Blog | 5/23/2025

Trump Administration Healthcare News: May 23, 2025

Health Advances weekly healthcare tracker focused on top level government administration news.

NOTE: All words/analysis are those from the source noted, opinions are those of the original authors and not reflective of Health Advances in general nor any individual. All sources are non-confidential and in the public domain (but some may be behind paywalls).

This issue reflects news as of 11 AM on May 22, 2025. The details and broad themes may have changed.

KEY BUDGET NEWS (Healthcare)

House approves Trump’s massive tax and immigration package

  • House Republicans approved President Donald Trump’s sprawling tax and immigration agenda Thursday morning, sending to the Senate legislation that the GOP hopes will transform the federal government and the economy and power the White House’s drive to deport immigrants and build up the military.
  • Trump’s One Big Beautiful Bill, as the measure is formally known, extends trillions of dollars in tax cuts from his first term along with new campaign promises — including no taxes on tips and overtime wages — and hundreds of billions of dollars in new spending.
  • But the legislation, which passed 215-214-1 after marathon talks, carries a hefty price tag. The latest projection from the Congressional Budget Office, lawmakers’ nonpartisan bookkeeper, showed it will add $2.4 trillion over 10 years to the national debt, which already exceeds $36 trillion.
  • To offset the cost, the measure would slash spending on social safety net programs by more than $1 trillion over 10 years.
  • Even then, the mammoth legislation could also force nearly $500 billion in cuts to Medicare over the next decade to keep the national deficit within legal limits, unless Congress later adjusts the limits. The legislation could strip Medicaid coverage from 8.7 million people and lead to 7.6 million more uninsured people over 10 years, the CBO projected.
  • The final vote came just before 7 a.m. Thursday, wrapping up a more than 24-hour session that started in committee at 1 a.m. Wednesday.
  • https://www.washingtonpost.com/business/2025/05/22/trump-tax-bill-house-republicans/
  • Link to the OBBBA that passed the House: https://www.congress.gov/bill/119th-congress/house-bill/1/text

Health Provisions in the 2025 Federal Budget Reconciliation Bill

Trump budget bill would modernize HSAs, incentivize shift to rebranded ICHRAs

  • Not to be lost within a sprawling Republican-backed budget bill are new flexibilities designed to increase usage of heath savings accounts (HSAs), individual coverage health reimbursement arrangements (ICHRAs) and direct primary care (DPC) arrangements.
  • The bill encourages the proliferation of DPC arrangements, a model where patients or an employer directly pays a physician for primary care services, similar to an accountable care organization, said Gelfand. Under current law, DPCs are considered a health plan, and individuals cannot have a DPC and an HSA.
  • DPCs would no longer be classified that way in the legislation before the House. Instead, it is characterized as a supplementary product that allows individuals to spend HSA dollars on DPCs, helping alleviate an ongoing primary care provider shortage, said Nelli.
  • Other changes allow HSA funds to be spent on gym memberships, increases the HSA contribution limit for some individuals, classifies bronze and catastrophic plans as a HDHP that can pair with an HSA and permits one spouse to contribute to an HSA even if the other spouse has a flexible spending account.
  • The Trump budget bill also rebrands ICHRAs, as Custom Health Option and Individual Care Expense (CHOICE) arrangements. The previous name was an “awkward” acronym, said Jack Hooper, CEO of Take Command, an ICHRA provider and vendor, though not everyone agrees.
  • The bill codifies a rule from 2019 creating the program and lets employees use pretax dollars through a cafeteria plan to pay for on-exchange marketplace premiums, explains the KFF.
  • Press: https://www.fiercehealthcare.com/payers/trump-budget-bill-would-modernize-hsas-incentivize-shift-ichras
  • KFF analysis: https://www.kff.org/tracking-the-affordable-care-act-provisions-in-the-2025-budget-bill/

KEY HEALTH NEWS (Global)

RFK Jr. calls for global health cooperation outside the World Health Organization

