Health Care Watch: June 27, 2026

The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from June 21 – June 27.  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 22, Energy & Commerce Committee Ranking Member Frank Pallone, Jr. (D-NJ), Health Subcommittee Ranking Member Diana DeGette (D-CO), and Oversight & Investigations Subcommittee Ranking Member Yvette Clarke (D-NY) sent a letter to the National Institutes of Health (NIH) Director Dr. Jay Bhattacharya requesting information about NIH's role in and assessment of the Office of Management and Budget’s (OMB’s) proposed rule on the Uniform Guidance for Federal Assistance published on May 29.  The letter requested information by July 7, including NIH's involvement in developing the rule, identification of NIH officials and components that participated in drafting or reviewing the rule, NIH's assessment of how the rule would affect grantees and award volume, and how the proposed pre-issuance review by political appointees would interact with NIH's grant approval process.  

• On June 25, the Energy & Commerce Health Subcommittee advanced 15 health care bills by voice vote to the full committee, including legislation requiring hospitals and health care providers to publicly post service prices, requiring insurers to disclose the portion of premiums spent on health care, and requiring greater transparency of prior authorization and supplementary benefits in Medicare Advantage (MA) plans.  The subcommittee also advanced legislation placing xylazine and nitazenes on the federal controlled substances list.  The full committee is expected to markup these bills on July 1.

• On June 25, the Energy & Commerce Oversight & Investigations Subcommittee held a hearing on Medicaid fraud and program integrity.  Republican members questioned whether states are doing enough to prevent fraud and examined recent Trump administration enforcement actions, including a deferral of billions in Medicaid funding from some states and a six-month pause on enrollment of new Medicare hospice and home health agency providers.  Democratic members raised concerns that those enforcement actions threaten patient access to care.  State Medicaid directors from California, Minnesota, New York, and Ohio testified, describing fraud prevention measures their states have undertaken, including enhanced screening of Medicaid providers.

• On June 25, the Education & the Workforce Committee held a markup advancing 11 bills to the full House, which included a bill to increase transparency in employer-sponsored health plans.  The Health Data Access, Transparency, and Affordability Act of 2026 would increase the scope of health data employer-sponsored group health plans receive from network service providers, including pharmacy benefit managers (PBMs). 

Senate 

• On June 22, the Appropriations Committee postponed a markup of a bill to fund the U.S. Food & Drug Administration (FDA) in fiscal 2027.  The committee has not determined a date for the rescheduled markup.  

• On June 25, Sen. Lisa Blunt Rochester (D-DE), along with Finance Committee Ranking Member Ron Wyden (D-OR) and Democratic Leader Chuck Schumer (D-NY), introduced the Medicare Cost Cap Act, which would create a $5,000 cap on out-of-pocket costs under Medicare Parts A and B for beneficiaries enrolled in traditional Medicare.  The bill would also eliminate asset limits for Medicare Savings Programs (MSPs) and the Part D Low Income Subsidy (LIS), align eligibility criteria across MSP and LIS, and establish bidirectional eligibility deeming between MSPs and LIS.  A fact sheet can be found here. 

• On June 25, Health, Education, Labor & Pensions (HELP) Chairman Bill Cassidy (R-LA) released a draft discussion bill titled the 340B Drug Pricing Integrity and Affordability for Patients Act.  The draft would allow manufacturers to elect to provide the ceiling price through one of three mechanisms: a discount at the time of sale, a retrospective rebate, or a discount through a claim’s repository operated by the U.S. Department of Health & Human Services (HHS) Secretary.  The draft would set a limit of five contract pharmacies for certain hospital covered entities, establish service area requirements, and create new penalties for compliance violations.  Additional provisions include patient affordability requirements with sliding fee scales for hospital covered entities, criteria for off-campus hospital child sites, contracting reforms governing third-party administrator and contract pharmacy remuneration, enhanced transparency reporting requirements, and modifications to the prime vendor program.

• The Senate is in recess until July 13.  

