Health Care Watch: June 7, 2026
he following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from June 1 – June 6. Where available, hyperlinks are included to the relevant documents. Please let us know if you have any questions or would like additional information on the items below.
LEGISLATIVE UPDATE
House
On June 3, Energy & Commerce Committee Chairman Brett Guthrie (R-KY) issued a statement in support of the Centers for Medicare & Medicaid Services’ (CMS’) Interim Final Rule with Comment (IFC) requiring certain adult Medicaid expansion enrollees to meet the 80-hour per month community engagement requirement as a condition of eligibility called for under the One Big Beautiful Bill (H.R. 1). Chairman Guthrie stated that the requirements would protect taxpayers, help lift Americans out of poverty, keep beneficiaries connected to their communities, and safeguard safety net programs for the most vulnerable populations.
On June 4, the Judiciary Committee held a hearing titled, “Medicines and IP: Balancing Innovation and Access.” The hearing examined the balance between pharmaceutical patent protections, innovation incentives, and patient access to affordable prescription drugs. Members expressed bipartisan agreement that patent protections are essential to incentivize pharmaceutical research and that prescription drug affordability is a top priority.
On June 4, the House passed H.R. 8646, the Agriculture, Rural Development, Food and Drug Administration (FDA), and Related Agency Appropriations Act, 2027, by a vote of 213-210. The bill would provide $7.1 billion in funding to FDA ($100 million lower than the Administration’s request), with $3.36 billion coming from the federal treasury and the remainder from industry user fees. The Senate Appropriations Committee postponed consideration of its less austere FDA funding bill earlier in the day.
On June 5, Energy & Commerce Committee Ranking Member Frank Pallone (D-NJ) and Senate Finance Committee Ranking Member Ron Wyden (D-OR) released a report examining the impact of health care funding reductions enacted under H.R. 1. The report found that in April 2026, 32 hospitals, clinics, and other health care facilities reduced or closed operations across seven states and 514 health care workers were laid off across five states. The report also found that since July 2025, 216 clinics and hospitals have closed across 39 states, approximately 8,450 health care employees from 30 states have lost their jobs, and average deductibles for Affordable Care Act (ACA) marketplace plans increased by $1,027 in 2026.
Senate
On June 1, Finance Committee Ranking Member Wyden issued a statement in response to the CMS Medicaid community engagement requirements IFC expressing concern that the rule’s documentation and verification requirements will result in millions of Americans losing Medicaid coverage. Ranking Member Wyden argued that the requirements, set to take effect at the beginning of 2027, will create barriers to health care access for working families and their children.
On June 3, the Aging Committee held a hearing titled, “Poisoned Pills: The Human Cost of Dangerous Foreign Drugs.” Members discussed systemic failures in FDA oversight of foreign generic drug manufacturers, particularly from India and China, including pre-announced inspections, reliance on self-reported data, and lack of independent batch testing.
On June 3, the Homeland Security and Governmental Affairs Investigations Subcommittee held a hearing to examine COVID-19 vaccine injections and attacks on scientific publications. Members discussed the plausible mechanisms linking mRNA COVID-19 vaccines to cancer, FDA safety surveillance failures, alleged suppression of dissenting scientific research, and calls to repeal the 1986 National Childhood Vaccine Injury Act. Witnesses focused on evidence of T-cell suppression, spike protein found in tumor biopsies, and DNA contamination in vaccine vials as potential cancer-driving mechanisms.
On June 3, the Health, Education, Labor & Pensions (HELP) Committee held a full committee hearing titled, “Protecting Our Children: Exposing the Dangers of Irreversible Gender Transition Procedures on Minors,” examining medical and legal perspectives on gender transition procedures for minors. Members discussed whether gender transition procedures for minors should be federally banned, with Republicans arguing the evidence base for the procedures is insufficient and procedures cause irreversible harm and Democrats countering that these procedures are rare, carefully screened cases where medical decisions belong to parents, children, and doctors rather than Congress.
REGULATORY UPDATE
On May 28, FDA extended the comment period for its Request for Information (RFI) titled AI-Enabled Optimization of Early-Phase Clinical Trials Pilot Program, originally published on April 29. The original RFI sought input on a proposed pilot program to assess how AI-enabled technologies can improve efficiency, speed, and quality of decision-making in early-phase clinical trials. Comments are now due by June 29.