  • Health Secretary Robert F. Kennedy Jr. on Tuesday called on other countries to work with the U.S. on global health outside of the World Health Organization, as he rejected the pandemic agreement WHO members just adopted.
  • “We want to free international health cooperation from the straitjacket of political interference by corrupting influences of the pharmaceutical companies, of adversarial nations and their [non-governmental organization] proxies,” Kennedy said in prerecorded video remarks aired Tuesday at the World Health Assembly in Geneva, an annual gathering of top health officials from WHO member countries.
  • “Global cooperation on health is still critically important to President Trump and myself, but it isn’t working very well under the WHO, as the failures of the Covid era demonstrate,” Kennedy added.
  • https://www.politico.com/news/2025/05/20/rfk-jr-pandemic-covid-china-un-00358464

KEY FEDERAL GOVERNMENT NEWS

An Evidence-Based Approach to Covid-19 Vaccination

  • Moving forward, the FDA will adopt the following Covid-19 vaccination regulatory framework:
    • On the basis of immunogenicity — proof that a vaccine can generate antibody titers in people — the FDA anticipates that it will be able to make favorable benefit–risk findings for adults over the age of 65 years and for all persons above the age of 6 months with one or more risk factors that put them at high risk for severe Covid-19 outcomes, as described by the CDC.
    • For all healthy persons — those with no risk factors for severe Covid-19 — between the ages of 6 months and 64 years, the FDA anticipates the need for randomized, controlled trial data evaluating clinical outcomes before Biologics License Applications can be granted.
    • Insofar as possible, when approving a Covid-19 vaccine for high-risk groups, the FDA will encourage manufacturers to conduct randomized, controlled trials in the population of healthy adults as part of their postmarketing commitment.
  • https://www.nejm.org/doi/full/10.1056/NEJMsb2506929?logout=true
  • Additional press: https://www.raps.org/News-and-Articles/News-Articles/2025/5/FDA-unveils-new-COVID-19-framework-restricting-sho

Legal, Process Problems May Plague New US FDA COVID-19 Vaccine Policy

  • The FDA may have violated laws and regulations along with many norms in how it released its planned changes for COVID-19 vaccine approvals.
  • The US Food and Drug Administration’s new COVID-19 vaccine policy may be in legal jeopardy and open to more public scrutiny because of the way it was initiated.
  • The new framework, issued 20 May by FDA Commissioner Martin Makary and Center for Biologics Evaluation and Research Director Vinay Prasad, was outlined in a New England Journal of Medicine commentary, followed by a video announcement by Prasad and Makary the same day.
  • Prasad largely developed the policy himself, per remarks in the video address and without involvement of the agency’s vaccine office.
  • https://insights.citeline.com/pink-sheet/vaccines/legal-process-problems-may-plague-new-us-fda-covid-19-vaccine-policy-HAUDHEREXZCA5DAZ47HZ6L544U/  (subscription required for full text)

CMS deploying more coders, 'advanced systems' to audit all Medicare Advantage contracts

FDA Eyes User Fee Changes

  • Despite contentions by HHS Secretary Robert F. Kennedy Jr. and allies that FDA user fees contribute to corruption, the Trump administration appears willing to engage in efforts to reauthorize the fee programs that fund large portions of the agency’s activities.
  • During a May 16 presentation, Grace Graham, FDA’s deputy commissioner for policy, legislation, and international affairs, made it clear that RFK Jr.’s claims that user fees contribute to industry “capture” of reviewers is influencing the agency’s thinking.
  • “The perception of a company handing over a multi-million-dollar application fee when they are submitting an application may cause some American people to question the outcome of those reviews,” Graham said at the Food and Drug Law Institute’s annual meeting in Washington DC.
  • At the same time, her comments signaled that, while the administration wants to rethink some elements of user fees, it is not abandoning the programs. “It is worth exploring whether and how restricting and simplifying the user fee program may help rebuild trust in the FDA and its decisions, and take advantage of the upcoming reauthorization to do so,” she said.
  • https://www.mystrategist.com/market-pathways/article/fda_eyes_user_fee_changes_eu_plans_orphanpeds_panel_and_more.html   (subscription required for full text)

HHS Publishes A Request for Information From The Public On Deregulation

KEY BIOPHARMA NEWS

All branded drugs not facing generic, biosimilar competition must abide by MFN order in 'all markets,' HHS tells pharma

