contained within HHS, such as its Office of Chief Counsel, which is a part of HHS’ Office of the General Counsel despite being administratively contained within FDA’s Office of the Commissioner. This has previously resulted in a situation where FDA’s Chief Counsel stepped down, and both FDA and HHS simultaneously named acting chief counsels for the same position – a situation reported on by POLITICO in 2021.

Though HHS has the authority to overrule the FDA, in practice it has generally avoided doing so – except on rare occasions. Before President Trump first took office in 2017, the classic example of HHS interference in FDA affairs occurred in 2011, when then-HHS Secretary KATHLEEN SEBELIUS publicly overruled FDA’s approval of an over-the-counter version of Plan B (Plan B One Step) intended for use by “women 16 years and younger” without a prescription. Then-FDA Commissioner MARGARET HAMBURG issued a rare statement explaining and defending FDA’s decision to support approval, and explaining that Sebelius had issued a memo “invoking her authority under the Federal Food, Drug, and Cosmetic Act to execute its provisions and stating that she does not agree with the Agency’s decision to allow the marketing of Plan B One-Step nonprescription for all females of child-bearing potential.” Hamburg then explained that Sebelius had directed her to issue a Complete Response Letter – in effect, a denial requesting the application sponsor to obtain additional data – which FDA then did.

Sebelius’ letter made clear that HHS is in charge of FDA decisions, but that it commonly delegates such decision making to the FDA. “The Secretary of the Department of Health and Human Services is responsible, acting through the FDA Commissioner, for executing the Federal Food, Drug, and Cosmetic Act,” she wrote, referring to her authority under 21 U.S.C. 393(d)(2).

Under the Trump administration, however, this exceptional behavior became more common. In fact, during the coronavirus pandemic in particular, HHS frequently stepped in on FDA-related policy decisions. In one notable example, HHS revoked FDA’s authority to regulate certain laboratory-developed tests (LDTs) intended for use for Covid-19 testing. HHS also frequently stepped in to handle regulatory matters that would traditionally have been the sole remit of the FDA. For example, HHS – not FDA – decided to reclassify dozens of medical devices that had been subject to FDA oversight, thereby exempting the devices from oversight under the agency’s premarket notification process and allowing them to be marketed without prior FDA review. HHS also decided to give the Office of the Assistant Secretary for Health (OASH) the authority to review certain Laboratory Developed Tests (LDTs) on a voluntary basis. It rescinded FDA’s ability to collect OTC user fees on a temporary basis after concerns were raised by industry about the scope of the collection of user fees. It cancelled the FDA’s Unapproved Drugs Initiative, which was thought to be causing unintended consequences. HHS ordered FDA to provide additional information about the length of drug reviews, saying it wasn’t meeting an obscure statutory requirement to review all drugs within 180 days. HHS even terminated a communications contract that supported the hiring of a senior advisor to Commissioner Hahn, WAYNE PINES, as part of a spat with the former commissioner. The laundry list of political interference with FDA reviews and actions that fill a 79-page staff report published by the Select Subcommittee on the Coronavirus Crisis in August 2022, “ A ‘Knife Fight’ With the FDA: The Trump White House’s Relentless Attacks on FDA’s Coronavirus Response.” While several of these actions were reversed by the Biden administration early in its tenure, HHS officials under a second Trump administration could quickly reinstate them.

These actions provide a look at how a second Trump administration might move to quickly leverage HHS’ authority to dial back FDA’s independence and authority to achieve various goals. This authority could be used, for example, to overrule FDA staff on matters related to mifepristone, vaccines, Covid-19 products, LDTs, birth control products and more. While FDA staff may protest, there is little they could practically do aside from resign in protest. That has happened several times in recent history, such as when MARION GRUBER and PHILIP KRAUSE resigned from FDA in 2021 over the authorization of the Covid-19 vaccine booster shots, and the resignation of SUSAN WOOD, then the head of the FDA’s Office of Women’s Health, in 2005 after FDA leadership failed to approve nonprescription access to Plan B.

This is worth keeping in mind as President-elect Trump has promised to give ROBERT F. KENNEDY JR control over significant portions of his health policy portfolio. Even if Kennedy isn’t confirmed as FDA Commissioner or HHS Secretary, he could still direct HHS staff to compel FDA to take certain actions against the wishes of career FDA staff or agency leaders.

What will change for existing FDA policies that are priorities of the current administration?

Expect a sharp change in the FDA’s priorities after DONALD TRUMP begins his second presidential term. AgencyIQ lists several policies that have been FDA priorities in the Biden administration but that appear to run counter to Trump’s campaign statements and actions taken during his first stay in the White House.

