Healthcare Preview for the Week of: May 19, 2025 [Podcast]
MAHA and More Medicaid
Late Sunday night, May 18, 2025, the House Budget Committee voted to advance the reconciliation package drafted by the Energy and Commerce Committee and Ways and Means Committee last week. The four Freedom Caucus members who voted against the bill last Friday changed their votes to “present” on Sunday, which allowed the bill to move forward with a 17 – 16 majority in committee while still acknowledging their desire for additional federal savings.
The package moves to the House Committee on Rules next, which is scheduled to convene at 1:00 am on Wednesday (yes, am). The Rules Committee has already released a revised version of the package in a format that highlights the changes made. Additional modifications are expected in order to garner the near unanimity required for passage through the House. Anticipated changes impacting healthcare include implementing work requirements earlier than 2029. Republican leaders hope to have the bill on the House floor later this week, before Congress breaks for the Memorial Day recess.
Two subcommittees within the Senate Committee on Appropriations will meet this week to review portions of the president’s budget request for fiscal year 2026. US Department of Health and Human Services Secretary Robert F. Kennedy Jr. will appear before the Subcommittee on Labor, Health and Human Services, Education, and Related Agencies on Tuesday, and US Food and Drug Administration Commissioner Martin A. Makary will appear before the Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies on Thursday.
Outside of Congress, the Administration’s Make America Healthy Again Commission is anticipated to release its initial assessment and strategy this week, likely on Thursday. The commission, established in February and chaired by Secretary Kennedy, was instructed to develop a report that, among other things:
Reviews childhood chronic disease in the United States compared to other countries.
Assesses the threat of potential overutilization of medication and certain food ingredients and chemicals.
Identifies best practices for preventing childhood health issues.
Evaluates the effectiveness of existing educational programs.
Evaluates existing federal programs and funding.
Restores the integrity of science, including by eliminating undue industry influence.
Today’s Podcast
In this week’s Healthcare Preview, Rodney Whitlock and Debbie Curtis join Julia Grabo to discuss what happened over the weekend with the House’s budget reconciliation bill and what to pay attention to moving forward.
The Lobby Shop- Reconciliation Roadmap and Tariff Updates [Podcast]
In this episode of The Lobby Shop, Liam Donovan provides an update on the budget reconciliation process in Congress, and the team dives into the proposed House cuts to energy programs funded by the Inflation Reduction Act, proposed Medicaid reductions, and the ongoing debate over SALT deductions—along with the challenges the legislation faces in the Senate and a tight legislative timeline. Josh Zive and Paul Nathanson also examine the current state of the Trump Administration’s tariffs, including the temporary easing of the U.S.–China trade war, multiple Section 232 investigations, and the complex policy landscape companies must navigate amid evolving tariff rules.
New York’s Warehouse Worker Protection Act Goes Into Effect June 1, 2025: What Employers Need to Know
In 2024, the state of New York passed the Warehouse Worker Protection Act (WWPA) in response to increasing concerns over warehouse worker safety and injuries. The law aims to create safe conditions for employees working in fast-paced distribution environments, with a focus on minimizing the risk of musculoskeletal injuries and disorders.
Starting June 1, 2025, employers operating large warehouses in New York must comply with the WWPA’s new requirements.
Covered Employers
The WWPA applies to employers who directly or indirectly employ or have control over the wages, hours, or working conditions of either:
100 or more employees at a single warehouse location; or
1,000 or more warehouse employees across all New York warehouses.
Warehouses covered by the law include those that fall under the North American Industry Classification System codes for warehousing and storage. This includes facilities such as general warehouses, e-commerce fulfillment centers, wholesale distribution hubs, and courier operations, where employees perform tasks like receiving, stocking, packaging, sorting, labeling, or shipping merchandise.
What Is Required
The WWPA aims to improve safety for warehouse employees by addressing the risks associated with fast-paced working environments and repetitive motion injuries. To that end, employers must implement a comprehensive injury reduction program at each covered warehouse facility. This program must include the following five components:
Worksite Evaluations – Employers must ensure that each job, process, or operation involving manual materials handling undergoes a written worksite evaluation by a qualified ergonomist. These evaluations should identify risk factors such as rapid pace, forceful exertions, repetitive motions, twisting, bending, and awkward postures that could lead to musculoskeletal injuries and disorders. Evaluations must be conducted initially by June 19, 2025, and reviewed and updated annually.
Control of Exposures – Upon identifying risk factors, employers are required to correct them in a timely manner. If corrections necessitate more than thirty days, a schedule for the proposed corrections must be provided.
Employee Training – Employers must provide annual injury reduction training to all employees involved in manual materials handling tasks. This training should cover early symptoms of musculoskeletal injuries, risk factors, methods to reduce risks, and the employer’s injury reduction program. Training must be conducted during normal work hours, without loss of pay, in a language and vocabulary that workers understand.
Onsite Medical & First Aid Practices –For warehouses with on-site medical offices or first aid stations, employers must ensure these are staffed with medical professionals operating within their legal scope of practice. Employers are also required to consult with a licensed medical consultant to evaluate and oversee protocols for the identification and treatment of musculoskeletal injuries and disorders. The medical consultant must review and update these protocols annually.
Employee Involvement – Employers must involve employees and their designated representatives in the development and implementation of all aspects of the injury reduction program. This includes consulting with workplace safety committees, where established, and providing access to worksite evaluations and related records. All documents should be provided in writing, both in English and in the primary language identified by each employee.
In addition to implementing the injury reduction program, employers must also maintain accessible copies of worksite risk evaluations at the warehouse and make them readily available to workers. Upon request, these documents must be provided to employees in writing, free of charge, and within one business day of the request.
What Employers Should Do Now to Prepare
As we approach the WWPA’s effective date, employers should take proactive steps to ensure compliance with the WWPA’s requirements. Key actions include:
Determine if You’re Covered: Review your warehouse headcount and facility types. If you operate high-volume distribution, fulfillment, or shipping centers and meet the employee thresholds, then the law likely applies.
Establish or Update Your Injury Reduction Program: Ensure your warehouse has a written injury reduction program that meets the requirements of the WWPA as outlined above.
Set Up Employee Training: Develop an annual training program for warehouse employees that covers safe work practices and details of the injury reduction plan.
Establish a Request Process: Be ready to respond to employee requests for worksite evaluations and quota records.
Major Changes to Expenditure Rate of LIT in SEA 1 (2025)
Indiana Governor Mike Braun signed Senate Enrolled Act 1 (SEA 1) into law last month, introducing a number of changes to the state’s property tax and local income tax system. Most of these changes will take effect July 1, 2027, to enable the new rates to be effective January 1, 2028, subject to certain exceptions. Barnes & Thornburg LLP is closely reviewing the provisions of SEA 1 and will continue to provide additional guidance on how this new legislation affects our municipal clients. This alert summarizes the major changes to local income taxes (LIT) and provides a timeline of those changes:
Summary of Major Changes
Expiration of Existing Expenditure Rate: All expenditure LIT rates imposed in a county under IC 6-3.6-6 expire on December 31, 2027, unless the adopting body (the fiscal body of the county) adopts an ordinance to renew the expenditure tax rate beginning on January 1, 2028. The ordinance renewing the expenditure tax rate must be adopted by October 1, 2027.
Entirely New Structure: The existing structure with component rates and additional revenue being allocated to public safety, economic development and certified shares is being replaced with an entirely new structure with a maximum expenditure rate of 2.9%. More details on the new structure are available below.
Annual Renewal Starting in 2031: Beginning after December 31, 2030, expenditure tax rates expire on December 31 of each year unless renewed by an ordinance of the adopting body by October 1 of each year.
Change in Adopting Body: Local income tax councils are eliminated effective July 1, 2027 and the fiscal body of the county will become the adopting body for the county.
Municipal Tax Rate: Cities and towns with at least 3,500 residents will be able to adopt their own local income tax rate beginning January 1, 2028.