On May 29, FDA issued a draft guidance titled Oncology Pharmaceuticals: Streamlined Nonclinical Safety Studies for Biologics and Conjugated Products, which provides recommendations to reduce animal testing in nonclinical safety assessments for certain cancer drugs. When finalized, the guidance will recommend approaches including eliminating animal testing when there is no binding or pharmacologic activity, using a single relevant species instead of two, using rodent studies only, or replacing three-month non-human primate studies with a weight-of-evidence risk assessment that may include New Approach Methodologies (NAMs). Comments are due by July 30.
On May 29, the White House Office of Management and Budget (OMB), in coordination with the U.S. Department of Health & Human Services (HHS) and more than 35 other federal agencies, proposed a rule to revise the Guidance for Federal Financial Assistance. According to the proposed rule, the revisions aim to improve transparency, accountability, and oversight for the use of federal funds; clarify the status of OMB's policies and requirements in the 2 CFR regulatory text as an OMB regulation; reduce recipient burden; and eliminate prior diversity, equity, and inclusion (DEI) requirements. Comments are due by July 13.
On May 29, HHS Secretary Robert F. Kennedy, Jr., announced a series of initiatives to strengthen the federal response to Lyme disease and other tick-borne illnesses, delivered during a press conference and "Take Back Your Health" tour stop in New Hampshire. HHS reaffirmed its goal of reducing Lyme disease cases by 25% by 2035 compared to 2022 levels and reiterated Secretary Kennedy's support for reauthorization of the Kay Hagan Tick Act.
On June 2, HHS Secretary Kennedy, joined by Rep. Derrick Van Orden (R-WI), traveled to Wisconsin as part of his national "Take Back Your Health" tour, with stops focused on dairy production, infant formula manufacturing, and faith-based addiction recovery. Secretary Kennedy and Rep. Van Orden then toured the Perrigo infant formula facility in Eau Claire and highlighted FDA results from the largest-ever targeted testing of infant formula in the United States as part of Operation Stork Speed.
On June 2, CMS Administrator Dr. Mehmet Oz and Administration for Community Living (ACL) Principal Deputy Administrator Mary Lazare published a joint blog post marking Medicare Fraud Prevention Week as June 1-5.
On June 2, FDA issued a draft guidance outlining how sponsors developing cell and gene therapy products, including those that use genome editing in human somatic cells, can use publicly available information and established platform knowledge to streamline regulatory submissions. The FDA encourages sponsors to engage early through pathways including Initial Targeted Engagement for Regulatory Advice on CBER/CDER Products (INTERACT) and pre-IND meetings. Comments are due on September 1.
On June 2, CMS Administrator Oz confirmed that the Most-Favored-Nation (MFN) agreements the Trump administration negotiated with 17 pharmaceutical companies to provide certain drugs at reduced prices through TrumpRx.gov will end when the current administration concludes. Dr. Oz urged Congress to codify the agreements into law to ensure the pricing arrangements continue regardless of changes in administration.
On June 3, CMS released an IFC titled Medicaid Community Engagement Requirement, requiring certain adult Medicaid applicants and enrollees ages 19-64 to meet an 80 hours per month work requirement through employment, education, work programs, or community service as a condition of Medicaid eligibility. The rule, issued under H.R. 1, establishes standards states must use to implement the statutory work requirement, including eligibility determinations, exemptions, verification, and state reporting requirements. Exemptions include pregnancy, postpartum status, disability, medically frail status, American Indian or Alaska Native status, parents or caregivers of young children and people with disabilities, and those already complying with similar requirements under the Supplemental Nutrition Assistance Program (SNAP) or the Temporary Assistance for Needy Families (TANF) program.
On June 4, CMS released educational materials in support of the Medicare GLP-1 Bridge, a short-term demonstration scheduled to begin on July 1, that will expand access to certain GLP-1 medications for eligible Medicare Part D beneficiaries who do not currently have access to these medications through the Part D benefit. The materials include a Prescriber Fact Sheet, a Pharmacy Fact Sheet, and a Prior Authorization Form outlining clinical criteria for eligibility. CMS will also host an informational pharmacy webinar on the demonstration on June 11 from 12PM to 1PM ET.