By Laura DiAngelo, MPH

The FDA has many high-priority policies in the works that are either under development or on their way to implementation. These projects reflect the priorities of the current administration, the incoming Trump administration may take a different stance on much work that’s underway. Here are the issues that are top of mind.

First up: Artificial Intelligence (AI). The past two years have been pivotal in AI policy at the U.S. federal level, bolstered by the 2023 Executive Order (EO) from President JOE BIDEN on “Safe, Secure and Trustworthy” development and use of AI. At the FDA, the agency has been working on an AI strategy for regulating AI as a medical device, as well as the use of AI in drug development, surveillance and research.

Per President-elect DONALD TRUMP’s campaign platform, his administration “will repeal Joe Biden’s dangerous Executive Order” on AI and “In its place, Republicans support AI Development rooted in Free Speech and Human Flourishing.”

What does this mean for the current trajectory of AI policy in the U.S. at the federal level? That’s not entirely clear. Right now, it’s not known whether the work under the current EO will remain in place, or whether a new EO would focus on different activities and priorities. Additionally, federal agencies may have to pivot to address new directions from the new administration. In a recent reorganization, HHS recently consolidated AI policy work under the EO to establish the office of the Assistant Secretary for Technology Policy (ASTP). The ASTP will coordinate FDA efforts on an AI federal strategy for health care, including life sciences. If the 2023 EO is revoked, or replaced with a new EO that includes different activities or authorities, ASTP’s duties and mission may need to shift. Further, the 2023 EO tasked the National Institute on Standards and Technologies (NIST) with developing a robust series of guidelines and standards on AI, as an entity that helps industry and regulators understand and apply foundational concepts related to new technologies, including AI. NIST has undertaken much of this work already, but the future of these guidelines is unclear should the 2023 EO be revoked.

Second: Diagnostics reform and the Laboratory Developed Test (LDT) rule. In April 2024, FDA finalized a regulation that would end a long-standing policy of enforcement discretion over LDTs. The rule sets up a pathway to regulate LDTs as medical devices over the next several years, with a transition period through 2028. At that point, the FDA will require that LDT manufacturers comply fully with device regulations. While the future of the regulation is uncertain, and Trump has not directly addressed this policy so far, his first presidency did include a public fight with the FDA on the subject. The agency had sought to extend regulatory oversight of LDTs during the pandemic, with the first Trump administration overruling the agency’s policy – a policy then reversed early in the Biden administration. With the FDA’s LDT rule already facing legal challenges, it’s possible that the Trump administration will seek to revise, roll back or revoke the final rule. For now, however, it’s still in place – as are its associated deadlines.

Third: Diversity Action Plans (DAPs). In June 2024, FDA issued a new draft guidance on Diversity Action Plans (DAPs), an upcoming required component of certain regulatory submissions. Under a DAP, a product sponsor must include specific enrollment goals for certain research programs based on the racial and ethnic demographics of the population meant to use the products. Sponsors will also have to report the rationale for these goals and “an explanation of how the sponsor intends to meet such goals.” The agency was required to issue this guidance under provisions in the Consolidated Appropriations Act for 2023, which granted the FDA authority to require that these plans be submitted for certain products.

Notably, under those statutory provisions, the FDA is directed to issue a final guidance by around June 2025. For now, this requirement stands – as does the FDA’s statutory authority to require DAPs for certain submissions. Still, the first Trump administration issued an EO that barred the federal government from working with contractors that conduct “any form of race or sex stereotyping” – including diversity training. And while stumping in New Hampshire in January 2024, Trump set forward his administration’s intentions: “We will terminate every diversity, equity and inclusion program across the entire federal government.” While the FDA would currently still have to follow their directions under the 2023 appropriations bill and issue guidance on DAPs, exactly how the agency implements these requirements may be subject to a big facelift in the new administration.

This is far from an exhaustive list. Policies related to global research infrastructure, oversight and inspections, generics and authorities related to digital health may also be impacted by changing priorities – and we expect to learn more in the coming months.

How might MAGA and MAHA’s plans for FDA clash?

President-elect DONALD TRUMP has said he wants to let ROBERT KENNEDY JR. assume control of significant parts of his health policy portfolio. But unless he places restrictions on that control, parts of Trump’s Make America Great Again (MAGA) agenda may run headlong into Kennedy’s plans to Make America Healthy Again (MAHA). The FDA offers several notable flashpoints.