  • In a May 20 press release, the Department of Health and Human Services (HHS) laid out expectations for how drugmakers can cooperate with the Trump order. The order applies to "all brand products across all markets that do not currently have generic or biosimilar competition," the HHS said, noting that drug companies must "commit to aligning" their U.S. prices with "the lowest price of a set of economic peer countries."
  • The peer countries are those in the Organisation for Economic Co-operation and Development that have a gross domestic prodcut per capita of at least 60% of the U.S.' GDP per capita, the HHS said.
  • The industry is likely to come out strongly against the HHS guidance. Immediately in the wake of the EO signing ceremony, Stephen Ubl, CEO of U.S. trade group PhRMA, said in a statement that "importing foreign prices from socialist countries would be a bad deal for American patients and workers."
  • https://www.fiercepharma.com/pharma/all-branded-drugs-not-facing-generic-biosimilar-competition-must-abide-mfn-order-all-markets

HHS, DARPA link up with Rutgers, Cost Plus Drugs and others in initiative to rethink US drug production

  • In a new public-private partnership spearheaded by the administration, the Department of Health and Human Services' (HHS') Administration for Strategic Preparedness and Response (ASPR) and the Defense Advanced Research Projects Agency (DARPA) are linking up with several universities and companies in a bid to improve manufacturing for essential medicines using technologies such as artificial intelligence, machine learning and informatics.
  • The project, dubbed Equip-A-Pharma, will allow the federal agencies to work directly with Battelle Memorial Institute and Aprecia, Bright Path Laboratories, Rutgers University and Mark Cuban’s Cost Plus Drugs as the partners strive to boost domestic manufacturing of eight drugs and their active pharmaceutical ingredients, the ASPR said in a Thursday press release.
  • The overall goal, to hear the ASPR tell it, is for each company and its partners to demonstrate over the next year how their respective “agile technologies” can potentially help produce APIs and finished drugs at points of care such as hospitals.
  • Press: https://www.fiercepharma.com/manufacturing/hhs-darpa-link-rutgers-cost-plus-drugs-and-others-under-initiative-overhaul-us-drug
  • ASPR press: https://aspr.hhs.gov/newsroom/Pages/EQUIP-A-Pharma-15May2025.aspx

FDA Announces Updates to Pathway for Importing Prescription Drugs from Canada

  • The FDA has announced new enhancements to a pathway that allows states to “import certain prescription drugs from Canada to significantly reduce the cost of these drugs to the American consumer.”
  • The agency will “offer individual states and tribes the opportunity to submit a draft proposal for pre-review and meet with the agency to obtain initial feedback from FDA prior to formally submitting their section 804 importation program (SIP) proposal. Meetings between individual states and the FDA will be optional and informal with the goal of reducing the burden on the state or tribe and helping it develop a robust SIP proposal.”
  • The agency will also “develop a user-friendly tool that will assist states in developing their proposals. These actions will further clarify requirements and enhance the quality of proposals submitted to the agency, shortening the review timeline.” The agency is also working to “assist states with options to streamline the required cost savings analysis, and to provide input regarding the information states may rely on as they estimate cost savings for American consumers.”
  • The agency will meet with states in the fall to “discuss these enhancements and gather feedback. This meeting will provide a forum to exchange information that will make it easier for states to obtain authorization while protecting public safety.”
  • Press: https://www.hpnonline.com/sourcing-logistics/news/55291836/fda-announces-updates-to-pathway-for-importing-prescription-drugs-from-canada
  • FDA Press: https://www.fda.gov/news-events/press-announcements/fda-takes-steps-enhance-state-importation-programs-help-lower-prescription-drug-prices

Judge: HHS has authority to pre-approve implementation of 340B ‘rebate models’

  • A U.S. district court judge for the District of Columbia May 15 ruled the Department of Health and Human Services must preapprove the use of 340B “rebate models” before they can be implemented, which the department has not yet done for any of the models pursued by the plaintiff drug companies.
  •  Judge Dabney Friedrich issued the ruling in a case brought by a number of drug companies, finding that when the statute says that in implementing price reductions, “any rebate or discount” taken into account shall be “as provided by the Secretary,” it means that HHS has the authority to approve or reject the proposed rebate models. “Put another way, the statute contemplates that the Secretary may ‘have as a condition’ or ‘stipulate’ how any rebate or discount is accounted for in the price ultimately paid by covered entities.”
  • https://www.aha.org/news/headline/2025-05-16-judge-hhs-has-authority-preapprove-implementation-340b-rebate-models