WHITE HOUSE
On May 29, President Donald J. Trump issued an Executive Order (EO) directing the Centers for Disease Control and Prevention (CDC) and its Advisory Committee on Immunization Practices (ACIP) to review a January 2026 HHS report recommending a slimmer childhood vaccine schedule, and to "take any appropriate steps to update" U.S. core childhood vaccine recommendations in line with practices in peer developed countries. The order follows a March federal court injunction in American Academy of Pediatrics (AAP) v. Kennedy that blocked earlier HHS actions to remove several routinely recommended childhood vaccines and stayed changes to ACIP's membership.
On June 1, the White House announced that President Trump has submitted to the Senate the nomination of Ge Bai to serve as an Assistant Secretary of HHS. Bai is currently the principal deputy assistant secretary in the HHS Office of the Assistant Secretary for Planning and Evaluation. Bai is also a professor of accounting at Johns Hopkins Carey Business School and professor of health policy and management at Johns Hopkins Bloomberg School of Public Health.
On June 3, STAT News reported that Mike Stuart is no longer serving as HHS General Counsel. Principal Deputy General Counsel Robert Foster is now the Acting General Counsel.
RULES AT THE WHITE HOUSE OFFICE OF MANAGEMENT & BUDGET (OMB)
Pending Review
CMS
Amending the Indirect Hold Harmless Threshold of Health Care-Related Taxes (CMS-2452); Proposed Rule, 12/31/2025
Strengthening Oversight of Accrediting Organizations (AO), Burden Reduction, and Related Provisions (CMS-3367); Final Rule; 02/04/2026
Medicare Drug Price Negotiation Program (CMS-4215); Proposed Rule; 02/26/2026
CY 2027 Hospital Outpatient PPS Policy Changes and Payment Rates and Ambulatory Surgical Center Payment System Policy Changes and Payment Rates (CMS-1850); Proposed Rule; 04/13/2026
CY 2027 Revisions to Payment Policies under the Physician Fee Schedule and Other Revisions to Medicare Part B (CMS-1848); Proposed Rule; 04/14/2026
Exchange Pre-Enrollment Eligibility Verification (CMS-9873); Proposed Rule; 04/22/2026
CY 2027 Changes to the End-Stage Renal Disease (ESRD) Prospective Payment System and Quality Incentive Program (CMS-1846); Proposed Rule; 04/22/2026
CY 2027 Home Health Prospective Payment System Rate Update and Home Infusion Therapy Services Payment Update (CMS-1844); Proposed Rule; 05/11/2026
Strengthening the Integrity of Medicaid and CHIP Managed Care, Financing, and Access to Care (CMS-2450); Proposed Rule; 05/12/2026
Request for Information: Comprehensive Review of the Essential Health Benefits Framework and Typical Employer Standard (CMS-9874); Notice; 05/14/2026
Short-Term, Limited-Duration Insurance (CMS-9881); Proposed Rule; 05/30/2026
Request for Information: Pharmacy Benefit Manager Compensation and Data Collection (CMS-4218); Notice; 06/01/2026
Request for Information; Clinical Laboratory Improvement Amendments (CLIA) of 1988 Regulations (CMS-3485); Notice; 06/01/2026
FDA
Evaluating the Safety of Antimicrobial New Animal Drugs with Regard to their Microbiological Effects on Bacteria of Human Health Concern; Guidance for Industry; Notice; 7/10/25
Substances Generally Recognized as Safe; Proposed Rule; 12/01/25
Establishment Registration and Product Listing for Tobacco Products; Proposed Rule; 02/19/2026
Drug Establishment Registration and Drug Listing Requirements for Establishments Engaged in Distributed Manufacturing and Certain Foreign Establishments; Rule; 03/04/2026
Cannabidiol (CBD) Products Compliance and Enforcement Policy; Notice; 03/13/2026
Serotonin-2A Agonists and Related Products: Considerations for Clinical Investigations; Guidance for Industry; Availability; Notice; 04/17/2026
Use of Salt Substitutes to Reduce the Sodium Content in Standardized Foods; Final Rule; 04/20/2026
Demonstrating Substantial Evidence of Effectiveness for Human Drug and Biological Products; Revised Draft Guidance for Industry; Availability; Notice; 04/24/2026
