Beltway Buzz, May 16, 2025
The Beltway Buzz™ is a weekly update summarizing labor and employment news from inside the Beltway and clarifying how what’s happening in Washington, D.C., could impact your business.
Republican Legislators Push Ahead With Agenda. This week, the U.S. House of Representatives’ Committee on Ways and Means advanced—on a party-line 26–19 vote—a tax reform package that included Republicans’ top fiscal priorities. The bill makes permanent many provisions of the 2017 Tax Cuts and Jobs Act and includes other measures, such as an expansion of the child tax credit. Of particular interest to the Buzz, the bill also provides temporary (2025 through 2028 tax years) above-the-line deductions for qualified tips and overtime premium pay. There is still quite a long way to go for this bill, and changes are expected, especially considering that some Republicans in the U.S. Senate have already expressed some reservations about the proposal.
OMB Approves EEO-1 Changes. On May 12, 2025, the Office of Management and Budget (OMB) approved changes to the EEO-1 form that removes employers’ option to disclose non-binary employee data. The U.S. Equal Employment Opportunity Commission (EEOC) requested the changes pursuant to President Trump’s Executive Order 14168, “Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government.” The proposed instruction booklet filed with OMB indicates that the 2024 EEO-1 filing period would begin on May 20, 2025. There has been no word yet from the EEOC in light of OMB’s approval of the change. Kiosha H. Dickey and James A. Patton, Jr. have the details.
PBGC Nominee on the Move. On May 15, 2025, the U.S. Senate Committee on Health, Education, Labor and Pensions voted to advance the nomination of Janet Dhillon to serve as the director of the Pension Benefit Guaranty Corporation (PBGC). Created by the Employee Retirement Income Security Act of 1974, PBGC protects workers’ retirement benefits through its single-employer and multiemployer insurance programs. Dhillon previously served as chair of the EEOC. Her nomination now awaits a vote on the Senate floor.
House Committee Examines OSHA. On May 15, 2025, the House Committee on Education and the Workforce’s Subcommittee on Workforce Protections held a hearing entitled “Reclaiming OSHA’s Mission: Ensuring Safety Without Overreach.” The hearing focused on the Occupational Safety and Health Administration’s (OSHA) regulatory and enforcement agenda during the Biden administration and “explore[d] common-sense solutions that can return OSHA to fulfilling its purpose of advancing workplace safety.” Legislators and witnesses discussed OSHA’s proposed heat standard, the final “walkaround rule,” and the Severe Violator Enforcement Program. With regard to OSHA’s heat proposal, Republicans and their witnesses criticized its one-size-fits-all proscriptions—arguments that are likely to be made at OSHA’s public hearing on the proposal in June.
Disparate Impact Follow-Up. President Trump’s recent executive order directing federal agencies to limit the use of disparate-impact theories of liability is having a ripple effect at implementing agencies and among stakeholders. Here is the latest fallout:
Department of Energy Rescinds Regulations. The U.S. Department of Energy—not an agency that we normally deal with at the Buzz—took steps this week to rescind forty-seven regulations. Included is a direct-to-final rule, entitled, “Rescinding Regulations Related to Nondiscrimination in Federally Assisted Programs or Activities (General Provisions).” With regard to a regulatory provision concerning nondiscrimination in federally assisted programs or activities, the direct-to-final rule states the following:
Furthermore, absent a specific, identified, instance of intentional discrimination, statistical information indicating that certain protected groups are underrepresented in some occupations or professions does not obligate any FFA [federal financial assistance] recipient to take remedial or affirmative action under this part. To the contrary, any affirmative action for which “measures of success” depend on “whether some proportional goal has been reached” amounts to “outright racial balancing” which is “patently unconstitutional.” For these reasons, DOE is rescinding 10 CFR 1040.8 in its entirety.
Former EEO Officials Respond. While federal agencies begin implementing the executive order (EO), former EEOC and Office of Federal Contract Compliance Programs (OFCCP) officials issued a statement challenging the legal rationale underlying the EO, noting that President Trump’s executive order “may not change a clear statutory mandate and decades of legal precedent.” The statement further notes that contrary to the EO’s claim that the disparate impact theory eliminates meritocracy in the workplace, “disparate impact liability is a means to ensure that merit prevails and that unnecessary and unjustified criteria do not disqualify meritorious candidates on grounds linked to their race, sex, or other protected personal characteristic.” To be sure, the statement will have no impact on the administration’s current views, but it does serve as a reminder to employers and workers that while disparate impact may be deprioritized by the administration, it is still codified in federal law, has been affirmed by the Supreme Court of the United States, and is a viable legal theory for plaintiffs’ counsel.
Immigration: TPS Update.
In a notice published in the Federal Register on May 13, 2025, the U.S. Department of Homeland Security announced that it would not extend the designation of Afghanistan for Temporary Protected Status (TPS), which is set to terminate on May 20, 2025. Pursuant to the required sixty-day notice period, TPS for Afghanistan will now expire on July 14, 2025. According to the notice, “there are notable improvements in the security and economic situation such that requiring the return of Afghan nationals to Afghanistan does not pose a threat to their personal safety due to armed conflict or extraordinary and temporary conditions.”
Venezuela TPS. A bipartisan group of representatives has introduced the Venezuela TPS Act of 2025. The bill would automatically designate Venezuela for TPS for eighteen months—with an option for renewal—from the time the bill is enacted. Of course, enactment will be a significant challenge in the Republican-controlled U.S. Congress. Pursuant to a federal court ruling, Venezuela’s TPS designation has been extended through October 2, 2026, and work authorization remains valid through April 2, 2026.
RIP, Justice Souter. Supreme Court Justice David Souter died last week at the age of eighty-five. Appointed by President George H. W. Bush, Souter served on the Supreme Court from 1990 to 2009. The Buzz remembers Souter for his role in authoring two significant Supreme Court decisions on employment law. Souter authored the majority opinion in Faragher v. City of Boca Raton (1998), which held that “an employer is vicariously liable for actionable discrimination caused by a supervisor, but subject to an affirmative defense looking to the reasonableness of the employer’s conduct as well as that of a plaintiff victim.” Additionally, in Meacham v. Knolls Atomic Power Laboratory (2008)—a disparate-impact case under the Age Discrimination in Employment Act (ADEA) involving a reduction in force—the Court held that the employer, not the employee, has the burden of proving that its employment decision was based on reasonable factors other than age. Souter, writing for the 7–1 majority, stated that while “there is no denying that putting employers to the work of persuading factfinders that their choices are reasonable makes it harder and costlier to defend[,]” the Court must read the ADEA “the way Congress wrote it.”
Cal/OSHA Announces Discussion Drafts for Revised Wildfire Smoke Protection and Heat Illness Prevention Standards
On Friday, May 9, 2025, the California Division of Occupational Safety and Health (Cal/OSHA) announced discussion drafts for the wildfire smoke regulation, as well as the indoor heat and outdoor heat regulations. The drafts were posted online and provide for substantial changes to both regulations. Future advisory committees will be announced, however, and Cal/OSHA requests written comments by July 7, 2025.
Quick Hits
The revisions to Section 3395, the outdoor heat illness prevention regulation, provide greater details and requirements for acclimatization. The same changes are intended for Section 3396, the indoor heat illness prevention regulation.
Both the indoor and outdoor heat draft revisions would require that the plan be distributed to new employees upon hire, during heat illness prevention training, and at least once a year.
The draft wildfire smoke regulation would adjust the AQI table to indicate that AQI Category for PM2.5 at 301 or above (as opposed to 301 to 500) as “hazardous.” Additionally, the proposed regulation clarifies that a written respiratory protection program and fit testing are not required unless the AQI for PM2.5 exceeds 500.
Despite the fact that the federal Occupational Safety and Health Administration’s (OSHA) heat proposal draft has not been adopted (on June 16, 2025, OSHA will host a virtual public hearing on its proposed rule), Cal/OSHA appears to be moving ahead, attempting to codify aspects of the federal proposal prior to that rule’s adoption.
Next Steps
Employers interested in Cal/OSHA’s draft proposals to revise the wildfire smoke protection and heat illness prevention standards can submit written comments by July 7, 2025, to [email protected] and [email protected]. An advisory meeting will be scheduled at a later date.
The Regulatory Horizon: Legal Framework for Commercial Fusion Power
Key Takeaways
The fusion power industry has evolved from primarily government-led initiatives to include over 45 private companies with combined funding exceeding $7 billion
The NRC is developing fusion-specific regulations with proposed rules anticipated in May 2025
In 39 “Agreement States,” state authorities may regulate fusion under delegated NRC authority
Beyond nuclear regulations, fusion facilities will face state and local permitting related to land use, environmental impact, and public safety
Early engagement with both federal and state regulators is advisable for fusion companies to navigate this evolving regulatory landscape
Strategic Considerations for Stakeholders
For Fusion Developers: Submit comments during the NRC’s rulemaking period to shape regulations favorable to your technology approach
For Investors: Evaluate potential fusion investments based partly on regulatory preparedness and engagement with authorities
For Utilities: Begin exploring power purchase agreement structures that account for fusion’s unique regulatory status
For Communities: Prepare to participate in upcoming state and local permitting processes by developing informed positions on fusion facility siting
For Policy Advocates: Identify gaps in current regulatory frameworks that could be addressed through state legislation or federal guidance
For International Entities: Monitor the U.S. regulatory approach as a potential model for other jurisdictions developing fusion regulations
The energy source that powers the stars was first demonstrated in an experiment in 1934.
Ever since then the promise of clean, virtually limitless energy has been greatly anticipated with commercial fusion power perennially predicted to come “within the next ten years.” Recent advances in physics, materials science, and other fields may finally prove those predictions true. This article provides a brief overview of the current state of the fusion power industry and discusses the developing regulatory framework as we await the reality of commercial fusion power.
The Emerging Fusion Industry
Fusion R&D was historically dominated by national governments collaborating on major projects like Euratom’s Joint European Torus (1973) and the International Thermonuclear Experimental Reactor (1985), which began with Euratom, Japan, the US, and Soviet Union and now includes 27 nations. While national projects in China, Japan, South Korea, France and elsewhere continue advancing fusion technology, they’ve been joined by private sector companies bringing new energy (pun intended) to commercial fusion development.
Today, over 45 companies worldwide are pursuing commercial fusion with funding exceeding $7 billion from venture capital, governments, and energy-intensive industries seeking to become fusion power customers. Unlike government efforts focused on limited technologies, private enterprises explore diverse innovative approaches. All stakeholders face challenges in high-temperature materials, plasma stability, commercial scalability, and system costs. This competition and collaboration between entrepreneurial companies and governmental projects fuels growing optimism that commercial fusion power may soon become a reality.
As technical development progresses, parallel efforts are creating regulatory frameworks that recognize fusion’s unique characteristics, ensuring safe deployment without inhibiting industry growth.
…Congress and the U.S. Nuclear Regulatory Commission (USNRC) have taken a number of steps to develop a regulatory framework for fusion power.
Evolution of the U.S. Fusion Power Regulatory Framework
As discussed in previous articles in this series, there is an extensive statutory and regulatory framework applicable to fission-based nuclear power in the United States. This framework is predicated broadly on issues related to public safety and control of the fissile material that fuels commercial reactors which could present weapons proliferation concerns if not regulated appropriately. Recognizing that fusion facilities do not present these same risks, Congress and the U.S. Nuclear Regulatory Commission (USNRC) have taken a number of steps to develop a regulatory framework for fusion power.
The Nuclear Energy Innovation and Modernization Act of 2018 (NEIMA) included “fusion reactors” in the definition of “advanced reactors” and directed USNRC to develop a regulatory framework for the licensing of advanced reactors by December 31, 2027. Following USNRC Staff’s consideration of various licensing approaches, in 2023 USNRC directed its staff to develop rules for the licensing and regulation of fusion energy facilities that treat these facilities under the “byproduct material” regulations rather than the regulations applicable to commercial fission power facilities. Congress essentially codified this decision in Section 205 of the Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy (ADVANCE) Act of 2024 which amended the Atomic Energy Act (42 U.S.C. § 2014) and NEIMA to define “fusion machines” and classify the radioactive materials used in and produced by them as byproduct material.
This regulatory approach makes sense since fusion machines use certain byproduct materials as fuel and may produce additional byproduct materials through the fusion reaction. It offers the benefits of a streamlined process as compared to the 10 CFR Part 50 processes applicable to fission reactors and technology-neutral, risk-informed, performance-based regulations that could be relevant to multiple fusion technologies.
Since 2023, USNRC Staff has engaged with public stakeholders to develop proposed rules that will provide regulatory clarity and predictability for the US fusion power industry. USNRC has described this as a limited-scope rulemaking that considers known fusion systems and those that can be reasonably anticipated in the immediate future, builds on existing regulations as much as possible, and focuses on license application requirements and processes and other issues specific to fusion systems. USNRC’s proposed fusion power regulations will be located primarily in 10 CFR Part 30 – Rules of General Applicability to Domestic Licensing of Byproduct Material, with additional guidance in a new fusion-specific Volume 22 of NUREG-1566, Consolidated Guidance About Materials Licenses. A draft of NUREG-1566, Volume 22 was released in March 2024 and provides additional information for fusion system possession license applications and implementing guidance. Publication of the proposed rules is presently anticipated in May 2025 which will initiate the formal rulemaking proceeding.
