McDermott+ Check-Up: May 9, 2025
THIS WEEK’S DOSE
Republicans Advance Reconciliation Debate. Work continued behind the scenes among Republicans to reach consensus on Medicaid policies, with a House Energy and Commerce Committee markup announced for May 13, 2025.
Senate Committees Hold HHS Nomination Hearings, President Trump Withdraws Surgeon General Nomination. Committees considered the nominations of James O’Neill for US Department of Health and Human Services (HHS) deputy secretary and Gary Andres for HHS assistant secretary for legislation. President Trump withdrew Janette Nesheiwat’s nomination for surgeon general and nominated Casey Means in her place.
President Trump Signs Additional Healthcare EOs. The executive orders (EOs) seek to increase domestic drug manufacturing, as President Trump continues to hint at forthcoming pharmaceutical tariffs, and halt federal funding of certain infectious agents research. The president also previewed a forthcoming EO to tie Medicare drug pricing to lower prices abroad, often called the “most favored nation” policy.
Administration Defends FDA in Mifepristone Case. The decision may reflect efforts to protect the executive branch from state intervention.
CONGRESS
Republicans Advance Reconciliation Debate. After key House reconciliation markups expected to occur this week were postponed, Republicans held internal meetings to hash out Medicaid, nutrition, and tax policies to be included in reconciliation. Moderate Republicans continued to urge the House Energy and Commerce Committee not to enact Medicaid policies that could cut coverage or reduce funding for the expansion population. Policies rumored for potential inclusion include work requirements for able-bodied adults, repeal of Biden-era regulations, restrictions on state coverage of undocumented immigrants, and increased eligibility checks. Conservative Republicans led by House Budget Committee Vice Chair Smucker (R-PA) sent a letter to Speaker Johnson stating that if net savings targets aren’t met, tax cuts must be reduced. Senate Majority Leader Thune (R-SD) and Senate Finance Committee Chair Crapo (R-ID) also joined the debate, stating that the House is not pursuing enough spending cuts, including in Medicaid.
The Energy and Commerce Committee announced its markup for May 13, 2025, at 2:00 pm EDT. It is important to remember that just because a markup is announced, it doesn’t mean it has to happen. If it goes forward as planned, the markup will likely last all evening and into May 14, 2025. Language will need to be released by 2:00 am EDT on Monday. While nothing is officially off the table, Republicans do not appear to have support for policies that target states, such as provider taxes, state directed payments, or a cap on the expansion population. Once bill text and a Congressional Budget Office (CBO) analysis are released, we will see if the Energy and Commerce Committee has been able to meet its $880 billion savings target. Democrats will focus on offering amendments to try to undermine the legislation.
As Democrats work to prevent significant Medicaid cuts from moving forward, the CBO, in response to a request from Senate Finance Committee and House Energy and Commerce Committee Ranking Members Wyden (D-OR) and Pallone (D-NJ), released savings estimates for five Medicaid policies that have been under consideration in reconciliation, along with estimates of Medicaid coverage losses attached to those policies. The policies scored include reducing the expansion population federal match, limiting state provider taxes, capping federal spending for all enrollees, capping federal spending for the expansion population, and repealing the Biden-era eligibility and enrollment final rule. CBO previously scored most of these policies, but the figures are now updated. Estimates of Medicaid coverage losses for each proposed policy range from 2.3 million to 8.6 million people.
Senate Committees Hold HHS Nomination Hearings, President Trump Withdraws Surgeon General Nomination. Both the Senate Finance Committee and the Health, Education, Labor, and Pensions (HELP) Committee held hearings for key HHS personnel. The Finance Committee considered the nominations of James O’Neill to be HHS deputy secretary and Gary Andres to be HHS assistant secretary for legislation. Republicans on the committee focused mostly on nominees’ views on rural health and pharmacy benefit managers (PBMs) and their previous experiences at HHS and on Capitol Hill. Democrats questioned nominees on the measles outbreak, HHS staffing cuts, and recent statements made by Secretary Kennedy regarding autism. Sen. Cassidy (R-LA) similarly expressed concerns about HHS’s restructuring and the agency’s stance on vaccines.
The evening before the HELP Committee hearing to consider O’Neill for deputy secretary and Janette Nesheiwat, MD, for surgeon general, President Trump abruptly withdrew Nesheiwat’s nomination and instead named Casey Means, MD, for surgeon general. Means is the sister of Calley Means, special government employee for HHS. Both Casey and Calley Means have worked closely with HHS Secretary Kennedy for years and were actively involved in his presidential campaign. The committee will consider Means’ nomination at a later date. During the HELP Committee nomination hearing, Republicans focused on the importance of regulatory oversight and safety of drug approvals and expressed interest in preventing the misuse of artificial intelligence (AI). Chair Cassidy continued his focus on the measles outbreak from earlier in the week and asked questions about vaccine mandates for immigrants. Democrats focused on the impact HHS staffing and funding reductions will have on programs, including Medicaid and Head Start.