October 1 Deadlines (starting 2027): Adopting bodies must adopt an ordinance by October 1 to adopt, increase, decrease, or rescind a LIT tax, or to grant, increase, decrease, rescind, or change a distribution or allocation. These ordinances take effect on the immediately following January 1. If the ordinances are adopted after October 1, they take effect on the second succeeding January 1 (i.e., an ordinance adopted October 2, 2027, takes effect January 1, 2029); provided, however, ordinances to impose a tax rate under IC 6-3.6-6-2(b)(3) or (4), must be adopted on or before October 1 of a calendar year.
Timeline
Beginning May 10, 2025, through and including July 1, 2027, a unit may not pledge to the payment of bonds, leases or obligations, LIT received under IC 6-3.6 in an amount that exceeds twenty-five percent (25%) of the taxing units certified distribution under IC 6-3.6.
Effective for 2026 and 2027: A county fiscal body may adopt a local income tax to reduce the property tax liability for homesteads (terminates on December 31, 2027)
Effective July 1, 2027:
Following tax rates/allocations repealed:
Allocation of Additional Revenue to Public Safety (IC 6-3.6-6-8)
Allocation of Additional Revenue to Economic Development (IC 6-3.6-6-9)
Allocation of Additional Revenue to Certified Shares (IC 6-3.6-6-10, 11, 12, 14 and 15)
Distribution for Property Tax Relief Credit (IC 6-3.6-6-20)
Local Income Tax Councils are eliminated and the fiscal body of the county becomes the adopting body for all county expenditure tax rates
Effective December 31, 2027: Property tax relief credit expires (IC 6-3.6-5)
Effective January 1, 2028:
Following tax rates/allocations repealed:
PSAP (IC 6-3.6-6-2.5)
Acute Care Hospital (IC 6-3.6-6-2.6)
Correctional Facilities and Rehabilitation Facilities (IC 6-3.6-6-2.7)
Emergency Medical Servies (IC 6-3.6-6-2.8)
Courtroom Costs (IC 6-3.6-6-2.9)
New expenditure rate structure is effective (details below)
After December 31, 2030, the expenditure tax rate expires on December 31 of each year unless the adopting body adopts an ordinance to readopt the tax rate.
New LIT Expenditure Rates (Effective January 1, 2028)
An entirely new LIT structure will be replacing the existing LIT structure with rates effective January 1, 2028. The new rate structure along with the corresponding maximum rate, the adopting body, details of each component are described below.
The total expenditure rate may not exceed 2.9%. The total rates for County Services, Fire Protection and EMS, and Nonmunicipal Civil Taxing Unit may not exceed 1.7%. After December 31, 2030, all expenditure rates expire on December 31 of each year unless renewed by ordinance of the adopting body by October 1 of each year. All population requirements are determined by the most recent federal census.
County Services Rate (IC 6-3.6-6-2(b)(1))
Rate: not to exceed 1.2%
Adopting Body: fiscal body of county
Taxpayer: all individuals residing in the county (including any municipality within the county)
Distribution: retained by county
Uses of Revenue: general purpose revenue for any purpose of the county, including PSAP, economic development, acute care hospitals, correctional facilities and rehabilitation facilities, county judicial staff expenses, and homestead property tax replacement credits (expires on December 31, 2027).
Fire Protection and EMS Rate (IC 6-3.6-6-2(b)(2))
Rate: not to exceed 0.4%
Adopting Body: fiscal body of county
Taxpayer: all individuals residing in the county (including any municipality within the county)
Distribution: revenue shall be distributed by the county to each fire protection district, fire protection territory, and municipal fire department within the county. At the discretion of the fiscal body of the county, the county may distribute this revenue to township fire departments, volunteer fire departments and EMS providers that apply for distribution. The allocation for each provider is determined by a formula based on service population and square miles of service territory for each provider.
Uses of Revenue: fire protection and emergency medical services
Nonmunicipal Civil Taxing Unit Rate (IC 6-3.6-6-2(b)(3))
Rate: not to exceed 0.2%
Adopting Body: fiscal body of county
Taxpayer: all individuals residing in the county (including any municipality within the county)
Types: nonmunicipal civil taxing unit means townships, libraries, and other civil tax units that imposed an ad valorem property tax levy preceding the distribution year and those civil taxing units whose budgets require binding review by another local unit. It does not include counties, cities, towns, schools, or fire protection districts. It does not include a solid waste management district or a joint solid waste management district unless a majority of the members of the county fiscal bodies of the counties within the district adopts a resolution approving the distribution.
Distribution: the fiscal body of the county may adopt a tax rate for each type of nonmunicipal civil taxing unit not to exceed 0.05% per type. Each type is allocated on a pro rata per capita basis. Each nonmunicipal civil taxing unit wanting a distribution must adopt a resolution by July 1 of the year preceding the year of distribution. The county must distribute revenue to each nonmunicipal civil taxing unit that requested distribution. If
One (1) or more, but not all, nonmunicipal civil taxing units request a distribution, then the fiscal body of the county may either distribute the total amount of revenue to (a) only those that requested a distribution or (b) all of the nonmunicipal civil taxing units.
If no nonmunicipal civil taxing unit requests a distribution, then the county may retain the revenue and use it as general purpose revenue.
Uses of Revenue: general purpose revenue
Small Cities and Towns Rate (IC 6-3.6-6-2(b)(4))
Rate: not to exceed 1.2%
Adopting Body: fiscal body of county
Taxpayer: all individuals within the county except for individuals residing in a municipality that is eligible to adopt the municipal tax rate under IC 6-3.6-6-22 (cities and towns with at least 3,500 residents)
Eligible City or Town: means cities or towns
with population less than 3,500; or
with population of at least 3,500, but that have made an election to be treated as a city or town with a population less than 3,500.
Distribution: if the fiscal body of the county imposes a County Services rate of 1.2%, then the fiscal body of the county may elect to retain up to 75% of the revenue under this subsection. Each eligible city or town wanting a distribution must adopt a resolution by July 1 of the year preceding the year of distribution. The revenue not retained by the county must be distributed to each eligible city or town that requested distribution. Revenue is distributed to eligible cities and towns based upon the population of the applicable city or town compared to all of the eligible cities and towns receiving a distribution. If:
One (1) or more, but not all, eligible cities and towns request a distribution, then the fiscal body of the county may either distribute the total amount of revenue to (a) only those that requested a distribution or (b) all of the eligible cities and towns.
If no eligible city or town requests a distribution, then the county may retain the revenue and use it as general purpose revenue.
Uses of Revenue: general purpose revenue for any purpose of the unit, including public safety and economic development
Municipal Tax Rate (Cities and Towns with 3,500 residents or more) (IC 6-3.6-6-22)
Rate: not to exceed 1.2%
Adopting Body: fiscal body of applicable city or town
Taxpayer: all individuals residing in the applicable city or town
Distribution: to the applicable city or town that imposed the tax
Uses of Revenue: general purpose revenue for any purpose of the city or town
Not all LIT changes are included in this summary. There are certain exceptions and rules for Marion County, Hancock County, Grant County, Lake County, Porter County, LaPorte County, and political subdivisions located within such counties. For more information, please contact the Barnes & Thornburg attorney with whom you work.
Maryland Further Delays Implementation of FAMLI Program
On April 8, Maryland enacted House Bill 102, further postponing the implementation of the state’s Family and Medical Leave Insurance (FAMLI) program. This latest delay, recommended by the Maryland Department of Labor, is intended to provide employers and employees with additional time to prepare for the program’s requirements.
House Bill 102 marks the third consecutive year that the launch of Maryland’s FAMLI program has been delayed. In addition to the new timeline, the legislation revises several key aspects of the program, including definitions, contribution rates, reporting requirements, and introduces new provisions for self-employed individuals.