Bipartisan Drug Pricing Reform: The FPDP Act and Revival of Most-Favored-Nation Pricing

  • The resurgence of the FPDP Act and MFN model more broadly warrant close attention from healthcare stakeholders, particularly pharmaceutical manufacturers and Medicaid administrators.
  • Taken together, the FPDP Act and these EOs suggest a dual-pronged approach by the US administration: lowering drug prices through international benchmarking while reshoring the production of drugs and biologics to US soil.
  • While these policies are philosophically aligned, they may present practical contradictions: if companies are forced to sell drugs at internationally benchmarked prices but also invest heavily in US infrastructure and manufacturing, profit margins may erode, creating long-term disincentives for participation in federal programs.
  • Key Takeaways:  The FPDP Act and the MFN EO are serious attempts to revive and refine the original MFN model, this time with bipartisan backing. The proposed model also dovetails with broader efforts by the US administration to reshore pharmaceutical manufacturing, creating a policy framework that favors United States-made, globally benchmarked drugs and biological products.
  • https://www.morganlewis.com/blogs/asprescribed/2025/05/bipartisan-drug-pricing-reform-the-fpdp-act-and-revival-of-most-favored-nation-pricing#page=1

KEY HEALTH INFORMATION TECHNOLOGY (HIT) NEWS

CMS & HHS Health IT Office Issue Request for Information on Digital Health Products and Health Technology Infrastructure

  • In the RFI, CMS and ASTP/ONC recognize the promise of digital health products to enhance healthcare experiences, reduce costs, increase access to care, enable chronic disease prevention, and improve patient outcomes, but they acknowledge that the current digital health ecosystem is not optimally designed to fully unleash these benefits. 
  • Based on stakeholder feedback, ASTP/ONC seek to “drive large-scale adoption of health management and care navigation applications, reduce barriers to data access and exchange, realize the potential of recent innovations in healthcare . . ., and accelerate progress towards a patient-centric learning health system.”
  • The questions in the RFI seek feedback on which elements of the existing digital health ecosystem are or are not working, policies that would ease health data exchange and promote innovation in digital health products, and ways HHS can encourage consumer engagement with digital health products.  The RFI also requests feedback on how current requirements around the use of technology by healthcare providers—such as certified electronic health record technology (CEHRT)—can enable value-based care while meeting other program objectives.
  • For technology vendors and data providers, the RFI tees up several questions about digital health product innovation and accessibility, including questions about the health technology ecosystem in general, as well as questions about digital identity, technical standards and certification, data exchange, and compliance.
  • Press: https://www.covingtondigitalhealth.com/2025/05/cms-hhs-health-it-office-issue-request-for-information-on-digital-health-products-and-health-technology-infrastructure/
  • Federal Register: https://www.federalregister.gov/documents/2025/05/16/2025-08701/request-for-information-health-technology-ecosystem

KEY ACRONYMS

  • ASPR = Administration for Strategic Preparedness and Response
  • ASTP/ONC = Assistant Secretary for Technology Policy/Office of the National Coordinator
  • CBO = Congressional Budget Office
  • CEHRT = certified electronic health record technology
  • CHOICE = Custom Health Option and Individual Care
  • CMS = Center for Medicare & Medicaid Services
  • DARPA = Defense Advanced Research Projects Agency
  • DPC = direct primary care
  • EO = Executive Order
  • FDA = Food and Drug Administration
  • FPDP = Fair Prescription Drug Prices for Americans Act
  • GOP= Grand Old Party
  • HHS = Department of Health and Human Services
  • HSA = heath savings accounts
  • ICHRA = individual coverage health reimbursement arrangements
  • MA = Medicare Advantage
  • MFN = most favored nation
  • OBBB = One Big Beautiful Bill (H.R.1 — 119th Congress)
  • OCED = Organisation for Economic Co-operation and Development
  • RFI= Request for Information
  • SIP = section 804 importation program
  • WHO = World Health Organization

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