ADMINISTRATION
President Trump Signs Additional Healthcare EOs. The EO “Regulatory Relief to Promote Domestic Production of Critical Medicines” aims to make the United States more competitive in producing safe and effective medicines. It directs the US Food and Drug Administration (FDA) and the US Environmental Protection Agency, within 180 days, to accelerate domestic pharmaceutical manufacturing inspections and approvals of new and expanded manufacturing capacities. It also directs the FDA to advance improvements within 90 days to the inspection regime of foreign manufacturing facilities involved in the supply of US medicines, funded by increased fees on foreign manufacturing facilities. Read the fact sheet here. The day after the EO was issued, the FDA announced it would increase unannounced inspections at foreign food and drug manufacturing facilities.
The gain-of-function research EO “Improving the Safety and Security of Biological Research” directs federal agencies to halt funding of dangerous gain-of-function research, as defined in the EO, conducted in foreign countries. It directs HHS to include new enforcement terms in research contracts or grants, including a requirement that recipients do not operate or fund dangerous gain-of-function research in foreign countries, with revocation of funding and a ban on HHS funding for up to five years for violations. The Office of Science and Technology Policy will track domestic gain-of-function research under the EO. Read the fact sheet here.
The administration announced that another healthcare-related EO is expected as soon as next week that will pursue “most favored nation” pricing for prescription drugs in the Medicare program. This is a policy the president pursued in his first term and recently promoted to Congress for inclusion in reconciliation for Medicaid.
COURTS
Administration Defends FDA in Mifepristone Case. Idaho, Kansas, and Missouri brought the lawsuit in Texas and challenged the FDA’s review and approval of mifepristone, an abortion medication. In 2024, the US Supreme Court ruled that the original plaintiffs in the case – doctors and medical associations – lacked standing to bring the case. The Biden administration previously defended the FDA in this new iteration of the case, a posture the Trump administration is continuing. In a filing to the Texas court, the Trump administration alleged that the plaintiff states lack standing and requested that the case be dismissed. In other words, the administration is avoiding the merits of the case and pursuing dismissal on procedural grounds. Some commenters suggest that this action is intended to more broadly protect federal authority, although during his presidential campaign, President Trump said that he wouldn’t restrict access to abortion medications.
QUICK HITS
HHS OCR Sends Letter on Race-Based Discrimination to Medical Schools. The HHS Office for Civil Rights (OCR) issued a letter stating that medical schools cannot use race-based criteria or racial stereotypes in admissions, campus life, or hospital operations. OCR notes such actions violate Section 1557 of the Affordable Care Act, Title VI of the Civil Rights Act, and the Equal Protection Clause of the US Constitution. Read the press release here.
ACL Announces $1 Billion in OAA Funding. The Administration for Community Living (ACL) released $1.1 billion in state funding through Older Americans Act (OAA) programs to complete fiscal year (FY) 2025 funding.
NIH, CMS Announce Autism Research Partnership. The National Institutes of Health (NIH) and Centers for Medicare & Medicaid Services (CMS) partnership continues HHS’s focus on researching the root causes of autism. CMS will provide data on Medicare and Medicaid enrollees with autism, in compliance with privacy laws, to the NIH to examine trends, health outcomes, access to care, and the economic burden of autism.
FTC, DOJ Continue Anticompetitive Regulation Emphasis. The Federal Trade Commission (FTC) and US Department of Justice (DOJ) sent a letter to federal agencies instructing them to develop a list of regulations that reduce competition. The action follows an FTC request for information on anticompetitive regulations, with comments due May 27, 2025.
FDA Will Adopt AI in Review Process by June 2025. FDA completed its first AI-assisted scientific review pilot and aims to accelerate review processes by having all centers integrate AI by the end of June 2025.
Trump Administration Fires Acting FEMA Administrator After Congressional Hearing. Acting Federal Emergency Management Agency (FEMA) administrator Cameron Hamilton testified before the House Appropriations Committee that FEMA should not be eliminated, after which he was fired. The Trump Administration aims to eliminate or reduce FEMA and shift disaster response to states.
BIPARTISAN LEGISLATION SPOTLIGHT
Sens. Hawley (R-MO) and Welch (D-VT) reintroduced the Fair Prescription Drug Prices for Americans Act, which was also introduced in the 118th Congress. The legislation would prohibit pharmaceutical companies from setting drug prices above the international average, and violating companies would be subject to civil monetary penalties. Read the press release here. This topic is receiving increased attention from the Trump administration, as noted above.
NEXT WEEK’S DIAGNOSIS
HHS Secretary Kennedy will be on Capitol Hill on May 14, 2025, testifying in front of the House Appropriations Committee and the Senate HELP Committee on the FY 2026 skinny budget proposal released last week. It will be his first appearance in Congress as HHS secretary. Democrats will likely question Kennedy on his response to the measles outbreak and HHS restructuring and reductions in force. HELP Committee Chair Cassidy may echo some of those concerns, as he did in the HHS nomination hearings this week, and may continue his focus on vaccines. On May 13, 2025, the Senate Judiciary Committee will examine pharmacy benefit managers, and the House Energy and Commerce Committee plans to hold its reconciliation markup.
Services Propose to Remove Habitat Modification from ESA’s Definition of ‘Harm’
The U.S. Fish and Wildlife Service (USFWS) and the National Marine Fisheries Service (NMFS) have proposed to rescind the regulatory definition of “harm” under the ESA to generally remove consideration of habitat when analyzing impacts to covered species. This move has potential to dramatically impact species conservation efforts and developer and landowner obligations under the Endangered Species Act (ESA), 15 U.S.C. §§ 1531-1541.