Overview of Maryland’s FAMLI Program
The FAMLI program is designed to provide eligible employees with paid leave benefits for a variety of family and medical reasons, including:
To welcome a child into their home, including through adoption and foster care.
To care for themselves if they have a serious health condition.
To care for a family member’s serious health condition.
To make arrangements for a family member’s military deployment.
Eligible employees may receive up to 12 weeks of paid leave per year, with job protection and weekly benefits of up to $1,000 for qualifying reasons. If the employee experiences both their own serious health condition and welcomes a child in the same year, they could be eligible for up to 12 weeks per event for a total of up to 24 weeks. The program requires employers to both pay and withhold contributions from employee wages, with these requirements now set to begin on January 1, 2027. Employees may begin submitting benefit claims between January 1, 2027, and January 3, 2028, although these dates may be adjusted by the Secretary of Labor.
Key Program Details
Contribution Rates: The total contribution rate is capped at 1.2% of an employee’s wages, split evenly between employers and employees (each responsible for 50%). Employers may choose to cover all or part of the employee’s share.
Self-Employed Individuals: By July 1, 2028, the Department of Labor must establish regulations for an optional enrollment program for self-employed individuals, including details on contributions and benefits.
Annual Rate Announcement: The Department of Labor will announce the total contribution rate for each upcoming year by November 1.
Benefit Amounts: Weekly benefits are based on the employee’s average weekly wage and the state average. The minimum weekly benefit is $50, and the maximum is $1,000 through December 31, 2028. Beginning in 2029, the maximum benefit will be adjusted annually based on the Consumer Price Index.
Employer Coverage and Exemptions
All employers with at least one employee in Maryland are covered by the FAMLI program. However, employers that offer their own family and medical leave insurance benefits that are at least equivalent to those provided under the state program may apply for an exemption. To qualify, employer plans must be insured by a carrier holding a certificate of authority from the Maryland Insurance Commissioner.
Next Steps for Employers
Maryland employers should update their compliance timelines to reflect the new contribution and benefit claim dates. It is important to monitor forthcoming regulations and guidance from the Department of Labor, particularly regarding program implementation and requirements for self-employed individuals. Employers should also review their current leave policies to determine whether they may qualify for an exemption from the state program.
Missouri’s Paid Sick Leave and Portions of the Minimum Wage Increase Repealed
On May 14, 2025, the Missouri Senate passed a bill (HB 567) repealing the paid sick leave requirement along with a portion of the minimum wage increase included in Proposition A, which voters approved on November 5, 2024. Passage required Missouri employers to allow employees to accrue, and use paid sick leave for qualifying reasons on and after May 1, 2025. Likewise, Proposition A provided an increase to the Missouri minimum wage.
While the legal challenges to Proposition A that were filed in the Missouri Supreme Court were not successful, on May 14, 2025, the Missouri Senate accepted and passed House Bill 567, which repealed the entire paid sick leave requirement in Proposition A. The bill also repealed a portion of the minimum wage increase provision in Proposition A, which based future increases to minimum wage on the Consumer Price Index, beginning in 2027. Minimum wage will still increase to $15 per hour in 2026, but there is no longer an increase set to take effect in 2027 and beyond.
The bill repealing the Missouri Paid Sick Leave provisions will now go to Governor Kehoe for signature, who has expressed support for the bill. Because HB 567 does not contain an emergency clause, the repeal will not become effective until August 28, 2025. In the interim, the paid sick leave provisions under Missouri law remain in force and effect. This means employers must continue to provide paid sick leave benefits in accordance with Proposition A’s requirements through August 28, 2025. This is particularly important given the individual right to file a lawsuit seeking legal and injunctive relief and to recover actual damages, liquidated damages at two (2) times the amount of actual damages, and attorney fees and costs.
CMMI’s New Strategic Direction: Trump Administration’s “Make America Healthy Again” Strategy
On May 13th, the Centers for Medicare & Medicaid Services (CMS) Administrator, Dr. Mehmet Oz, and CMS Deputy Administrator and Innovation Center Director, Abe Sutton, hosted a webinar to discuss a new strategic direction for the Center for Medicare and Medicaid Innovation (CMMI). Responding to the Trump Administration’s strategy to “Make America Healthy Again,” Administrator Oz and Director Sutton discussed the three pillars of the CMMI’s new strategic direction: (1) promote evidence-based prevention; (2) empower people to achieve their health goals; and (3) drive choice and competition for people (Strategic Direction).1 This blog will provide an overview of the CMMI and the Strategic Direction outlined during the webinar and materials posted on CMMI’s website.
I. Overview of the CMMI
The CMMI, also known as the “Innovation Center,” was authorized under the Affordable Care Act (ACA) with the goal of designing, implementing, and testing new health payment models to address quality of care and efficient resource management. Although the focus of the CMMI is on Medicare, Medicaid, and CHIP programs, the CMMI also develops interventions that affect patients with commercial insurance, such as multi-payer alignment models.
The ACA funded the CMMI with US$10 billion for years 2011 through 2019 and allocated another US$10 billion to the CMMI each decade thereafter. Notably, this funding is not subject to standard Congressional appropriations procedures. Under the management of CMS, the CMMI has launched over 40 new payment models, including accountable care organizations (ACOs), bundled payment models, and medical home models.
II. New Strategic Direction of CMMI
In their webinar, Administrator Oz and Director Sutton described the three pillars of the CMMI’s Strategic Direction and highlighted the supporting public policy objectives.2 Administrator Oz and Director Sutton stated that the costs that America’s health care systems bear are unsustainable and stressed the need for health care in America to focus on the treatment and prevention of the root causes of diseases as opposed to purely treating symptoms that can lead to poor outcomes for patients.3 To address these challenges, Director Sutton stated that CMS’s Strategic Direction will “leverage innovation and smart public policy” to help people stay healthier longer and also protect federal taxpayers.4
1. Strategic Pillar #1: Promote Evidence-Based Prevention
The first pillar is to “promote evidence-based prevention” by planning to incorporate prevention in all payment model designs.5 Such prevention mechanisms include offering patients incentives for sustained lifestyle changes and lifestyle education and support.6 Additionally, Director Sutton stated that the next phase of the CMMI models will offer patients access to “evidence-based holistic medicine approaches.”7 To drive adoption of such prevention-based activities, Director Sutton also announced that the CMMI will leverage incentives and “utilize waivers to drive preventive care and seek opportunities for patients through community organizations providing evidence-based activities.”
2. Strategic Pillar #2: Empower People to Achieve Their Health Goals
Director Sutton announced that the second pillar is to “empower people to achieve their health goals which starts with giving patients better access to information, tools and support to help them live healthier lives.”8 The CMMI intends to increase patient access to relevant and usable data, so patients can appreciate and understand their health status, set health goals with their providers, avoid out-of-pocket costs, and engage in their care more effectively.9
Director Sutton stated that the CMMI is assessing several tools focused on helping patients make more informed decisions about their care by providing insights into provider cost and performance.10 Moreover, the CMMI intends to “leverage technology and data-sharing, both for the benefit of patients to adopt healthier behaviors and for providers to deliver coordinated care.” Lastly, the CMMI intends to “align financial incentives with flexibilities of health,” which may include the use of waivers to support predictable cost-sharing for certain services, drugs or devices or other performance incentives tied to patient-centered quality measures, including lifestyle.11
3. Strategic Pillar #3: Drive Choice and Competition
The final strategic pillar is to “drive choice and competition.”12 This pillar focuses on testing different models and features that can promote competition in health care markets.13 The CMMI intends to promote models that support a variety of practices and providers, such as those in rural communities and those treating patients with chronic conditions, in order level the playing field for independent practices and providers.14
The CMMI intends to promote choice in care and posed different potential mechanisms it may implement in accordance with this pillar, such as requiring site-neutral payments across settings “to reduce costs and reinvest hospital capacity in outpatient and community-based care through changes to certificate of need requirements” and expanding scopes of practice, virtual care, and at-home care so patients can receive care more flexibly. However, Director Sutton did not have an exact date as to when providers can receive additional information on its new models or changes to existing models.
