Health Care Watch: July 18, 2026
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from July 12 – July 18. 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 July 15, the Energy & Commerce Health Subcommittee held a hearing titled Maintaining America's Leadership in Biomedical Innovation: FDA's Role in Advancing U.S. Drug Development. Members discussed the timeliness, predictability, and consistency of the U.S. Food & Drug Administration (FDA) drug review, including for rare disease products; opportunities to reduce clinical trial administrative burden through digital technologies and real-world evidence; and U.S. competitiveness in biopharmaceutical research and development.
On July 15, the Energy & Commerce Health Subcommittee held a markup and advanced three bills to address illicit drugs.
On July 15, the Ways & Means Committee held a markup and advanced seven bills, including legislation to address the use of prior authorization and increasing transparency in the Medicare Advantage program.
On July 16, the Budget Committee advanced a budget resolution for fiscal year 2027, which includes reconciliation instructions aimed to fund the war in Iran and reform federal elections, (FY27) by a vote of 20-14. There are no instructions for the committees with jurisdiction over health programs to find savings.
On July 17, GOP leaders released text for a continuing resolution to fund the federal government, generally at current levels, through December 4. Speaker Mike Johnson (R-LA) intends for the house to consider this legislation the week of July 20.
Senate
On July 14, Budget Committee Ranking Member Jeff Merkley (D-OR) and Finance Committee Ranking Member Ron Wyden (D-OR) sent a letter to Department of Health & Human Services (HHS) Secretary Robert F. Kennedy, Jr., and Centers for Medicare & Medicaid Services (CMS) Administrator Dr. Mehmet Oz raising concerns about the composition of the Healthcare Advisory Committee, which HHS and CMS announced on March 26. This committee was established to advise on care delivery and financing across Medicare, Medicaid, the Children's Health Insurance Program (CHIP), and the Affordable Care Act (ACA) marketplaces. The letter questioned whether membership on the committee meets the balance requirement of the Federal Advisory Committee Act (FACA) and raised conflict-of-interest concerns regarding several named members. The senators requested written responses by August 14.
On July 15, the Health, Education, Labor, & Pensions (HELP) Committee held a hearing on the nominations of Sean Kaufman to be Assistant Secretary for Preparedness and Response at HHS and Dr. Erica Schwartz to be Director of the Centers for Disease Control and Prevention (CDC).
On July 15, the Armed Services Committee's Personnel Subcommittee held a hearing on the TRICARE Pharmacy Program.
On July 15, the Special Committee on Aging held a hearing titled Behind the Label: Foreign Ownership and Control in America's Drug Supply Chain.
On July 16, the Senate voted along party lines to reject a Congressional Review Act resolution, introduced by Finance Committee Ranking Member Wyden, that would have ended CMS’ Wasteful and Inappropriate Services Reduction (WISeR) Medicare fee-for-service (FFS) prior authorization model.
REGULATORY UPDATE
On July 13, HHS and the Department of Veterans Affairs (VA) entered into a Memorandum of Understanding (MOU) on the research, clinical development, and deployment of potential future rapid-acting psychedelic drug products for veterans with serious mental health conditions, if approved by FDA. The agreement, which advances Executive Order (EO) 14401, Accelerating Medical Treatments for Serious Mental Illness, directs the agencies to coordinate workforce training, develop clinical protocols, support research and real-world evidence generation, and prepare the VA health care system to implement future FDA-approved products. The MOU remains for five years, with an option to renew.
On July 13, FDA and VA entered into a separate MOU to expand information-sharing and scientific collaboration on the development and evaluation of therapies for serious mental illnesses. The agreement accompanies the HHS and VA MOU.
On July 13, FDA issued a final guidance for industry titled Psychedelic Drugs: Considerations for Clinical Investigations, addressing the development of psychedelic drug therapies for serious mental illnesses. FDA also announced a public hearing on the potential future therapeutic use of psychedelic drugs.
On July 13, the Health Resources & Services Administration (HRSA) reported that 340B covered entities purchased $100 billion in covered outpatient drugs under the 340B Drug Pricing Program in calendar year 2025. The data, drawn from the 340B Prime Vendor Program, showed that disproportionate share hospitals accounted for the largest share of purchases at approximately $79.2 billion, and that high-cost pharmaceuticals purchased through specialty distribution channels represented 38.1% of units but 61.9% ($61.9 billion) of reported purchases. HRSA reported that the top 10 drugs by 340B purchases accounted for approximately 28.6% of total program spending, led by Keytruda, Biktarvy, and Darzalex Faspro.