Currently, 39 states have entered into such agreements and USNRC has indicated it intends to work with Agreement States to develop a comprehensive fusion regulatory framework.
The Agreement States Program and Other State Regulations
The Agreement States Program is based in Section 274b of the Atomic Energy Act and enables USNRC to authorize individual states to license and regulate nuclear materials – including source materials, special nuclear materials, and byproduct materials – in order to protect the public from radiation hazards associated with such materials. These agreements effectively delegate to the state USNRC’s authority to regulate the specified nuclear materials for the duration of the agreement. USNRC may also grant exemptions from certain licensing requirements of the Atomic Energy Act and from its regulations applicable to certain licensees as needed to carry-out the agreements. Such exemptions may include requirements and regulations related to byproduct materials. This is particularly relevant given that USNRC intends to regulate fusion power under the byproduct materials framework.
Currently, 39 states have entered into such agreements and USNRC has indicated it intends to work with Agreement States to develop a comprehensive fusion regulatory framework. In Agreement States, entities seeking regulatory approval to use byproduct materials for fusion applications will be required to apply to the relevant state authority; in non-Agreement States, the application will be filed with USNRC.
…it is also important to keep in mind that fusion facilities will also be regulated by state and local governments under their existing land use, environmental, public health and safety, and other relevant authority.
While states’ specific role in regulating not only byproduct materials used in fusion systems but also the systems themselves may evolve following completion of the USNRC rulemaking, states such as Massachusetts, Washington, and others are already regulating fusion systems being used for R&D purposes under their existing nuclear materials authority. Given the current state of fusion regulations and the unique technical and radiological issues associated with fusion, which state radiation control offices may be unfamiliar with, it is advisable for fusion companies to engage early with their relevant state regulators. Such engagement will allow time for states to gather relevant information and seek technical support from USNRC under the Agreement States program thereby increasing the likelihood of a timely state licensing decision that meets the company’s schedule.
While substantial attention is being paid to the federal regulations for fusion systems and, by extension, regulation by Agreement States, it is also important to keep in mind that fusion facilities will also be regulated by state and local governments under their existing land use, environmental, public health and safety, and other relevant authority. State and local permitting and siting authorities are likely to have many questions concerning how First-of-A-Kind fusion systems can be located appropriately and developed and operated consistent with public interests. Therefore, it is equally prudent for fusion companies to engage with these authorities at the appropriate stage in project development.
Conclusion
As we witness the convergence of technological breakthroughs, substantial private investment, and regulatory development, the long-promised potential of fusion energy appears increasingly within reach. USNRC’s proposed regulatory framework acknowledges fusion’s unique characteristics while providing necessary oversight. For industry stakeholders across the spectrum—from developers and investors to utilities and communities—the next three years present a window of opportunity to shape this emerging framework. By engaging proactively with federal and state regulators, participating in upcoming rulemaking processes, and preparing for implementation of the final regulations, stakeholders can help ensure that the regulatory environment supports rather than hinders fusion’s commercial development. As fusion technology moves from laboratory to commercial deployment, this collaborative approach to regulation may well become a model for how emerging clean energy technologies can be safely and effectively integrated into our energy infrastructure, potentially unlocking one of humanity’s most promising solutions to climate change and energy security challenges.
Find the previous articles from this series here:
Powering the Digital Future: Navigating the Nuclear Option for Data Centers
Cybersecurity in the Nuclear Industry: US and UK Regulation and the Sellafield Case
New Life for Nuclear Power: License Extensions and Recommissioning
Powering The Future: The UK’s Nuclear Revolution
McDermott+ Check-Up: May 16, 2025
THIS WEEK’S DOSE
Key House Health Committees Advance Reconciliation, Bill Held Up in Budget Committee. The Energy and Commerce Committee and Ways and Means Committee passed their recommendations for reconciliation out of committee, but the Budget Committee failed to advance the bill today and is currently scheduled to reconvene at 10pm on Sunday, May 18, 2025.
HHS Secretary Kennedy Testifies in Congress. The House Appropriations Committee and Senate Health, Education, Labor, and Pensions (HELP) Committee held hearings on the US Department of Health and Human Services (HHS) budget.
Senate Judiciary Committee Discusses PBM Reform. Committee members widely agreed on the need for pharmacy benefit manager (PBM) policy change.
House Judiciary Subcommittee on Administrative State, Regulatory Reform, and Antitrust Holds Hearing on Medical Residency. The hearing examined the structure and legal implications of the National Resident Matching Program and evaluated its antitrust exemption.
Senate Finance Committee Advances Trump HHS Nominees. The nominations for deputy secretary of HHS and assistant secretary of legislation of HHS now move to the Senate floor.
Trump Signs EO on Drug Prices. The executive order (EO) seeks to implement most-favored nation pricing.
CMS Releases Proposed Rule on MCO Taxes. The Centers for Medicare & Medicaid Services (CMS) proposal would address state-imposed “provider taxes” on managed care organizations (MCOs).
HHS Agencies Issue RFIs. The requests for information (RFI) focus on possible deregulatory actions and the health technology ecosystem.
HHS Identifies Documents for Recission. The recission was enacted upon publication.
CMS Innovation Center Releases Strategic Framework. The strategy outlines how the center intends to structure current and future value-based care models.
CONGRESS
Key House Health Committees Advance Reconciliation, Bill Held Up in Budget Committee. On May 13, 2025, and into the next afternoon, the House Energy and Commerce Committee held a 26.5 hour markup of its budget reconciliation committee print, which included sweeping policy changes to Medicaid enrollment process, eligibility, and financing, as well as a Medicare physician payment adjustment, PBM reform, and changes to the Medicare prescription drug negotiation program and the Affordable Care Act (ACA). At the same time, the House Ways and Means Committee held a 15.5 hour markup of its budget reconciliation committee print. The Ways and Means package included provisions related to paid leave, CHOICE health plans (now called ICHRAs), health savings accounts, and research, as well as significant changes to ACA Exchange enrollment. Both committees successfully advanced their committee prints along party lines and did not adopt any amendments.
Energy and Commerce Committee: The House budget resolution instructed the House Energy and Commerce committee to find a minimum of $880 billion in savings. On May 11, 2025, Democrats released a memo from the Congressional Budget Office (CBO) estimating that the Energy and Commerce reconciliation recommendations related to Medicaid, the expiration of expanded premium tax credits, finalizing the 2025 Marketplace Integrity and Affordability Proposed Rule, and the Marketplace provisions that extend beyond codifying the proposed rule would increase the number of people without health insurance by at least 13.7 million by 2034. CBO noted on May 12, 2025, that the budget reconciliation text would exceed the savings target and reduce deficits by more than $880 billion over 10 years. On May 13, 2025, CBO released a new set of preliminary scores for certain Medicaid provisions listed in the bill, which in total would save $625 billion over 10 years. The scores also estimate that a total of 7.6 million individuals would become uninsured by 2034, including 1.4 million people without verified citizenship, nationality, or satisfactory immigration status. These are the figures congressional Republicans have cited. CBO has not yet provided final scoring for the package, and particular provisions are still without a score as well. That analysis is expected in the coming days.
During the Energy and Commerce Committee the markup, Democrats offered 246 health-related amendments, many of which were ultimately withdrawn. They largely focused on extending the enhanced advanced premium tax credits (APTCs), preventing the Medicaid policies that would reduce coverage from going into effect, addressing prescription drug prices, and preserving access to home- and community-based services. Republicans did not offer any amendments. The amendments can be found here, and the committee’s section-by-section summary can be found here.
Ways and Means Committee: The budget resolution instructed the House Ways and Means Committee to produce policies that would not raise the federal deficit by more than $4 trillion if the spending cuts in the overall bill totaled less than $1.5 trillion, or by more than $4.5 trillion if the bill achieved $2 trillion in savings. The Joint Committee on Taxation found that the Ways and Means Committee’s proposed tax provisions would increase the deficit by $3.18 trillion, meeting the goals stated in the resolution.
Throughout the markup, Democrats spoke out against the Medicaid provisions being considered in the House Energy and Commerce Committee and encouraged the Ways and Means Committee to extend the enhanced APTCs. Democrats argued that if the bill was supposed to help working Americans, healthcare improvements needed to be a key part of the legislation and tax breaks for the wealthy shouldn’t be financed by taking healthcare away from lower- and middle-class working Americans. Republicans offered no amendments. Their talking points focused on how the tax package was designed to limit tax liability of working Americans and restrict provision of government benefits to US citizens only, not individuals in the country illegally.
Budget Committee: Speaker Johnson (R-LA) aims to pass the reconciliation package on the House floor before Memorial Day. Once all the committees of jurisdiction have completed their work, the House Budget Committee is tasked with pasting together the various committee prints into a single reconciliation package. That is largely a perfunctory role as they have no authority to make any changes. The Budget Committee met today, May 16, 2025, to do that work. Ultimately, a vote was held to decide if the committee should vote on the package, which failed in a 16–21 vote due to a hardline conservative push to enact larger spending cuts. When voting no, Reps. Clyde (R- GA), Roy (R-TX), Brecheen (R-OK), and Norman (R-SC) cited concerns that the federal spending reductions, particularly the Medicaid cuts, do not go far enough. Rep. Smucker (R-PA) also voted no, clarifying that the no vote was so that the committee could procedurally bring the bill back up later. Specifically, conservatives are unhappy about the Medicaid work requirement provisions. As written, the work requirements do not begin until 2029, and conservatives want to shorten that timeline.
The Budget Committee is currently scheduled to reconvene at 10pm on Sunday, May 18, 2025, to vote on the bill, and the Rules Committee is expected to meet on Wednesday, May 21, 2025, to prepare the bill for floor debate. Republican leadership continues to work behind the scenes to resolve remaining differences related to Medicaid and other issues, such as disagreement on the state and local tax deduction (SALT).
HHS Secretary Kennedy Testifies in Congress. In the House Appropriations Committee hearing, Kennedy defended the cuts outlined in President Trump’s skinny budget request and heard concerns from both Republicans and Democrats about some of his policies, such as removing fluoride from drinking water. In the Senate HELP Committee hearing, Kennedy faced questions from a bipartisan group of senators about his previous statements on vaccine safety and efficacy. In both committees, Kennedy defended workforce and program cuts from the Department of Government Efficiency.
Senate Judiciary Committee Discusses PBM Reform. The hearing examined the role of PBMs and how current practices impact drug pricing, access to medication, and local pharmacies. Republican and Democratic senators expressed concerns over low reimbursement rates to local pharmacies, lack of transparency, and the impact of vertical integration on drug affordability. Several witnesses emphasized the need to reform PBMs and recommended that future policies prioritize patients over profit.
House Judiciary Subcommittee on Administrative State, Regulatory Reform, and Antitrust Holds Hearing on Medical Residency. The hearing examined the structure and legal implications of the National Resident Matching Program and evaluated its antitrust exemption. The hearing also explored the role of the Accreditation Council for Graduate Medical Education (ACGME) in shaping residency program standards and access, and how the residency placement and accreditation system affects medical graduates and the broader physician labor market. Republicans portrayed the matching program and ACGME accreditation as monopolistic, opaque, hospital-centric, and contributing to physician shortages, wage suppression, and lack of resident autonomy. Democrats defended the matching program as an imperfect but functional solution to manage medical residency placements. They emphasized the need for increased public investment, particularly in expanding residency slots, supporting international medical graduates, and protecting research funding.
Senate Finance Committee Advances Trump HHS Nominees. The executive session considered the nominations of James O’Neill to be deputy secretary of HHS and Gary Andres to be assistant secretary of legislation of HHS. Both nominees advanced (see vote outcomes below), and their nominations will now move to the Senate floor.
James O’Neill’s nomination to be deputy secretary of HHS advanced by a vote of 14 – 13, along party lines.
Gary Andres’ nomination to be assistant secretary of legislation of HHS advanced by a vote of 19 – 8. Sens. Warner (D-VA), Whitehouse (D-RI), Hassan (D-NH), Warnock (D-GA), and Welch (D-VT) joined Republicans in voting yes.
ADMINISTRATION
Trump Signs EO on Drug Prices. President Trump’s “most-favored nation” EO seeks to equalize drug prices between the United States and other developed countries. It instructs federal agencies to take the following actions:
The US trade representative and the secretary of commerce will ensure foreign countries are not engaged in practices that lead to high drug prices in the United States.
The HHS secretary will facilitate direct-to-consumer purchasing programs for drug manufacturers that sell their products to US consumers at the most-favored nation price.
The HHS secretary, in coordination with other relevant agencies, will have 30 days to bring prices for pharmaceutical drugs in the United States in line with comparable developed nations. If significant progress toward most-favored nation pricing is not delivered at that time, HHS in conjunction with CMS must develop rulemaking to impose most-favored-nation pricing.
HHS and the US Food and Drug Administration (FDA) must consider certifying that the importation of certain prescription drugs from other developed countries is safe, and if such certification is made, FDA must create a waiver process to allow for the importation of prescription drugs.
Several federal agencies, including the Federal Trade Commission, the Office of the Attorney General, and the US Department of Commerce, are instructed to investigate any anticompetitive practices leading to higher prices.
FDA is instructed to review and potentially modify or revoke approvals granted for drugs that maybe be unsafe, ineffective, or improperly marketed.
