On Aug. 31, 2026, the U.S. Securities and Exchange Commission (SEC) and the U.S. Food and Drug Administration (FDA) entered into a three-year memorandum of understanding (MOU), establishing a framework for sharing information related to FDA-regulated products and activities. The agreement is the latest development in the FDA’s broader initiative to increase transparency and accountability.
For life sciences companies, the practical implication is straightforward: the SEC is now better able to compare a company’s public narrative with its underlying FDA record.
What changed under the SEC-FDA agreement?
- A structured process. Each agency will maintain designated points of contact, a mechanism for receiving requests and a secure means of transferring nonpublic information.
- Filing reviews are expressly in scope. The SEC may use nonpublic FDA information in any public-company filing review, not only in enforcement matters. The FDA is not required to notify a company when its records are shared. Its designated contacts include the Division of Corporation Finance, which issues comment letters.
- A defined referral pathway. The FDA’s Office of the Chief Counsel leads referrals of potential violations to the SEC.
- Inspections are in scope. One of the FDA’s initial points of contact for the SEC is the Associate Commissioner for the Office of Inspections and Investigations.
What didn’t change?
Just as importantly, the disclosure standards that apply to public companies are unchanged.
- Existing legal authority remains the foundation. The agencies already had authority to share this information under existing federal regulations.
- Confidentiality protections remain. The SEC may not disclose nonpublic FDA information outside the agency without the FDA’s written permission.
- Protected information stays restricted. The FDA will not share trade secrets or confidential commercial information where federal statutes prohibit disclosure.
- The MOU does not create enforceable obligations. It describes an intended framework and remains subject to applicable laws, personnel and resources.
Heightened visibility and enforcement
In July 2025, the FDA published more than 200 complete response letters (CRLs), which identified deficiencies that prevent approval of an application in its current form. That first batch involved applications the FDA later approved. In September 2025, the FDA began promptly releasing newly issued CRLs and published 89 more tied to pending or withdrawn applications. After a brief pause early in 2026, the FDA resumed its publication efforts and through August 2026 more than 300 CRLs have been released.
In addition, there has also been a series of lawsuits and penalties levied against life sciences companies related to public disclosure of FDA related matters. Recent enforcement actions have resulted in millions of dollars in settlement payments and civil penalties, underscoring regulators’ focus on ensuring companies provide complete and accurate disclosures about clinical trial results and regulatory interactions.
These matters illustrate how disclosures can become misleading when material regulatory context is omitted, and how liability can and has reached individual companies.
Where exposure may arise
- Public disclosures: Risk factors, management’s discussion and analysis (MD&A), pipeline descriptions, earnings materials and legal proceedings may not fully reflect known regulatory developments.
- Financial reporting: Regulatory assumptions used in impairment, prelaunch inventory, revenue forecasts, going-concern assessments and contingent consideration may be inconsistent with information communicated to investors and auditors.
- Manufacturing and inspections: Form 483 observations, warning letters and remediation activities may affect supply, launch timing and related disclosures.
- Disclosure controls: Significant regulatory information may not reach the disclosure committee promptly and relevant functions may not be consistently involved in evaluating disclosure and financial reporting implications.
Five actions for life sciences companies to take now
The MOU does not create new disclosures requirements, but it should prompt life sciences leadership teams and boards to confirm that their regulatory communications, public disclosures and financial reporting assumptions are aligned. These five steps can help:
- Look back: Compare recent filings, earnings materials and investor presentations with the underlying FDA record.
- Reconcile and document: Link significant FDA-related statements to source documents, document materiality judgments and retain evidence of review and approval.
- Define escalation triggers: Establish protocols for clinical holds, CRLs, Form 483 observations, warning letters and significant FDA feedback.
- Align assumptions: Use one consistent view of regulatory developments across accounting estimates, board reporting, investor communications and auditor discussions.
- Engage the right stakeholders. Confirm that regulatory affairs, clinical, quality, legal, finance and investor relations are involved in evaluating significant FDA developments and related disclosures. The review should address whether management has considered the complete regulatory record, challenged potentially optimistic language and evaluated the implications for filings, financial reporting and investor communications.
What boards and audit committees should ask themselves
Boards and audit committees should consider adding FDA-related disclosure oversight to their pre-filing agenda. Critical questions include:
- What has changed in the FDA record since the last filing?
- Where does senior management judgment materially affect disclosure wording or timing?
- Are current approval, launch and commercialization assumptions still supportable?
- Would the filing remain balanced if the SEC reviewed every relevant FDA communication?
Building these questions into the pre-filing review now gives boards time to test disclosures against the full FDA record before these deadlines:
- November 9 or November 16, 2026 (depending on filer status): Third-quarter Form 10-Q filings
- March 1 to March 31, 2027: Fiscal 2026 Form 10-K filings