On July 13, the Federal Trade Commission (FTC) announced a proposed settlement order with Caremark and Zinc Health Services (collectively, Caremark), resolving the agency’s antitrust case alleging that the pharmacy benefit manager’s insulin rebate practices inflated list prices and increased patient out-of-pocket costs. The settlement would require Caremark to not discriminate against lower wholesale acquisition cost versions of drugs on standard formularies, offer plan sponsors options that pass manufacturer rebates through to members at the point of sale and move away from rebate guarantees and spread pricing, and delink PBM fees from drug list prices, among other provisions. The FTC estimates the agreement could secure up to $8.5 billion in consumer savings over 10 years and unlock an additional $4.5 billion for patients through point-of-sale rebates.
On July 14, FDA issued guidance for industry titled Formal Meetings Between FDA and Sponsors or Requestors of Over-the-Counter Monograph Drugs. The guidance describes standardized procedures for requesting, preparing, scheduling, conducting, and documenting formal meetings between FDA and sponsors or requestors of over the counter (OTC) monograph drugs under section 505G of the Federal Food, Drug, and Cosmetic Act.
On July 14, HRSA issued a Request for Information (RFI) soliciting feedback on training and care delivery models for the safe administration of potential future FDA-approved psychedelic drugs in ambulatory clinical settings, including health centers and rural health clinics. The notice seeks input on workforce training across the pre-administration, administration, and follow-up phases of care; requirements for Federally Qualified Health Centers, Certified Community Behavioral Health Clinics, and Rural Health Clinics; and the potential role of artificial intelligence and digital health tools in expanding access. Comments are due by August 13.
On July 14, CMS released the CY 2027 Medicare Physician Fee Schedule (PFS) proposed rule, proposing changes to physician payment and value-based care programs. The proposal would revise the Medicare Shared Savings Program (MSSP) to adjust benchmarks, add financial incentives for new accountable care organizations (ACOs), and allow ACOs with applications beginning April 1, 2027, to reduce or eliminate beneficiary out-of-pocket costs for certain items and services. It would also recalibrate PFS payment rates, sunset traditional Merit-based Incentive Payment System (MIPS) reporting beginning with the 2029 performance period in favor of MIPS Value Pathways (MVPs), introduce three new MVPs focused on diabetes, hypertension, and hospital-based care, and reform the Alternative Payment Model (APM) incentive payment. Comments are due by September 14. A press release can be found here. A fact sheet can be found here. A fact sheet on the proposed MSSP changes can be found here.
On July 16, the Department of Homeland Security's (DHS) U.S. Citizenship and Immigration Services (USCIS) issued a final rule rescinding the 2022 public charge ground of inadmissibility regulations. The rule restores broader discretion for immigration officers to consider use of means‑tested benefits, including Medicaid, as part of public charge determinations for certain noncitizens seeking admission or permanent residency.
On July 16, CMS released a Quality, Safety, & Oversight memo introducing a risk-based survey (RBS) process that streamlines standard recertification surveys at higher-performing nursing homes, freeing resources to focus on facilities posing greater health and safety risk. Facilities will continue to be surveyed at least every 15 months, and qualifying facilities will receive a designation icon on Care Compare at Medicare.gov. To qualify, nursing homes must meet quarterly criteria including a five-star overall rating, accurate data submission, zero citations for harm or substandard quality in the last survey cycle, and no recent ownership changes. Approximately 12% of nursing facilities are expected to qualify initially, with implementation scheduled for September 2026 following state agency training.
On July 16, CMS issued draft guidance on manufacturer effectuation of the Maximum Fair Price (MFP) for 2028 under the Medicare Drug Price Negotiation Program, including for the first time detailed procedures for MFP effectuation for drugs payable under Medicare Part B, in addition to updated policies for Part D-covered drugs. Manufacturers may provide MFP access to Part B providers either prospectively, by ensuring acquisition price does not exceed the MFP, or retrospectively, by reimbursing the difference between acquisition cost and the MFP; the guidance also outlines Medicare Transaction Facilitator operations, a 14-day prompt payment window, and enrollment requirements, with public comments due September 18, 2026. A fact sheet can be found here. Comments are due by September 18.
On July 16, CMS' Center for Medicare published a blog post outlining a three-pillar strategy for FFS Medicare: aligning spending and value, empowering beneficiaries to make informed choices, and accelerating accountability. Key proposals include allowing approved ACOs to reduce Part B cost sharing for certain services starting in April 2027, increased hospital price transparency, removing payment differentials between settings of care, Shared Savings Program benchmark methodology reforms, and a transition to digital quality measures. The post accompanies the CY27 PFS and Hospital Outpatient Prospective Payment System proposed rules and includes requests for information on primary care payment redesign, site-of-service payment differentials, and specialty care in the Shared Savings Program.