Notably, Director Sutton expressed concerns about the administrative burden experienced by providers attempting to enter into value-based arrangements. In response, the CMMI intends to standardize model design features where appropriate (e.g., quality measures, benchmarking, and attribution) to reduce the administrative burden of participating in advanced alternative payment models and support multi-payer alignment. In doing so, the CMMI will be assessing models across their life cycles to determine indicators of savings to federal taxpayers.
Indeed, as part of the CMMI’s larger effort to protect federal taxpayers, the CMMI has committed that all models have downside financial risk and require providers to assume some of the financial risk. Further, the CMMI has stated it intends to push Medicare and Medicaid beneficiaries to accountable care arrangements with providers who assume global downside financial risk.15
III. Conclusion
The CMMI’s Strategic Direction in response to the Trump Administration’s strategy to “Make America Healthy Again” focuses on providing patients with information and incentives to engage in healthy lifestyles and prevent and/or mitigate disease with increased access to care. The Strategic Direction is not a departure from the statutory goals of the CMMI. Rather, the CMMI will provide a host of new informational, care management, non-clinical, and clinical tools to patients with, or a likelihood of developing, chronic conditions and target efforts to certain provider types historically not included in models. The result of these activities is to encourage patient engagement in healthy lifestyles and prevent and/or mitigate diseases with increased access to care.
Participants in current CMMI models should watch for potential changes to program design and potential expansion of programs to accommodate new Medicare and Medicaid beneficiaries. Existing attribution and participating consent processes utilized in existing models will likely need to be reworked to support efforts to mandate participation of beneficiaries. Further, the Strategic Direction appears to open the door to non-traditional providers, like care management platforms. These organizations should likewise watch for potential model expansions or announcements which may offer an opportunity to demonstrate their value propositions as part of broad reimbursement models.
Footnotes
[1]CMS Innovation Center Strategy to Make America Healthy Again, Ctrs. for Medicare & Medicaid Servs., (April 13, 2025), https://www.cms.gov/newsroom/press-releases/dr-mehmet-oz-shares-vision-cms.
[2] Webinar: CMS Innovation Center’s 2025 Strategy to Make America Healthy Again (Centers for Medicare & Medicaid Services 2025) (webinar recording not yet released) [hereinafter Webinar: CMS Innovation Center’s 2025 Strategy to Make America Healthy Again]
[3]Webinar: CMS Innovation Center’s 2025 Strategy to Make America Healthy Again.
[4]Id.
[5]Id.
[6]Id.
[7]Id.
[8]Id.
[9]CMS Innovation Center Strategy to Make America Healthy Again, Ctrs. for Medicare &Medicaid Servs., (April 13, 2025), https://www.cms.gov/newsroom/press-releases/dr-mehmet-oz-shares-vision-cms.
[10]Webinar: CMS Innovation Center’s 2025 Strategy to Make America Healthy Again.
[11]Webinar: CMS Innovation Center’s 2025 Strategy to Make America Healthy Again.; Strategic Direction, Ctrs. for Medicare & Medicaid Servs., May 13, 2025, https://www.cms.gov/priorities/innovation/about/strategic-direction.
[12]Strategic Direction, Ctrs. for Medicare &Medicaid Servs., May 13, 2025, https://www.cms.gov/priorities/innovation/about/strategic-direction.
[13]Id.
[14]Id.
[15]Id.
FDA Announces Plans for Post-Market Review of Chemicals in Food
On May 15, 2025, FDA announced a three-part agenda “to increase transparency and ensure the safety of chemicals in our food.” This step follows from the Agency’s post-market activities last fall, where FDA published a discussion paper and held a public meeting to outline its plan for developing a robust post-market review process for chemicals in food and to seek input from stakeholders. It is unclear from the announcement to what extent the comments submitted to FDA in January 2025 have been considered, following FDA’s public meeting on the development of a post-market assessment program.
Regarding its current proposal, FDA’s initiative will include the following elements: (1) a modernized, evidence-based prioritization scheme for reviewing existing chemicals; (2) a final, systematic post-market review process shaped by stakeholder input; and (3) an updated list of chemicals under review. FDA will continue to share information about the status of this work on its public website as part the Agency’s push for greater transparency.
FDA’s updated list of substances in the food supply undergoing review includes butylated hydroxytoluene (BHT), butylated hydroxyanisole (BHA), and azodicarbonamide (ADA). All three of these substances have been targeted by Vani Hari, aka the Food Babe, indicating what appears to be an increase in her influence of the Make America Healthy Again (MAHA) agenda. The Agency also stated it will take steps to expedite substances currently under review, including titanium dioxide, for which FDA had determined in 2024 does not present a safety concern when used as a color additive for foods, phthalates, and propylparaben.
FDA’s announcement was concurrent with a presentation by Mark Hartman, Director of FDA’s Office of Food Chemical Safety, Dietary Supplements, and Innovation (OFCSDSI) at the Food and Drug Law Institute’s (FDLI’s) Annual Meeting in Washington, DC, where Hartman reassured the audience that, although a substance may undergo post-market review, this does not mean it is destined to be deemed unsafe. The OFCSDSI Director also relayed during his presentation that FDA is actively working on a rulemaking regarding self-GRAS determinations, a directive from HHS Secretary Kennedy on March 10, 2025. In this regard, Hartman shared that FDA is considering whether new chemicals should be allowed to continue to operate under a voluntary system or require mandatory GRAS Notice submissions, and which regulatory approaches should be used to address the lack of visibility on past self-GRAS positions.
FDA and HHS Solicit Comments on Deregulation
FDA and the Department of Health and Human Services (HHS) have launched a public Request for Information (RFI) to “identify and eliminate outdated or unnecessary regulations” in alignment with President Donald Trump’s Executive Order 14192.
Under the RFI, HHS Secretary Robert F. Kennedy, Jr. has committed to rescinding at least ten existing regulatory actions for every new regulation proposed. The effort is intended to “lower the cost of living, remove bureaucratic barriers, and allow health care providers to devote more time and resources to patient care.”
HHS intends to implement the following measures under the Executive Order:
The 10-to-1 rule: Eliminate at least ten existing regulations for every new regulation introduced.
Regulatory cost cap: The total cost of all new regulations in fiscal year 2025 must be significantly less than zero.
Expanded scope: The order applies to guidance documents, memoranda, policy statements, and similar directives, in addition to formal regulations.
Radical transparency: HHS will publish annual reports detailing estimated regulatory costs and the specific rules being offset.
According to FDA Commissioner Marty Makary, “[t]his initiative is about restoring common sense to health care regulation. . . .We welcome public input to help identify reforms that truly make a difference.”
During an FDA Update session at the Food and Drug Law Institute’s (FDLIs) Annual Meeting in Washington, D.C., FDA officials reiterated the Agency’s commitment to transparency and complying with the Executive Order while also working toward FDA’s priorities. For example, the Agency has moved forward with approving new uses for three non-certified color additives as part of the Agency’s strategy to phase out certified color additives, as we previously blogged.
The RFI’s 60-day public comment period opened May 13, 2025. Comments may be submitted through regulations.gov under docket AHRQ-2025-0001 or at regulations.gov/deregulation.
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.
Competition Currents | May 2025
United States
A. Federal Trade Commission (FTC)
1. FTC requests public comment on EnCap, Verdun, XCL petition to modify order.
On April 2, 2025, the FTC announced it was seeking public comments through May 2, 2025, on a petition to reopen and modify its 2022 consent order relating to Verdun Oil Company II LLC’s acquisition of EP Energy LLC. Specifically, the parties asked to remove a prior approval requirement in the consent order (requiring the parties to seek prior approval from the FTC before engaging in certain related transactions in the future) that covered Verdun, which was under common management with XCL Resources Holdings, LLC at the time of the transaction, and their parent entities, EnCap Energy Capital Fund XI, L.P. and EnCap Investments L.P. (together, EnCap). See GT’s April 2022 Competition Currents for more information regarding the original consent order. In their request, the parties noted market changes since the consent decree was entered (including EnCap’s and XCL’s exit from crude oil exploration and production in the Uinta Basin area in Utah after a 2024 sale), which they argue obviates the need for a prior approval requirement.
