THIS WEEK’S DOSE
- Reconciliation Moves Forward with Senate Introduction of Concurrent Budget Resolution. This move initiates the next stage in the reconciliation process, which requires House and Senate passage of a unified budget resolution.
- Senate Confirms CMS Administrator. By a vote of 53 – 45, Mehmet Oz, MD, was confirmed as administrator of the Centers for Medicare & Medicaid Services (CMS).
- Senate Judiciary Committee Holds Drug Legislation Markup. All six bills were passed by voice vote.
- Senate Homeland Security and Governmental Affairs Committee Holds OPM Director Nomination Hearing. The hearing for Office of Personnel Management (OPM) director nominee Scott Kupor largely focused on the federal workforce.
- House Energy and Commerce Health Subcommittee Holds Hearing on OTC Monograph Drugs. The hearing focused on the development of over-the-counter (OTC) sunscreen products.
- House Energy and Commerce Oversight and Investigations Subcommittee Holds Hearing on Cybersecurity for Medical Devices. Witnesses advocated for increased cyber resilience of medical devices.
- House Education and Workforce Health, Employment, Labor, and Pensions Subcommittee Holds Hearing on Employer-Sponsored Healthcare. The subcommittee sought to better understand the current landscape of employer-sponsored healthcare and discuss potential improvements.
- HHS Begins Implementing Dramatic Restructuring, Cutting Agency Workforce and Consolidating Divisions. The US Department of Health and Human Services’ (HHS’s) initiative will eliminate or merge many divisions and offices, close five of the 10 regional offices, and create unprecedented changes that will have far-reaching consequences.
- Laboratory-Developed Test Final Rule Struck Down. A federal court ruled that the US Food and Drug Administration could not regulate laboratory-developed tests as medical devices.
- HHS Faces Legal Challenges to Rescinded Funding. Democratic attorneys general and governors in 23 states and Washington, DC, filed a lawsuit against HHS regarding the recent cancellation of $12 billion in state infectious disease and substance use grants.
CONGRESS
Reconciliation Moves Forward with Senate Introduction of Concurrent Budget Resolution. This move initiates the next stage in the reconciliation process, which requires the Senate and House to pass a unified budget resolution. Rather than resolving the different approaches of the previously passed resolutions in the two chambers, the resolution unveiled in the Senate this week takes the unusual, but permitted, approach of having the Senate and House stick with their preferred policies and funding levels. This would defer the tough decisions – including agreements on the level of spending cuts, tax extensions, and raising the debt limit – until later in the process.
In the healthcare space, this would mean that the House maintains its instruction to the Energy and Commerce Committee to cut $880 billion, much of which is anticipated to come from Medicaid, while the Senate instructs the Finance Committee (which has jurisdiction over Medicaid) to achieve a minimum of $1 billion in spending cuts.
The Senate cleared a procedural hurdle on the budget resolution and is moving toward advancing the measure by this weekend. President Trump met with Members and threw his strong support behind the effort. If the Senate passes the resolution, the House plans to advance it next week, which would likely require the intervention of the president, as near-unanimity among House Republicans would be necessary. Some conservative members of the House, including House Budget Committee Chair Arrington (R-TX), have come out in opposition to the Senate budget resolution, fearing that it would ultimately lead to a final reconciliation bill that does not achieve the level of spending cuts included in the House’s preferred plan.
Senate Confirms CMS Administrator. The full Senate confirmed Mehmet Oz, MD, as CMS administrator by a party-line vote of 53 – 45. Oz’s tenure begins amid significant restructuring and workforce reductions occurring at CMS and HHS.
Senate Judiciary Committee Holds Drug Legislation Markup. The six bipartisan bills listed below were all advanced out of the committee by voice vote. In the markup, senators emphasized the importance of lowering prescription drug prices.
- S. 527, the Prescription Pricing for the People Act of 2025, would require the Federal Trade Commission (FTC) to study the role of intermediaries in the pharmaceutical supply chain.
- S. 1040, the Drug Competition Enhancement Act, would prohibit product hopping.
- S. 1041, A Bill to Amend Title 35, United States Code, to Address the Infringement of Patents That Claim Biological Products, and for Other Purposes, would address patent thickets.
- S. 1097, the Interagency Patent Coordination and Improvement Act of 2025, would establish an interagency task force between the US Patent and Trademark Office and the US Food and Drug Administration (FDA) for patent-related information sharing and technical assistance.
- S. 1095, the Stop STALLING Act, would enable the FTC to deter filing of sham citizen petitions.
- S. 1096, the Preserve Access to Affordable Generics and Biosimilars Act, would prohibit pay-for-delay deals.