A fact sheet can be found here. While EOs typically lay out the administration’s policy priorities, effectuating such policies requires additional actions, including potential rulemakings.
CMS Releases Proposed Rule on MCO Taxes. Federal law requires state-imposed “provider taxes,” which include MCO taxes, to be uniform and broad based, meaning it must be applied at the same level and to all MCOs in the state, not just Medicaid MCOs. However, a state can apply to CMS for a waiver from this requirement if the net impact of the tax is generally redistributive and the amount of the tax is not directly correlated to Medicaid payments. With its proposal, CMS aims to close what it considers a loophole to prohibit states from taxing Medicaid MCOs at a higher rate than non-Medicaid MCOs. CMS identified eight taxes in seven states that would be affected by this proposal, if finalized. We understand those states to be California, Illinois, Massachusetts, Michigan, New York, Ohio, and West Virginia.
Key proposals include:
Prohibiting states from explicitly taxing Medicaid units at higher tax rates than units of other payors and better implementing the mandate that a tax be generally redistributive.
Defining terms used in the regulation, including “Medicaid taxable unit” and “non-Medicaid taxable unit” to prohibit states from using overly vague language.
Specifying that noncompliant states that received their most recent waiver approval within two years of the effective date of the final rule would not be eligible for a transition period. Noncompliant states that received waiver approval more than two years prior to the effective date of the final rule would have a transition period of at least one full state fiscal year to adjust the tax to come into compliance.
Read the press release here and the fact sheet here. Comments are due on July 14, 2025.
The House reconciliation bill reported by the Energy and Commerce Committee includes a similar but not identical provision.
HHS Agencies Issue RFIs.
In conjunction with FDA, HHS asked the public to help identify any opportunities to produce cost savings, increase efficiency, and catalyze health and economic innovation through deregulation, with the goal of addressing regulations that are “unnecessary, inconsistent with the law, overly burdensome, outdated, out of alignment with current EOs, or otherwise unsound.” Read the press release here. Comments are due on July 14, 2025.
CMS and the Assistant Secretary for Technology Policy/Office of the National Coordinator for Health IT requested input from the public regarding the digital health products market for Medicare beneficiaries, as well as the current state of data interoperability and the broader health technology infrastructure. Responses may be used to further efforts to cultivate this market, increase beneficiary access to effective digital capabilities, and increase data availability. Read the press release here. Comments are due on June 15, 2025.
HHS Identifies Documents for Recission. In a final rule, HHS rescinded the following four documents, effective immediately:
“Extension of Designation of Scarce Materials or Threatened Materials Subject to COVID-19 Hoarding Prevention Measures; Extension of Effective Date with Modifications” (86 FR 35810, July 7, 2021), which designated health and medical resources in scare supply and necessary to respond to the spread of COVID-19.
“Opioid Drugs in Maintenance and Detoxification Treatment of Opiate Addiction; Repeal of Current Regulations and Issuance of New Regulations: Delay of Effective Date and Resultant Amendments to the Final Rule” (66 FR 15347, March 19, 2001).
“Practice Guidelines for the Administration of Buprenorphine for Treating Opioid Use Disorder” (86 FR 22439, April 28, 2021), which provided eligible physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, and certified nurse midwives, who are state-licensed and registered by the DEA to prescribe controlled substances, an exemption from certain statutory certification requirements related to training, counseling, and other ancillary services.
“Notification of Interpretation and Enforcement of Section 1557 of the Affordable Care Act and Title IX of the Education Amendments of 1972” (86 FR 27984, May 25, 2021), which clarified that ACA Section 1557’s prohibition on discrimination included discrimination based on sexual orientation and gender identity.
CMS Innovation Center Releases Strategic Framework. The strategy outlines how the Innovation Center intends to structure current and future value-based care models, with an emphasis on prevention, individual engagement, and market-based mechanisms. The framework highlights the center’s plans related to:
Promoting evidence-based prevention.
Increasing model activity in Medicare Advantage, Medicaid, and prescription drug pricing.
Focusing on cost savings and financial accountability.
Expanding access to consumer-facing tools and data.
Increasing the role of independent and rural providers.
Emphasizing choice and competition.
QUICK HITS
CMS Releases Draft Guidance for Third Medicare Drug Price Negotiation Cycle. The guidance seeks to improve program transparency, further prioritize selection of prescription drugs with high costs to Medicare, and minimize any negative impacts of the negotiated maximum fair price on pharmaceutical innovation. Read the press release here and the fact sheet here. Comments are due on June 26, 2025.
FDA Begins Process of Removing Ingestible Fluoride Prescription Drug Products for Children. The agency has set a goal date of October 31, 2025, for completing a safety review and public comment period.
GAO Releases Reports on Caregiving, TRICARE. The first US Government Accountability Office (GAO) report recommends that HHS clarify when youth may qualify for support services. The second report provides information on the US Department of Defense’s processing of TRICARE claims from behavioral health providers.
NEXT WEEK’S DIAGNOSIS
Both chambers will be in session next week, as the House works to pass its budget reconciliation package before the Memorial Day recess. Budget hearings will continue, with HHS Secretary Kennedy testifying in front of the Senate Appropriations Labor-HHS Subcommittee. The House Oversight and Government Reform Economic Growth, Energy Policy, and Regulatory Affairs Subcommittee and Health Care and Financial Services Subcommittee will hold a joint hearing on the Inflation Reduction Act. Meanwhile, we await the president’s full budget request for FY 2026.
The BR International Trade Report: May 2025
Recent Developments
Various trade deals in the air.
U.S.-China trade deal: Washington and Beijing take steps to ease trade war. On May 12, the United States and China announced a deal to deescalate the trade tensions between the two countries. The centerpiece of the deal is a 90-day pause to the 100+ percent tariffs each country had imposed on the other. As of May 14, the United States lowered its general tariff on Chinese goods to 30 percent, while China lowered its tariffs on American goods to 10 percent. During the 90-day pause, the countries will endeavor to negotiate a more lasting resolution to ongoing trade tensions.
Trump administration announces UK trade deal. On May 8, President Trump announced his administration’s first major trade deal since his “Liberation Day” unveiling of broad reciprocal tariffs on April 2. Leaders in Washington and London agreed to terms that would (i) establish a “new trading union” for aluminum and steel products, (ii) lower the tariff on UK-origin automobiles to 10 percent for the first 100,000 vehicles imported into the United States each year, and (iii) streamline customs procedures for products exported from the United States. Notably, under the terms of the deal, the United States’ 10 percent base reciprocal tariff on UK-origin goods remains in effect. Shortly after the agreement was announced, International Consolidated Airlines, the owner of British Airways, purchased $13 billion of Boeing planes.
White House announces trade deals with Saudi Arabia and Qatar. Over May 13-14, during President Trump’s visit to the Middle East, the White House announced a $600 billion investment commitment from Saudi Arabia and a $142 billion U.S.-Saudi arms deal, as well as “an economic exchange worth at least $1.2 trillion” with Qatar.
United States and Ukraine sign long-awaited critical minerals deal. On April 30, the United States and Ukraine signed a natural resources deal which establishes the U.S.-Ukraine Reconstruction Investment Fund (the “Investment Fund”). The Investment Fund grants the United States certain priority access to Ukrainian critical minerals, oil, and natural gas in exchange for military assistance. Unlike previous iterations of the deal, the April 30 agreement did not require Ukraine to reimburse the United States for past military aid. Treasury Secretary Scott Bessent emphasized that the deal embodies America’s efforts to encourage peace between Russia and Ukraine, stating “[t]his agreement signals clearly to Russia that the Trump Administration is committed to a peace process centered on a free, sovereign, and prosperous Ukraine over the long term.”
United Kingdom and India agree to trade deal. On May 6, after more than three years of negotiations, the United Kingdom and India announced a free trade deal, described by the UK government as “the biggest and most economically significant bilateral trade deal the UK has done since leaving the EU.” Meanwhile, the United States is seeking to enter into a significant trade agreement with India. In late April, Vice President JD Vance and Indian Prime Minister Narendra Modi met in India to “finalize[ ] the terms of reference for . . . trade negotiation[s].”
Semiconductor export controls. On May 13, Commerce announced a range of long-awaited actions regarding export controls (see our alert) applicable to advanced integrated circuits and computing items, including:
rescission of the Biden Administration’s “AI Diffusion Rule,” which was scheduled to significantly broaden preexisting controls over such items effective May 15;
informing the public that export licensing requirements may apply (a) to the export, re-export, and transfer of such items (such as to cloud providers) for use in training large AI models for persons in China and certain other restricted countries, where there is knowledge that such models are for use in WMD or military-intelligence applications, or (b) U.S. person “support” for such activity;
issuance of guidance regarding red flags that may present a risk of diversion of controlled items to prohibited end-users or end-uses; and
imposition of export licensing requirements applicable to most transactions worldwide involving certain Huawei “Ascend” chips, on the ground that such chips were produced in violation of U.S. export controls.
Section 232 investigations update.
Critical Minerals: On April 15, President Trump ordered the initiation of a Section 232 investigation into imports of processed critical minerals, which the U.S. Department of Commerce (“Commerce”) launched on April 22. Subsequently, he issued an April 24 executive order to spur the exploration and extraction of critical mineral deposits located on the seabed.
Trucks: On April 22, Commerce launched a Section 232 investigation into imports of certain medium- and heavy- duty trucks, their parts, and their derivatives. The probe aims to assess whether such imports compromise the country’s ability to meet domestic demand and pose risks to national security.
Aircraft, jet engines, and related parts: On May 1, Commerce Secretary Howard Lutnick initiated a national security investigation into imports of aircraft, jet engines, and related parts, which could lead to additional tariffs, among other measures. Among other factors, Commerce will investigate the concentration of U.S. imports of such items from a small number of suppliers, along with what Commerce described as “foreign government subsidies and predatory trade practices.”
President Trump orders rescission of Syria sanctions. During a speech in Saudi Arabia, the president announced his intent to remove all U.S. sanctions on Syria—in place for decades—explaining that his decision followed discussions with Saudi Crown Prince Mohammed bin Salman and Turkish President Recep Tayyip Erdoğan and aims to give Syria “a chance at greatness.” The next day, the president met with Syrian President Ahmad al-Sharaa, formerly associated with al-Qaeda, who led the rebel group that toppled the Assad regime in December 2024. This marked the first meeting between an American president and a Syrian leader since 2000.
U.S. Department of the Treasury (“Treasury”) announces intent to launch a “fast track” process for CFIUS review of foreign investments. Treasury’s May 8 announcement, issued under the auspices of President Trump’s February “America First Investment Policy” memorandum (see our prior alert), sets the stage for eventual implementation of streamlined review for preferred investors by the Committee on Foreign Investment in the United States (“CFIUS”). Treasury noted that it will design a pilot program featuring a “Known Investor Portal” through which CFIUS can collect information from foreign investors in advance of a CFIUS filing.
U.S. Trade Representative issues final rule on Chinese ships. On April 17, the Office of the United States Trade Representative (“USTR”) issued a final rule concerning the imposition of port fees on Chinese vessel operators, owners, and Chinese-built vessels. The rule seeks to implement steep tonnage-based port fees for both Chinese-built ships and Chinese-owned ships, with the intent of resurrecting the U.S. commercial shipbuilding industry. Following a 180-day implementation period, annually increasing tonnage-based fees will be levied at U.S. ports on Chinese-owned and operated ships, while Chinese-built ships face increasing fees based on net tonnage or containers. In addition, fees of $150 per car will be levied on all foreign-built car carriers, not just those with ties to China. After three years, incrementally increasing restrictions will be placed on the transportation of liquified natural gas (“LNG”) via foreign-built vessels. Check out our coverage of the final rule here.
Amidst U.S. trade tensions, incumbent governments retain power in Canadian and Australian elections.
Down in the polls by double digits only a few months ago, Canada’s Liberals surged in response to trade tensions with the United States and the resignation of longtime Prime Minister Justin Trudeau, who was replaced as party leader by Mark Carney. Conservative leader Pierre Poilievre, once considered the strongest contender to become prime minister, lost his parliamentary seat in the elections. The new government will look to reshape relations with the United States, which Prime Minister Carney initiated with a White House visit on May 6.
A similar story played out in Australia, where incumbent Labour Party Prime Minister Anthony Albanese fended off a challenge by Peter Dutton’s Liberal-National coalition. Similar to Canada, U.S. trade tensions loomed large in the election.
European Union announces retaliatory tariff plan against the United States. The retaliatory measures would target a list of almost 5,000 goods which total approximately $107 billion in European imports. Reports suggest that U.S.-origin aircraft and automobiles would be hit hardest by the tariff package.
UK Government takes control of last remaining “virgin steel” plant in country from Chinese company. Following the announcement by British Steel’s Chinese parent company, Jingye, that it would stop purchasing materials to keep the blast furnace running at the Scunthorpe plant, the UK government took action to prevent the closure of the plant. Although neither the plant nor British Steel have been nationalized for the time being, emergency legislation passed by the UK Parliament allows Business Secretary Jonathan Reynolds the ability to direct the British Steel board and staff, allowing for the purchase of necessary materials.
April 2025 ESG Policy Update—Australia
Australian Update
ASIC Publishes Regulatory Guidance for New Sustainability Reporting Requirements
On 31 March 2025, the Australian Securities and Investments Commission (ASIC) published its Regulatory Guide 280 Sustainability Reporting (RG280) following the introduction of Australia’s first climate-related financial disclosure regime and comprehensive public consultation with various stakeholders.