2. FTC approves modification of Enbridge Inc. final order.
On April 8, 2025, the FTC approved a petition by Enbridge Inc. to set aside the 2017 final consent order in Enbridge’s merger with Spectra Energy Corp. At the time of the Spectra acquisition, Enbridge received an indirect ownership interest in the Discovery Pipeline, a competitor to the Walker Ridge Pipeline that Enbridge owns. The FTC was concerned that the acquisition would give Enbridge access to competitively sensitive information about the Discovery Pipeline and required Enbridge to establish firewalls to limit its access to information relating to the Discovery Pipeline as well as requiring Discovery Pipeline board members affiliated with Spectra to recuse themselves from votes involving the pipeline. In December 2024, Enbridge asked the FTC to reopen and set aside the 2017 order after it sold its interest in the Discovery Pipeline, making the consent decree terms obsolete.
3. Mark Meador confirmed as FTC commissioner.
President Trump nominated Mark Meador as FTC Commissioner, the Senate confirmed him on April 10, 2025, and he was sworn in as commissioner on April 16, 2025. Most recently, Meador worked in private practice and served as a visiting fellow at the Heritage Foundation Tech Policy Center. Previously, he was the deputy chief counsel for antitrust and competition policy for Sen. Mike Lee (R-Utah), as well as a trial attorney in the DOJ Antitrust Division. His term as FTC commissioner will expire on Sept. 25, 2031.
4. FTC seeks public comment on petition to modify Chevron-Hess final order.
The FTC announced on April 11, 2025, that it is seeking public comment through May 12, 2025, on a petition to set aside its final consent order (issued in January 2025) relating to Chevron Corporation’s acquisition of Hess Corporation. The consent order prohibited Chevron from appointing Hess CEO John B. Hess to its board of directors, as called for in the transaction’s merger agreement.
5. FTC seeks public comment on petition to modify Exxon-Pioneer final order.
Similarly, the same day, the FTC also announced that it is also seeking public comment through May 12, 2025, on a petition to set aside its final consent order (also issued in January 2025) relating to Exxon Mobil Corporation’s acquisition of Pioneer Natural Resources. The consent order prohibited Exxon Mobil from appointing Scott Sheffield (founder and former CEO of Pioneer) to its board of directors or from having him serve in any advisory capacity.
6. FTC launches public inquiry into anticompetitive regulations.
On April 14, 2025, the FTC announced that in response to President Trump’s executive order “Reducing Anticompetitive Regulatory Barriers,” it was launching a request for information on the impact of federal regulations on competition (to determine whether any regulations unnecessarily exclude new entrants or protect incumbents, for example). Comments can be submitted through May 27, 2025.
7. Illinois and Minnesota join FTC lawsuit challenging medical device coatings deal.
In March 2025, the FTC sued to block GTCR BC Holdings, LLC’s proposed acquisition of Surmodics, Inc., both of whom engage in manufacturing medical device coatings. GTCR is a private equity firm that also owns a majority of Biocoat, Inc., which per the FTC is the second-largest provider of outsourced hydrophilic coatings, with Surmodics being the largest. The FTC’s complaint alleges that the proposed acquisition is anticompetitive because it would give the combined company more than 50% of the market share for outsourced hydrophilic coatings, which medical device manufacturers use in devices including catheters and guidewires. On April 17, 2025, the FTC amended its complaint to add Illinois and Minnesota as co-plaintiffs.
8. FTC and DOJ issue letter seeking identification of anticompetitive regulations across the federal government.
Also as part of the antitrust agencies’ response to the executive order “Reducing Anticompetitive Regulatory Barriers,” on May 5, 2025, the FTC and DOJ issued a joint letter to all federal government agency heads requesting a list of anticompetitive federal regulations within the respective agency’s rulemaking authority that could reduce competition and innovation – including the agency’s recommendation for whether the regulation should be kept, amended, or rescinded. After receiving public and agency comments, the FTC and DOJ will provide the Office of Management and Budget with its consolidated recommendations.
B. Department of Justice (DOJ) Civil Antitrust Division
1. Justice Department hosts roundtables to address competition issues in the entertainment industry and unfair practices in the labor market.
On April 4, 2025, the DOJ hosted discussions centered on competition issues in the entertainment industry. First, DOJ Assistant Attorney General (AAG) Gail Slater met with union members and legal experts to discuss how non-compete agreements and no-poach agreements impact employees, with experts weighing in on strategies to protect workers. Second, AAG Slater discussed unfair practices in the live entertainment market in order to identify labor-market conduct that harms workers.
2. AAG Gail Slater welcomes Antitrust Division leadership team.
On May 1, AAG Slater appointed Dina Kallay to serve as DOJ deputy assistant attorney general for international, policy and appellate, joining the DOJ leadership team of Roger Alford (principal deputy assistant attorney general), Omeed Assefi (acting deputy assistant attorney general), Mark Hamer (deputy assistant attorney general), William “Bill” Rinner (deputy assistant attorney general), Dr. Chetan Sangvhi (deputy assistant attorney general), and Sara Matar (chief of staff).
3. Justice Department and FTC seek information on unfair and anticompetitive practices in live ticketing.
On May 7, 2025, the DOJ announced that in response to President Trump’s executive order “Combating Unfair Practices in the Live Entertainment Market,” it was launching, jointly with the FTC, a public inquiry aimed at identifying unfair and anticompetitive practices in the live entertainment market. AAG Slater stated of the inquiry, “Competitive live entertainment markets should deliver value to artists and fans alike,” while FTC Chair Ferguson also added, “Many Americans feel like they are being priced out of live entertainment by scalpers, bots, and other unfair and deceptive practices.” Comments can be submitted through July 7, 2025.
C. U.S. Litigation
1. Chalmers v. National Collegiate Athletic Association, Case No. 1:24-cv-05008 (S.D.N.Y. April 29, 2025).
On April 29, U.S. District Judge Paul A. Engelmayer dismissed a proposed class action by 16 former men’s basketball players against the National Collegiate Athletic Association (NCAA). The antitrust suit was filed last July, a month after the announcement of the $2.78 billion settlement that would compensate past athletes for their name, image, and likeness (NIL) and put a future revenue sharing plan in place. The players’ college careers spanned from 1994 to 2016, and Engelmayer agreed with the NCAA’s argument that the statute of limitations on their claims expired, noting in his opinion that “the NCAA’s use today of a NIL acquired decades ago as the fruit of an antitrust violation does not constitute a new overt act restarting the limitations clock.”
2. Compass Inc. v. Northwest Multiple Listing Services, Case No. 2:25-cv-00766 (W.D. Wash. Apr. 28, 2025).
On April 28, Compass Inc. sued the broker-led Northwest Multiple Listing Service (MLS), claiming that the MLS’s rules in Washington that prohibit “premarketing” real estate before they are officially listed for sale is an anticompetitive boycott. Compass—a broker service operating in Washington—engages in “office exclusive” listing that tests the asking price, pictures, and home specifications to a small set of potential buyers before the home is actually put up for sale. Compass alleges that the practice is used in other states, but that Washington prohibits this premarketing because it is “fundamentally unfair and perpetuates inequities that have long plagued the housing system.”