Senate Homeland Security and Governmental Affairs Committee Holds Nomination Hearing for OPM Director. In addition to considering OPM director nominee Scott Kupor, the hearing considered Eric Ueland’s nomination for deputy director of the Office of Management and Budget. Republican senators asked both nominees how they would address the federal government’s increasing size, as well as its hiring and firing processes. Democratic senators asked the nominees if they support the reduction of federal employees.
House Energy and Commerce Health Subcommittee Holds Hearing on OTC Monograph Drugs. During the hearing, witnesses urged the committee to improve FDA’s ability to develop safe and effective sunscreen products that can reduce the rates of skin cancer in the United States. Republican Members focused their questions on the regulation of OTC monograph drugs and how the United States can improve its clinical ability to produce sunscreens similar to those in other countries that have lower rates of skin cancer. Given the timing of the hearing, Democratic Members focused their questions on how the reorganization of HHS, specifically the FDA, will hinder the agency’s role to regulate and approve the efficiency and safety of OTC drugs and medical devices.
House Energy and Commerce Oversight and Investigations Subcommittee Holds Hearing on Cybersecurity for Medical Devices. In the hearing, witnesses emphasized the need for increased cyber resilience of medical devices and suggested various solutions, including improved coordination between stakeholders and the government and increased cybersecurity training and education. Democrats focused their comments on the ongoing HHS reorganization and reduction in force, and changes made to National Institutes of Health (NIH) funding. They expressed concerns about how those actions will affect medical device research, review, and regulation. Republicans focused on the potential for cyberattacks from foreign countries, including China, the risk of backdoor attacks, and barriers to cybersecurity faced by rural hospitals.
House Education and Workforce Health, Employment, Labor, and Pensions Subcommittee Holds Hearing on Employer-Sponsored Healthcare. Subcommittee members and witnesses discussed the current landscape of employer-sponsored healthcare and potential improvements. Republicans emphasized the importance of association health plans for small businesses and self-employed individuals, highlighting their potential to provide affordable and comprehensive health coverage by allowing small businesses to band together and negotiate better rates. Democrats expressed concerns about budget cuts to Medicaid and the layoffs occurring at HHS, stressing that they could potentially hurt small businesses and employer-sponsored insurance coverage.
ADMINISTRATION
HHS Begins Implementing Dramatic Restructuring, Cutting Agency Workforce and Consolidating Divisions. Following last week’s announcement of HHS’s “dramatic restructuring” that includes the elimination of 10,000 employees, the consolidation of 28 divisions into 15, the elimination of five of the agency’s 10 regional offices, and the creation of a new Administration for a Healthy America subdivision, HHS employees began to receive layoff notices this week. According to last week’s HHS announcement and subsequent anecdotal reports this week, significant workforce reductions are underway at FDA, NIH, CMS, and the Centers for Disease Control and Prevention, among others.
The action sent shockwaves across Capitol Hill and the healthcare sector. In Congress, Democrats swiftly expressed deep concerns, along with some Republicans. Senate Health, Education, Labor, and Pensions (HELP) Committee Chair Cassidy (R-LA) and Ranking Member Sanders (I-VT) formally invited HHS Secretary Kennedy to testify at a hearing on April 10, 2025, to update the committee on these actions. In the letter of invitation, they noted that during the confirmation process, Secretary Kennedy committed to coming before the committee quarterly, and that this is the first such invitation. While House Energy & Commerce Chair Guthrie (R-KY) and Health Subcommittee Chair Carter (R-GA) released a supportive statement, Chair Guthrie also requested a bipartisan staff briefing for HHS to explain the actions. Ranking Member Pallone (D-NJ) and Health Subcommittee Ranking Member DeGette (D-CO) called that action too little and wrote to Chair Guthrie, asking him to conduct oversight and hold hearings, including with Secretary Kennedy.
Democrats also sent multiple letters to Secretary Kennedy seeking more transparency:
- Senate Finance Committee Ranking Member Wyden (D-OR), Senate HELP Committee Ranking Member Sanders, Senate Democratic Leader Schumer (D-NY), and Senator Warner (D-VA) led 34 Democratic senators in a letter requesting information about the fired employees by April 4, 2025, along with a detailed, staff-level briefing on the reduction in force plan.
- House Energy and Commerce Committee Ranking Member Pallone, Health Subcommittee Ranking Member DeGette, and Oversight and Investigations Subcommittee Ranking Member Clarke (D-NY) sent a letter requesting documents and answers to a series of questions by April 15, 2025.
- Lead Democratic appropriators from both sides of the Capitol sent a letter requesting specific information about HHS’s organizational structure by April 4, 2025.