The new disclosure regime requires the preparation of a sustainability report containing climate-related financial information under Chapter 2M of the Corporations Act 2001 (Cth) (Corporations Act). RG280 provides practical guidance for companies, registered schemes, registrable superannuation entities, and retail corporate collective investment vehicles who are required to prepare these new sustainability reports.
RG280 includes guidance in relation to:
Determining who must prepare a sustainability report under the Corporations Act;
The content required in a sustainability report;
Disclosing sustainability-related financial information outside the sustainability report (e.g. product disclosure statements); and
ASIC’s administration of the sustainability reporting requirements.
In addition, ASIC has also been given additional powers to grant sustainability reporting and audit relief, and to issue directions to reporting entities where it considers a statement in a sustainability report is incorrect, incomplete or misleading.
ASIC Commissioner Kate O’Rourke has said “the publication of RG280 is a critical piece that supports the implementation of these sustainability reporting requirements passed by the Australian Parliament. We will continue to expand our broader suite of publications related to sustainability reporting over time as market practices evolve”.
S&P Platts to Launch Daily Benchmark for Australian Safeguard Mechanism Credits
S&P Platts is set to launch a daily market assessment for Australian Safeguard Mechanism Credits (SMCs) on 5 May 2025.
The Safeguard Mechanism reforms commenced on 1 July 2023 under the Safeguard Mechanism (Crediting) Amendment Act 2023 (Cth), allowing the Clean Energy Regulator (CER) to issue SMCs from January 2025 to certain designated large facilities (Safeguard Facilities) whose net emissions are below their legislated baseline targets. The regime has been designed to incentivise Safeguard Facilities to reduce their emissions beyond these baseline targets.
Safeguard Facilities that earn SMCs can sell them to other Safeguard Facilities, surrender them to stay within their baseline or retain them for future use until 2030. One SMC represents one tonne of carbon dioxide-equivalent emissions below a facility’s baseline. For more information on SMCs and Australia’s carbon credit regulatory framework, see our previous alert here.
S&P Platts’ new benchmark will reflect SMCs in the spot market following issuances from the CER. Its introduction is intended to improve price transparency and boost the confidence of carbon market participants in trading, compliance and investment decision-making. The launch comes as a welcome step in the evolution of Australia’s emissions reduction framework, allowing participants in the carbon credit market to better navigate compliance and employ investment strategies towards the country’s net-zero targets.
ASFI Launches Sustainable Finance Action Plan for 2025-2027
The Australian Sustainable Finance Institute (ASFI) has launched its Sustainable Finance Action Plan for 2025-2027 (Action Plan), aiming to align Australia’s financial system with sustainable and inclusive growth. The plan builds on the Australian Sustainable Finance Roadmap, which was introduced in 2020 to provide recommendations for improving Australia’s financial system to support sustainable development.
ASFI’s members, comprising 41 leading financial institutions with over AU$37 trillion in assets, are committed to integrating sustainability into their practices. The Action Plan emphasises embedding sustainability into leadership, integrating sustainability into practice, enabling resilience and building sustainable finance markets including by financing emissions reductions, increasing capital flows for climate adaptation, expanding financial innovation and promoting international collaboration to support sustainable finance objectives.
Some examples of the priorities that ASFI recommend include:
The expansion of Australia’s mandatory climate disclosure regime;
A clearer articulation of the requirements for sustainable financial product labelling;
Changes to competition law to provide a more permissive scheme for sustainability collaborations and to streamline exemption processes for sustainability activities; and
The explicit inclusion of sustainability-related considerations within directors’ duties under the Corporations Act to act with reasonable care, skill and diligence, and in good faith in the best interests of the company.
State of Net Zero Investment 2025 Report Highlights Australian Commitment to Climate Progress
On 2 April 2025, the State of Net Zero Investment 2025 Report (Report) was published by the Investor Group on Climate Change (IGCC). The Report revealed a strong commitment from Australian institutional investors towards climate progress, despite some current global anti-ESG sentiment. This comprehensive Report, covering data from 65 major superannuation and retail funds, represents AU$4.2 trillion in assets managed for 15 million Australian beneficiaries.
The Report highlights advancements in five of six key climate indicators, though notes there has been a decline in the number of investors with climate action plans, likely due to new minimum regulatory standards for transition plans. Interest in climate solutions, particularly renewable energy and green infrastructure, is on the rise. However, challenges such as policy uncertainty and a lack of suitable investment opportunities have emerged, reversing previous positive trends.
The CEO of IGCC emphasised the fiduciary duty of investors to protect financial interests by setting emissions targets and exploring climate solutions. Despite a mixed short-term outlook, increased policy certainty could enhance investor confidence in Australian growth industries.
The Report underscores the critical role of investors in transitioning to a low-carbon economy. The survey data, collected in late 2024, reflects ongoing industry discussions and trends expected to continue into the new year.
VIEW FROM ABROAD
Net Zero Banking Alliance Eases Climate Commitment Target
On 15 April 2025, the Net Zero Banking Alliance (NZBA), a coalition of over 120 global banks, announced a shift in its climate commitment from the 1.5°C target to a broader “well-below 2°C” goal, in alignment with the Paris Agreement. This decision reflects the challenges banks face in coordinating efforts and the slow progress in decarbonising key sectors like housing and aviation.
The NZBA’s adjustment is influenced by the slower-than-expected advancements in technology and policymaking. The NZBA Chair highlighted that the expectations from 2021 have not aligned with current realities. Economic and political headwinds, particularly from markets like the United States and United Kingdom, have also contributed to this shift, with major banks delaying or scaling back net zero targets.
Critics argue that this pivot undermines the credibility of voluntary climate commitments, especially since only 30% of major emitters have 1.5°C-aligned transition plans. Despite the controversy, NZBA leadership emphasises a shift from “target-setting to implementation”, offering practical tools and exploring alternate methods like carbon markets and avoided emissions accounting.
This decision marks a significant moment in the credibility and durability of private sector climate leadership, with potential implications for green finance and the pace of decarbonisation efforts.
EU Commission Eases Corporate Obligations Under New Deforestation Law
On 16 April 2025, the European Commission introduced revisions to the EU Deforestation Regulation (EUDR) to simplify compliance while maintaining environmental goals. The EUDR prohibits products linked to deforestation from entering the EU market, requiring companies to conduct due diligence on commodities such as palm oil, beef, timber, coffee, cocoa, rubber and soy, including derived goods like leather and chocolate. Companies must trace products to their origin and ensure no deforestation occurred post-2020.
The regulation, effective since June 2023, initially required large companies to comply by the end of 2024 and small businesses by June 2025.
In response to readiness concerns, the European Union delayed the compliance deadline by one year in October 2024, aligning with the EU’s Competitiveness Compass strategy to enhance productivity and reduce red tape. Key revisions include allowing annual submission of due diligence statements, reusing existing documentation and group-level reporting. These changes aim to reduce administrative costs by 30% and ease the compliance burden on companies.
The Commissioner for Environment emphasised the commitment to reducing administrative burdens while achieving the regulation’s goals of reducing global deforestation. The revisions reflect a collaborative approach with stakeholders to ensure effective implementation.
Nathan Bodlovich, Cathy Ma, Daniel Nastasi, Bernard Sia, Natalia Tan, Aibelle Espino, and Isaac Gilmore contributed to this article
Feeling the Heat: Renewable Energy Under the Microscope
This article is based on a May 5th Womble Bond Dickinson webinar featuring Kristina Moore and Veronica Renzi.
The temperature is rising for the Renewable Energy Sector as well as related funding sources, such as green banks. The heat is coming from several sources, including:
An expansive fight over obligated federal funding.
Congressional investigations into companies receiving federal financial support.
The potential elimination of tax incentives augmented under the Inflation Reduction Act (IRA).
Rising tariffs.
All these issues are significant factors impacting the renewable energy sector. The IRA, passed under the Biden Administration, remains a particular target for Republican lawmakers, who seek to reclaim as much funding as they can.
Congressional Investigations Ramping Up the Temperature
Comparing it to “Gold bars sliding off the side of the Titanic,” Congressional Republicans have voiced strong objections to the rapid pace that IRA renewable energy funds were allocated.
On Jan. 27, the White House ordered the EPA to halt the spending of IRA obligated funds. Then, a little over a month later, the EPA formally referred the alleged financial mismanagement, conflicts of interests, and oversight failures regarding the Greenhouse Gas Reduction Funds to the Office of Inspector General.
In response, several IRA funding recipients have sued the EPA, seeking the release of already allocated funds. A federal judge issued a temporary restraining order barring the EPA from freezing Greenhouse Gas Reduction Fund allocations, at least until a court can consider the dispute.
However, the D.C. Court of Appeals reversed that decision, restoring the freeze to $20 billion in Greenhouse Gas Reduction Fund allocations. Arguments will be heard May 19 about the future of these funds.
On March 20, the House Oversight Committee sent a letter to the EPA indicating its intention to investigation the policies and IRA funding allocation during the Biden Administration. The letter requested a briefing with committee staff.
Various grant recipients have also received letters from Congressional committees requestion answers to questions about the Greenhouse Gas Reduction Fund.
Many have compared the current Congressional oversight climate to the Solyndra investigations in 2011. The Solyndra investigation focused on a $535 million loan guarantee issued by the U.S. Department of Energy to Solyndra, Inc. Led by the House Oversight and Energy and Commerce Committees, the inquiry sought to assess whether the government’s decision to approve the loan was warranted and to investigate whether Solyndra’s executives had misrepresented the company’s financial stability. No one wants to be that next household name because of a Congressional investigation.
Budget Reconciliation Could Change IRA Support for Sustainable Energy
Based on a budget resolution passed by both houses of Congress, Budget Reconciliation is a process by which lawmakers can avoid a Senate filibuster and pass spending measures with just 51 votes—a key tactic in this closely divided Congress.
Such a bill would include President Trump’s top priorities. These include extending the Tax Cuts and Jobs Act, which passed during his first administration and is set to expire this year.
For Congress to move forward with tax cuts, they also must find cost savings. Such offsets could target IRA sustainable energy-related production tax credit (45Y and 48E) and manufacturing tax credits (45X).
However, industries in that sector are pushing back, making their case for keeping these incentives to bolster domestic energy production to meet the rapidly growing needs of AI data centers. They also point to the need for a predictable investment climate. Companies brought jobs and investments to the U.S. based in part on these IRA tax incentives.
Even if these tax credits survive, they are likely to be modified by Congress moving forward. In terms of timeline, President Trump has requested that the Budget Reconciliation bill be on his desk by July 4. That would require the House to finish their work around Memorial Day and for the Senate to complete its steps by the end of June.
What’s Next: Challenges and Opportunities
In light of these developments, the future of renewable energy funding and the associated legislative landscape remains uncertain. The intense scrutiny from Congressional investigations, coupled with potential policy changes through budget reconciliation, has created a precarious environment for green energy stakeholders.
What happens in the coming months could determine the trajectory of renewable energy in the United States for years to come.
Recent Federal Developments for May 2025
TSCA/FIFRA/TRI
EPA Receives TSCA Section 21 Petitions Seeking Reconsideration Of Exemption Conditions In Final Trichloroethylene Rule: The U.S. Environmental Protection Agency (EPA) recently updated its website to include two petitions submitted under Section 21 of TSCA that seek reconsideration of exemption provisions of EPA’s final risk management rule for trichloroethylene (TCE). On March 24, 2025, PPG Industries, Inc. (PPG) submitted a petition seeking an amendment to the December 2024 final rule’s exemption for the industrial and commercial use of TCE as a processing aid for specialty polymeric microporous sheet materials manufacturing that would allow PPG to meet an interim existing chemical exposure limit (ECEL) of five parts per million (ppm) and an action level of 2.5 ppm. EPA’s May 9, 2025, letter acknowledging receipt of the petition states that it will either grant or deny the portions of the petition eligible for TSCA Section 21 within 90 days of the date the petition was received (i.e., by June 22, 2025). On April 30, 2025, the Alliance for a Strong U.S. Battery Sector (Alliance) and Microporous, LLC submitted a TSCA Section 21 petition for reconsideration of and revisions to the final TCE rule. Petitioners request that EPA revise the final rule to increase the interim ECEL to six ppm and extend the length of the duration from 20 to 25 years to account for the time required to research, develop, test, and obtain approvals for any alternative to TCE in battery-separator manufacturing. EPA’s May 9, 2025, letter acknowledging receipt of the petition states that it will either grant or deny the portions of the petition eligible for TSCA Section 21 within 90 days of the date the petition was received (i.e., by July 30, 2025). More information is available in our May 13, 2025, blog item.
EPA Announces Updates To MyPest, A Pesticide Registration Tracking App For Companies: On April 18, 2025, EPA announced updates to its pesticide registration tracking app, MyPest. EPA states MyPest allows registrants of pesticide products to monitor the status of their pesticide registration submissions in real time. The launch of the latest version of MyPest includes updates to an enhanced dashboard page with information about the registrant’s cases and products, the ability to view detailed information of each application, and the capability to communicate with EPA staff directly within the application page. According to EPA, MyPest gives pesticide registrants greater insight into the registration process and provides an easier way for them to communicate with EPA on registration packages under review. EPA believes this update will be “a significant step forward in making the regulatory process more efficient and transparent.” This work is part of EPA’s overall digital transformation strategy and process streamlining that will improve the timeliness of pesticide registration decisions. EPA states over 1,200 registrants have already signed up for MyPest. Additional updates planned for later this year include further enhancements to the user experience and detailed information on the progress of registration review cases and data call-ins.