The two Services’ Notice of Proposed Rulemaking (NPRM), Rescinding the Definition of ‘‘Harm’’ Under the Endangered Species Act, 90 Fed. Reg. 16102 (April 17, 2025), would remove habitat modification as a basis for finding an unlawful “take” of a listed species under the Act.
Under current regulations—50 C.F.R. § 17.3 and § 222.102—“harm” is broadly defined to include not only direct injury or death of protected species, but also significant habitat modifications or degradation that kills or injures wildlife by significantly impairing essential behavioral patterns, such as breeding, feeding, or sheltering.
The proposed change would eliminate the regulatory definition of “harm” altogether and rely instead on the statutory definition of “take” in section 3(19) of the ESA, 16 U.S.C. § 1532(19). The statutory definition of “take” includes “harm” among a list of 10 actions that cause direct physical injury or death of listed species and include trapping, capturing, or collecting, among others. Habitat-related impacts, unless they are directly and physically harmful to animals, do not fall within the statutory definition.
The two Services offer three justifications for the proposed rule change:
restoring clarity and predictability for regulated entities, like landowners and developers, who have argued that the current interpretation sweeps too broadly and creates uncertainty;
realigning the definition with pre-1999, narrower interpretations of “take”; and
reducing litigation risk by minimizing reliance of indirect theories of injury.
Meanwhile, critics of the NPRM charge that it would:
dramatically weaken protection of endangered and threatened species by ignoring the importance of habitat loss;
contradict longstanding judicial interpretations, including the Supreme Court’s decision in Babbitt v. Sweet Home Chapter of Communities for a Great Oregon, 515 U.S. 687 (1995), where the Court upheld the agencies’ authority to define “harm” to include significant habitat modification; and
would increase species extinction risk by preventing early intervention when habitat destruction imperils survival but before physical injury begins.
If finalized, the proposed change may spawn vigorous debate and litigation. While in last term’s Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), the Supreme Court overruled the longstanding Chevron principle of agency deference in rulemaking, it remains to be seen how and whether it defers to its own past interpretation of “harm” in Babbitt. If the proposed rescission becomes final, the rule change would make it more difficult for the government and citizen groups to bring enforcement actions based on habitat destruction alone and shift the focus of ESA compliance to proving physical harm to individual animals rather than preventing ecological harm.
Comments on the NPRM are due May 19, 2025.
NY’s Superfund Law Poised for Overhaul: Aligning with CERCLA and Accounting for Environmental Justice
As part of the 2025 Executive Budget, New York’s legislature has passed significant amendments to New York’s Environmental Conservation Law concerning the Inactive Hazardous Waste Disposal Site Remedial Program—commonly referred to as the State Superfund program. It is anticipated that the governor will sign the legislation. The proposed amendments (S.8308-C/A.8808-C) would align New York’s state-level liability framework more closely with core components of federal CERCLA, the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §§ 9601–9675.
The new law would strengthen enforcement authority and emphasizes environmental justice (EJ) priorities. Notably, it codifies a state analog to CERCLA’s “bona fide prospective purchaser” (BFPP) defense—previously absent from New York statutory law. This legislative package marks a departure from the governor’s initial proposal and signals a broader evolution of the State Superfund program. Property owners, prospective purchasers, and others should carefully assess how these changes affect liability exposure and the steps necessary to qualify for liability protections.
Revising Liability Standards and Introducing New Defenses
The bill broadens the definition of “responsible person,” to include any owner, operator, disposer, arranger, or transporter—excluding only Brownfield Cleanup Program volunteers—as liable for hazardous waste disposal at a site. Without carve-outs, this expansive language would capture “innocent owners” and prospective purchasers of contaminated sites who had no role in the contamination. While the definition aligns with federal CERCLA, the governor’s initial January 2025 proposal did not include CERCLA-style defenses, potentially complicating the sale of contaminated properties. The law, as-passed, now provides for a state BFPP safe harbor. Since 2002, federal CERCLA law has recognized that a party can maintain BFPP status to avoid potential liability for the purchase of a contaminated site so long as certain statutory criteria are met. New York’s version would extend similar protections to good-faith buyers who conduct “all appropriate inquiries” and fulfill continuing care obligations. This marks a significant improvement over New York’s vague common law “innocent owner” defense, which was largely derived from Navigation Law oil spill cases, offering greater clarity for purchasers navigating contaminated site transactions.
Shifts in Enforcement and Procedural Architecture
The new legislation also rejects an earlier proposal authorizing the DEC commissioner to issue unilateral cleanup orders, akin to EPA’s power under CERCLA § 106. Instead, the bill introduces a summary abatement mechanism modeled on NY ECL § 71-301, under which the commissioner may issue an order finding an imminent danger to health or welfare of the people or environment. If a party fails to comply or refuses to enter a remedial program the DEC may refer the matter to the attorney general for injunctive relief or cost recovery. Orders may be challenged administratively and, if upheld, via an Article 78 proceeding. The legislation leaves unchanged the DEC’s ability to issue notices of potential liability, pursue consent orders, or undertake cleanups and seek cost recovery through litigation. The bill also raises civil penalties significantly—to $65,000 to $125,000 per day for continuing violations—bringing them closer to federal levels.