By Alexander Gaffney, MS, RAC

The first Trump administration’s oversight of the FDA had a generally predictable philosophy when it came to product oversight and approvals

FDA approvals were deemed to be generally too slow, not encouraging of sufficient competition, were marked by inefficiencies, and did not permit individuals to exercise enough control over their care.
The MAGA approach to regulation – accelerated significantly by both the Covid-19 pandemic and the 2017 passage of the FDA Reauthorization Act (FDARA) – resulted in some significant changes to the way FDA worked, including some changes which endure to this day. For example:

o Approval speed was a priority. This resulted in some of the fastest approvals ever made by FDA during the pandemic, as well as a push by HHS for FDA to provide additional information about the length of drug reviews. An application of this principal that stood out was the administration’s Operation Warp Speed plan, which among other things involved a Coronavirus Treatment Acceleration Program (CTAP). That program was modeled on FDA’s existing Real-Time Oncology Review Program (RTOR); under both programs, the FDA begins review of a critical drug’s data package as soon the agency receives any portions of a sponsor’s submission, with extra support provided by FDA regulatory staff to speed a drug’s review and potential approval. Elements of CTAP and RTOR (which also began during the Trump administration) have expanded into other FDA pilot program such as its STAR and START pilot programs.

o A Trump-era initiative pushed the FDA to leverage its user fee programs to promote drug competition and bring down prices. One of the most effective plans unveiled during the Trump administration was FDA’s Drug Competition Action Plan in 2017, which was intended to “encourage robust and timely market competition for generic drugs and help bring greater efficiency and transparency to the generic drug review process.” one of the central tenets of the plan was “improving the generic drug approval process” to make it more efficient; over time, such changes have been effected through the agency’s Generic Drug User Fee (GDUFA) program. FDA still maintains a webpage to highlight its progress against the Drug Competition Action Plan.

o Enhanced user fees: The Prescription Drug User Fee (PDUFA) program is one of the FDA’s most important sources of funding and important drivers of reforms and efficiencies. During the first Trump administration, the passage of FDARA also reauthorized the PDUFA program and provided FDA with a significant boost in non-appropriated resources. According to a five-year financial report at the time of the bill’s passage, the program was expected to bring in $911.3 million in FY 2018, increasing to $1.13 billion by FY 2022.

o Major legislative efforts: The first Trump administration fought for the passage of several landmark pieces of legislation. Perhaps the most notable was the Trickett Wendler, Frank Mongiello, Jordan McLinn and Matthew Bellina Right to Try Act – better known as the federal “Right-to-Try” Act. The law, modeled on similar state legislation, permits a drug company to make an investigational product available to a patient with a life-threatening disease or condition who has exhausted approved treatment options and is ineligible for a clinical trial for the drug. While the pathway is conceptually similar to FDA’s longstanding “Expanded Access” pathway, the RTT pathway includes a legal liability shield for participating companies, no requirement for the company to obtain review by an Institutional Review Board, the ability for the company to charge for access to the drug, and restrictions on the FDA’s ability to reference adverse events uncovered during the use of the RTT product during any subsequent product review for the purpose of approval. Trump continued to reference this legislation during his 2024 campaign.

But Kennedy’s plans for FDA apparently differ significantly from those of Trump’s first administration