Food Standards of Identity Modernization; Pasteurized Orange Juice; Final Rule; 05/08/2026
Forms FDA 3542 and 3542a: Questions and Answers; Draft Guidance for Industry; Availability; Notice; 05/12/2026
Action Levels for Cadmium in Processed Food Intended for Babies and Young Children; Draft Guidance for Industry; Notice; 05/22/2026
Biosimilar and Interchangeable Biosimilar Products: Considerations for Container Closure Systems and Device Constituent Parts; Draft Guidance for Industry; Availability; Notice; 05/27/2026
Requirements for Additional Traceability Records for Certain Foods: Enforcement Policy for Certain Retail Food Establishments and Restaurants; Notice; 06/01/2026
New Dietary Ingredient (NDI) Notifications and Related Issues; Identity and Safety Information About the NDI: Guidance for Industry; Notice; 06/02/2026
Expedited Investigational New Drug Pilot Program; Request for Information; Notice; 06/03/2026
Requirements For Additional Traceability Records For Certain Foods: Compliance Date Extension; Final Rule; 06/03/2026
HEARINGS
House
Appropriations Committee
June 9; 11 AM EST; 2359 Rayburn
Energy & Commerce Health Subcommittee
Legislative hearing on Lowering Health Care Costs for All Americans: Examining Policies to Increase Health Care Transparency
June 10; 10:15 AM EST; 2123 Rayburn
Bills to be considered:
H.R. ____, [Lower Costs, More Transparency Act of 2026];
H.R. ____, [To amend title XXVII of the Public Health Service Act to require hospitals to post prices on the walls.];
H.R. ____, [To amend title XXVII of the Public Health Service Act and title XVIII of the Social Security Act to ensure health insurer accountability through publishing of overhead costs and claim payments.];
H.R. ____, [To amend title XVIII of the Social Security Act and title XXVII of the Public Health Service Act to require the displaying of claim denial rates.];
H.R. 5582, Patients Deserve Price Tags Act;
H.R. 9117, Clear Healthcare Expense Cost Knowledge Act of 2026;
H.R. ____, [To amend title XVIII of the Social Security Act to require the inclusion of certain information in Medicare Advantage encounter data.];
H.R. ____, [To amend title XI of the Social Security Act to require mandatory reporting with respect to certain health-related ownership information.]; and
H.R. ____, [To amend title XVIII of the Social Security Act to limit the compensation that may be paid to agents and brokers by Medicare Advantage organizations.].
REPORTS
Office of Inspector General (OIG)
On June 1, HHS OIG released an audit finding that CMS potentially overpaid Medicare Advantage (MA) organizations by $462 million in 2021 based on acute stroke diagnosis codes submitted on physician data records that lacked a corresponding acute stroke diagnosis on inpatient or outpatient hospital records. OIG reviewed medical records for 97 sampled enrollees and found that none of the high-risk acute stroke diagnosis codes submitted to CMS were supported by the associated medical records. OIG recommended that CMS implement a procedure to prevent overpayments when acute stroke diagnosis codes on physician data records are not corroborated by hospital records during the same service year. CMS did not state whether it agreed or disagreed with OIG’s recommendation
On June 4, HHS OIG released an audit finding that Lehigh Valley Hospital (Allentown, PA) received at least $17.8 million in estimated net Medicare overpayments during the audit period of October 1, 2020, to September 30, 2022, based on a review of 100 inpatient and outpatient claims, 38 of which did not comply with Medicare billing requirements. OIG recommended that the hospital refund $17.8 million to the federal government, conduct internal audits for claims after the audit period, and provide additional training on Medicare billing requirements. An outside counsel for Lehigh Hospital disagreed with most of OIG’s findings and all its recommendations.