Environmental Justice Considerations
The bill enhances the role of local governments in identifying potential inactive hazardous waste sites, particularly within disadvantaged communities (DACs). DEC must now consider these referrals in prioritizing state-funded cleanups. The statute directs state Superfund dollars—not voluntary cleanup incentives—to Class 1 and 2 sites located in DACs, marking a policy shift that favors direct state remediation in EJ areas. Again, tying into developments at the federal level that have mostly abandoned prior administrations’ focus on DACs, New York law now expressly compels the prioritization of cleanups in DACs, giving the state primacy in the protection of these communities.
GT Insights
This bill marks a significant step toward aligning New York’s Superfund program with federal CERCLA, particularly by its codifying BFPP protections. Previously, good-faith purchasers had limited options—either enter a Brownfield agreement, BFPP administrative consent order, or litigate under an ill-defined “innocent owner” defense. The new framework would provide clearer, more accessible liability relief. The adoption of established summary abatement authority seeks to balance the need for administrative enforcement tools without overreaching through unilateral orders. The structured abatement referral process, combined with heightened penalties, enhances enforcement while allowing for both administrative and judicial review. This new framework should strengthen the state’s leverage over noncompliant actors without risking over-reliance on heavy-handed unilateral orders in ordinary agency disputes. Finally, the mandated prioritization of Class 1 and 2 cleanups in DACs signals a state-led commitment to EJ—positioning New York as the primary regulator of that space amid inconsistent federal policy.
EPA Seeks Public Comment on Candidates for Peer Reviewers for Several Phthalates
The U.S. Environmental Protection Agency (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 Toxic Substances Control Act (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.
States Sue Trump Administration Over Blocked Wind Developments
On Monday, May 4, 2025, a coalition of 17 states and the District of Columbia filed suit in Massachusetts District Court over the Trump administration’s efforts to block federal permits for all offshore wind development. The administration’s policy was announced in a January 20, 2025 executive order placing federal permitting of wind projects on hold while the Interior Department reviews applications for offshore leases. The lawsuit asks the court to declare the executive order unlawful and to prevent federal agencies from taking any measures to block or delay wind projects, claiming the it is baseless and unjustified. Several offshore wind projects are under development, having advanced through the long list of environmental reviews required by federal law, while others are in the regulatory pipeline. The plaintiffs note that the executive order contradicts the administration’s simultaneous declaration of a “national energy emergency,” and undermines efforts by the affected plaintiffs to comply with their renewable energy requirements.
Notwithstanding the executive order, the offshore wind industry has faced economic headwinds in recent years that have resulted in delays, additional costs, and, in some cases, project cancelations. As a result of economic uncertainty and political hostility, the status of offshore wind projects varies widely – Atlantic Shores (1.5GW) off the coast of New Jersey recently had its air pollution permit invalidated by the EPA; Empire Wind (810MW) off the coast of New York is under a stop order issued by the Interior Department; Beacon Wind (2.5GW) off the coast of New York withdrew a key permit application, citing the need to reevaluate the project design; Vineyard Wind 1 (800MW) off the coast of Massachusetts is on track to complete construction in 2025; New England Wind 1 and 2 (2.6GW) off the coast of Massachusetts is fending off lawsuits to reopen its Clean Air Act permits; Southcoast Wind (2.4GW) off the coast of Massachusetts has announced a construction delay; and Revolution Wind (704MW) off the coast of Rhode Island is progressing.
The jurisdictions involved in the lawsuit are Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Illinois, Massachusetts, Maine, Maryland, Michigan, Minnesota, New Jersey, New Mexico, New York, Oregon, Rhode Island, and Washington.
How to Become a U.S. Government Contractor: A Legal Guide to the Basics
For many businesses, contracting with the U.S. government represents a significant opportunity for stable and often long-term revenue. However, doing business with the federal government comes with unique requirements, procedures, and compliance obligations. Whether you’re a small startup or an established company considering entering the federal market, understanding the basic steps to becoming a government contractor is essential.
Here’s a legal overview of the fundamental steps to get started:
1. Understand Federal Contracting Basics
Before diving into the registration process, it’s important to understand how government contracting works. The U.S. government is the world’s largest buyer of goods and services. Federal contracts range from supplying office supplies to building infrastructure to providing professional services.
The Federal Acquisition Regulation (FAR) governs how federal agencies acquire goods and services. Contractors must comply with these rules, as well as agency-specific supplements.
2. Obtain a Unique Entity ID and Register with SAM
To do business with the federal government, your company must first:
Obtain a Unique Entity Identifier (UEI) – As of April 2022, the federal government replaced the DUNS number with the UEI, which you can obtain through SAM.gov.
Register in the System for Award Management (SAM) – SAM registration is mandatory for all contractors seeking federal contracts. This process includes submitting basic company information, selecting applicable NAICS codes (which classify your business’s industry), and certifying compliance with various federal regulations.