REGULATORY UPDATE

• On June 18, the Federal Trade Commission (FTC) required Aurobindo Pharma Limited to divest four generic drug products to complete its $250 million acquisition of Lannett Company Inc.  The FTC's proposed consent order would require Aurobindo to divest the products to Quagen Pharmaceuticals LLC.  The four products to be divested are mycophenolate mofetil oral suspension, niacin extended-release tablets, pilocarpine tablets, and rabeprazole sodium delayed release tablets.  

• On June 22, HHS announced a coordinated department-wide effort to strengthen U.S. clinical research and accelerate the development of new treatments.  The initiative spans actions from the FDA, NIH, the Office of the National Coordinator for Health Information Technology (ONC), the Advanced Research Projects Agency for Health (ARPA-H), and the HHS Office of Inspector General (OIG).  FDA is soliciting public comments on a proposed pilot program to shorten the timeline from drug identification to first-in-human Phase 1 clinical trials and issued draft guidance clarifying that one high-quality late-stage clinical trial with confirmatory evidence will generally be sufficient to provide substantial evidence of effectiveness for drug approval.  A fact sheet on the FDA’s initiatives can be found here.  Other actions include NIH efforts to advance the use of artificial intelligence (AI) and real-world data in clinical trials, the National Cancer Institute's (NCI) work to streamline cancer trial activation, ARPA-H programs to modernize clinical research, and an OIG Request for Information on potential modifications to safe harbor regulations under the federal anti-kickback statute related to clinical trial participation.  

• On June 24, HHS announced the conclusion of the federal public health response to the Hantavirus exposure event associated with the M/V Hondius cruise ship.  The final 42-day monitoring period ended on June 21, with no individuals in the U.S. remaining under public health monitoring and no sustained transmission of Hantavirus in the U.S. 

• On June 24, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule to update payment rates and policies under the Medicare End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) for calendar year (CY) 2027.  CMS proposes to increase the ESRD PPS base rate to $299.55, which would increase total payments to ESRD facilities by approximately 1.1% compared to CY 2026. This proposed amount includes a $15.96 adjustment, which reflects the inclusion of phosphate binders into the ESRD PPS base rate. The proposed rule also includes changes to the Low-Volume Payment Adjustment, payment adjustments for pediatric patients, an increase to the home and self-dialysis training add-on amount, and technical modifications to the transitional drug add-on payment adjustment (TDAPA) and post-TDAPA add-on payment adjustment.  For the ESRD Quality Incentive Program (QIP), CMS is proposing to replace the Hypercalcemia reporting measure with a Hyperphosphatemia clinical measure and remove the Medication Reconciliation and COVID-19 Vaccination Coverage Among Health Care Personnel reporting measures, beginning with payment year 2029.  A fact sheet can be found here.

• On June 24, CMS’ Office of the Actuary released its National Health Expenditure Projections for 2025-2034 in Health Affairs.  The projections estimate that national health spending will reach nearly $9.0 trillion by 2034 and represent 20.6% of the economy, compared with $5.3 trillion and 18% in 2024.  The report notes that the rate of national health spending growth during this period is influenced by continued elevated use of medical services and goods through 2026, major legislative changes affecting insurance coverage and spending through 2028 (including H.R. 1), and continued demographic shifts toward public programs, mainly Medicare.  The insured share of the population is expected to decrease to 90.5% in 2034 from 91.8% in 2024 resulting in a 3 million increase in the number of uninsured to 31.6 million.  Overall prescription drug spending growth is projected to slow from 11.1% in 2025 to 8.2% in 2026 due in part to Medicare's Drug Price Negotiation Program. 