3. Mack’s Junk Removal LLC v Rouse Services LLC, Case No. 2:25-cv-03565 (N.D. Ill. Apr. 23, 2025).
A nationwide class action was filed alleging several large construction equipment rental companies utilized RB Global Inc.’s product, Rouse, to set rates for construction equipment rental. According to the allegations, rental companies defer all rental-pricing decisions to Rouse, which uses an AI algorithm to set rates at anticompetitive levels. The complaint also alleges that Rouse allows participants to get detailed sales data of local competitors, allowing for a greater chance of price fixing.
4. Regeneron Pharmaceuticals Inc. v. Amgen Inc., Case No. 1:22-cv-00697 (D. Del. Apr. 11, 2025).
On April 11, 2025, U.S. District Judge Jennifer L. Hall denied defendant Amgen Inc.’s motion to dismiss an antitrust lawsuit. In the lawsuit, competitor Regeneron Pharmaceuticals alleges that Amgen improperly bundled discounts of its other medications—in which it has market dominance—to pharmacy benefit managers if they would agree to exclusively cover Amgen’s Repatha, a cholesterol-reducing medication. Regeneron, which offers a competing cholesterol medication, claims that such bundling schemes effectively drive other competitors out of the market. In her ruling, Judge Hall held that Regeneron has presented evidence of both improper bundling and “de facto exclusive dealing arrangements” to proceed to further discovery.
The Netherlands
ACM
1. The ACM approves sustainability collaboration in textile sector under competition rules.
The Dutch competition authority (ACM) has issued an informal assessment of the Textile Alliance — an initiative involving companies, trade associations, and civil society organizations in the garments, shoes, leather, and textile sectors — concluding that the initiative complies with Dutch and EU competition law.
The Textile Alliance aims to promote international corporate social responsibility by improving compliance with human rights, environmental, and animal-welfare standards in production and supply chains. According to ACM’s assessment, the arrangements focus on individual company commitments and voluntary tools, such as a collective risk assessment, without mandating uniform actions or exchanging competition-sensitive information. The assessment affirms that competition law does not necessarily pose a barrier to sector-wide sustainability agreements.
2. The ACM approves FincoEnergies’ acquisition of Klaas de Boer with conditions.
The ACM has approved FincoEnergies’ acquisition of Oliehandel Klaas de Boer with conditions to maintain competition in the marine fuel supply market. Both companies are major suppliers of marine fuels in several Dutch ports. The ACM had competition concerns due to limited alternative suppliers and high costs for buyers to switch ports. To address this, FincoEnergies and Klaas de Boer must sell various assets, including tankers and a storage terminal, to GMB Groep and Slurink Transport Services, ensuring continued competition in the affected ports and eliminating competition concerns.
3. The ACM emphasizes the importance of competition for European competitiveness in joint statement.
Certain European competition authorities, including the ACM, have issued a joint statement highlighting the crucial role of competition in enhancing European competitiveness. The statement aligns with the European Commission’s recently presented “Competitiveness Compass” and emphasizes that competition fosters productivity, innovation, and investment. The authorities assert that competition and economies of scale go hand in hand and that competition rules are essential for well-functioning markets. The statement specifically addresses competition in the telecom sector, where the authorities warn that reduced merger scrutiny, particularly in telecommunications, may result in fewer incentives to improve networks, services, and innovation. As such, careful oversight of mergers is deemed necessary. Mergers that harm competition should either be blocked or approved only under strict conditions. The national competition authorities of Belgium, Portugal, Austria, Czech Republic, Ireland, and the Netherlands signed the joint statement.
4. The ACM informs healthcare institutions of competition rules for new cancer and vascular surgery standards.
The ACM has issued guidance to healthcare providers on how to comply with competition law when making regional agreements on the redistribution of care, following new national volume norms for cancer and vascular treatments. These norms limit certain complex procedures to hospitals that perform them frequently, starting in 2026. The ACM emphasized that while cooperation is allowed, such agreements must not amount to unlawful market sharing. The ACM will not intervene in regional care arrangements if all relevant stakeholders are involved and the cooperation pursues clear, measurable goals aimed at improving care accessibility, affordability, and quality.
Poland
A. UOKiK issues conditional clearance for Medicover’s acquisition of CityFit Gyms.
On March 31, 2025, the President of the Polish Office of Competition and Consumer Protection (UOKiK) conditionally approved ABC Medicover Holdings B.V.’s acquisition of 16 fitness clubs. ABC Medicover is a member of the Medicover group, a major private healthcare provider. The transaction consists of the acquisition of sole control over 16 companies operating under the CityFit and CityFit Blue brands. Medicover already has a strong presence in the Polish fitness sector through such brands as Just Gym, Well Fitness, McFit, Stellar, Platinum Fitness, Smart Gym, and Premium Fitness & Gym, operating over 150 clubs nationwide.
Based on its competition assessment, the UOKiK President concluded that while the concentration would not significantly restrict competition on most relevant markets, serious concerns arose in two cities (Bielsko-Biała and Gliwice) where the post-transaction market shares would be particularly high. To address these concerns, the clearance was made conditional on structural remedies. Medicover must divest one club in each of the two concerned cities — either an existing Medicover location or a CityFit club included in the acquisition. The buyer must be an independent third party the UOKiK President approves, with a credible commitment to operating a fitness facility at the divested location for a minimum of two years.
B. UOKiK launches investigation and conducts dawn raids in home appliances sector.
On March 31, 2025, the UOKiK President announced it was launching a preliminary investigation into a suspected price-fixing agreement between Electrolux Poland and major electronics retailers. The proceedings focus on suspicions that Electrolux Poland may have coordinated the retail prices of household appliances—including refrigerators, washing machines, dishwashers, coffee machines, ovens, vacuum cleaners, irons, and kettles—sold under the Electrolux and AEG brands. According to the authority, these practices may have prevented consumers from benefiting from lower prices, both online and in brick-and-mortar stores.
Based on signals received from the market indicating potential antitrust violations, the UOKiK President, after securing court approval, conducted unannounced inspections at the headquarters of Electrolux Poland and several entities operating retail chains, including companies running major home appliances chain stores. The case is still at its preliminary stage and is conducted in rem, meaning that it is not yet directed at any specific undertakings. Should evidence confirm the suspicions, the UOKiK President may open formal antitrust proceedings and bring charges against identified entities.
The investigation follows recent enforcement actions in the sector. Notably, in 2024, the UOKiK imposed over PLN 66 million in fines on companies involved in a decade-long price-fixing scheme concerning Jura-brand coffee machines. That decision also included a close to PLN 250,000 fine on an individual responsible for the agreement.
Italy
Italian Competition Authority (ICA)
1. ICA launches investigation against CNF for alleged concerted practice.
On March 25, 2025, ICA opened an investigation into the National Bar Council (CNF) for an alleged concerted practice in violation of Article 101 of TFEU. The investigation concerns the application of the “fair compensation rule” for lawyers, introduced by Law No. 49/2023. The “fair compensation rule” aims to provide specific protections for legal professionals when dealing with large clients, based on the presumption lawyers are often compelled to accept reduced fees from such clients.
According to ICA, CNF’s interpretation and enforcement of these rules—particularly through the new Article 25-bis of the Lawyers Code of Ethics—exceeds the scope of the law and may restrict competition among lawyers. ICA specifically challenged CNF’s use of ambiguous language prohibiting lawyers from agreeing upon or estimating fees, without specifying the context or limits. In ICA’s view, this lack of clarity failed to specify that the fair compensation obligations (and related disciplinary consequences) apply only to relationships with large corporate clients. By doing so, CNF is allegedly attempting to directly influence the economic behavior of lawyers under its supervision, potentially deterring them from negotiating fees below the indicated benchmarks.
ICA has given CNF a 60-day deadline, starting from the date of notification of this decision, to exercise its right to be heard by the legal representatives of the party. ICA has established that the procedure must conclude by the end of December 2026.
2. Unfair commercial practice: fine of almost EUR 20 million has been imposed on CoopCulture and other tourist operators.