No further details on the restructuring have been released as of the publication of this Check-Up, and Members of Congress are learning of the specific impacts only anecdotally through reports of specific terminations. Still unknown is the impact on HHS operations, the timing of regulations and agency guidance, and daily operations. We will continue to provide updates as we learn more.
COURTS
Laboratory-Developed Test Final Rule Struck Down. The US District Court for the Eastern District of Texas struck down the FDA’s final rule on laboratory-developed tests (LDTs), under which FDA would have started regulating LDTs as medical devices, with the initial phase starting May 6, 2025. Citing the new Loper Bright standard that has replaced the Chevron doctrine, the court concluded that the LDT final rule exceeded FDA’s authority under the Food, Drug, and Cosmetic Act, stating that FDA’s authority to regulate “devices” extends to tangible, physical products that are commercially distributed – not professional services that use such products.
HHS Faces Legal Challenges to Rescinded Funding. Last week, HHS canceled $12 billion in state infectious disease and substance use grants. Democratic attorneys general and governors in 23 states and Washington, DC, have filed a lawsuit against HHS seeking a temporary restraining order and injunctive relief to halt the funding cuts, stating that the cuts were unlawful and harmful. As legal challenges continue, it is being reported that the Trump administration is withholding tens of millions of dollars from Planned Parenthood clinics, claiming the clinics have violated Trump’s executive order on diversity, equity, and inclusion. In related news, the US Supreme Court heard oral arguments this week on South Carolina’s effort to exclude Planned Parenthood from its Medicaid program.
QUICK HITS
- President Imposes Higher Tariffs. President Trump announced his plan to impose higher tariffs, including a 10% universal tariff on all goods imported into the United States, beginning April 5, 2025, and higher reciprocal tariffs on certain jurisdictions, including China, Japan, and the European Union, beginning April 9, 2025. The plan comes with certain exemptions, including pharmaceutical products, although that could change as the administration considers and advances additional trade policies.
- CBO Releases Long-Term Budget Outlook. The Congressional Budget Office (CBO) predicts that the Medicare Hospital Insurance Trust Fund will run out of funds in 2052, which is 17 years later than previously estimated. According to CBO, expenditures from the trust fund are projected to be smaller and income to the trust fund is projected to be greater than projected last year because Part A spending was less than anticipated in 2024, payments to hospitals are expected to grow more slowly than they did in 2024, and modeling of federal payments to insurers in the Medicare Advantage program has been updated. Read the full report here.
- NIH, FDA Nominees Sworn In. Jay Bhattacharya, MD, PhD, was sworn in as NIH director, and Martin Makary, MD, MPH, was sworn in as FDA commissioner.
- ONDCP Releases Drug Policy Priorities. The White House Office of National Drug Control Policy (ONDCP) outlined six priorities for the Trump Administration:
- Reduce the number of overdose fatalities, with a focus on fentanyl
- Secure the global supply chain against drug trafficking
- Stop the flow of drugs across borders and into communities
- Prevent drug use before it starts
- Provide treatment that leads to long-term recovery
- Innovate in research and data to support drug control strategies
BIPARTISAN LEGISLATION SPOTLIGHT
| Sens. Schatz (D-HI), Wicker (R-MS), Warner (D-VA), Hyde-Smith (R-MS), Welch (D-VT), and Barrasso (R-WY) reintroduced the CONNECT for Health Act this week. The bipartisan bill would make permanent the current Medicare flexibilities that are scheduled to expire on September 30, 2025, without further congressional action. The bill has a total of 59 original cosponsors. A press release from Sen. Schatz can be found here. Companion legislation in the House is expected imminently from Reps. Thompson (D-CA), Schweikert (R-AZ), Matsui (D-CA), and Balderson (R-OH). |
NEXT WEEK’S DIAGNOSIS
The Senate and House will be in session next week, as Republican leaders continue efforts to advance the partisan budget reconciliation process. Hearings and markups of note next week include the following:
- The House Energy and Commerce Committee will hold a markup that was postponed this week after Speaker Johnson abruptly cancelled votes for most of the week. The broadly bipartisan markup will include several health-related bills.
- A Senate HELP Committee markup will include a pediatric cancer bill.
- The House Ways and Means Health Subcommittee will hold a hearing on biosimilars.
House Energy and Commerce Chairman Guthrie stated that HHS Secretary Kennedy has agreed to a bipartisan briefing to answer questions about the HHS reorganization, but we are awaiting official confirmation. It is not yet known whether Secretary Kennedy will accept the Senate HELP Committee’s invitation to testify on April 10, 2025. We are also watching for the IPPS proposed rule and Medicare Advantage and Part D final rule, which are both pending release.