SEC-FDA Information-Sharing MOU: Implications for Pharma and Biotech

The US Securities and Exchange Commission (SEC) and the US Food and Drug Administration (FDA) recently signed a joint memorandum of understanding (MOU) establishing a formal, standing framework for the exchange of nonpublic information about FDA-regulated products and the companies that make, distribute, and sell them. This development makes the alignment of a company’s FDA regulatory record, investor disclosures, and policies and procedures regarding material nonpublic information particularly important.

The SEC has obtained information from the FDA in past enforcement investigations, but the new MOU signals that the SEC intends to increase its use of FDA-sourced information to sharpen its review of public disclosures and other potential violations. For those who trade in this sector, such as hedge funds and other market participants, FDA-sourced information could also factor into SEC data analytics used to generate, build, and support insider trading investigations.

On August 31, 2026, SEC Chairman Paul S. Atkins and Acting FDA Commissioner Kyle Diamantas executed the MOU, formally establishing a framework for the exchange of information between the two agencies “to enhance both parties’ ability to carry out their respective missions of protecting the public health and ensuring the integrity of the financial markets,” including, for the SEC, situations in which a company engaged in FDA-regulated activities “may have disseminated false or misleading statements to the investing community, such as representations about the status of FDA review, product approvals, clinical trial results, or other matters within the FDA’s regulatory authority that could affect investors’ decisions.” 

The MOU expressly contemplates the SEC’s use of FDA information in connection with “any enforcement investigation, proceeding, or civil action,” including materially misleading statements by a company on the noted topics above. Although the MOU does not create new obligations for companies, it alters the practical enforcement and disclosure landscape. The SEC now has a more defined process and channel to obtain the very information—development program feedback, clinical safety and efficacy correspondence, application status, and compliance information—that is often the subject of a life sciences company’s market-moving public statements. With the FDA now positioned to refer potential violations to the SEC’s Division of Enforcement through its Office of the Chief Counsel and to supply supporting nonpublic records, FDA-sourced facts may increasingly inform and corroborate SEC enforcement inquiries.

Moreover, although the MOU does not expressly discuss other examples of potential misconduct, it may facilitate information-sharing in support of other types of SEC investigations. For example, under Regulation Fair Disclosure (Reg FD), the SEC seeks to address selective disclosure of material nonpublic information by public companies to certain third parties such as analysts and institutional investors.

Even in the absence of any trading on the basis of this information, the SEC has brought enforcement actions against public companies that selectively share material nonpublic information with these third parties without making required disclosures to the broader investing public. The SEC-FDA MOU may enable the SEC to determine what material nonpublic information a public company possessed and when, potentially without alerting the company that the SEC is conducting an investigation.

In terms of insider trading, the MOU similarly could allow the SEC to create a timeline that aligns material nonpublic FDA-related information with trading data. The SEC’s sophisticated data analytics already allow its enforcement staff to analyze potentially suspicious trading ahead of market-moving announcements. With the benefit of information from the FDA, SEC staff could go back further in time and compare trading at the point when material nonpublic information was shared between the FDA and a public company. From there, SEC staff could review trading by company employees and their associates, as well as institutional investors and other traders who may have received the information through company sources.

The MOU contemplates that each agency will have a principal point of contact (POC) from the relevant office or division to facilitate the MOU. For the SEC, the MOU specifically requires at least one POC from the Division of Enforcement and at least one from the Division of Corporation Finance. With the inclusion of the Division of Corporation Finance, the MOU is not limited solely to the SEC’s investigatory and enforcement arm of the SEC and companies should expect that both Divisions will utilize the MOU to effect their respective missions.

With these developments in mind, companies should consider reviewing and strengthening existing practices to mitigate SEC enforcement and other disclosure-related risks. For example:

• Significant FDA interactions, submissions, and developments should be approached with an eye toward securities law compliance as these interactions proceed and related records develop. For example, companies should consider the accuracy and completeness of meeting minutes resulting from formal and informal FDA interactions not only as these may inform important product development decisions but also as they may impact a company’s record of what it knew and when. Contemporaneous records can be helpful in refreshing recollections and supporting a company’s actions, particularly after the passage of time.
• As part of its disclosure considerations, a company should consider its obligations to make a disclosure, namely, whether a development is something a reasonable investor would consider material. Materiality is a subjective standard, and many factors may come into play. Companies should have a defined and documented process for making these determinations. In addition to whether to make a disclosure, companies should ensure that any disclosure is not materially misleading either because of what is affirmatively said or because of what is left out.
• Companies should also ensure that they have adequate policies, procedures, and training concerning Reg FD and insider trading and periodically review and update these materials as appropriate.
• Market participants that engage in trading in the life sciences sector should consider any obligations they have under the federal securities laws, such as the requirements that investment advisers and broker-dealers have reasonably designed policies and procedures to prevent the misuse of material nonpublic information.
• While the MOU carries forward existing confidentiality obligations across agencies, new processes, differing standards across agencies, and potentially higher workloads may increase the risk of improper disclosure. Companies submitting information to the FDA should carefully consider thorough and clear marking of trade secret and confidential commercial information included in submissions to the FDA.

Under the MOU, the two agencies intend to share nonpublic information related to FDA-regulated products and activities and to the persons and firms that manufacture, distribute, and sell FDA-regulated products.

Under the MOU, each agency’s disclosure to the other agency is governed by the disclosing agency’s existing regulations, which, for disclosures made by the FDA, include 21 CFR 20.85, providing an avenue for disclosure of nonpublic information while retaining existing statutory protections relating to certain trade secret and confidential commercial and financial information. Consistent with the FDA’s regulation, nonpublic information disclosed under the MOU may not be further disclosed beyond the SEC without the FDA’s consent.