3. Determine Small Business Status and Set-Asides
If your business qualifies as a small business under SBA size standards (based on your NAICS codes), you may be eligible for set-aside contracts. Special categories include:
Woman-Owned Small Business (WOSB)
Service-Disabled Veteran-Owned Small Business (SDVOSB)
HUBZone Business
8(a) Business Development Program participants
To pursue these opportunities, consider obtaining the relevant certifications from the U.S. Small Business Administration (SBA).
4. Develop a Capability Statement
A capability statement is a concise, targeted document that outlines your company’s qualifications, past performance, core competencies, and differentiators. This is often a critical tool when introducing your business to government buyers or prime contractors.
5. Explore Opportunities and Bid on Contracts
There are several ways to find and pursue government contracting opportunities:
Contract Opportunities on SAM.gov – This is the primary portal for federal solicitations over $25,000.
GSA Schedules – If your product or service is in demand across multiple agencies, you may benefit from getting on a General Services Administration (GSA) Schedule, which streamlines the procurement process.
Subcontracting – Many companies begin as subcontractors to established primes, which can help build experience and credibility in the federal market.
6. Understand Compliance Obligations
Government contractors must comply with various regulations, including:
Labor laws (e.g., Service Contract Act, Davis-Bacon Act)
Equal employment opportunity obligations
Cybersecurity requirements (especially under DFARS and NIST standards for DoD contracts)
Ethics and anti-kickback rules
You should establish internal compliance policies and consult with legal counsel to ensure your operations align with federal expectations.
7. Keep Registrations and Certifications Current
Once you’re registered and active in government contracting, it’s critical to:
Update your SAM registration annually
Maintain certifications and eligibility status
Track performance metrics and customer feedback
Stay informed of regulatory changes
Final Thoughts
Becoming a U.S. government contractor is not a one-step process — it requires legal and administrative diligence, strategic planning, and ongoing compliance. Partnering with experienced advisors, legal counsel, or procurement consultants can streamline your entry into this lucrative market. For companies ready to invest the time and resources, government contracting offers a pathway to sustained business growth and stability.
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Setting the Record Straight: New Chemical Review Needs Scientists
On May 2, 2025, U.S. Environmental Protection Agency (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, Administrator 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 the Toxic Substances Control Act (TSCA) amounts to a policy of automatic approval, an oversimplification that mischaracterizes both TSCA statutory requirements and the Agency’s intended actions.
First enacted in 1976, TSCA grandfathered in all chemicals in commerce at the time (deemed “existing chemicals”). When Congress amended TSCA in 2016 through the bipartisan Frank R. Lautenberg Chemical Safety for the 21st Century Act (Lautenberg), “new TSCA” laid out a detailed chemical prioritization, risk evaluation, and risk management scheme for existing chemicals identified as high-priority. EPA has developed a framework for evaluating these legacy chemicals, and has prioritized and assessed chemicals largely drawn from the 2014 Update to the TSCA Work Plan. To date, EPA has concluded that all existing chemicals it has reviewed present an “unreasonable risk” and has issued final risk management rules for five and proposed risk management rules on an additional three of the first ten chemicals. EPA has imposed restrictions to eliminate unreasonable risk on these chemicals in five final rules, all of which are being judicially challenged. Currently, EPA is in the process of evaluating another 28 chemical substances under Lautenberg. If personnel are transferred into the TSCA assessment program, it does not mean those assessments are likely to receive an “automatic approval” for continued use.
“New” chemicals have always undergone rigorous premanufacture notice review (PMN) by EPA scientists. Before the Lautenberg amendments, EPA developed and often relied upon an assessment regimen that used knowledge, models, and information on analog chemicals as the basis for many assessments of new chemical applications. The 2016 amendments formalized the process and requires that EPA make one of five risk determinations (not likely to present an unreasonable risk, may present an unreasonable risk, may present an unreasonable risk if produced in substantial quantities, that there is insufficient information to make a determination, or that the chemical presents an unreasonable risk). Unless EPA makes a “not likely” finding, EPA must issue a restriction in the form of an order and a Significant New Use Rule (SNUR). In nearly all cases in which EPA identified a hazard other than “low hazard,” EPA has imposed restrictions regardless of their relative hazard or risk vis-a-vis comparable existing chemicals. While the program developed under the original legislation — using knowledge and evaluation based on structurally similar chemicals — was “not good enough” for some detractors, it was no automatic approval process and regulated new chemical risks according to TSCA requirements. The fundamental approval standard of the 1976 or 2016 legislation remains the same — to control unreasonable risk from chemicals — but the new chemical review program since 2016 has been frustrating chemical innovation.
While the majority of existing chemicals can be used without additional scrutiny or reporting obligations, new chemicals with consent orders and/or SNURs are commercially disadvantaged. When a chemical goes through the PMN review process and can be shown to have a favorable toxicological profile compared to currently used chemicals for the same uses/current products, it is disadvantaged in the marketplace even though it has a better risk profile. It will face greater regulatory hurdles and market access challenges due to the issuance of an order or SNUR than a more hazardous, existing chemical that has not yet gone through TSCA risk assessment. Industry stakeholders often refer to this disparity as the “new chemical bias.”
