Regulatory Limbo

The FDA’s Great Intermission

In a world where pacemakers, peanut butter, wrinkle creams, and cold meds all depend on federal review or oversight, the government has — quite literally — left the chat.

On October 1, 2025, at 12:01 a.m. ET, the United States federal government entered a funding lapse (a “shutdown”) due to the failure of Congress to enact full‑year appropriations or a continuing resolution for fiscal year 2026. While the shutdown does not force a complete cessation of operations for the Food and Drug Administration (FDA), the agency is operating under a contingency (“lapse”) plan that constrains many of its activities.

In short, the FDA, normally a regulatory juggernaut, has found itself crouching behind a “Be Right Back” sign taped to the door of progress. We’ll discuss here the impact on industry, the current indications that some FDA personnel are beginning to return or be reinstated, and practical priorities and steps that companies should adopt during this period of regulatory uncertainty.

So, What Exactly is Regulatory Limbo, How Long Will this Continue, and When It’s Over, What Does it Really Mean?

Under the Antideficiency Act (ADA) and related guidance, when Congress fails to appropriate funds, agencies must cease non‑essential operations. Exceptions exist for “excepted” or “exempt” activities that protect life or property or are legally required (e.g., user‑fee funded).

Regulatory limbo refers to the constrained operational state the FDA enters during a government shutdown, in which only activities deemed “essential” or funded through existing user fee carryover can continue. This means routine regulatory functions — such as reviewing new submissions, conducting standard inspections, and advancing policy initiatives — are paused or significantly delayed.

The duration of this disruption is entirely dependent on Congressional action to restore federal funding. When the shutdown ends, the resumption of operations will not be immediate or seamless. The FDA will likely face a significant backlog of submissions, inspection requests, and communications, creating further delays as the agency works to restore full functionality and prioritize its workload. Companies should plan for continued disruption even after the official shutdown concludes. 

Ongoing Activities

• Ongoing review of medical product applications supported by carryover user fees (drugs, biologics, devices) as long as carryover funds last.
• Public‑health functions: recalls and market withdrawals; mitigation of drug shortages; adverse event surveillance; import screening for safety; “for‑cause” inspections where imminent threat exists.
  
  

Activities to pause or slow:

• The FDA cannot accept new submissions that require payment of user fees (e.g., NDAs/BLAs, ANDAs, 510(k)s, De Novo, PMAs) because legally it cannot collect new user fees prior to appropriations.
• Routine surveillance inspections (especially foreign firms or manufacturing sites) may be postponed or limited.
• Pre‐market review of novel food/animal feed ingredients, regulatory science research, policy development, staffing/hiring/training activities.
  
  

While user‐fee funds permit continued review of existing submissions, the carryover is finite. If the shutdown persists long‑term, even user‑fee supported review may slow or halt.

In addition, because many FDA review programs (PDUFA, MDUFA, GDUFA, etc.) rely heavily on user fees paid by industry, companies are impacted not only directly (in terms of review timelines) but indirectly (via agency staffing, backlog risk, regulatory predictability). Agencies may also apply enforcement back‑logs once funding resumes.

FDA Staff: Out, In, Maybe-ish?

While much of the FDA workforce has been furloughed, it’s not a total ghost town. Some staff tied to critical functions — think public health emergencies, recalls, or certain user-fee funded activities — are gradually trickling back in. A few reviewers are working remotely, others are cautiously reappearing in inboxes, and some are still caught in bureaucratic limbo, waiting for the green light (or at least a funded paycheck).

So, if you’ve emailed your FDA contact and haven’t heard back, it’s not personal — they might just be furloughed, reassigned, or buried under a shutdown-sized pile of unread messages that they are working to get through. But in recent days, we have seen an encouraging uptick in more substantive responses.  

Impact on Industry: Key Sectors and Risk Areas

Medical devices

• The inability to accept new 510(k), PMA, De Novo submissions means device companies face delays in clearance/approval.
• For submissions already in queue and paid, review may continue but risk of backlog remains. Companies should monitor communication with FDA and be proactive.

Food, dietary ingredients, animal feed

• The FDA has explicitly noted reduction in food safety operations: e.g., suspension of weekly updates to its CORE Investigation Table; pause of pre‑market reviews of novel food/animal feed ingredients.
• Import screening remains, but fewer inspections likely; routine food facility inspections are sharply reduced.
• Companies in this segment face heightened risk of food safety incidents, slower import clearances, potential delays in novel ingredient authorizations and export certifications.

