FDA’s proposed mandatory Generally Recognized as Safe (GRAS) notification rule would create both transitional and recurring costs for companies relying on the GRAS pathway. In its Preliminary Regulatory Impact Analysis (PRIA), FDA estimates the proposed rule would have a 10-year present value cost of approximately $89.6 million at a 3% discount rate, with a lower estimate of $34.9 million and an upper estimate of $210.0 million. FDA estimates annualized costs of approximately $10.5 million per year using the same discount rate.
The significance of FDA’s analysis extends beyond the headline cost estimate. The proposed rule would shift certain GRAS-related expenditures from discretionary regulatory activities to costs associated with maintaining access to the GRAS pathway. Companies that might currently reach an independent GRAS conclusion without notifying FDA would generally need to prepare an FDA notification, while companies with eligible legacy GRAS uses could incur transitional costs associated with the proposed streamlined submission process. FDA would also incur costs to review the resulting submissions.
FDA’s estimates are preliminary and depend on assumptions about the number of existing independent GRAS conclusions, affected companies, future submissions, labor requirements, and other variables. The economic analysis is therefore best understood as an initial model of the potential financial impact rather than a final determination of what mandatory GRAS notification will cost industry.
FDA’s August 2026 proposal to establish mandatory GRAS notification would change more than the administrative process associated with GRAS conclusions. If finalized substantially as proposed, it would change the economics of relying on GRAS by requiring certain regulatory activities that are discretionary under the existing notification framework.
Under the current system, a company may conclude that the intended use of a substance is GRAS without submitting that conclusion to FDA, provided the applicable statutory and regulatory requirements are satisfied. FDA’s proposal would generally require notification for uses that currently may rely on an independent GRAS conclusion, while establishing a time-limited streamlined submission pathway for certain qualifying uses already in commerce.
The financial implications of that change are examined in FDA’s Preliminary Regulatory Impact Analysis, which estimates the costs that industry and FDA could incur if mandatory notification is implemented. FDA’s primary estimate places the 10-year present value of those costs at $89.6 million using a 3% discount rate, but the Agency’s analysis also identifies substantial uncertainty around that figure.
The central financial issue for industry is therefore not simply the $89.6 million estimate. The more consequential change is that mandatory notification could make FDA-facing submission preparation a recurring component of the GRAS pathway, while simultaneously creating a one-time transition for a potentially large population of substances already marketed on the basis of independent GRAS conclusions.
FDA estimates that the proposed mandatory GRAS notification rule would result in approximately $89.6 million in present-value costs over 10 years, expressed in 2024 dollars and calculated using a 3% discount rate. FDA’s lower estimate is $34.9 million and its upper estimate is $210.0 million, demonstrating the degree of uncertainty surrounding the economic model.
Using a 7% discount rate, FDA estimates a 10-year present value of approximately $82.3 million, with a range of $31.5 million to $195.9 million. The corresponding annualized estimates are approximately $10.5 million per year at a 3% discount rate and $11.7 million per year at a 7% discount rate.
| Estimated Economic Impact | FDA Primary Estimate | FDA Estimated Range |
| 10-year present value — 3% | $89.6 million | $34.9M–$210.0M |
| 10-year present value — 7% | $82.3 million | $31.5M–$195.9M |
| Annualized cost — 3% | $10.5 million/year | $4.1M–$24.6M/year |
| Annualized cost — 7% | $11.7 million/year | $4.5M–$27.9M/year |
These estimates represent the expected economic cost of implementing the proposed regulatory framework rather than a projected amount that companies would pay directly to FDA. FDA’s model incorporates costs incurred by affected businesses as well as government resources required to review the increased volume of submissions.
The distinction is important because the proposed rule changes where regulatory resources must be spent. Under the existing framework, a company that independently concludes that an intended use is GRAS may choose not to incur the additional administrative costs associated with FDA notification. Mandatory notification would generally eliminate that choice for future qualifying GRAS conclusions, making submission preparation part of the expected cost of using the GRAS pathway.