EPA’s recent efforts to prioritize the review of new chemical submissions, long subject to delays and underinvestment, should not be misconstrued as deregulation. Allocation of staff with the right expertise — toxicologists, chemists, industrial hygienists — is an attempt to help with the review of EPA’s backlog of pending cases. There will likely be little change to EPA’s interpretation of what substances are “not likely” to present an unreasonable risk. Finding ways to address delays and backlogs are separate from criticism or debate about what the overall EPA budget should be. EPA should be adequately resourced to both operate a review program for chemicals (and pesticides) and conduct research on environmental issues as part of its overall mission.
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 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.
ECHA Will Propose EU-Wide Restrictions on Certain Hexavalent Chromium Substances
The European Commission (EC) requested that the European Chemicals Agency (ECHA) assess the risks posed by certain hexavalent chromium substances. ECHA announced on April 29, 2025, that it has concluded that a European Union (EU)-wide restriction for hexavalent chromium substances is justified because the substances “are among the most potent workplace carcinogens and pose a serious risk to workers’ health.” ECHA states that it expects to begin a six-month public consultation on a ban on hexavalent chromium substances, except in the following use categories when defined limits for worker exposure and environmental emissions are met:
Formulation of mixtures;
Electroplating on plastic substrate;
Electroplating on metal substrate;
Use of primers and other slurries;
Other surface treatment; and
Functional additives/process aids.
ECHA states that this restriction could replace the current authorization requirements under the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) regulation, ensuring that the risks associated with hexavalent chromium substances are effectively controlled once they are no longer subject to REACH authorization. ECHA notes that it included barium chromate in the scope of the restriction to avoid regrettable substitution.
ECHA states that stakeholders will have the opportunity to provide information during the six-month consultation, which is expected to start on June 18, 2025. ECHA plans to organize an online information session to explain the restriction process and help stakeholders take part in the consultation. ECHA’s Committees for Risk Assessment (RAC) and Socio-Economic Analysis (SEAC) will evaluate the restriction proposal and scientific evidence received during the consultation.
DFC to Play Critical Role in New U.S.-Ukraine Minerals Deal
On April 30, 2025, the United States and Ukraine signed an agreement (the “Agreement”) establishing a framework for the creation of the United States-Ukraine Reconstruction Investment Fund (the “Partnership”). The Partnership will be a joint natural resources and infrastructure investment fund between the U.S. and Ukraine. The U.S. International Development Finance Corporation (“DFC”) will play a critical role by serving as a limited partner of the Partnership alongside Ukraine’s State Organization Agency on Support of Public-Private Partnership. The Agreement does not identify the general partner.
The Agreement, by operation of its terms, provides the Partnership with preferential rights to participate in natural resources and public-private partnership projects and DFC (or DFC’s assignee) with preferential rights to negotiate offtake arrangements with respect to critical minerals projects. The U.S. and Ukraine are still in the process of finalizing the limited partnership agreement, which is expected to further clarify the operations of the Partnership. The key provisions of the Agreement, including capital contributions, investment rights, and offtake arrangements, are summarized below.
Capital Contributions
Ukraine will contribute to the Partnership 50% of the amounts received by Ukrainian governmental authorities for licenses, permits, and production sharing agreements relating to the exploration, extraction, and processing of “Natural Resources Relevant Assets.”[1]
The U.S. capital contribution to the Partnership will be increased by the assessed value of any new military assistance the U.S. provides to Ukraine in accordance with the limited partnership agreement.
The Agreement does not indicate how the Partnership will be initially capitalized.
Investment Opportunity Rights
Ukrainian governmental authorities responsible for licenses and permits relating to Natural Resources Relevant Assets and Ukrainian governmental authorities responsible for public-private partnership agreements and concessions must include in the relevant license, permit, or agreement, a provision requiring the recipient thereof to make “relevant investment information” available to the Partnership at any time the recipient is seeking to raise capital.
When the Partnership expresses formal interest in “participating” in one of these natural resources or infrastructure projects, the relevant Ukrainian governmental authority must include in the relevant license, permit, or agreement, provisions requiring the recipient thereof to grant to the Partnership a right similar to a right of first refusal. Specifically, the recipient must engage in good faith negotiations with the Partnership and refrain from granting to any third party materially more favorable economic terms than those offered to the Partnership.
The Agreement does not specify the precise nature of the Partnership’s participation in these projects and whether such participation may extend beyond direct investment.
Market-Based Offtake Rights
The Agreement provides a critical role for DFC, allowing DFC (or DFC’s assignee) to negotiate offtake rights in respect of projects involving Natural Resources Relevant Assets.
Specifically, the Agreement requires Ukrainian governmental authorities responsible for licenses or special permits relating to Natural Resources Relevant Assets to include in the relevant license or permit: (1) provisions allowing DFC (or DFC’s assignee) to negotiate offtake rights on market-based commercial terms, and (2) prohibiting the license or permit recipient from offering to any third party materially more favorable economic terms for offtake than those provided to DFC (or DFC’s assignee).
The Agreement provides a broad framework for U.S.-Ukraine cooperation in investing in critical minerals and infrastructure projects in Ukraine. DFC will play a critical role by serving as limited partner of the Partnership and by having the right to negotiate offtake arrangements for a wide array of natural resource projects in Ukraine. Further details regarding the limited partnership agreement and implementation of the Agreement are expected in the near future.