WHITE HOUSE

• On June 25, President Donald Trump signed an executive order (EO) directing HHS, Agriculture (USDA), and the Environmental Protection Agency (EPA) to take actions supporting regenerative agriculture practices and reducing chemical exposure risks in the food supply as part of the Make America Healthy Again (MAHA) Commission agenda.  The order directs the Secretary of HHS, in coordination with USDA and EPA, to expedite development of a research and evaluation framework for cumulative chemical exposure in the food supply, issue a grand prize challenge from the NIH for researchers to evaluate exposure, diagnosis, and treatments related to cumulative chemical exposures on individual health, and prioritize research through ARPA-H on technologies that reduce reliance on conventional chemical crop protection tools.  An HHS press release can be found here.  A fact sheet can be found here. 

• On June 25, President Trump announced the nomination of Chris Klomp for Deputy Health Secretary.  Mr. Klomp has served as chief counselor of HHS since February, having previously served as the Director of the Center for Medicare, and has led administration negotiations with drug manufacturers on most favored nation (MFN) pricing.

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

• 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 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

• Short-Term, Limited-Duration Insurance (CMS-9881); Proposed Rule; 05/30/2026

• Request for Information; Clinical Laboratory Improvement Amendments (CLIA) of 1988 Regulations (CMS-3485); Notice; 06/01/2026

• Guarding U.S. Medicare Against Rising Drug Costs (GUARD) Model (CMS-5546); Final Rule; 06/15/2026

• Prohibition on Federal Medicaid and Children's Health Insurance Program Funding for Specified Sex-Rejecting Procedures Furnished to Children and Youth (CMS-2451); Final Rule; 06/16/2026

• FY 2027 Skilled Nursing Facility (SNFs) Prospective Payment System and Consolidated Billing and Updates to the Value-Based Purchasing and Quality Reporting Programs (CMS-1843); Final Rule; 06/18/2026

• Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals; the Long-Term Care Hospital Prospective Payment System; and FY 2027 Rates (CMS-1849); Final Rule; 06/24/2026

• FY 2027 Inpatient Psychiatric Facilities Prospective Payment System Rate and Quality Reporting Updates (CMS-1847); Final Rule; 06/24/2026

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

• 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

• Food Standards of Identity Modernization; Pasteurized Orange Juice; Final Rule; 05/08/2026 

• 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

• Requirements For Additional Traceability Records For Certain Foods: Compliance Date Extension; Final Rule; 06/03/2026

• Rulemaking to Provide by Regulation that an Ingredient Is Not Excluded From the Dietary Supplement Definition; Proposed Rule; 06/05/2026

HEARINGS

House

• Energy & Commerce Committee

Markup – likely including health policy legislation

July 1; 10 AM EST; Location TBA

Bills to be considered: TBA

• Ways & Means Committee

Markup – likely including health policy legislation

Week of June 29

Bills to be considered: TBA, but could include a hospital transparency and Medicare Advantage prior authorization legislation

• Education & Workforce Committee

Health, Employment, Labor, and Pensions Subcommittee 

Direct Contracting: A Prescription for Lower Health Care Costs  

July 1; 10:15 AM EST; 2175 Rayburn

Witnesses: TBA

Senate

• Armed Services Committee

Personnel Subcommittee 

Hearing on the TRICARE Pharmacy Program

July 15; 2:30 PM EST; 222 Russell

Witnesses: Rear Admiral (Dr.) David J. Smith, USN (Ret.), Deputy Director, Defense Health Agency; Dr. Adam Kautzner, President, Express Scripts and Evernorth Care Management; Dr. Micah Lansford, Pharmacist and Owner, Roden-Smith Pharmacy; Greg Reybold, Vice President of Public Policy, American Pharmacy Cooperative, Inc.

REPORTS 

Office of Inspector General (OIG) 

• On June 23, HHS OIG released an audit finding that CMS made Medicare payments to hospice providers for certain new enrollees who did not meet hospice eligibility requirements, with 45 of 100 reviewed initial certification periods lacking adequate documentation of terminal illness or failing to meet eligibility documentation requirements.  OIG estimated that Medicare could have saved $255.1 million during the audit period if hospice Medicare Administrative Contractors (MACs) had implemented eligibility review procedures for new enrollees without inpatient or emergency room claims in the 18 months prior to starting hospice care.  OIG recommended that CMS work with hospice MACs to consider this high-risk area in eligibility reviews and develop pre- or post-payment review procedures for such enrollees, and CMS concurred with the recommendation.