Trade, imports and exports

• Because FDA is a partner government agency for many imported shipments, delays in clearance, hold‑ups at ports, or more stringent hold times may occur. We suggest building in extra lead‑time for imports.
• On the export side, certification processes for regulated products (especially food/animal) may slow or shift to state regimes, generating regulatory inconsistency.

What Companies Should Do and Prioritize

Given the circumstances described, industry participants should adopt a proactive stance. Key priorities include:

• Review and update internal regulatory timelines and launch plans

1. • Reassess product launch or submission timelines: If your submission depends on new user‑fee payment or new inspections, anticipate delay. Adjust milestone expectations accordingly.
   • For pipeline products, embed contingency buffers: e.g., add weeks/months for regulatory review, inspections, import/export certification delays.
   • Communicate with investors/partners: Ensure stakeholders understand the regulatory environment and potential impacts.

• Ensure responsiveness to FDA requests for existing submissions

1. • For applications already under review, maintain high responsiveness: reply promptly to FDA queries or deficiency letters, schedule meetings as requested—even if slower than usual. The agency remains working on continuing applications.
   • Confirm meeting logistics, questionnaires, scheduling: there may be delays or changes in meeting format.
   • Document any deviations or delays that occur due to agency staffing or timing problems.

• Strengthen compliance and quality systems

1. • Do not rely on reduced inspections to relax controls. “For‑cause” inspections or serious safety events will continue.
   • Review supply‑chain oversight (especially with food/consumer products): longer import hold times, less routine FDA inspection may place more onus on internal monitoring.
   • Maintain or enhance adverse‑event surveillance, recall readiness, and corrective/preventive action processes: if the agency delays routine surveillance, your internal systems become even more critical.

• Anticipate backlog and enforcement surge

1. • Plan now for the possibility that once full funding resumes, FDA may catch up by increasing inspection/outreach/enforcement. Entities that postponed or scaled back compliance should expect scrutiny.
   • Keep internal documentation of regulatory decision‑making during the shutdown: if deviations were made because of agency constraints, having records may mitigate liability or enforcement risk later.

• Manage import/export and supply‑chain risks

1. • For importers: build extra lead time for shipments subject to FDA clearance; anticipate port or customs hold‑ups.
   • For exporters: particularly in food/animal feed, monitor the status of export certification and any shift to state regulators or delayed federal certifications. Build contingencies with foreign buyers.
   • For perishable goods: longer hold‑times or inspection delays may increase spoilage risk; plan logistics accordingly.

• Maintain stakeholder and investor communications

1. • Prepare disclosure for public companies: regulatory review delays may qualify as material events, impacting “time to market” and investor expectations.
   • Provide transparent explanation of how the shutdown affects submission timelines, inspections, supply chain, and compliance risk.

• Monitor legislative and agency developments

1. • Stay abreast of Congressional activity on appropriations and user‑fee re‑authorizations: the earlier the funding is restored, the sooner full FDA operations resume.
   • Monitor FDA announcements of inspection resumption, backlog clearance, or additional staffing reinstatement. These may offer signals for when to accelerate launch plans or de‑risk operations.

• Update internal risk‑registers and scenario plans

1. • Include scenarios: (A) short shutdown (weeks) vs (B) extended shutdown (months). Each scenario should have planned mitigations (e.g., delayed submissions, longer supply‑chain lead‑times, increased internal audits).
   • For new product introductions: have fallback options if regulatory review is delayed (e.g., marketing in other jurisdictions, alternate supply routes, interim compliance modalities).

Regulatory Wrap-Up: What Now, What Next

The current federal government shutdown presents a complex regulatory risk environment for FDA‑regulated industries. While the FDA has taken steps via its contingency plan to continue essential operations, the disruption to regulatory review, inspections, import/export processes, and policy development is real and has meaningful industry consequences. That said, there are signs that the FDA is beginning to restore certain staff functions, which suggests a gradual return to operations—but the timeline remains uncertain.

Companies that treat this as a “business as usual” scenario risk under‑estimating operational, compliance and reputational risks. The prudent path is to adopt a heightened state of readiness: revise timelines and assumptions, reinforce internal compliance and supply‑chain oversight, plan for post‑shutdown backlog and enforcement, and maintain clear communication with stakeholders.

In short: assume delay, build in buffers, maintain vigilance, and position for recovery when the funding hiatus ends.

For questions on FDA regulatory compliance or enforcement, please contact us at info@garg-law.com.