This guidance is intended to clarify how the Food and Drug Administration (FDA or Agency) applies the factors set forth in section 505-1 of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 355-1) in determining whether a risk evaluation and mitigation strategy (REMS) is necessary to ensure that the benefits of a drug outweigh its risks. This guidance fulfills one of the performance goals that FDA agreed to satisfy in the reauthorization of the Prescription Drug User Fee Act (PDUFA) V.