Government Accountability Office (GAO)

• On June 26, GAO published a report summarizing its prior work on HHS and NIH contributions to pharmaceutical drug development, noting that research conducted at HHS labs between 1980 and 2019 led to 4,446 U.S. patents, of which 93 patents licensed by NIH to companies contributed to the development of 34 drugs that reached the marketplace.  The report highlighted that NIH began taking steps as of July 2025 to publicly report its licensed patent data in an accessible and searchable format, following a prior GAO recommendation, and that NIH had previously revised its standard licensing agreement in November 2020 to allow termination of licenses held by companies that violate federal antitrust laws.

ADDITIONAL POLICY NEWS

• On June 18, the Senior Care Pharmacy Coalition (SCPC) issued a statement on contracting challenges between long-term care (LTC) pharmacies and the three largest PBMs: CVS Caremark, Express Scripts, and Optum Rx.  SCPC stated that ongoing disputes threaten the stability of pharmacy services for seniors and individuals with complex medical needs, noting that LTC pharmacies provide clinical support, medication management, hand delivery of medications, emergency access, and coordination with nursing facilities and assisted living communities beyond medication dispensing.  SCPC urged all parties to work toward fair, transparent, and sustainable agreements and called on the Trump Administration to act on eight core changes the coalition outlined in a February letter to CMS Administrator Dr. Mehmet Oz.  

• On June 22, REGENXBIO Inc. announced it has aligned with FDA on the path forward for resubmission of the Biologics License Application (BLA) for NAVSUNLI, a one-time investigational gene therapy for Mucopolysaccharidosis II, also known as Hunter syndrome.  As part of the company's appeal of the February 2026 Complete Response Letter, the FDA acknowledged that existing NAVSUNLI clinical data is sufficient to be considered for the accelerated approval pathway and that no additional patients or studies are needed, including a previously recommended untreated control arm.  REGENXBIO expects a Type A meeting with the FDA to take place in July and plans to resubmit the BLA in the third quarter of 2026, with the FDA stating it would review the resubmission on an expedited basis.  

• On June 23, JAMA Network Open published a study estimating the interim effectiveness of 2025-2026 COVID-19 vaccines against medically attended COVID-19 among adults aged 18 years and older in the U.S.  The case-control study, using data from the Centers for Disease Control and Prevention (CDC) Vaccine Effectiveness Network, found that estimated vaccine effectiveness was 50% against COVID-19-associated emergency department and urgent care encounters and 55% against COVID-19-associated hospitalizations between September 3 and December 31, 2025.  This study had previously been blocked from release by CDC Acting Director Dr. Jay Bhattacharya due to concerns about its methodology.  

• On June 23, FTC filed an amicus brief in an antitrust case brought by CareFirst of Maryland Inc. alleging that Johnson & Johnson (J&J) maintained monopoly power over STELARA through the acquisition of Momenta Pharmaceuticals and subsequent assertion of its patent portfolio to delay or prevent competition.  STELARA is used to treat several autoimmune conditions, including psoriasis, psoriatic arthritis, ulcerative colitis, and Crohn's disease.  The FTC’s brief argues that, under Section 2 of the Sherman Act and longstanding Supreme Court precedent, plaintiffs do not need to prove that a company specifically intended to harm competition, and that the district court’s contrary ruling improperly focuses on intent rather than the effect of J&J’s conduct on competition and consumers.

• On June 25, a federal judge in the U.S. District Court for the District of Columbia temporarily blocked the Trump administration's regulation that would cap student borrowing at $50,000 annually and $200,000 total for professional degree programs in 11 designated fields and at $20,500 annually and $100,000 total for other graduate programs, set to take effect July 1.  Judge Beryl Howell's ruling blocked the administration's definition of professional degrees pending further court review but did not block the borrowing caps themselves, noting that action is within Congress's authority.