The head of the U.S. Food and Drug Administration (FDA) informed a pair of his subordinates on April 1 that the agency will not interfere with a new federal policy providing Medicare beneficiaries coverage for hemp-derived CBD products.
FDA Commissioner Dr. Marty Makary wrote in a letter on Wednesday that while the agency preserves its authority to regulate products containing hemp or hemp-derived compounds under the Food, Drug and Cosmetic (FD&C) Act, it will loosen its “enforcement posture” for certain CBD products eligible under the Centers for Medicare and Medicaid Services’ (CMS) CBD pilot program that commenced on April 1.
The new CMS policy allows up to $500 per year in coverage of doctor-recommended CBD products containing no more than 0.3% delta-9 THC and no more than 3 milligrams per serving of total THC (including delta-8, delta-10 and THCA) in orally transmitted form. Inhalable products are “expressly excluded.”
Coinciding with the CMS pilot program launch, Makary sent the letter clarifying the FDA’s enforcement discretion to Kyle Diamantas, the FDA’s deputy commissioner for human foods, and Dr. Tracy Beth Høeg, the FDA’s acting director of the Center for Drug Evaluation and Research.
“The CMS has signaled an intention to expand various coverage flexibilities to potentially include hemp-derived CBD products,” Makary wrote. “The FDA does not intend to enforce sections 502(f)(1) or 505 of the Federal Food, Drug and Cosmetic Act with respect to an orally administered, hemp-derived CBD product solely on the basis that it contains CBD.”
Those sections deal with labeling and interstate commerce requirements.
The commissioner provided four stipulations to the FDA’s new enforcement policy, including that such a CBD product is:
- manufactured, marketed and labeled in a manner that would be consistent with the dietary supplement framework, including bearing a supplement facts panel and structure/function claims;
- not contaminated;
- not packaged or labeled in a manner that would be attractive to or marketed for children; and
- provided to a beneficiary through a program of medical items or services payable under Title XVIII of the Social Security Act, under the direction of the patient’s treating physician, in a manner ancillary to the covered items or services furnished under such program.
This shift in the FDA’s position on consumable products containing cannabinoids comes more than seven years after the 2018 Farm Bill provided the agency with the power to establish a regulatory framework for CBD products. But the FDA never acted on that authority.
Without clarity or guidance from the FDA, many CBD products on the market today aren’t accurately tested and labeled, and good manufacturing practices aren’t always followed.
Instead, the FDA has regularly sent warning letters to companies that it claims are illegally selling CBD-containing food and beverage products.
Jonathan Havens, a partner at Saul Ewing LLP who chairs the firm’s regulatory and compliance practice, said the fourth condition outlined in Makary’s letter is “key,” adding that it does not open the floodgates, “but it does mark a meaningful shift” in the FDA’s posture.
“By tying enforcement discretion to reimbursability, FDA effectively brings CMS policy into play,” Havens said. “Yet FDA references a 0.4 mg THC per container threshold drawn from impending federal intoxicating hemp ban legislative language that goes into effect this November, while CMS guidance permits up to 3 mg of THC per serving in certain contexts. The result is a clear policy tension.”
The forthcoming federal ban on intoxicating hemp products will be implemented on Nov. 12, prohibiting any products containing more than 0.4 milligrams of THC “per container,” as well as those containing “synthetic” (e.g., delta-8 THC) or “unnatural” (e.g., HHC) cannabinoids.
The legislation, which President Donald Trump signed in November as part of a deal to end the government shutdown, mandated the FDA to publish a list of natural and synthetic cannabinoids and provide a definition for “container” within 90 days, or by Feb. 10, a deadline that has come and gone.
While the CMS allowance of hemp-derived products to contain up to 3 milligrams of THC per serving collides with the forthcoming federal ban, the CMS indicated in its new policy that it will “adjust its definition in accordance with the law.”
This means for the next seven-plus months, the CMS pilot program will operate under its own THC potency rules for eligible CBD products.
“Could a product be CMS-compliant yet fall outside FDA’s enforcement discretion policy due to THC content? Today’s letter doesn’t fully resolve that question,” Havens said. “Bottom line: A meaningful step but far from a full opening of the market. Stakeholders operating at the intersection of FDA’s and CMS’s policies will need to navigate carefully.”
Separately, the FDA submitted a proposed rule on CBD product compliance and enforcement policies, White House officials revealed in March. While the FDA’s proposed policy has not been published, the White House Office of Management and Budget’s (OMB) Office of Information and Regulatory Affairs (OIRA) is hosting a series of meetings this week and next week with industry stakeholders who requested meetings pertaining to the policy change.
Also in the mix, Smart Approaches to Marijuana (SAM), a cannabis prohibitionist group, filed a lawsuit on March 30 seeking to stop the CMS pilot program altogether, naming CMS Administrator Mehmet Oz and Health Secretary Robert F. Kennedy Jr. as defendants. Although a federal judge denied SAM’s motion for a temporary restraining order, the U.S. District Court for the District of Columbia scheduled an April 20 hearing to consider a preliminary injunction.