EPA Announces Settlement To Resolve Chemical Data Reporting Requirements: EPA announced on April 23, 2025, a settlement with Miller Waste Mills, Inc. (doing business as RTP Company) to resolve violations of chemical data reporting requirements under TSCA. EPA states that the Company must pay a $112,155 civil penalty. According to EPA, Miller Waste Mills imports chemicals used in textile waste processing and thermoplastic compounds. EPA alleges Miller Waste Mills failed to submit data reports for four imported chemical substances required by law. EPA assesses chemicals produced or sold in the United States to determine potential risks to public health and the environment. The Agency also ensures that any non-confidential business information regarding the chemicals is available to the public. EPA states that the alleged violations impeded its ability to maintain accurate and updated information.
DOJ Moves For Voluntary Dismissal Of Its Appeal Of Decision Finding That Section 230 Offers Immunity To Online Retailers: On April 24, 2025, the U.S. Department of Justice (DOJ) filed an unopposed motion in the U.S. Court of Appeals for the Second Circuit for voluntary dismissal of its appeal of an October 2024 decision finding that eBay is immune from liability under Section 230 of the Communications Decency Act. USA v. eBay, No. 24-3104. As reported in our September 28, 2023, memorandum, in September 2023, DOJ, on behalf of EPA, filed a complaint in the U.S. District Court for the Eastern District of New York against eBay “for unlawfully selling, offering for sale, causing the sale of, and distributing hundreds of thousands of products” in violation of the Clean Air Act (CAA), FIFRA, and TSCA. USA v. eBay, No. 23-CV-7173. On September 30, 2024, the court granted eBay’s motion to dismiss the case, finding that:
eBay did not sell, offer for sale, or cause the sale or offer for sale of aftermarket defeat devices in violation of the CAA;
eBay did not distribute or sell pesticides in violation of FIFRA;
EPA pled facts sufficient to allege that eBay introduces methylene chloride-containing products into commerce, thus distributing them in violation of TSCA and the methylene chloride rule; and
Section 230 of the Communications Decency Act independently bars EPA’s claims.
The lower court notes that although eBay’s motion to dismiss fails under TSCA, because the court agrees with eBay’s argument that Section 230 applies, it granted eBay’s motion to dismiss. Under the Biden Administration, EPA filed a notice of appeal in the U.S. Court of Appeals for the Second Circuit on November 26, 2024.
EPA Provides Technical Support For Companies Submitting New Chemical Data: On April 25, 2025, EPA announced the availability of new resources intended to help companies with the requirements described in EPA’s December 2024 final rule governing the review of new chemicals under TSCA. According to EPA, the new materials “provide companies with clear instructions on how to include required data elements in the current system used for new chemical submissions while the agency works to update that system.” EPA’s final rule clarifies the level of detail for the data elements that submitters are required to provide with new chemical notices whenever that information is known to or reasonably ascertainable by the submitter. EPA states that “[a]s noted in the preamble to the final rule, enhancements to the Central Data Exchange (CDX) for submitting the data elements were not finalized concurrently with the amendments.” Until then, submitters can provide the required information using the existing CDX workflow. The new information on EPA’s website describes how submitters can satisfy the amended data requirements pending updates to CDX. EPA states that once it completes the CDX updates, it intends to conduct stakeholder outreach before rolling the updates out “so that users know all data elements are included in CDX and that the use of this supplemental information” will no longer be necessary.
EPA Outlines Actions To Address PFAS: On April 28, 2025, EPA outlined upcoming Agency action to address PFAS. According to EPA’s announcement, “[i]n line with Administrator Zeldin’s Powering the Great American Comeback initiative, EPA’s work in this space will advance Pillar 1: Clean Air, Land, and Water for Every American, and Pillar 3: Permitting Reform, Cooperative Federalism, and Cross-Agency Partnership.” EPA states that these actions “are guided by the following principles: strengthening the science, fulfilling statutory obligations and enhancing communication, and building partnerships.” EPA plans additional actions and decisions across its program offices to help communities impacted by PFAS contamination. Our April 29, 2025, memorandum provides the actions outlined on April 28, 2025, as well as links to our memoranda and blogs for more information.
EPA Announces Release Of Final Insecticide Strategy: On April 29, 2025, EPA announced the release of its final Insecticide Strategy (Strategy). EPA states in the Strategy that it is “intended to create a consistent, reasonable, transparent, and understandable approach to assess potential impacts and identify mitigations to reduce potential population-level impacts to listed species from the use of agricultural insecticides.” Specifically, EPA states that the Strategy identifies mitigations aimed at protecting more than 900 species listed by the U.S. Fish and Wildlife Service (FWS) that EPA considers when it registers a new insecticide or reevaluates an existing one. According to EPA, the Strategy includes a three-step framework that EPA will use when reviewing pesticide applications or when a pesticide is undergoing registration review, including how to apply mitigations when needed. The Strategy and accompanying support documents, including a Response to Comments document and an updated Ecological Mitigation Support Document describing mitigations and supporting data that inform implementation of both the herbicide and insecticide strategies, are available at EPA-HQ-OPP-2024-0299. More information on the final Insecticide Strategy is available in our May 5, 2025, blog item.
EPA Seeks Public Comment On Candidates For Peer Reviewers For Several Phthalates: EPA announced on April 30, 2025, that it is requesting public comments on candidates who are interested and available to serve as ad hoc reviewers assisting its Science Advisory Committee on Chemicals (SACC) in the peer review of the Agency’s data, methods, models, and approaches for the draft TSCA risk evaluations of dibutyl phthalate (DBP), di(2-ethylhexyl) phthalate (DEHP), and dicyclohexyl phthalate (DCHP). According to EPA, “[t]his includes the cross-phthalate technical support documents for human health benchmark dose analysis, cancer analysis, and cumulative risk analysis.” EPA states that the final selection of the ad hoc peer reviewers will depend upon the scientific expertise needed to address the SACC peer review charge and “obtaining a breadth and balance of different scientific viewpoints.” The peer review will take place at a virtual public meeting in August 2025. Comments are due May 15, 2025.
EPA notes that it is also working on risk evaluations for two other phthalates, benzyl butyl phthalate (BBP) and diisobutyl phthalate (DIBP). EPA plans to use SACC’s recommendations from the review of DBP, DEHP, and DCHP to inform the risk evaluations of BBP and DIBP because the science approaches used in the BBP and DIBP risk evaluations are consistent with the approaches used in DBP, DEHP, and DCHP. As a result, EPA does not expect to need an additional peer review.
Court Grants EPA’s Request For Abeyance, Denies EPA’s Request For Voluntary Remand In Challenge To Risk Evaluation Rule: As reported in our March 31, 2025, blog item, on March 21, 2025, the U.S. Court of Appeals for the District of Columbia Circuit heard oral argument in a case challenging EPA’s May 3, 2024, final rule amending the procedural framework rule for conducting risk evaluations under TSCA. United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (USW) v. EPA, Consolidated Case No. 24-1151. On April 30, 2025, the court issued an order denying EPA’s motion for voluntary remand and granting EPA’s motion to hold the case in abeyance. In its order, the court states that “serious question arose regarding the propriety of the court retaining jurisdiction over this case and issuing any judgment on the present record.” The court notes that as matters now stand:
EPA has advised the court that it does not intend to defend the 2024 rule. As reported in our March 14, 2025, memorandum, EPA intends to initiate further rulemaking to reexamine multiple aspects of the 2024 rule. During oral argument, EPA stated that it prefers the case be held in abeyance pending reconsideration.
Industry Petitioners (Texas Chemistry Council, American Chemistry Council, American Fuel & Petrochemical Manufacturers, and American Petroleum Institute) and Olin Corporation (as intervenor) advised the court during oral argument that they do not seek a judgment on the merits and that the parties lack adversity with respect to the 2024 rule. They also prefer that the case be held in abeyance.
Alaska Community Action on Toxics and Sierra Club, appearing as intervenors in support of EPA’s 2024 rule, asked the court to uphold the rule.
The court states that it “ha[s] substantial doubts about whether Labor Petitioners — United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, International Association of Machinists and Aerospace Workers, AFL-CIO, and Worksafe, Inc. — have demonstrated Article III standing in accordance with our precedent and D.C. Circuit Rule 28(a)(7).”
The court granted EPA’s motion to hold the case in abeyance and directed the parties to file status reports by July 29, 2025, and at 90-day intervals thereafter. The court denied EPA’s motion for voluntary remand. Senior Circuit Judge Edwards dissented from the grant of abeyance, stating that the case “is ready for hearing and disposition by this court and any further delay is unjustified.” According to Edwards, “[i]t is quite extraordinary that nine years after the Lautenberg Amendments, questions remain as to the agency’s obligations under the statute, and no clear framework has emerged for how the agency is to assess for risk.”
Chemical Companies Petition EPA To Amend TSCA Section 8(a)(7) PFAS Reporting Rule: On May 2, 2025, a coalition of chemical companies petitioned EPA for an amendment of the TSCA Section 8(a)(7) rule requiring reporting for PFAS. Filed under TSCA Section 21 and the February 19, 2025, Executive Order on Ensuring Lawful Governance and Implement the President’s “Department of Government Efficiency” Deregulatory Initiative, the petition states that EPA’s October 2023 reporting rule should have included “the typical TSCA 8(a) reporting exemptions (e.g., by-products, impurities, articles, [research and development (R&D)] materials, and a production volume threshold)” that apply in other TSCA Section 8(a) reporting rules. The petitioners ask that EPA revise the reporting rule to exclude imported articles, R&D materials, impurities, byproducts, non-isolated intermediates, and PFAS manufactured in quantities of less than 2,500 pounds (lb.). Petitioners also request that EPA remove the requirement to submit “‘all existing information concerning the environmental and health effects’ of the chemical substance covered by” the reporting rule and instead allow “robust summaries, similar to the approach adopted by the European Chemicals Agency” (ECHA).
EAB Issues Consent Agreement And Final Order For TSCA Section 5 Violations: On May 5, 2025, the EPA Environmental Appeals Board (EAB) issued a consent agreement and final order between EPA and Cytonix, LLC (Cytonix). According to the consent agreement, in 2022, EPA inspectors discovered Cytonix’s potential noncompliance with requirements under TSCA Section 5 for a manufactured chemical substance consisting of short-chain polyfluorinated materials (Chemical A) that was developed as a replacement for a chemical substance containing long-chain (C8) perfluorinated alkyl groups. Cytonix neither admitted nor denied the specific factual allegations. Cytonix agreed to pay a civil penalty of $190,525 for the alleged violations. More information is available in our May 15, 2025, blog item.
EPA Postpones TSCA PFAS Reporting Period To April 2026: EPA published an interim final rule on May 13, 2025, that extends the dates of the reporting period for data submitted on the manufacture of PFAS under TSCA. 90 Fed. Reg. 20236. Under the interim final rule, the data submission period will begin April 13, 2026, and end October 13, 2026. Small manufacturers reporting exclusively as article importers will have until April 13, 2027, to report. According to EPA, the extension will allow it to develop and test further the software being used to collect data from manufacturers, “thereby providing critical feedback to EPA, including what additional guidance would be useful for the reporting community.” The interim final rule was effective May 13, 2025. Comments on the interim final rule are due June 12, 2025. EPA notes that while it “may reopen portions of the rule to comment regarding potential modifications,” comments regarding topics other than the commencement of the reporting period are outside the scope of this action. More information is available in our May 12, 2025, memorandum.
EPA Denies TSCA Section 21 Petition Concerning Prohibition Of Hydrogen Fluoride In Domestic Oil Manufacturing: As reported in our February 14, 2025, blog item, on February 11, 2025, community and environmental groups submitted a petition under TSCA Section 21 to EPA to prohibit the use of hydrogen fluoride in domestic oil refining “to eliminate the extreme and unreasonable risks this use presents to public health and the environment.” On May 12, 2025, EPA denied the petition, stating that the request to initiate a proceeding for a TSCA Section 6(a) rule is deficient. 90 Fed. Reg. 20575. EPA notes that the releases are described as “catastrophic, accidental, and worst-case scenarios, as well as circumstances involving extreme weather and natural disaster events.” EPA states that it has consistently maintained that “it is not appropriate for a risk evaluation in accordance with TSCA section 6(b) to consider catastrophic or accidental releases, extreme weather events, and natural disasters that do not lead to regular and predictable exposures.” According to EPA, the petition does not establish unreasonable risk under the conditions of use of using and distributing in commerce hydrogen fluoride for domestic refining, and, “[b]y extension, the petition’s claim that governmental authorities and industry programs cannot eliminate such unreasonable risk is moot.”