[1] The Agreement defines “Natural Resource Relevant Assets” as the sites, reserves, and deposits in the territory of Ukraine of aluminum, antimony, arsenic, barite, beryllium, bismuth, cerium, cesium, chromium, cobalt, copper, dysprosium, erbium, europium, fluorine, fluorspar, gadolinium, gallium, germanium, gold, graphite, hafnium, holmium, indium, iridium, lanthanum, lithium, lutetium, magnesium, manganese, neodymium, nickel, niobium, palladium, platinum, potash, praseodymium, rhodium, rubidium, ruthenium, samarium, scandium, tantalum, tellurium, terbium, thulium, tin, titanium, tungsten, uranium, vanadium, ytterbium, yttrium, zinc, zirconium, oil, natural gas (including liquified natural gas), and other minerals or hydrocarbons otherwise agreed by DFC and Ukraine’s State Organization Agency on Support of Public-Private Partnership.
European Union Adopts 16th Package of Sanctions Against Russia
In a bid to further increase the pressure on Russia, the Council of the European Union has adopted additional measures which have been introduced in its 16th sanctions package. The new measures amending the framework Council Regulation (EU) 833/2014 are found and included in Council Regulation (EU) 2025/395 (EU’s 16th Package). They target systemically important sectors of the Russian economy, including energy, trade, transport, infrastructure and financial services.
Additional Listings
An additional 48 individuals and 35 entities have been targeted by asset freezes and travel bans. The EU’s 16th Package adds new criteria for listing individuals and entities that are part of support or benefit from Russia’s military-industrial complex. This is in addition to any entities or individuals who are active in sanctions circumvention, maritime or Russian crypto assets exchanges.
Anti-Circumvention Measures
An additional 74 vessels, bringing the total number of listed vessels to 153, have been added. These vessels are part of the shadow fleet or contribute to Russia’s energy revenues.
Trade Measures
Ban on Primary Aluminium Imports
The EU’s 16th Package also adopts further restrictions on the trade of goods and services. An aluminium import ban on EU imports of primary aluminium from Russia has been included. The exception to this is that it includes a “phase-in period” permitting the import of 275,000 tons over a 12-month period.
Export Bans
Export restrictions have been added which target 53 new companies, which include 34 companies outside of Russia and which support Russia’s military-industrial complex.
Dual-use export restrictions have been extended to additional items in order to cut Russia’s access to key technologies, including the following:
Dual-use chemical precursors to produce chloropicrin and other riot control agents used as chemical weapons by Russia in violation of the Chemical Weapons Convention.
Software related to computer numerical control machine tools used to manufacture weapons and video game controllers used by the Russian army to pilot drones on the battlefield.
Chromium ores and compounds due to their military applications.
Additional export restrictions on industrial goods, such as steel products, fireworks and certain minerals and chemicals, have been included.
Energy Measures
The EU’s 16th Package prohibits temporary storage or the placement under free zone procedures of Russian crude oil or petroleum products in EU ports, which was, until now, allowed if the oil complied with the price cap and went to a third country. This prohibition will inflict additional costs on the transport of Russian oil.
The package extends the prohibition to provide goods, technology and services for the completion of Russian liquefied natural gas projects to also crude oil projects in Russia, such as the Vostok oil project.
The package extends the existing software ban to restrict the export, supply or provision of oil and gas exploration software, which includes drilling processes, geological inspections and reservoir calculations, to Russia.
Infrastructure Measures
With immediate effect, a full transaction ban on specific Russian infrastructures—ports and airports which are believed to have been used to transport combat-related goods and technology or to circumvent the oil price cap by transporting Russian crude oil via ships in the shadow fleet—have been included in this latest package as they contribute to Russia’s military efforts.
The restrictions are broadly drafted and will apply to any transactions with relevant ports and airports (as listed in Annex XLVII of the EU’s 16th Package), even if there is no direct transaction with the port authorities themselves.
Transport Measures
One of the most notable changes under Article 5ae of the EU’s 16th Package is the imposition of a full flight ban which provides for the possibility to list any third-country airline operating domestic flights within Russia or supplying, selling, transferring or exporting, directly or indirectly, aircraft or other aviation goods and technology to a Russia air carrier or for flights within Russia.
If listed in Annex XLVI of the EU’s 16th Package, these air carriers, as well as any entity owned or controlled by them, will not be allowed to land in, take off from or fly over EU territory.
The flight ban will not apply to the following:
• In the case of an emergency landing or an emerging overflight.• If such landing, take-off or overflight is required for humanitarian purposes.
Financial Measures
An additional 13 Russian banks and three non-Russian banks, namely Bank BelVEB, Belgazprombank and VTB Bank (PJSC) Shanghai Branch (due to their use of the system for Transfer of Financial Messages of the Central Bank of Russia), have been either disconnected from the Society for Worldwide Interbank Financial Telecommunication international payment system or subjected to a transaction ban, intensifying financial isolation of Russia.
The European Union has also extended a transaction ban to allow it to target financial institutions and crypto asset providers circumventing the oil price cap so as to further isolate Russia’s financial network.