Speaking broadly, gone would be a focus on faster, more flexible, and better-resourced FDA reviews. In its place would be a focus on slower and more rigid reviews backed by fewer resources – several examples follow.
Children’s Health Defense, the group for which Kennedy has served as chief litigation counsel, sued FDA in an attempt to revoke FDA’s EUA for Pfizer and BioNTech’s Covid-19 vaccine. The case, which featured Kennedy as a lead attorney, contended that FDA authorized Covid-19 vaccines too quickly.
Eliminating user fees: Kennedy has said he intends to appoint people to high-level agency positions like “CALLEY MEANS and CASEY MEANS,” referring to medical entrepreneurs (and siblings) within the Make America Healthy Again (MAHA) movement. MAHA is both a political action committee and a plank on RFK’s campaign website, now transformed into a page congratulating President-elect Trump for his victory and explaning that “Our People-Powered Movement is more powerful than Wall Street, Big Tech, Big Pharma, Big Food and the War Machine.”
Calley Means told media personality TUCKER CARLSON in an Aug. 2024 interview that he favors an executive order directing the FDA to “stop being funded by pharma[ceutical companies],” referring to user fees. “Reform Pharma,” an initiative of the Children’s Health Defense, has also developed a 10-point plan to “restore healthcare integrity,” with plans to “reform regulatory oversight agencies,” including the FDA, which it says currently serves as an extended arm of the pharmaceutical industry by way of its user fee funding mechanisms.
The Right-to-Try legislation provided pharmaceutical companies an explicit liability shield against lawsuits and also allowed them to limit disclosure of certain adverse event reports to FDA outside of annual summary reports. By contrast, the MAHA movement seems focused on weakening liability protections for vaccine manufacturers. Rep. CHIP ROY (R-Texas) has introduced legislation supported by Children’s Health Defense that would remove federal liability protections for Covid-19 vaccines. And Kennedy said he wants FDA to make more adverse event information about vaccines available. “I’m going to make sure scientific safety studies and efficacy are out there, and people can make individual assessments about whether that product is going to be good for them,” he told NBC News.
Kennedy came on board with Trump relatively late in this campaign cycle, and it’s been unclear what his role might be in the Trump administration. The public – and likely policy-makers within the Trump transition team – haven’t had much time to weigh these two visions of the FDA’s role against one another. On the one hand, the vision of the FDA during the first Trump administration represented a classically conservative approach to the agency and its role within a constrained federal government. In this view, the FDA should promote competition, reduce inefficiencies, maximize choice, and reduce the burden of government on taxpayers.
In comparison, the second Trump administration seems poised to adopt some of the positions advanced by Kennedy and the Make America Healthy Again (MAHA) movement detailed above. The Means siblings, in particular, espouse policy changes aimed at steering “more healthcare dollars to incentivize metabolic habits at the root of disease,” to include actions to ban direct-to-consumer pharmaceutical advertising and “reform insane Ag subsidies” to trim or ban federal subsidy of tobacco and “ultra-processed food,” which Calley Means interprets to mean corn, soy, and wheat. These MAHA proposals, along with the Kennedy-MAHA proposal to eliminate the FDA’s user fee-based support, seemingly contradict some of the MAGA orthodoxies of the first Trump administration.

It’s unclear which vision – MAHA or MAGA – will ultimately win out

For now, Trump has said he plans to let Kennedy “go wild on health. I’m going to let him go wild on the food. I’m going to let him go wild on medicines.” He also said Kennedy would be empowered to “focus on health” in his administration.
There are ample opportunities for clashes between MAGA and MAHA. Should FDA approve products more quickly to benefit patients (MAGA), or wait to accumulate the most evidence (MAHA)? Should companies be shielded from liability to encourage development, or intentionally exposed to it? Should FDA rely more heavily on user fees to reduce taxpayer obligations to fund the agency, or should those funds come from other sources (including taxpayers)? Should life sciences companies be offered a seat at the table in the interest of helping patients, or should regulators have more of an adversarial relationship with them? Should FDA be seen as promoting confidence about the medical products it regulates, or encouraging skepticism? Should the government regulate chemicals more loosely, or more stringently owing to their potential risks to human health?
These are not small differences in philosophy, and there are potentially significant political ramifications to how they are answered. It’s possible that the MAHA movement and its goals could run into fierce opposition in Congress as soon as specific proposals are advanced; few groups have as much clout and organizing prowess in Congress as advocates for cancer patients and those with terminal or rare diseases. Nearly every member of Congress hears regularly from sick patients and their advocates. And while some of those patients might eagerly support reforms to the FDA, others may have concerns that those same reforms would deprive the FDA of the resources it needs to review much-anticipated products effectively or efficiently.
Importantly, actions taken by Kennedy or his allies to eliminate to reduce industry-paid user fees could deprive the FDA of the resources it needs to conduct timely and efficient reviews of drugs, biologics and vaccines, thereby slowing approvals and reducing drug competition. That would be antithetical to some of the goals advanced in the first Trump administration. They may also stymie the efforts of Kennedy and MAHA in general. For example, cuts to FDA user fees (in addition to likely cuts from Congress to FDA’s budget) would reduce the agency’s ability to invest in the same adverse event monitoring systems for vaccines that Kennedy is so interested in leveraging.
It’s also worth keeping a close eye on the potential for personnel-related conflicts. During the first Trump administration, advisors and influencers in Trump’s orbit would often fall out of favor after a relatively short period of time and be dismissed from the administration. And without an additional term as President to run for, President Trump may not feel a strong need to keep Kennedy around through his full term. Further, while Kennedy may be tasked with selecting leaders for HHS and FDA, he is also a former Democrat. Kennedy may find it challenging to select potential agency leaders who have not spoken unfavorably about Trump in the recent past.