FDA’s estimated financial impact is driven by two different categories of regulatory activity: one-time costs associated with implementing the new framework and addressing qualifying substances already in commerce, and recurring costs associated with future GRAS notifications.
The one-time costs include reviewing and understanding the final rule, revising internal standard operating procedures, and preparing streamlined submissions for eligible substances, for firms that choose to use this proposed one-year option.. FDA also recognizes that manufacturers in non-English-speaking countries could incur translation expenses when preparing submissions.
Recurring costs would arise because companies reaching new GRAS conclusions after the effective date would generally be required to prepare and submit notices that might otherwise have remained independent conclusions. FDA would correspondingly incur annual costs to evaluate those additional notices.
The economic significance of the proposal therefore comes from the combination of a potentially large transition exercise and a permanent change in regulatory practice. The transition costs would be associated with the proposed one-year option for qualifying pre-existing uses. That option would let firms submit streamlined information instead of initially submitting a full GRAS notice; it would not require every legacy conclusion to be resubmitted through the streamlined pathway. Uses that do not qualify for an exception may still require a GRAS notice under the proposed framework..
FDA’s preliminary economic analysis does not identify a new company-paid FDA user or review fee for submitting a GRAS notice. The costs FDA expects to incur when reviewing additional notices are included in the regulatory impact analysis, but those government review costs should not be interpreted as fees that would be charged directly to the notifier.
For industry, the proposed rule instead creates costs associated with preparing, supporting, reviewing, maintaining, and submitting GRAS documentation. Depending on the circumstances, those activities may require regulatory personnel, toxicologists, scientific reviewers, literature assessments, exposure calculations, administrative resources, outside consultants, or other technical expertise.
This distinction is particularly important when evaluating the financial impact of mandatory notification. The relevant question for most companies is not how much FDA would charge to receive a GRAS notice, but how much work would be necessary to ensure that a GRAS conclusion is scientifically defensible and organized appropriately for submission to FDA.
The size of the existing independent GRAS population is one of the most important variables in FDA’s economic model because those substances represent the potential legacy population that would need to be considered during implementation.
FDA acknowledges that the exact number of substances currently marketed on the basis of independent GRAS conclusions is unknown. For its analysis, FDA assumes that between 1,000 and 3,000 human and animal food substances are currently being used based on independent GRAS conclusions and adopts the midpoint of 2,000 substances as its primary estimate.
The uncertainty surrounding that population helps explain the wide range in FDA’s overall cost estimate. A materially larger or smaller legacy population would change the number of companies potentially preparing streamlined submissions and, consequently, the resources required by both industry and FDA.
The proposal attempts to reduce that transitional burden through a time-limited streamlined submission mechanism for certain qualifying uses already in commerce. Rather than treating every existing independent GRAS conclusion in the same manner as a new GRAS notice, the proposed framework would allow eligible companies to submit a more limited set of information during the specified transition period.
For companies with established GRAS portfolios, the financial impact of the rule could therefore depend substantially on how many existing conclusions qualify for the streamlined pathway and how readily the information required for those submissions can be assembled from existing records.
The longer-term economic impact of the proposal comes from GRAS conclusions that would otherwise remain outside FDA’s voluntary notification program.
FDA’s historical data illustrate the difference between the existing notification system and the broader GRAS market. As of March 2025, FDA reported 1,309 filed GRAS notices, including 1,234 notices for human food substance uses and 75 for animal food substance uses.
FDA’s economic model anticipates that mandatory notification would generate approximately 98.5 additional notices annually under its primary estimate, with an estimated range of approximately 60 to 137 additional notices per year. These would represent notices for GRAS conclusions that, under the existing voluntary framework, might otherwise have been made independently without submission to FDA.
The financial consequence is a structural increase in the amount of GRAS work that must ultimately be prepared for regulatory submission. Companies would still need an adequate scientific basis to establish GRAS status under the existing framework, but mandatory notification would add a recurring FDA-facing component to conclusions that previously could remain internal.
This change also increases the economic value of maintaining GRAS dossiers in a submission-ready condition. A dossier that accurately reflects current manufacturing specifications, intended uses, exposure, safety information, and publicly available evidence should require less remediation before notification than documentation that has become outdated or was never organized with FDA submission in mind.