Measures Against Disinformation
To combat media manipulation and distortion of events, further restrictive measures have been placed on broadcasting activities. Eight additional media outlets, namely EADaily, Fondsk, Lenta, NewsFront, RuBaltic, SouthFront, Strategic Culture Foundation and Krasnaya Zvezda, have had broadcasting suspended because they are under the permanent control of Russian leadership and participate in spreading misinformation and propaganda.
Concluding Remarks
These increased enforcement efforts and highlighted sanctions are not just symbolic but impactful. As the European Union strengthens its sanctions framework and expands enforcement efforts, businesses must proactively assess their compliance strategies to mitigate legal and operational risks.
Administrators May Change, But PFAS Is Forever: EPA Announces PFAS Plan
The U.S. Environmental Protection Agency (EPA), under Administrator Lee Zeldin, has unveiled its anticipated strategy for addressing the pervasive issue of per- and polyfluoroalkyl substances (PFAS), often referred to as “forever chemicals.” While the announcement provides a broad framework, specific details (particularly regarding potential changes to previous rulemakings under CERCLA and the Safe Drinking Water Act) remain unclear. The EPA’s strategy is built upon three core pillars: strengthening the underlying science; fulfilling statutory obligations and improving communication; and actively building partnerships with stakeholders. However, Administrator Zeldin’s approach largely echoes the core principles outlined in the EPA’s 2021 PFAS Strategic Roadmap, indicating a degree of continuity in the federal government’s focus on these persistent chemicals.
Under the “Strengthening the Science” pillar, the EPA plans to appoint a dedicated lead for PFAS efforts, implement a comprehensive testing strategy under the Toxic Substances Control Act (TSCA) to seek scientific information informed by hazard characteristics and exposure pathways, and increase efforts to collect air related PFAS data and improve measurement techniques. The agency will also work to identify and address information gaps and provide more frequent, annual updates to the PFAS Destruction and Disposal Guidance.
The “Fulfilling Statutory Obligations and Enhancing Communication” pillar outlines the EPA’s commitment to developing effluent limitations guidelines for PFAS manufacturers and metal finishers, addressing challenges with national primary drinking water regulations, and leveraging RCRA authorities to tackle releases from manufacturing operations. The EPA will also add PFAS to the Toxic Release Inventory (an existing direction from Congress), enforce existing Clean Water Act and TSCA limitations, and utilize Safe Drinking Water Act authority to address immediate endangerment. Prioritizing risk-based review of chemicals and implementing TSCA Section 8(a)(7) to collect information “efficiently” are also key aspects. Finally, Zeldin intends to work with Congress and industry to establish a “polluter pays” liability framework, with a reference to protecting “passive receivers.”
Finally, the “Building Partnerships” pillar emphasizes collaboration to advance remediation and cleanup efforts, working with states on risk assessment and tool development, and reviewing comments and determining the path forward regarding PFAS in biosolids risk assessment. The EPA will also aid states and tribes on enforcement, review state air petitions, and support investigations to hold violators accountable.
Although substantially reflective of some Biden-era initiatives, Zeldin’s plan introduces differences, such as an increased emphasis on air emissions and a single agency-wide PFAS lead instead of a council. The reference to TSCA Section 8(a)(7) also suggests potential amendments to the PFAS reporting rule. This initial announcement is presented as the first step, with further actions expected, highlighting Zeldin’s stated commitment to addressing PFAS.
EPA Announces Upcoming Plans to Address PFAS
On 28 April 2025, Environmental Protection Agency (EPA) Administrator Lee Zeldin announced the agency’s upcoming plans to address Per- and Polyfluoroalkyl Substances (PFAS). This marks the new administration’s most significant announcement related to PFAS since President Donald Trump returned to office, and EPA indicated there will be “more to come” regarding PFAS.
The planned actions span several EPA programs and are guided by the following stated principles: “strengthening the science, fulfilling statutory obligations and enhancing communication, and building partnerships.”1 EPA plans to designate an agency lead for PFAS to align these efforts across the agency. Some notable planned actions are as follows:
EPA intends to “address the most significant compliance challenges” related to the national primary drinking water regulations (NPDWR) for PFAS. For more information on the NPDWRs, see our prior alert.
The agency will also enforce Clean Water Act and Toxic Substances Control Act (TSCA) limitations on PFAS use and release to prevent further contamination.
EPA plans to implement TSCA section 8(a)(7) to collect “necessary information [on PFAS] . . . without overburdening small businesses and article importers.” The TSCA PFAS Reporting Rule has broad reporting requirements, which currently apply to article importers without de minimis exemptions. For a detailed summary of the Rule, which remains unchanged at this time, see our previous alert.
The agency will work with Congress and industry members to establish a “clear liability framework” for PFAS based on a “polluter pays” model that protects “passive receivers.”
EPA also plans to develop and release effluent limitations guidelines (ELGs) for “PFAS manufacturers and metal finishers” and consider other ELGs that may be necessary to reduce PFAS discharges.
EPA’s full news release is available here. The agency has not yet provided additional details or a timeline for carrying out these efforts.
Footnotes
1 https://www.epa.gov/newsreleases/administrator-zeldin-announces-major-epa-actions-combat-pfas-contamination