As Prescribed

The US Food and Drug Administration (FDA) recently published two new draft guidances to implement provisions of the Food and Drug Omnibus Reform Act (FDORA) aimed at refining the accelerated approval pathway. These guidances seek to address regulatory challenges and enhance oversight of drug products granted accelerated approval. Additionally, a recent report from the Office of the Inspector General (OIG) underscores FDA’s efforts in refining the accelerated approval pathway. These efforts raise important implications for the rare disease community.

Private foundations providing support, resources, and advocacy for individuals and families affected by rare diseases have played an important role for more than 30 years in the advancement of treatments for rare diseases. Much of this support has been in the form of grants to nonprofit institutions to help fund research on promising treatments.

The value of merger and acquisition (M&A) deals of rare disease companies has increased significantly over the past few years (from $18.9 billion in 2019 to $50.6 billion in 2022 according to a 2024 article in Nature Reviews Drug Discovery). This combined with recent billion-dollar acquisitions in the rare disease space have piqued the interest of large pharmaceutical companies, as well as investors, and may be indicative of further growth of this life sciences sector in the years ahead. This article analyses some of the key challenges faced by parties to an M&A transaction in the rare disease space and outlines strategies that can be deployed to ensure a successful closing.

Patient assistance programs (PAPs) emerged to help patients who lack health insurance or prescription drug coverage obtain critical, and often, life-saving medications. This is especially true for rare disease patients, whose medications are typically costly, such that even affording copay or coinsurance payments can be a prohibitive challenge. However, for various reasons, PAPs have come under intense scrutiny from the US Department of Health and Human Services Office of Inspector General (HHS OIG) under theories that the subject programs run afoul of, among others, the anti-kickback statute, and civil monetary penalties laws, which expressly prohibit any person from offering or transferring anything of value to a government beneficiary that the person knows or should have known is likely to influence a beneficiary’s selection of a particular provider, practitioner, or supplier.

As we discussed in our blog post last week, 2024 saw the Department of Health and Human Services Office of Inspector General (HHS OIG) provide more concrete regulatory guidance for programs sponsored by pharmaceutical manufacturers that provide financial assistance and free genetic testing and counseling services to patients suffering from rare diseases. While the favorable treatment from HHS OIG is a positive development for stakeholders and patients, the Advisory Opinions should not be interpreted as permission slips for stakeholders to push the limits of facilitating testing, assistance, or treatment of federal healthcare program beneficiaries. Recent False Claims Act (FCA) enforcement developments demonstrate that stakeholders should carefully consider the structure and risk associated with providing assistance to patients, regardless of disease state.

In response to calls from industry stakeholders for increased innovation, coordination, and tailored regulatory approaches to the development of treatments in rare disease, in recent years the US Food and Drug Administration (FDA) has established a number of rare disease-focused programs within the agency. Building on other recent FDA initiatives such as the Center for Drug Evaluation and Research (CDER) Accelerating Rare disease Cures (ARC) Program and the Center for Biologic Evaluation and Research (CBER) Rare Disease Program, FDA expanded its rare disease toolkit to include its Rare Disease Innovation Hub in 2024 to serve as a point of collaboration between CDER and CBER with the overarching goal of enhancing collaboration across centers to improve patient outcomes and addressing common challenges in drug development for rare diseases.

Several members of our firm’s life sciences team were on the ground at the 43rd Annual J.P. Morgan Healthcare Conference in San Francisco from January 13 to 16, 2025. It was an exciting and sunny four days, during which key players from across the life sciences industry gathered to engage in deal discussions and consider upcoming trends for the pharmaceutical, biotechnology, and healthcare industries. Although there was a notable increase in the level of security at the conference given recent events, the overall sentiment of the conference was one of optimism.

The US Food and Drug Administration (FDA) recently issued a notice of noncompliance to the FADOI Foundation, citing the organization’s failure to submit required clinical trial results to ClinicalTrials.gov. The notice reflects FDA’s increasing attention toward noncompliance with the agency’s requirements for submission of clinical trials information and may signal an increase in enforcement that we may see from FDA going forward.

The life sciences industry has long been at the forefront of innovation, and 2025 promises to continue this trajectory with exciting developments in intellectual property (IP), licensing, and mergers and acquisitions (M&A). As the sector navigates a dynamic landscape of scientific advancements, economic pressures, and regulatory changes, stakeholders are increasingly leveraging strategic transactions to gain a competitive edge.

As the healthcare and life sciences industry gears up for the highly anticipated JP Morgan Healthcare Conference later this month, stakeholders across the sector are focusing on key trends and strategies to make the most of this unparalleled networking and deal-making event. To help attendees make the most of the 2025 conference and related events, Morgan Lewis recently hosted its second annual Pre-JPM Conference Networking Event featuring a panel discussion of industry leaders, who offered insights into what they are prioritizing in the run-up to the conference and how they are positioning themselves for a successful conference.