Reducing Fraud and Lowering Barriers to the Production of Drugs in Shortage by Outsourcing Facilities

The U.S. Food and Drug Administration (FDA), through its Center for Drug Evaluation and Research (CDER), Office of Compliance (OC), and Office of Compounding Quality and Compliance (OCQC), is announcing a grant opportunity titled "Reducing Fraud and Lowering Barriers to the Production of Drugs in Shortage by Outsourcing Facilities." This Notice of Funding Opportunity (NOFO) seeks to address critical gaps in the drug supply chain and respond to persistent shortages by enabling the development of infrastructure and programs that promote safe and sustainable production of medications by outsourcing facilities. This initiative aims to increase the supply of essential drugs while mitigating risks of health fraud. Drug shortages have long posed significant risks to public health by prompting providers to seek alternatives that may include counterfeit or substandard therapies. These vulnerabilities, particularly in the case of critical drugs such as controlled substances, cardiac medications, and IV fluids, have presented opportunities for fraudulent and unsafe products to enter the supply chain. Outsourcing facilities, created under Section 503B of the Drug Quality and Security Act of 2013, are held to higher manufacturing standards and can compound medications on the FDA drug shortages list without individual prescriptions. These facilities offer an avenue to provide legitimate supplies of medications during shortages and are poised to be critical players in stabilizing the drug supply chain. The grant will fund research and the establishment of a sub-grant program. The initial phase involves identifying drug products first approved by FDA in 2000 or earlier, or included in the 2020 FDA List of Essential Medicines, that are prone to persistent shortages and/or fraudulent activity such as counterfeiting or supply diversion. The findings are to be reported to the FDA. The second phase will support the development of a sub-grant program that will provide financial assistance to outsourcing facilities engaged in the development and production of drugs identified in the first phase. The selected grantee will be responsible for designing eligibility criteria, issuing requests for proposals, managing subawards, monitoring results, and reporting metrics back to the FDA. Up to $3,000,000 in total funding is available for this opportunity in FY 2025, with a maximum of two awards expected. Each project can span a period of up to three years, and clinical trials are not permitted under this NOFO. The application process follows standard federal grants submission procedures, requiring registration in several systems including SAM.gov, Grants.gov, and eRA Commons. Applications must conform strictly to the instructions provided in the application guide and this NOFO. No late submissions will be accepted. The opportunity opens for submissions on July 23, 2025, and all applications must be submitted by August 8, 2025, by 11:59 PM local time. There is no Letter of Intent requirement. Review of applications will be based on FDA-specific criteria focusing on significance, investigator qualifications, innovation, approach, and environment. Applications must clearly demonstrate the applicant’s capacity to perform shortage-related research, establish and manage subawards, and monitor outcomes effectively. Organizations with potential conflicts of interest, such as those primarily serving outsourcing facilities, must disclose such relationships. Eligibility is broad and includes public and private higher education institutions, nonprofits, for-profit organizations including small businesses, and various levels of U.S. governmental entities. Foreign organizations are not eligible to apply, and cost sharing is not required. The lead applicant must be an experienced individual capable of leading a research and program development effort of this scope. For assistance, potential applicants may contact Meghan Murphy (meghan.murphy@fda.hhs.gov) for scientific/research questions or Patrick Johnson (patrick.johnson@fda.hhs.gov) for grants management queries.

Applicants should ensure compliance with FDA-specific requirements and submit early to avoid rejections.