RCRA/CERCLA/CWA/CAA/PHMSA/SDWA
PHMSA Publishes Notice Of Temporary Enforcement Discretion For Real-Time Train Consist Information: The U.S. Department of Transportation’s (DOT) Pipeline and Hazardous Materials Safety Administration (PHMSA) published a “Notice of Temporary Enforcement Discretion for Real-Time Train Consist Information” (Notice) on April 3, 2025. According to the Notice, PHMSA and the Federal Railroad Administration (FRA) have been notified that Class I railroads anticipate significant challenges in their efforts to comply with the requirements and timelines of the June 24, 2024, final rule requiring railroads that carry hazardous materials to generate, maintain, and provide, in electronic form, certain information regarding hazardous materials in rail transportation to first responders, emergency response officials, and law enforcement personnel to enhance emergency response and investigative efforts. The final rule requires compliance by June 24, 2025, for Class I railroads. The Notice states that the challenges described by Class I railroads “include employee training, IT system updates, and installation of physical infrastructure along certain areas of their rail network to facilitate electronic real-time train consist information updates.” In consideration of these issues, once a Class I railroad provides PHMSA notice that their individual railroad is using this enforcement discretion in its operations, “PHMSA and FRA will take no enforcement action against those particular Class I railroads related to the requirements adopted in the HM-263 final rule until June 24, 2026.” The Notice was effective April 3, 2025.
EPA Extends Comment Period On Draft Sewage Sludge Risk Assessment For PFOA And PFOS: On April 17, 2025, EPA extended the comment period on a draft risk assessment of the potential human health risks associated with the presence of perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS) in biosolids, also known as sewage sludge. 90 Fed. Reg. 16128. According to EPA, the draft risk assessment “reflects the agency’s latest scientific understanding of the potential risks to human health and the environment posed by the presence of PFOA and PFOS in sewage sludge that is land applied as a soil conditioner or fertilizer (on agricultural, forested, and other lands), surface disposed, or incinerated.” Once issued in final, the risk assessment “will provide information on risk from use or disposal of sewage sludge and will inform the EPA’s potential future regulatory actions under the Clean Water Act.” EPA is extending the comment period to allow additional time for interested parties “to thoroughly review and analyze this draft science document.” Comments previously submitted need not be resubmitted. Comments are now due August 14, 2025.
EPA Requests Nominations For CASAC: On May 1, 2025, EPA requested nominations of scientific experts to be considered for appointment to the Clean Air Scientific Advisory Committee (CASAC). 90 Fed. Reg. 18658. CASAC is a chartered Federal Advisory Committee, established pursuant to the CAA to review air quality criteria and National Ambient Air Quality Standards (NAAQS) and recommend to the EPA Administrator any new NAAQS and revisions of existing criteria and standards as may be appropriate. CASAC also advises the EPA Administrator of areas in which additional knowledge is required to appraise the adequacy and basis of existing, new, or revised NAAQS; describes the research efforts necessary to provide the required information; advises the EPA Administrator on the relative contribution to air pollution concentrations of natural as well as anthropogenic activity; and advises the EPA Administrator of any adverse public health, welfare, social, economic, or energy effects that may result from various strategies for attainment and maintenance of such NAAQS. Nominations are due June 2, 2025.
EPA Will Keep MCLs For PFOA And PFOS: EPA announced on May 14, 2025, that it will keep the current national primary drinking water regulations (NPDWR) for PFOA and PFOS. EPA intends to extend the compliance deadlines for PFOA and PFOS, establish a federal exemption framework, and initiate enhanced outreach to water systems, especially in rural and small communities, through EPA’s new PFAS OUTreach Initiative (PFAS OUT). EPA states that this action “would help address the most significant compliance challenges EPA has heard from public water systems, members of Congress, and other stakeholders, while supporting actions to protect the American people from certain PFAS in drinking water.” EPA intends to rescind the regulations and reconsider the regulatory determinations for perfluorohexane sulfonic acid (PFHxS), perfluorononanoic acid (PFNA), and hexafluoropropylene oxide dimer acid (HFPO-DA or GenX), and the Hazard Index mixture of these three plus perfluorobutane sulfonic acid (PFBS) “to ensure that the determinations and any resulting drinking water regulation follow the legal process laid out in the Safe Drinking Water Act.” More information on the 2024 final rule is available in our May 9, 2024, memorandum.
FDA
FDA Provides PFAS Test Results In Bottled Water: On April 14, 2025, the U.S. Food and Drug Administration (FDA) posted its results for 2023 – 2024 testing of PFAS in domestic and foreign purified, artesian, spring, and mineral bottled water. FDA notes that it analyzed 197 samples for 18 types of PFAS in parts per trillion (ppt). The results indicate that ten samples contained detectable levels, but none exceeded the maximum contaminant levels in drinking water established by EPA.
FDA To Phase Out Petroleum-Based Synthetic Dyes In Foods: On April 22, 2025, FDA announced new measures for phasing out petroleum-based synthetic dyes from the nation’s food supply. FDA’s actions include:
Establishing a national standard and timeline for the food industry to transition from petrochemical-based dyes to natural alternatives;
Initiating the process to revoke authorization for Citrus Red No. 2 and Orange B within the coming months;
Working with industry to eliminate FD&C Green No. 3, FD&C Red No. 40, FD&C Yellow No. 5, FD&C Yellow No. 6, FD&C Blue No. 1, and FD&C Blue No. 2 from the food supply by the end of next year;
Authorizing four new natural color additives in the coming weeks, while also accelerating the review and approval of others;
Partnering with the National Institutes of Health (NIH) to conduct comprehensive research on how food additives impact children’s health and development; and
Requesting food companies to remove FD&C Red No. 3 sooner than the 2027-2028 deadline previously required.
FDA Commissioner Marty Makary, MD, MPH, stated ”Today, the FDA is asking food companies to substitute petrochemical dyes with natural ingredients for American children as they already do in Europe and Canada.”
FDA Announces Expanded Use Of Unannounced Inspections At Foreign Manufacturing Facilities: On May 6, 2025, FDA announced that it intends to expand use of inspections of foreign manufacturing facilities without giving prior notice. This change builds upon FDA’s Office of Inspection and Investigations Foreign Unannounced Inspection Pilot program in India and China and aims to ensure that foreign companies will receive the same level of regulatory oversight and scrutiny as domestic companies. According to the press release, FDA conducts approximately 12,000 domestic inspections and 3,000 foreign inspections each year in more than 90 countries, and foreign manufacturing sites “have often had weeks to prepare, undermining the integrity of the oversight process.”
FDA Announces Expansion Of Generative Artificial Intelligence Use: On May 8, 2025, FDA Commissioner Makary announced “an aggressive timeline to scale use of artificial intelligence (AI) internally across all FDA centers by June 30, 2025.” The announcement notes that the AI tools will “allow FDA scientists and subject-matter experts to spend less time on tedious, repetitive tasks that often slow down the review process.” FDA further stated that it “plans to expand generative AI capabilities—across all centers using a secure, unified platform. Future enhancements will focus on improving usability, expanding document integration, and tailoring outputs to center-specific needs, while maintaining strict information security and compliance with FDA policy.”
FDA Approves Three Food Colors: On May 9, 2025, FDA announced that it granted three new color additive petitions that will expand the palette of available colors from natural sources for manufacturers to safely use in food. FDA approved the three new color additives for Galdieria extract blue, butterfly pea flower extract (blue), and calcium phosphate (white). FDA indicates that this is part of its ongoing initiatives announced in April to remove petroleum-based food dyes and approve “safe, natural alternatives – to protect families and support healthier choices.”
NANOTECHNOLOGY
Registration Open Until May 16, 2025, For Joint Regulatory Risk Assessors Summit On Advancing Safety And Sustainability Assessment Of Advanced Materials: On June 19 to June 20, 2025, the EU Horizon Europe projects ACCORDs, iCare, MACRAMÉ, and nanoPASS are hosting a joint summit to address the needs of industry and regulators in assessing the safety and sustainability of advanced materials. The summit will feature discussions, latest method developments, and direct engagement with regulators, scientists, and industry professionals. Key sessions will focus on regulatory challenges, scientific developments, and pathways toward advancing test methods for regulatory testing. Registration will close May 16, 2025.
BIOBASED/RENEWABLE PRODUCTS/SUSTAINABILITY
B&C® Biobased And Sustainable Chemicals Blog: For access to a summary of key legislative, regulatory, and business developments in biobased chemicals, biofuels, and industrial biotechnology, go to https://www.lawbc.com/brand/bioblog/.
PUBLIC POLICY AND REGULATION
“Just do it” May Sell Shoes, But Can It Revolutionize Bureaucracy?: So catchy phrases (“You’re fired”), props (chainsaws), Executive Orders (take your pick), and even 900-page blueprints (Project 2025) may not be enough to impose fundamental change on “the system.” More benign is the realization that the workforce of two-plus million federal workers is hard to manage with only the 1,000 or so most senior appointees arriving with the new Administration.
Viable suggestions coming from the incumbent staff are impossible when the staff is afraid and confused by the swirl of e-mails from questionable authority. Surprise cuts to your program or the end of your career coming from press releases and reports of the latest Executive Order is not good for morale. The apparent rationale for the chainsaw metaphor is a “move fast and break things” approach. This is evocative of some strategies used in the Vietnam war, summarized as: “burn down the village to save it.”
Even if big moves and fundamental changes are the order of the day, the private sector and government functions are different in ways that matter. Failed mergers resulting in a drastic drop in stock prices are impactful in different ways than a drastic impairment of important government functions the public depends on — including clean water or safe food and social security checks delivered on time (and that do not bounce).
More respect for the staff and more understanding of the agency mission and how procedures or budgets evolved into today’s program (warts and all) would have served the reform taskmasters more effectively than the progress reported until now. More information is available in our April 23, 2025, blog item.
Recalibrating Regulation: EPA, Energy, And The Unfolding Consequences Of Deregulatory Momentum: EPA has long navigated the complex intersection of science, law, policy, and public trust. Under the Trump Administration, EPA faces renewed scrutiny. The Administration seeks regulatory rollbacks and is pursuing a broader deregulatory strategy that many believe risks sacrificing hard won environmental protections in the name of economic growth. While early promises to reduce bureaucratic red tape struck a chord with a number in industry, implementation has appeared blunt thus far, rather than measured. Deregulatory actions have sometimes resembled sweeping cuts “with a machete instead of a scalpel,” affecting the intended target of outdated or burdensome rules, but taking with it collateral damage, including critical administrative safeguards and scientific functions. Although EPA has avoided some of the steepest cuts levied on other federal agencies, many worry that this trajectory will fundamentally impair the Agency’s mission. For more thoughts on this deregulatory push, please read our April 24, 2025, blog item.
Navigating The Regulatory Crossroads: Chemical Policy In Trump’s First 100 Days: President Donald Trump’s initial 100 days in office during his second term have marked a significant shift in the United States’ approach to chemical regulation, emphasizing deregulation and industry facilitation over more traditional environmental and public health safeguards. President Trump’s actions, inactions, and policy choices during his first 100 days seem to have come at a cost, as polls show his approval rating has decreased to 39 percent, an 80-year low for a President’s first 100 days in office. This blog item expands on the following issues:
Deregulatory Initiatives and Industry Impact;
PFAS Regulation: A Plan for Regulatory Reversal?; and
Environmental Justice and Community Health Concerns.
The first 100 days of President Trump’s tenure have ushered in a new era of chemical regulation, characterized by a strong emphasis on deregulation and a leaner federal infrastructure. While proponents argue this fosters economic growth and innovation, critics highlight the potential risks to environmental integrity, public health, and institutional knowledge. As the Administration continues to redefine regulatory frameworks, stakeholders must navigate this evolving landscape with vigilance and adaptability. For more insight on these issues, please read our May 4, 2025, blog.
Setting The Record Straight: New Chemical Review Needs Scientists: On May 2, 2025, EPA Administrator Lee Zeldin announced the “[n]ext phase of organizational improvements to better integrate science into agency offices.” As part of this reorganization effort, Zeldin introduced the creation of the Office of Applied Science and Environmental Solutions (OASES) within the Office of the Administrator. According to Zeldin, OASES will “align research and put science at the forefront of the agency’s rulemakings and technical assistance to states.” That same day, The New York Times published an article titled, “Out at the E.P.A.: Independent Scientists. In: Approving New Chemicals.” The piece suggests that EPA’s renewed focus on addressing the backlog of new chemical submissions under TSCA amounts to a policy of automatic approval, an oversimplification that mischaracterizes both TSCA statutory requirements and the Agency’s intended actions.
For EPA’s new chemical review program, what is needed is a long-overdue step toward regulatory equity. EPA needs either to reconsider its interpretation of TSCA Section 5 or Congress needs to act to clarify whether it views EPA’s interpretation as what is best. Consumers and manufacturers alike stand to benefit from a process that allows safer, innovative chemicals to compete on a level regulatory playing field with legacy substances that will not rise to a level that would justify EPA designating the substance as high priority for risk evaluation. More information is available in our May 8, 2025, blog.
LEGISLATIVE
Bipartisan Bill Would Reduce Federal Use Of Products Containing PFOA And PFOS: On April 30, 2025, Representatives Mike Lawler (R-NY), Haley Stevens (D-MI), Brian Fitzpatrick (R-PA), Chris Pappas (D-NH), and Pat Ryan (D-NY) introduced the PFAS-Free Procurement Act (H.R. 3110), a bill aimed at reducing harmful chemical exposure by prohibiting the procurement of products containing PFOS or PFOA. According to Lawler’s April 30, 2025, press release, the bill would prohibit federal agencies from renewing or entering into contracts for products containing PFOS or PFOA, including nonstick cookware, cooking utensils, furniture, carpets, and rugs treated with stain-resistant coatings. The legislation would take effect six months after enactment and would apply to all contracts entered into after that date.
