DOJ Directive Signals FDA-Regulated Industries May Be Subject to Enhanced Scrutiny

U.S. Department of Justice (DOJ) Assistant U.S. Attorney General Colin McDonald, who heads the National Fraud Enforcement Division (NFED), issued "Directive 26-12: Corporate Enforcement in the Fight Against Fraud" on October 1, 2026. The directive was issued just over four months after the NFED was established. (See Holland & Knight's previous alert, "DOJ Fraud Division Issues New Corporate Enforcement Priorities," October 2, 2026). The directive also comes amid increased scrutiny by the U.S. Department of Health and Human Services of waste, fraud and abuse in federal healthcare programs, signaling that privately held drug and device companies may be the next focus of those enforcement efforts.

Though the directive outlines a broad enforcement strategy for NFED prosecutors, such as listing factors to be considered when determining whether to bring charges or negotiate pleas or other agreements, including reference to fraudulent activities that violate the Federal Food, Drug, and Cosmetic Act (FDCA) (21 U.S.C. 301) is notable, and any subsequent DOJ activities should be closely monitored by companies in U.S. Food and Drug Administration (FDA)-regulated industries.

The FDCA is the overarching federal law that governs the FDA's authority to regulate food, drugs, cosmetics, medical devices and compounded products. Reference to the law as part of the directive without a clear description of the specific violations or infractions that may warrant investigation suggests that any violation – large or small – may warrant heightened scrutiny and potentially result in legal action.

Although the FDA has the ability to pursue criminal investigations through its Office of Criminal Investigations or by partnering with the DOJ, the directive increases the likelihood that more cases may be handled jointly by the DOJ and FDA, and potentially brought by the DOJ instead of the FDA alone. Interagency collaboration on litigation could allow the FDA to draw upon or access additional resources to pursue criminal charges against drug, device or other companies with products regulated by the FDA. Given changes in staff capacity throughout the past two years, this could provide enhancements to the FDA's legal levers.

Conclusion

The DOJ's directive should be viewed as the Trump Administration's continued efforts to coordinate enforcement across federal agencies and reduce silos among federal regulators. A memorandum of understanding (MOU) between the FDA and U.S. Securities and Exchange Commission signed August 31, 2026, further underscores that enhanced enforcement involving FDA-regulated products and activities will touch multiple federal regulatory authorities.

Companies that manufacture, distribute, sell, import or administer regulated products should assess whether any conduct may be subject to enhanced scrutiny, particularly companies with integrated portfolios across the healthcare or drug supply chains. The DOJ has brought numerous actions against FDA-regulated companies this year and, based on the DOJ's action and MOU, expect the DOJ's heighted enforcement to only continue. Companies should also consider whether additional internal compliance efforts may be warranted related to required reporting or otherwise.

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