On February 3, 2026, President Trump signed into law the Mikaela Naylon Give Kids A Chance Act as part of the Consolidated Appropriations Act (CAA) of 2026. The CAA codifies FDA's interpretation of the scope of orphan drug exclusivity that was called into question by recent court decisions, reauthorizes the Rare Pediatric Disease Priority Review Voucher Program until 2029, and puts FDA authority to enforce PREA obligations on par with that of other postmarketing requirements.
Congress addresses the Catalyst decision and codifies FDA's interpretation of the Orphan Drug Act
The CAA codifies FDA's longstanding interpretation of the Orphan Drug Act (ODA) by limiting the scope of seven-year exclusivity to the indication ultimately approved for an orphan designated product. The amendment reverses the Eleventh Circuit's controversial decision in Catalyst Pharms., Inc. v. Becerra. As amended, the ODA now specifies that orphan drug exclusivity prevents the approval of the same drug for the “same approved use or indication within such rare disease or condition.” The statute further defines “approved use or indication” to mean the “use or indication approved under section 505 of this Act or licensed under section 351 of the Public Health Service Act for a drug designated under section 526 for a rare disease or condition.” Previously, the statute stated that orphan drug exclusivity prevents the approval of the same drug “for the same disease or condition.”
In the 2021 Catalyst case, the Eleventh Circuit interpreted the ODA to substantially broaden the scope of orphan drug exclusivity. In that case, FDA granted orphan drug exclusivity to Catalyst's Firdapse (amifampridine) for the treatment of Lambert-Eaton Myasthenic Syndrome (LEMS) in adults. FDA later approved another amifampridine product for pediatric LEMS during Firdapse's exclusivity period, reasoning that Firdapse's exclusivity extended only to its specifically approved indication—adult patients. Catalyst challenged the approval, arguing that its orphan drug exclusivity covered the entire designated orphan disease (LEMS), including pediatric patients, because the statute used the broad term “same disease or condition” when referring to the scope of exclusivity.
The Eleventh Circuit agreed, holding that, under the plain statutory language, orphan drug exclusivity blocks approval of the “same drug” for the full designated disease or condition, not only the approved indication. In response to the decision, FDA withdrew the pediatric approval of the other manufacturer's amifampridine product. However, FDA made clear in a Federal Register notice that it disagreed with the Catalyst decision and would continue to apply its indication-specific framework for exclusivity to other cases. Subsequently, FDA's interpretation was successfully challenged again in Neurelis Inc. v. Makary, which currently is on appeal before the DC Circuit. FDA has urged Congress to clarify the statute—an effort that had previously stalled but has been addressed by the CAA's amendments to the ODA.
The amendments are effective immediately and, by their terms, apply to any drug designated under section 526 of the federal Food, Drug and Cosmetic Act (FDCA) “regardless of the date on which the drug was so designated, and regardless of the date on which the drug was approved . . . or licensed.”
Reauthorization of the Rare Pediatric Disease Priority Review Voucher Program
Rare pediatric disease priority review vouchers (PRVs) are granted to sponsors of therapies that treat rare “serious or life-threatening diseases in which the serious or life-threatening manifestations affect individuals aged from birth to 18 years.” The primary benefit of PRVs is the promise of an expedited review process. Specifically, sponsors may use the voucher to obtain priority review on a subsequent application submitted under 505(b)(1) of the FDCA or section 351 of the Public Health Service Act, i.e., to obtain agency action on the application within six months after the 60-day filing period (for a new molecular entity) or within six months after receipt (for a non-NME). A significant benefit of the voucher is its transferability—grantees are permitted to sell their vouchers to other companies, frequently in $100 million-plus transactions.
A key limitation of the Pediatric Priority Review Voucher Program was a sunset date limiting the period in which these vouchers could be issued. Prior to reauthorization of the program, voucher eligibility was restricted to those products that received rare pediatric disease designation by December 20, 2024, and that were approved by September 30, 2026.
The CAA extends FDA's authority to grant rare pediatric disease PRVs until September 30, 2029. Unlike the previous sunset date, the CAA does not restrict issuance of PRVs to products designated as a drug for a rare pediatric disease prior to a specific date. Rather, it provides only that FDA may no longer issue vouchers after September 30, 2029.
The reauthorization of the program also makes a key change to the operational and logistical aspects of using a rare pediatric disease PRV. The user fee payment for an application that uses such a voucher is now due upon submission of the application, rather than upon submission of the statutorily required notification of intent to use the voucher.
Finally, the CAA directs the Government Accountability Office to issue a report on the effectiveness of the program in the development of rare pediatric disease drugs, including a review of the indications for which the voucher was awarded, whether an unmet need was met by such approval, the value of each voucher if transferred, the size of the company using the voucher, and other metrics for use of the voucher.
As of November 2025, FDA issued 63 vouchers across 47 rare pediatric diseases. FDA issued 11 of those vouchers in 2023, the highest number since the start of the program. In 2024, the original designation cutoff date, FDA issued only nine vouchers, and, in 2025, that number dropped to four vouchers. The reauthorization of the program ensures that the incentive framework intended to support the development of rare pediatric diseases remains available to drug developers. This legislative action, following a period of uncertainty regarding the program's status, restores clarity around its applicability going forward.
New teeth to enforce PREA requirements
The CAA strengthens FDA's ability to enforce the Pediatric Research Equity Act (PREA), which requires sponsors to conduct pediatric studies for certain drug and biological products. Historically, FDA's enforcement of PREA requirements was limited to issuing public non-compliance letters, leaving FDA with little practical leverage to ensure timely completion of pediatric studies.
The CAA now authorizes FDA to impose civil monetary penalties on sponsors that demonstrate “a lack of due diligence” in meeting PREA requirements. Penalties may be imposed after FDA issues a non-compliance letter and provides sponsors with a 45-day period to respond. If, after reviewing the response, FDA concludes the sponsor demonstrated a lack of due diligence, the responsible person may be subject to penalties of up to $250,000 per violation (capped at $1 million for all such violations adjudicated in a single proceeding). The CAA also allows escalating penalties for ongoing violations—starting at $250,000 for the first 30 days after FDA issues written notice, and doubling every subsequent 30-day period, up to $1 million per 30-day period and $10 million total for all such violations adjudicated in a single proceeding. This change puts FDA's PREA enforcement tools on par with those for addressing violations of the FDCA relating to post-marketing studies, clinical trial requirements, and risk evaluation and mitigation strategies for drugs. The penalties may be imposed for failures that occur starting around August 2026.
[View source.]