Bipartisan Bill Would Remove PFAS From Firefighter Gear: On May 5, 2025, Representative Debbie Dingell (D-MI), co-chair of the PFAS Task Force, along with Representatives Sam Graves (R-MO), Suzanne Bonamici (D-OR), Tom Kean, Jr. (R-NJ), Dina Titus (D-NV), Brian Fitzpatrick (R-PA), Glenn Ivey (D-MD), and Glenn “GT” Thompson (R-PA), reintroduced the bipartisan Protecting Firefighters and Advancing State-of-the-Art Alternatives Act (PFAS Alternatives Act) (H.R. 3184) to support development of next-generation PFAS-free turnout gear for firefighters and better protect firefighters from the dangers of their work. According to Dingell’s May 5, 2025, press release, the bill would:
Accelerate the development of PFAS-free turnout gear through research, development, and testing of PFAS-free turnout gear materials;
Facilitate the development of safer turnout gear materials that reduce the dangers firefighters face, including enhanced protection against primary and secondary exposure to particulates and byproducts of combustion; reduced maintenance that includes contamination resistance and greater ease of cleaning; visible warning indicators to alert firefighters to hazardous exposures or the need for decontamination; and consideration of body composition in turnout gear design;
Support guidance and training for firefighters on best practices for reducing harmful exposures through the proper wearing, cleaning, and caring for next-generation turnout gear; and
Involve the firefighting industry in the development process by requiring grant applicants to use the leadership, experience, and knowledge of firefighters to ensure the next-generation turnout gear will be both effective and practical for the everyday demands of firefighting.
The bill would authorize $25 million annually for each of fiscal years 2025 through 2029 to support the development of new materials, and an additional $2 million annually to support guidance and training.
MISCELLANEOUS
Comments On Minnesota’s Proposed Rule For Reporting Products Containing Intentionally Added PFAS Are Due May 21, 2025: With the January 1, 2026, reporting deadline fast approaching for reporting on products containing intentionally added PFAS, on April 21, 2025, the Minnesota Pollution Control Agency (MPCA) published a proposed rule intended to clarify the reporting requirements, specify how and what to report, and establish fees. Written comments on the proposed rule are due May 21, 2025, at 4:30 p.m. (CDT). On May 22, 2025, at 2:00 p.m. (CDT), MPCA will hold a public hearing during which it will accept oral comments on the proposed rule. The hearing will end at 5:00 p.m. (CDT), but additional days of hearings may be scheduled if necessary. The procedural rulemaking documents available include:
Proposed Permanent Rules Relating to PFAS in Products; Reporting and Fees (c-pfas-rule1-06);
Statement of Need and Reasonableness for PFAS in products reporting and fees rulemaking (c-pfas-rule1-07) (SONAR); and
Notice of intent to adopt rules with a hearing (c-pfas-rule1-05).
In addition to reviewing the proposed rule, stakeholders should read MPCA’s SONAR. There is much to absorb, and B&C highlights only some of the issues in its April 22, 2025, memorandum.
EPA Requests Nominations For SAB Candidates: On May 1, 2025, EPA requested nominations of scientific experts from a wide range of disciplines to be considered for appointment to the EPA Science Advisory Board (SAB). 90 Fed. Reg. 18657. SAB is a chartered Federal Advisory Committee, established in 1978 under the authority of the Environmental Research, Development and Demonstration Authorization Act (ERDDAA) to provide independent scientific and technical peer review, consultation, advice, and recommendations to the EPA Administrator on the scientific bases for EPA’s actions and programs. EPA states that members of the SAB constitute distinguished bodies of non-EPA scientists, engineers, economists, and behavioral scientists who are nationally and internationally recognized experts in their respective fields. Members are appointed by the EPA Administrator for a two or three-year term and serve as Special Government Employees who provide independent expert advice. Nominations are due June 2, 2025.
Maine Updates PFAS In Products Web Page, Includes Instructions For Submitting A CUU Proposal: The Maine Department of Environmental Protection (MDEP) updated its web page on PFAS in products on May 7, 2025. The updated page includes links to the April 2025 final rule on products containing PFAS, instructions for submitting a currently unavoidable use (CUU) proposal, and frequently asked questions (FAQ). The FAQs address several questions related to CUU determinations, including:
Does my product sold in Maine qualify for a CUU determination?
How and when do I submit a CUU proposal?
What are the timelines for MDEP’s decision making on CUU proposals?
How will MDEP communicate the results of a proposal for CUU determination?
Will CUU determinations be public information?
What will the status of the pending CUU proposals be while MDEP is actively reviewing them and has yet to reach a decision?
As reported in our April 11, 2025, blog item, CUU proposals are due June 1, 2025, for products containing intentionally added PFAS that are within a prohibited category beginning January 1, 2026. Those categories are cleaning products; cookware; cosmetics; dental floss; juvenile products; menstruation products; textile articles (with exception); ski wax; upholstered furniture; and products listed that do not contain intentionally added PFAS but that are sold, offered for sale, or distributed for sale in a fluorinated container or in a container that otherwise contains intentionally added PFAS.
Petitions Filed To Add Chemicals To List Of Chemical Substances Subject To Superfund Excise Tax: On May 13, 2025, the Internal Revenue Service (IRS) announced that petitions have been filed to add the following chemicals to the list of taxable substances:
Bromobutyl isobutylene isoprene rubber (BIIR) (90 Fed. Reg. 20346): Petition filed by Exxon Mobil Corporation, an exporter of BIIR;
Chlorobutyl isobutylene isoprene rubber (CIIR) (90 Fed. Reg. 20350): Petition filed by Exxon Mobil Corporation, an exporter of CIIR;
Di-isobutylene (90 Fed. Reg. 20352): Petition filed by TPC Group, Inc., an exporter of di-isobutylene;
Di-isodecyl phthalate (90 Fed. Reg. 20354): Petition filed by Exxon Mobil Corporation, an exporter of di-isodecyl phthalate;
Di-tridecyl phthalate (90 Fed. Reg. 20352): Petition filed by Exxon Mobil Corporation, an exporter of di-tridecyl phthalate;
Linear nonyl phthalate (90 Fed. Reg. 20348): Petition filed by Exxon Mobil Corporation, an exporter of linear nonyl phthalate;
Linear undecyl phthalate (90 Fed. Reg. 20353): Petition filed by Exxon Mobil Corporation, an exporter of linear undecyl phthalate;
Neo pentanoic acid (90 Fed. Reg. 20346): Petition filed by Exxon Mobil Corporation, an exporter of neo pentanoic acid; and
Regular butyl rubber (90 Fed. Reg. 20347): Petition filed by Exxon Mobil Corporation, an exporter of regular butyl rubber.
Comments on the petitions are due July 14, 2025.
On May 14, 2025, IRS announced that petitions have been filed to add the following chemicals to the list of taxable substances:
Di-isononyl phthalate(90 Fed. Reg. 20551): Petition filed by Exxon Mobil Corporation, an exporter of di-isononyl phthalate; and
Linear nonyl undecyl phthalate (90 Fed. Reg. 20553): Petition filed by Exxon Mobil Corporation, an exporter of linear nonyl undecyl phthalate.
Comments on the petitions are due July 14, 2025.
When States Step In: PFAS Policy Innovation or Fragmentation?
Per- and polyfluoroalkyl substances (PFAS) remain a top concern for regulators and the public alike. While federal regulators continue to lay the groundwork for a comprehensive response, including through the PFAS Strategic Roadmap, states are increasingly positioning themselves as policy innovators in this space. The recent announcement that the U.S. Environmental Protection Agency (EPA) will issue additional guidance and extend the compliance deadline for the Toxic Substances Control Act (TSCA) Section 8(a)(7) PFAS reporting rule underscores a broader dynamic: in the absence of fast-moving federal action that states perceive as comprehensive, states are setting the pace, even if their approaches do not always (or ever) mirror the federal approach to regulation and risk mitigation.
Federal Rulemaking Slows, States Surge Ahead
EPA issued in final the TSCA Section 8(a)(7) PFAS reporting rule in October 2023 to obtain historical data on PFAS manufactured or imported since 2011. Following significant stakeholder pushback over the reporting burden and the scope of the information required, EPA announced on May 13, 2025, that it extended by direct interim final rule the reporting deadline to October 2026 (longer for small business). EPA also signaled its receptivity to revisiting the contours of the core reporting rule — music to many corporate ears.
While this federal delay, and retreat in other PFAS areas, is recent, states have not waited for federal action. Over the past few years, several states have increasingly framed PFAS regulation as a space for environmental leadership, and their regulatory approaches diverge significantly from federal approaches to PFAS regulation.
PFAS Trendsetting: State-by-State
States have introduced wide-ranging PFAS policies aimed at consumer products, environmental media, and public health surveillance. Notably, many of these state efforts include categorical bans and reporting obligations that would be difficult to implement under TSCA without extensive TSCA rulemaking.
Maine’s landmark PFAS in Products Program, An Act To Stop Perfluoroalkyl and Polyfluoroalkyl Substances Pollution, enacted in 2021 and most recently amended in 2024, first prohibits intentionally added PFAS in certain consumer products before setting an ambitious timeline to eliminate most uses by 2032, while also allowing industry to submit currently unavoidable use (CUU) proposals. The 2021 statute required manufacturers to report the presence of intentionally added PFAS, but after several postponements, the legislature amended the statute so that only products with CUU determinations will be required to report. While implementation has faced logistical hurdles, the law positions Maine as a national trendsetter.
California continues to expand its PFAS regulatory portfolio through targeted legislation. Recent laws prohibit PFAS in juvenile products, food packaging, textile articles (including apparel, bedding, handbags, and upholstery), and menstrual products, while adding numerous PFAS chemicals to the Proposition 65 list. This piecemeal approach prompted Governor Gavin Newsom (D) to veto three bills in 2023 that separately addressed PFAS.
Colorado’s HB22-1345, passed in 2022, phases out PFAS in products such as carpets, cosmetics, and firefighting foam, and includes a labeling requirement for cookware that contains intentionally added PFAS. The labeling requirement took effect January 1, 2024, yet the same month that the labeling requirement took effect, SB24-081 was introduced. Enacted on May 1, 2024, the bill repeals the labeling requirement for cookware effective January 1, 2026, when cookware containing intentionally added PFAS is banned, as well as certain other consumer products containing intentionally added PFAS. This legislative one-two for cookware reinforces the idea that while consumer product restrictions are a primary policy tool for many states, the states may not have a long-term view in mind.
Minnesota passed Amara’s Law in 2023, and it was modeled after Maine’s 2021 statute — intentionally added PFAS were banned in certain consumer products on January 1, 2025; reporting on intentionally added PFAS will be required on or before January 1, 2026; and effective January 1, 2032, intentionally added PFAS will be banned in all products that are not exempt and do not have a CUU determination.
Connecticut and Vermont both enacted laws in 2024, with Vermont’s law (S25) restricting certain chemicals, including PFAS, in cosmetic and menstrual products and Connecticut’s statute (S.B. No. 292) banning intentionally added PFAS in certain consumer products and mandating disclosure and reporting.
New Mexico’s HB 212, the most recently enacted statute, is similar to Minnesota’s in that it will phase out certain consumer products containing intentionally added PFAS, require reporting, and ultimately ban products containing intentionally added PFAS that are not exempt or that do not have a CUU determination. New Mexico is unique among enacted legislation to date in that it distinguishes fluoropolymers. Products that contain only intentionally added fluoropolymers are exempt from both the reporting requirements and prohibition.
Leadership or Fragmentation?
While many states are eager to demonstrate environmental leadership, the result for industry is a fragmented landscape. State definitions of intentionally added PFAS vary, as do timelines, disclosure requirements, and enforcement approaches. Moreover, some states are advancing policies that would be difficult to replicate under federal law without significant evidentiary support or economic impact analysis — processes TSCA requires but state legislatures often bypass.
For companies operating across jurisdictions, this growing divergence raises compliance challenges and highlights the need to monitor both federal and state developments, along with a growing number of international measures. Safer States maintains a table of PFAS bans in key sectors with implementation dates.
Looking Ahead
EPA’s decision to extend the reporting window under TSCA Section 8(a)(7) may not have triggered state action, but it reinforces a pattern that has been building for years: states are not waiting for federal consensus before moving forward on PFAS. Whether these policies ultimately converge or further diverge remains to be seen, but what is clear is that PFAS compliance is increasingly being shaped by state leadership — and companies will need to navigate that evolving terrain carefully.
Seventh Circuit Certifies Question Regarding the Impact of Regulatory Permits on CGL Pollution Exclusions to the Illinois Supreme Court
In the recent case Sterigenics U.S., LLC v. National Union Fire Insurance Company of Pittsburgh, No. 24-1223 (7th Cir. 2025), the Seventh Circuit court has asked the Illinois Supreme Court to clarify a key issue of state law regarding pollution exclusions in commercial general liability (CGL) insurance policies. The question presented before the court is whether industrial emissions of toxic chemicals authorized by a regulatory permit constitute traditional environmental pollution excluded from coverage or whether the permit alters the analysis. This answer could have significant implications for insurers and insureds facing liability for bodily injuries caused by environmental contamination.