On March 25, 2025, ICA fined Società Cooperativa Culture (CoopCulture) and the following tourist operators: Tiqets International BV, GetYourGuide Deutschland GmbH, Walks LLC, Italy With Family S.r.l., City Wonders Limited, and Musement S.p.A. almost EUR 20 million for making it difficult to purchase tickets online to access the Colosseum Archaeological Park. Specifically, the ICA found that CoopCulture failed to take adequate measures to counter ticket hoarding using automated methods while also reserving significant quantities of tickets for sales offered during its own educational tours, from which it gained considerable economic benefits. This forced consumers to turn to tour operators and platforms that resold tickets bundled with additional services (such as tour guides and pick-up) at significantly higher prices.
At the same time, the six tourist operators purchased tickets using bots or other automated tools, thus contributing to the rapid depletion of base-price tickets on the CoopCulture website. By doing so, these operators took advantage of the systematic unavailability of tickets, which forced consumers who wished to visit the Colosseum to obtain tickets bundled with additional services. ICA found that CoopCulture’s conduct constitutes an unfair commercial practice in violation of Article 20, paragraph 2, of the Italian Consumer Code. Also, the conduct of Tiqets International BV, GetYourGuide Deutschland GmbH, Walks LLC, Italy With Family S.r.l., City Wonders Limited, and Musement S.p.A. was found to be unfair under Articles 24 and 25 of the Italian Consumer Code.
3. Key takeaways from ICA’s annual report.
On March 31, 2025, ICA published its annual report on its 2024 activities. During 2024, ICA’s activity recorded a notable increase, both in quantitative and qualitative terms, confirming a trend established in recent years. Notably, between January 2024 and March 2025, ICA received 1,452 competition-related reports, examined 121 merger transactions, and concluded two proceedings on restrictive agreements and nine on abuse of dominant position.
In particular, the number of merger filings ICA reviewed increased by approximately 50% compared to the average of the past 10 years. Moreover, in seven cases, ICA exercised its call-in power, pursuant to Article 16, paragraph 1-bis, of Law No. 287/1990, to require notification of a merger not reaching the turnover thresholds for mandatory notification. According to the ICA, recent legislative amendments strengthened its investigative and intervention tools, also contributing to reinforcing enforcement activities against cartels. ICA initiated four proceedings, with over eight investigations covering as many sectors and over 30 companies. ICA reported that the intensified efforts to counter the most serious antitrust violations is also attributable to the establishment of the whistleblowing platform, which received over 200 reports, and to the leniency program, which was recently enhanced.
As for consumer protection, between January 2024 and March 2025, ICA examined 36,900 reports and concluded 71 proceedings; 46 with confirmation of the infringement, 17 with acceptance of commitments, and eight with no violations. According to the ICA’s estimates, the consumer protection activities carried out between 2023 and 2024 enabled savings of over EUR 28 million, as well as the restitution of more than EUR 150 million to 900,000 consumers.
European Union
A. European Commission
1. The European Commission opens investigation into UMG’s acquisition of Downtown after referral from the Netherlands and Austria.
The European Commission has accepted a referral request from the ACM to investigate Universal Music Group’s proposed acquisition of Downtown, a service provider to independent labels and artists. The ACM expressed concerns that the acquisition may negatively affect competition in the Netherlands and potentially other EU countries. Universal Music Group, the world’s largest record company, has a history of acquiring smaller industry players, often without regulatory oversight due to low turnover thresholds.
In this case, the ACM was notified about the acquisition in February 2025, and the deal prompted complaints from industry stakeholders. The Austrian competition authority supported the ACM’s request for a European-level review. The ACM reiterated its call for a “call-in power” to enable review of smaller, potentially harmful mergers even when they fall below standard notification thresholds. The European Commission has now launched a formal investigation into the deal’s cross-border competitive effects.
2. European Commission fines car manufacturers and ACEA EUR 458 million for cartel on end-of-life vehicle recycling.
The European Commission has fined 15 major car manufacturers and the European Automobile Manufacturers’ Association (ACEA) approximately EUR 458 million for their involvement in a long-running cartel concerning the recycling of end-of-life vehicles (ELVs). The cartel, which lasted over 15 years, involved coordination on avoiding payments to car dismantlers and restricting transparency around recycling rates in new vehicles.
Mercedes-Benz was granted immunity under the leniency program for informing the European Commission of the anticompetitive behavior. Other companies admitted their involvement and agreed to settle the case. Some companies received a reduction of their fine for cooperation under the leniency program. This decision is part of the European Commission’s broader efforts to enforce EU competition rules and address anticompetitive practices in the automotive sector.
3. The European Commission approves Safran’s acquisition of Collins Aerospace, with conditions.
The European Commission has approved Safran USA Inc.’s acquisition of parts of Collins Aerospace’s actuation business, subject to commitments to address competition concerns. Safran’s and the target’s businesses are largely complementary, but the initial transaction raised competition concerns, particularly in the market for trimmable horizontal stabilizer actuator (THSA) systems. These systems, used in civil aircraft, were found to have insufficient alternative suppliers post-merger.
To resolve these concerns, Safran committed to divesting its North American THSA business. A market test confirmed the remedy’s effectiveness, and the European Commission approved the deal subject to full compliance, which will be monitored by an independent trustee.
B. European General Court
General Court upholds Symrise raids in cross-border fragrance cartel investigation.
The EU’s General Court has rejected Symrise’s challenge to annul European Commission’s raids of its premises during a 2023 cross-border cartel investigation into the fragrance industry. The court found that the European Commission had sufficient grounds for inspections, based on credible evidence, including open-source intelligence, suspiciously similar tender bids, and confidential information exchanges. Symrise argued that the raids infringed its privacy and defense rights due to an alleged lack of reasonable suspicion. However, the court ruled that the broader context of international cartel suspicion, including indications from Symrise’s own activities and third-party findings, justified the European Commission’s actions. Symrise stressed that the ruling does not equate to the finding of guilt and reaffirmed its denial of any anticompetitive behavior, stating it continues to cooperate with authorities.
1 Due to the terms of GT’s retention by certain of its clients, these summaries may not include developments relating to matters involving those clients.
Additional Authors: Holly Smith Letourneau, Sarah-Michelle Stearns, Yongho “Andrew” Lee, Alexa S. Minesinger, Alexander L. Nowinski, Miguel Flores Bernés, Valery Dayne García Zavala, Hans Urlus, Dr. Robert Hardy, Chazz Sutherland, Manish Das, Johnny Shearman, Robert Gago, Filip Drgas, Anna Celejewska-Rajchert, Ewa Głowacka, Edoardo Gambaro, Pietro Missanelli, Martino Basilisco, Yuji Ogiwara, Mari Arakawa, Philip Ruan, and Dawn (Dan) Zhang.
Brussels Regulatory Brief: April 2025
Antitrust and Competition
European and UK Antitrust Enforcers Impose Fines Over End-of-Life Vehicles Recycling Cartel
On 1 April 2024, both the European Commission (the Commission) and the UK Competition and Markets Authority (CMA) fined major car manufacturers and trade associations for participating in a 15-year long cartel concerning end-of-life vehicle recycling. The Commission’s and CMA’s decisions highlight the authorities’ interest in pursuing novel theories of harm that may have an adverse impact on the green transition.
Financial Affairs
EU Institutions Finalize Omnibus I; EFRAG adopts Work Plan to Simplify ESRS
The European Parliament and the Council of the European Union finalized the legislative procedure for Omnibus I, while the European Financial Reporting Advisory Group (EFRAG) adopted the work plan detailing next steps for European Sustainability Reporting Standards (ESRS) simplification.
Commission Presents Savings and Investments Union
The Commission presented its Savings and Investment Union, outlining future legislative and nonlegislative initiatives to strengthen EU capital markets.
Sanctions
European Court of Justice Confirmed that the Ban on the Export of EU Banknotes to Russia Also Applies when the Money Is Intended to Finance Medical Treatments
The European Court of Justice ruled that only amounts strictly necessary for travel and basic living expenses may be brought into Russia.