FDA does not establish a single expected cost per company because the financial burden would vary according to the number of affected substances, the type of submission required, and the condition of the underlying GRAS documentation.
FDA’s analysis does, however, estimate costs of approximately $7,800 to $53,100 per affected small entity. The Agency further concludes that the proposed rule could have a significant economic impact on a substantial number of small entities because its estimated impact exceeds 3% of annual revenue for affected small businesses.
The actual financial exposure of an individual company could differ substantially from those estimates. A company with a recently completed GRAS dossier that already reflects current FDA expectations may primarily face submission preparation and administrative costs, while a company relying on an older conclusion may need to reassess manufacturing information, specifications, intended use levels, dietary exposure, toxicological evidence, or the scientific literature before the dossier is ready for FDA review.
Portfolio size could further amplify the impact. A company relying on numerous independent GRAS conclusions may need to evaluate each substance and intended use separately, determine eligibility for any transitional pathway, prioritize commercially important substances, and allocate internal or external resources across multiple submissions.
FDA’s economic analysis therefore provides a useful industry-wide benchmark, but it does not replace a company-specific assessment of GRAS portfolio exposure.
FDA’s $89.6 million primary estimate should not be interpreted as a ceiling on the possible economic impact because the Agency explicitly identifies several categories of potential costs that it has not fully quantified.
FDA states that its analysis does not fully quantify additional costs that could arise when the Agency disagrees with a notifier’s interpretation of the data supporting a GRAS conclusion. FDA also does not quantify the cost of generating additional scientific data because it lacks sufficient information to estimate those costs and because the need for additional evidence may differ by substance and intended use.
FDA also acknowledges that mandatory notification could allow the Agency to identify purported GRAS uses that might otherwise have gone undetected. Its economic model does not quantify potential FDA costs associated with an increased volume of compliance and enforcement actions, including warning letters or seizure of adulterated products.
Commercial consequences are similarly difficult to model. FDA recognizes that an insufficient-basis determination could shift market share and revenue between manufacturers where a substance is used in some competing products but not others. FDA does not assign a monetary value to this potential effect because it cannot predict which substances might receive insufficient-basis letters or the market value of the products involved.
FDA separately estimates potential annual costs of $0.42 million to $73.74 million, with a primary estimate of $9.36 million, for removing products from the market and possible reformulation following certain FDA responses. These figures appear in the PRIA’s uncertainty and sensitivity analysis and are separate from FDA’s $89.6 million primary estimate. FDA describes the estimates as uncertain and requests comment and supporting data.
These exclusions are important when interpreting the cost-benefit analysis. FDA has monetized regulatory activities for which it believes reasonable estimates can be developed, while acknowledging that other scientific, enforcement, and commercial consequences remain uncertain.
FDA’s analysis indicates that the burden of mandatory notification may not be distributed evenly across affected companies.
FDA estimates approximately 1,028 firms currently make independent GRAS conclusions, with a lower estimate of 514 and an upper estimate of 1,542. When companies already represented in FDA’s GRAS notice database and affected food manufacturers are included, FDA estimates approximately 12,367 total affected entities, with a range of approximately 8,297 to 16,436.
The regulatory activities required by mandatory notification may represent a relatively modest incremental cost for larger organizations with established regulatory affairs, toxicology, and scientific teams. The same requirements could represent a more significant expenditure for smaller ingredient developers and manufacturers that have fewer internal resources or rely on external scientific and regulatory expertise.
FDA’s conclusion that the proposal could have a significant economic impact on a substantial number of small entities therefore warrants particular attention during the rulemaking process. The eventual treatment of legacy substances, transition periods, streamlined submissions, and other implementation mechanisms could materially affect how those costs are distributed.
FDA’s economic justification for mandatory notification is based principally on addressing information gaps associated with independent GRAS conclusions.