Background
This case involves Sterigenics U.S. and Griffith Foods International, two companies that operated a medical supply sterilization plant in Willowbrook, Illinois, from 1984 to 2019. The plant used ethylene oxide (EtO), an allegedly carcinogenic gas, to sterilize medical equipment and devices. The companies emitted EtO into the air pursuant to a permit issued by the Illinois Environmental Protection Agency (IEPA) in 1984 – a permit that failed to limit the amount of emissions. In 2018, a federal report suggested that Willowbrook residents were experiencing “staggering and disproportionate” rates of cancer, allegedly due to exposure to EtO. Over 800 people filed lawsuits against Sterigenics and Griffith, claiming that they suffered various illnesses, including cancer, as a result of inhaling EtO emitted by the plant.
Sterigenics and Griffith sought insurance coverage for the lawsuits under their CGL policies issued by National Union Fire Insurance Company. The policies covered bodily injuries caused by an occurrence during the policy period but excluded injuries arising from the discharge of pollutants into the atmosphere, unless the discharge was sudden and accidental.
National Union denied coverage and refused to defend the companies, arguing that the policies’ pollution exclusions applied. In 2021, Sterigenics and Griffith sued National Union in federal court in Chicago, seeking a declaration that the insurer had a duty to defend them against the underlying claims.
The U.S. District Court for the Northern District of Illinois ruled in favor of Sterigenics and Griffith, finding that the pollution exclusion did not apply because the companies emitted EtO pursuant to a permit issued by the IEPA. The court relied on a 2011 Illinois Appellate Court decision, Erie Insurance Exchange v. Imperial Marble Corp., which held that ambiguity existed within that policy’s language as to whether emissions authorized by a regulatory permit constituted traditional environmental pollution and were excluded by a standard pollution exclusion in a CGL policy.
The Decision
National Union appealed to the Seventh Circuit, which decided to certify the question to the Illinois Supreme Court, the definitive authority on Illinois law. The Seventh Circuit noted that the Illinois Supreme Court, in its 1997 decision in American States Insurance Co. v. Koloms, 687 N.E.2d 72 (Ill. 1997), interpreted the pollution exclusion in CGL policies to apply only to injuries caused by traditional environmental pollution, and not routine emissions such as carbon monoxide from a furnace. However, the Court in Koloms did not address the relevance of a permit or regulation authorizing emissions. The Seventh Circuit also observed that its decision in Scottsdale Indemnity Co. v. Village of Crestwood, 673 F.3d 715, 716 (7th Cir. 2012), which held that permitted emissions were not exempt from exclusion, conflicted with the Imperial Marble decision, and that the question was important and likely to recur in future cases.
Implications of the Case
The Illinois Supreme Court’s answer to the certified question could have far-reaching consequences for insurance coverage of environmental claims in Illinois and beyond. If the court agrees with the district court and the Imperial Marble decision and finds that a permit or regulation authorizing emissions makes the pollution exclusion inapplicable, then insurers could face increased exposure for bodily injuries caused by industrial emissions that comply with permits but may nonetheless violate environmental standards, which could create liability for the emitter. This also could incentivize insureds to obtain permits or comply with regulations to avoid the pollution exclusion, regardless of the actual environmental impact of their emissions.
On the other hand, if the court agrees with National Union and the Scottsdale decisions and finds that a permit or regulation authorizing emissions does not affect the pollution exclusion, then insurers could avoid coverage for bodily injuries caused by a wide range of industrial emissions allegedly harming third parties, even those permitted by regulatory authorities. For example, this decision will likely significantly impact coverage for PFAS liability.
The pollution exclusion is a common and controversial provision in CGL policies, and courts across the country have reached different and sometimes conflicting results on its meaning and scope. The Illinois Supreme Court’s answer could provide clarity and guidance for future cases involving environmental contamination and insurance coverage nationwide.
EPA Announces Plan to Scale Back and Extend Compliance Deadlines for Federal Drinking Water Regulations on PFAS
On May 14, 2025, less than three weeks after the U.S. Environmental Protection Agency (EPA) released its strategy to address per and polyfluoroalkyl substances (PFAS), the EPA announced its intent to retain the existing drinking water standards for the two most common PFAS (perfluorooctanoic acid (PFOA) and perfluorooctane (PFOS)). At the same time, EPA stated it would rescind and “reconsider” the regulation of the four other PFAS compounds included in the previous rule (perfluorononanoic acid (PFNA), hexafluoropropylene oxide dimer acid and its ammonium salt (HFPO-DA, commonly known as GenX chemicals), perfluorohexane sulfonic acid (PFHxS) and perfluorobutane sulfonic acid (PFBS)). For more information on the prior rule, see our April 2024 Alert, available here and for more information on EPA’s strategy to address PFAS, see our April 2025 Alert, available here.
In addition to limiting the number of PFAS compounds subject to regulation under the Safe Drinking Water Act, EPA stated it would extend compliance deadlines for PFOA and PFOS from 2029 to 2031, create a framework for federal exemptions for passive receivers of PFAS (consistent with its goal to “hold polluters accountable”), and establish a new “PFAS OUTreach Initiative” (PFAS OUT). According to EPA Administrator Lee Zeldin, with its particular emphasis on water systems in rural and small communities, PFAS OUT will “connect with every public water utility known to need capital improvements to address PFAS in their systems” by sharing resources, tools, funding, and technical assistance to help utilities meet the federal drinking water standards.
Trump Administration Announces New Executive Order to Promote Domestic Production of Biopharmaceuticals
Key Takeaways
Regulatory Relief for U.S. Manufacturing: The EO streamlines FDA and EPA processes to encourage domestic pharmaceutical production.
Increased Scrutiny of Foreign Facilities: Foreign manufacturers face higher inspection standards and potential tariffs, raising supply chain risks.
Piece of the Puzzle: Manufacturing EO is paired with other executive orders on trade and bilateral trade agreements.
Uncertain Policy Landscape: Shifting regulations and trade policies create both opportunities and challenges for biopharma investment decisions.
On May 5, 2025, President Donald J. Trump signed an Executive Order (EO) titled “Regulatory Relief to Promote Domestic Production of Critical Medicines.” The order’s goal is to strengthen the U.S. pharmaceutical supply chain by streamlining regulatory processes, encouraging domestic manufacturing of pharmaceuticals and their inputs, and intensifying the inspection of pharmaceutical manufacturing facilities located outside of the United States.
The May 5 order is the carrot to accompany an expected tariff “stick” on pharmaceutical importations, which President Trump signaled would be forthcoming and appears to have materialized in the form of a just-announced most-favored-nation pharmaceutical pricing executive order. In addition, last month, the Trump Administration initiated a Section 232 investigation of pharmaceutical imports to determine whether imports of pharmaceuticals threaten to impair U.S. national security and therefore should be subject to tariffs or other measures. Taken together, the EO and proposed tariffs will make pharmaceuticals sourced outside the United States more expensive and, perhaps, subject to increased FDA-inspection scrutiny and potential supply disruptions.
The administration’s goal is to accelerate investment in U.S.-based manufacturing and thus onshore some of the manufacturing. This update provides a brief overview of the EO and discusses its potential short- and longer-term implications.
Key Provisions of the EO:
1. Streamlining FDA Regulations:
The EO tasks the United States Department of Health and Human Services (HHS) and U.S. Food and Drug Administration (FDA) with reviewing and eliminating duplicative or unnecessary regulations that hinder domestic pharmaceutical manufacturing.
The EO directs the FDA to maximize the timeliness and predictability of FDA review with the stated goal of accelerating the development of domestic pharmaceutical manufacturing of “pharmaceutical products, active pharmaceutical ingredients, key starting materials and associated raw materials.”
The EO instructs the FDA to work on expanding programs and guidance to provide early technical advice to domestic facilities before they are operational and to work to ensure domestic inspections “are prompt, efficient, and limited to what is necessary to ensure compliance with the Federal Food, Drug and Cosmetic Act (FDCA) and other Federal law.”
2. Enhancing Inspection of Foreign Manufacturing Facilities:
The EO directs the FDA to “develop and advance improvements to the risk-based inspection regime that ensures routine reviews of overseas manufacturing facilities involved in the supply of United States medicines.” The EO states that the increased inspections should be funded by increased fees on foreign manufacturing facilities.
The EO also directs the FDA to negotiate with countries to increase site inspections and increase the number of unannounced inspections of foreign manufacturing facilities that make pharmaceuticals or inputs to pharmaceuticals.
3. Environmental and Construction Permitting:
The EO instructs the Environmental Protection Agency (EPA) and the Army Corps of Engineers to review and streamline requirements and guidance documents related to permitting and building domestic manufacturing facilities, including by accelerating siting and permitting approvals.
Implications for Biopharma Leaders and Their Advisors
Go… But Ready and Steady? For leaders and lawyers considering investment in domestic manufacturing capabilities, the EO presents an opportunity, particularly if it offers a smoother, faster and more predictable route from investment to operation for domestic biopharmaceutical manufacturing facilities. However, even if the EO shortens the timeline from investment to commissioning of pharmaceutical manufacturing capacity, the timeline for developing and launching manufacturing facilities measures in years, not months. The Trump Administration’s policy framework, the EO and tariffs, have the benefit of quick implementation, but the drawback that they could be modified or undone by a stroke of the pen by this or another administration during the long lead time necessary to permit, build, inspect and commission new manufacturing facilities.
Good News for Biotech Investors Amidst Broader Uncertainty for Biopharmaceutical Investments. As our Polsinelli colleagues have noted, the HHS in general and the FDA in particular have been transformed in the first 100 days of the Trump Administration. The FDA has seen a reduction of approximately 3,500 employees to accompany a significant change in leadership and priorities. While the changes may create some new opportunities, there is a concern that the changes will bring delays in review and approval of new biopharmaceuticals, increase uncertainty and perhaps lead to executive oversight and prioritization that differs markedly from the past for certain types of therapies (e.g., vaccines). Some observers have correlated the policy changes to a decrease in venture-based funding to the biotech industry. This new EO may create incentives towards investment in manufacturing, but biotech companies and investors will be making decisions on manufacturing amidst broader uncertainty about whether new therapies that could be manufactured in new U.S. facilities will be approved on a timely basis.
Potential for Supply Chain Disruptions. The global supply chain for biopharmaceuticals is exceedingly complicated. Particularly for biologic medicines, the drug substance (i.e., Active Pharmaceutical Ingredients, or API) for any given drug might be made in a bioreactor in Country A. The drug product (i.e., excipients) might be made at a facility in Country B. Syringes or subcutaneous injection devices might be manufactured in Country C. Filling and finishing the drug into vials, syringes, or subcutaneous injection devices might occur in Country D. Moreover, due to the limited tight supply of manufacturing capacity and the limited shelf life of pharmaceuticals, biotech companies may schedule slots in third-party manufacturing facilities over a year in advance. If, as the EO contemplates, the FDA increases the frequency and intensity of manufacturing facility inspections outside the United States, there is a real chance for supply chain disruptions that could lead to stock-outs of pharmaceuticals. For instance, data from the Association for Accessible Medicines (AAM) suggests that only 13% of API is manufactured in the U.S., meaning that the U.S. is heavily reliant on ex-U.S. suppliers. For instance, 40% of finished doses are made in the U.S., including from APIs produced outside the U.S. See AAM Testimony on the Generic Global Supply Chain. Biotech executives and their counsel will do well to fortify their supply chains and seek reassurance from manufacturing partners that their foreign facilities are ready for enhanced FDA inspection.
Which Nations Find Favor? As we prepared this update on manufacturing, the Trump Administration announced a most-favored nation executive order on pharmaceutical pricing on May 12, 2025. “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients” (MFN EO). The MFN EO authorizes the HHS to communicate price targets to pharmaceutical manufacturers within 30 days, to facilitate programs to allow U.S. patients to purchase medications directly from manufacturers, and to expand drug reimportation programs. Industry reactions have been swift, with Pharmaceutical Research and Manufacturers of America (PhRMA) CEO Stephen J. Ubl stating that “Importing foreign prices from socialist countries would be a bad deal for American patients and workers.” It is reasonable to expect that the MFN EO will be subject to litigation.
The MFN EO appears to be another layer in a multi-layered approach to tariffs on pharmaceuticals and biologics. On May 8, the Trump Administration announced a bilateral trade agreement with Great Britain. The ink is barely dry, but the White House’s fact sheet states that the agreement will “create a secure supply chain for pharmaceutical products.” May 8, 2025, White House Fact Sheet. In contrast, tariffs on Chinese imports remain high, and passage of the BIOSECURE Act, a bill pending in Congress, remains possible. The BIOSECURE Act would erect further barriers to biopharmaceuticals manufactured in China. In short, the Trump Administration’s policy on ex-U.S. foreign pharmaceutical manufacturing may become more complicated still, with certain countries granted more favorable tariff treatment and others disfavored or barred entirely.
Future Outlook and Industry Response
This EO intends to promote U.S.-based pharmaceutical manufacturing in the name of improving public health and protecting national security. The policy presents an opportunity for the U.S. biopharmaceutical industry over the medium and long term, but its implementation and effects, particularly amidst other policy changes, are hard to discern today. Change has been a constant in the Trump Administration. In the short term, stakeholders in the pharmaceutical industry should closely monitor regulatory developments and assess their supply chains to ensure that they are well-positioned to continuously meet the needs of patients and healthcare providers.