Antitrust and Competition
European and UK Antitrust Enforcers Impose Fines Over End-of-Life Vehicles Recycling Cartel
On 15 March 2022, the European Commission (Commission) and the UK Competition and Markets Authority (CMA) conducted parallel unannounced inspections (dawn raids) at the premises of companies and trade associations active in the automotive sector in several EU member states and in the United Kingdom. On 1 April 2025, the Commission fined 15 major car manufacturers and a trade association a total of approximately €458 million for participating in a 15-year-long cartel concerning the recycling of end-of-life vehicles (ELVs), i.e., cars that are no longer fit for use, either due to age, wear and tear, or damage. On the same day, the CMA imposed fines against 10 car manufacturers and two trade associations of approximately £77.7 million for breaching UK competition law for a similar conduct affecting the UK market.
Both the Commission and the CMA found that the parties infringed EU and UK competition law by colluding on two aspects:
Car manufacturers agreed not to pay car dismantlers for processing ELVs and shared commercially sensitive information on their individual agreements with car dismantlers. The car dismantlers were therefore unable to negotiate a price with the car manufacturers.
The parties also agreed not to advertise how ELVs could be recycled, recovered, and reused, and how much recycled materials are used in new cars. The Commission stated that the car companies’ objective was to prevent consumers from considering recycling information when choosing a car, which could lower the pressure on companies to improve their environmental efforts and go beyond legal requirements on recyclability.
The Commission’s and CMA’s investigations involved trade associations that were found to act as a facilitator of the cartel by arranging meetings and contacts between car manufacturers.
Both investigations were triggered by a leniency application submitted by one of the cartel participants. As this participant has revealed the cartel, it was not fined and received full immunity from penalties. In addition, all companies admitted their involvement in the cartel and agreed to settle the case, which reduced the fine by 10% in the Commission’s investigation and 20% in the CMA’s investigation.
Teresa Ribera, executive vice president for Clean, Just and Competitive Transition, commented:
We will not tolerate cartels of any kind, and that includes those that suppress customer awareness and demand for more environmental-friendly products. High quality recycling in key sectors such as automotive will be central to meeting our circular economy objectives, not only to cut waste and emissions, but also to reduce dependencies, lower production costs and create a more sustainable and competitive industrial model in Europe.
The Commission also stated that this investigation was the largest settlement case it has concluded so far. This shows that the Commission can use the settlement procedure in exceptionally large settlement cases. Also, this parallel investigation illustrates the Commission’s and the CMA’s close coordination in investigating novel theories of harm that may have an adverse impact on the green transition.
Financial Affairs
EU Institutions Finalize Omnibus I; EFRAG Adopts Work Plan to Simplify ESRS
On 3 April, the European Parliament approved the text of the first part of the Omnibus package (Omnibus I). Omnibus I postpones the application date of the reporting requirements under the Corporate Sustainability Reporting Directive (CSRD) by two years for certain groups of companies, and it also postpones the transposition deadline as the first wave of application of the Corporate Sustainability Due Diligence Directive by one year. Members of the European Parliament (MEPs) largely supported the proposal: 531 voted in favor, 69 against, and 17 abstained. The pro-European political groups (the European People’s Party, the Socialists and Democrats, and Renew Europe) were able to reach an agreement to approve the content of the proposal a few hours before the votes. Further, the final text of Omnibus I was published in the Official Journal of the European Union on 17 April and is now in force at the EU level. The directive mandates member states to transpose it into national law by 31 December 2025.
In a related development, the European Financial Advisory Reporting Group (EFRAG) adopted its work plan on the simplification of European Sustainability Reporting Standards (ESRS) under CSRD. This review is part of EFRAG’s broader mandate to assess the entire ESRS framework, as set out in a mandate letter from Commissioner Maria Luís Albuquerque. EFRAG is expected to submit its technical advice to the Commission by 31 October 2025.
Now that the first part of the package is completed, MEPs and member states at the Council of the European Union are discussing internally their approach to the second part (Omnibus II), which introduces substantial simplification amendments to the obligations and requirements notably comprised in these two frameworks. Check this article for a summary of the proposed amendments by Omnibus II.
Commission Presents Savings and Investments Union
On 19 March, the Commission issued a Communication on the Savings and Investments Union, seeking to offer EU citizens broader access to capital markets and better financing opportunities for businesses. The strategy focuses on four key pillars: (i) citizens and savings, (ii) investments and financing, (iii) integration and scale, and (iv) efficient supervision in the single market. For each pillar, the Commission underlined both legislative and nonlegislative actions to be adopted throughout 2025 and 2026.
For citizens and savings, the Commission underlined that it would facilitate negotiations between the European Parliament and member states on the Retail Investment Strategy, but it will not hesitate to withdraw the proposal if the negotiations do not meet the objectives of the strategy. Key initiatives include a review of pension frameworks to bolster retail investor participation, a financial literacy strategy by Q3 2025, and a EU-wide framework for savings and investment accounts. For the investment and financing pillar, the Commission aims to facilitate equity investments by institutional investors, revise Solvency II criteria for long-term equity investments, and streamline securitization requirements by mid-2025, with additional reforms targeting private market liquidity due in 2026.
On integration and supervision, the Commission plans to reduce capital market fragmentation and enhance cross-border activity through emerging technologies such as artificial intelligence, simplifying rules for asset managers and potentially reviewing the Shareholders Rights Directive. In the context of capital markets integration, the Commission launched a public consultation to gather views on obstacles to financial markets integration across the European Union. On oversight, reforms to the European Supervisory Authorities could delegate supervisory powers to EU-level bodies, particularly for crypto services and large cross-border managers.
The Commission will conduct a midterm review of the strategy by mid-2027 to assess progress and refine initiatives.
Sanctions
European Court of Justice Confirmed that the Ban on the Export of EU Banknotes to Russia Also Applies when the Money Is Intended to Finance Medical Treatments
Under EU sanctions imposed on Russia, it is prohibited to sell, supply, transfer, or export banknotes denominated in any official currency of an EU member state to Russia or to any natural or legal person, entity, or body in Russia, including the Russian government and the Central Bank of the Russian Federation, or for use in Russia. Only three limited exemptions to this general ban exist: (i) export of banknotes for the personal use of natural persons traveling to Russia or members of their immediate families traveling with them, (ii) export of banknotes for the official purposes of diplomatic missions, or (iii) export necessary for civil society and media activities that directly promote democracy, human rights, or the rule of law in Russia.
In case C-246/24, Generalstaatsanwaltschaft Frankfurt am Main, delivered on 20 April 2025, the European Court of Justice addressed the situation where German customs officers discovered a passenger heading to Russia carrying nearly €15,000 in banknotes. The passenger stated the money was intended not only for travel costs but also for medical procedures in Russia, including dental work, hormone therapy for fertility, and follow-up care after breast surgery. Authorities confiscated most of the money, permitting the passenger to retain around €1,000 for travel-related needs.
The court ruled that carrying banknotes to Russia for medical treatment does not qualify as personal use under the exemption. The court reiterated that exceptions are to be interpreted strictly so that general rules are not negated. A broad interpretation of the exemption would result in a situation where it would be possible to transfer to Russia, without restriction, large sums of banknotes to make personal purchases of any kind there, and, moreover, it would be difficult to verify that such purchases are carried out.
The exemption in question is limited to covering costs directly related to the journey and stay—medical treatments do not fall within that scope, as the EU sanctions are ultimately intended to prevent the Russian economic system from gaining access to cash denominated in any currency of a EU member state to support Russia’s activities in the war in Ukraine.
Additional Authors: Petr Bartoš, Vittoriana Todisco, Kathleen Keating, Sara Rayon Gonzalez, Covadonga Corell Perez de Rada, Simas Gerdvila, Edoardo Crosetto, and Martina Pesci.