Congressional Research Service (CRS)
On May 29, CRS released an In Focus report providing an overview of Medicare Part B drug coverage, reimbursement methodologies, and recent policy developments, noting that per enrollee spending growth on Part B drugs under fee-for-service Medicare was more than three times the spending growth rate of Part D drugs between 2008 and 2021. The report noted that Part B drugs became eligible for price negotiation under the Medicare Drug Price Negotiation Program in 2026, with negotiated maximum fair prices for five selected drugs set to take effect in 2028, and that CMS’ Center for Medicare & Medicaid Innovation (CMMI) has issued a notice of proposed rulemaking on the GLOBE model, a MFN pricing demonstration for certain high-expenditure Part B drugs.
ADDITIONAL POLICY NEWS
On May 27, the U.S. District Court for the Southern District of Georgia issued a ruling in Clover Insurance Co. v. HHS, invalidating the use of 20 MA Star Rating measures and ordering CMS to recalculate Clover Insurance Company's 2026 MA Star Ratings accordingly. The Court ordered that 10 measures were invalid because they were not derived from data collected in the Healthcare Effectiveness Data and Information Set (HEDIS), the Medicare Health Outcomes Survey (HOS), and the Consumer Assessment of Healthcare Providers and Systems (CAHPS) as authorized in statute. The remaining 10 measures were invalidated under the Administrative Procedures Act. If upheld, CMS could recalculate 2026 Star Ratings across all MA plans to exclude the invalidated measures, potentially affecting quality bonus payments and rebates for plans, which has been done before in previous litigation regarding Star Ratings.
On May 29, Replimune Group, Inc., announced plans to resubmit its Biologics License Application (BLA) for RP1 (vusolimogene oderparepvec) in combination with nivolumab for the treatment of advanced melanoma. The announcement follows productive discussions with the FDA to find a path forward after the agency issued two previous Complete Response Letters (CRLs) in July 2025 and April 2026. According to the company, the FDA has indicated it will treat the BLA resubmission as an urgent matter upon receipt and will prioritize its review in recognition of the significant unmet need for patients in the advanced melanoma community.
On June 1, the Pharmaceutical Care Management Association (PCMA) launched a seven-figure multi-channel campaign to educate policymakers on the role of PBMs. PCMA President and CEO David Marin stated that the campaign follows recent PBM reforms enacted earlier this year and company-led changes to business models and is intended to communicate how PBMs operate and the changes underway in the industry.
On June 2, news reports indicated Lilly notified an initial set of 340B-covered hospitals that the company's wholesalers will pull their 340B pricing eligibility on June 8 if they do not submit claims-level data for all pharmacy and medical dispensations as required under a Lilly policy implemented on February 1. According to a June 1 letter from Lilly to HHS’ Health Resources & Services Administration (HRSA) Administrator Thomas Engels, approximately 70% (or 2,350 entities) of 340B-covered entities have complied with the policy, with roughly 1,000 entities not in compliance. Lilly stated the action is intended to identify instances when a drug purchase is improperly granted multiple discounts under overlapping programs. The American Hospital Association described Lily’s actions as unlawful and called for HHS intervention.
On June 3, a coalition of 30 free-market groups sent a letter to members of Congress opposing recent efforts by HHS and FDA to intensify regulation of direct-to-consumer (DTC) prescription drug advertising, as well as legislation introduced by Sen. Bernie Sanders (I-VT) that would ban pharmaceutical advertisements. The coalition argued that DTC advertising informs patients of treatment options, facilitates conversations with medical professionals, and promotes market competition, and urged lawmakers to preserve patients' access to prescription drug advertising information.
On June 4, the U.S. Supreme Court unanimously ruled in Hikma Pharmaceuticals USA Inc. v. Amarin Pharma, Inc. that Amarin failed to state a claim for active inducement of patent infringement under 35 U.S.C. §271(b). Reversing the U.S. Court of Appeals for the Federal Circuit, the Court reinstated the District Court's dismissal of Amarin's complaint. Amarin had filed the infringement suit claiming that Hikma was encouraging doctors to prescribe its generic version of Amarin’s Vascepa heart health drug for a still-patented treatment method. Writing for the unanimous Court, Justice Ketanji Brown Jackson clarified that inducement requires "clear" and "affirmative" encouragement, rather than vague statements or mere industry-standard terms (like describing a product as a "generic equivalent"). However, the Court rejected Hikma’s request for broad immunity, noting that active inducement can still be achieved through implicit encouragement.