Under the existing framework, FDA may have little or no information about a substance introduced into interstate commerce on the basis of an independent GRAS conclusion. FDA argues that mandatory notification would provide greater visibility into these uses and allow the Agency to more effectively determine whether they meet the GRAS criteria or instead constitute food additive uses requiring premarket review and approval.
FDA also expects mandatory notification to increase transparency regarding substances used in human and animal food and to help confirm that GRAS conclusions have an appropriate scientific basis and supporting documentation. These benefits form an important part of FDA’s rationale for replacing the voluntary notification system.
FDA has not monetized those expected benefits, however, because it states that sufficient data are not currently available to do so. The preliminary cost-benefit analysis therefore presents a notable asymmetry: FDA provides monetary estimates for many expected compliance costs while describing the principal expected benefits qualitatively.
That distinction is likely to be relevant during public consultation because additional industry and stakeholder data could affect FDA’s assessment of both the costs and benefits before any final rule is issued.
FDA’s preliminary analysis suggests that the financial impact of mandatory notification will depend partly on a company’s ability to convert existing GRAS documentation into an FDA-ready submission without substantial additional scientific or regulatory work.
Companies relying on independent GRAS conclusions can therefore use the proposed rule as an opportunity to assess their existing portfolios without assuming that the proposal will necessarily be finalized in its current form. The immediate objective is to understand exposure rather than prematurely comply with a requirement that is not yet in effect.
A portfolio assessment should identify the substances and intended uses supported by independent GRAS conclusions, determine whether the underlying documentation reflects current manufacturing and specifications, assess whether use levels and dietary exposure remain accurate, and review whether relevant safety evidence has changed since the original conclusion was reached.
Companies can then distinguish between dossiers that are substantially submission-ready and those that could require scientific, regulatory, or administrative remediation. That distinction is particularly important because FDA’s economic analysis does not fully capture the potential cost of generating additional evidence when an existing dossier does not adequately support the GRAS conclusion.
The proposed rule therefore reinforces the strategic value of maintaining GRAS documentation as a current regulatory asset rather than treating the dossier as a static record completed when the original conclusion was reached.
dicentra supports food and ingredient companies in evaluating both the scientific basis for GRAS conclusions and the regulatory strategy surrounding FDA notification. As the proposed mandatory notification framework develops, that support can include assessing existing independent GRAS conclusions, identifying gaps in legacy dossiers, preparing submission-ready GRAS documentation, developing toxicological and exposure strategies, and preparing GRAS notices for FDA submission.
For companies with multiple GRAS substances, a portfolio-level assessment can also help determine where future regulatory costs are most likely to arise. Existing conclusions can be evaluated according to dossier readiness, commercial importance, scientific complexity, and the amount of work that could be required if notification becomes mandatory.
This approach is consistent with the central financial implication of FDA’s proposal: the cost of mandatory notification will depend not only on how many submissions a company must make, but also on how much work is required to make each underlying GRAS conclusion ready for FDA review.
FDA’s $89.6 million 10-year present-value estimate provides an important benchmark for evaluating the proposed mandatory GRAS notification rule, but it remains a preliminary estimate based on assumptions that may change as the rulemaking process progresses. FDA itself identifies uncertainty regarding the number of existing independent GRAS substances, the number of affected companies, and several categories of potential compliance costs.
The public consultation process may provide FDA with additional information regarding submission costs, scientific requirements, affected substances, small-business impacts, implementation timelines, and other assumptions underlying the Preliminary Regulatory Impact Analysis. New information could result in revisions to FDA’s economic analysis as well as changes to the regulatory framework itself before a final rule is issued.
For industry, the appropriate response is therefore to treat FDA’s analysis as an indication of the direction and potential scale of the regulatory change rather than a fixed forecast of its ultimate cost. Companies should continue monitoring the rulemaking process while evaluating how readily their existing GRAS portfolios could adapt to a mandatory notification framework.
dicentra will continue to monitor FDA’s rulemaking process and assess changes to the proposed requirements and economic analysis as additional information becomes available.
As FDA moves toward mandatory GRAS notification, companies relying on independent GRAS conclusions may need to reassess their existing documentation, identify scientific and regulatory gaps, and prepare for new submission requirements.
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