On July 16, HHS Secretary Kennedy and U.S. Department of Agriculture (USDA) Secretary Brooke Rollins attended a ceremonial signing at Tampa General Hospital in Tampa, FL, the first hospital to commit to the Make Hospital Food Healthier Pledge launched by HHS and CMS on July 8.
On July 17, FDA approved Lipfendra (enlicitide), the first oral inhibitor of proprotein convertase subtilisin/kexin type 9 (PCSK9), as an adjunct to diet and exercise to reduce low-density lipoprotein cholesterol (LDL-C) in adults with hypercholesterolemia, including those with heterozygous familial hypercholesterolemia (HeFH). The FDA granted the approval to Merck under Priority Review and through the Commissioner's National Priority Voucher (CNPV) pilot program.
WHITE HOUSE
On July 13, the White House released a statement outlining the Trump administration's fentanyl and drug policy actions and announcing the inaugural Fentanyl Free America Summit. The statement attributes declines in opioid-related deaths to administration actions and related measures, including enactment of the HALT Fentanyl Act, which permanently classifies fentanyl analogs as Schedule I substances, the designation of certain cartels as Foreign Terrorist Organizations, tariffs on China tied to precursor chemicals, and the closure of the de minimis import exemption.
On July 14, President Donald J. Trump sent to the Senate the nomination of Timothy Westlake to be Assistant Secretary for Mental Health and Substance Use at HHS.
On July 14, President Trump sent to the Senate the nomination of Chris Klomp to be Deputy Secretary of HHS.
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
Exchange Pre-Enrollment Eligibility Verification (CMS-9873); Proposed Rule; 04/22/2026
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
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
Global Benchmark for Efficient Drug Pricing (GLOBE) Model (CMS-5545); Final Rule; 06/26/2026
Cutting Administrative Requirements for Excellence in Patient Care (CMS-3484); Proposed Rule; 07/02/2026
FY 2027 Inpatient Rehabilitation Facility (IRF) Prospective Payment System Rate Update and Quality Reporting Program (CMS-1845); Final Rule; 07/09/2026
FY 2027 Hospice Wage Index, Payment Rate Update, and Quality Reporting Requirements (CMS-1851); Final Rule; 07/09/2026
Patient Protection and Affordable Care Act; State Innovation Waivers and Health Care Choice Compacts (CMS-9877); Proposed Rule; 07/13/2026
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
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
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
Administrative Detention of Tobacco Products; Proposed Rule; 07/09/2026
U.S.-Origin Statements on Seafood; Draft Guidance for Industry; Notice; 07/10/2026
Determining Whether to Submit an ANDA or a 505(b)(2) Application; Draft Guidance for Industry; Availability; Notice; 07/10/2026
HEARINGS
House
Energy & Commerce Committee
July 20, 5:00 PM EST; 2123 Rayburn
Healthcare bills under consideration:
H.R. 1266, Combating Illicit Xylazine Act;
H.R. 2004, Tyler's Law;
H.R. 7970, STOP Nitazenes Act;
H.R. 1561, ALERT Communities Act;
H.R. 7994, HERO Act;
H.R. 8005, Stop Pills That Kill Act;
H.R. 7184, PRESS Act;
H.R. 5880, Fight Illicit Pill Presses Act;
H.R. 9393, Lower Costs, More Transparency Act of 2026;
H.R. 9390, Prices on the Wall Act of 2026;
H.R. 9397, Premium Transparency Act;
H.R. 9396, Prior Authorization Accountability Act;
H.R. 3514, Improving Seniors' Timely Access to Care Act of 2025;
H.R. 9392, Medicare Advantage Cost Transparency Act;
H.R. 5243, To amend title XVIII of the Social Security Act to increase data transparency for supplemental benefits under Medicare Advantage;
H.R. 9389, Nutrition Education and Chronic Disease Prevention in Community Health Centers Act of 2026;
H.R. 8201, Expanding Community Access to Health Services Act;
H.R. 5526, Biosimilar Red Tape Elimination Act;
H.R. 8908, STOP GAMES Act of 2026; and
H.R. 9661, Expedited Access to Biosimilars Act.
Senate
Health, Education, Labor & Pensions (HELP) Committee
Markup
July 22; 10:00 AM EST; 430 Dirksen
Bills under consideration:
S. 2355, Patients Deserve Price Tags Act;
S. 4189, INSULIN Act of 2026;
S. ____, Making America’s Food Safer Act;
S. ____, Childhood Diabetes Reduction Act;
S. 1414, Expedited Access to Biosimilars Act;
S. 3788, CLEAR LABELS Act;
S. 3794, SAFE Drugs Act of 2026;
S. 3014, Ensuring Timely Access to Generics Act of 2025;
S. 494, National Plan for Epilepsy Act;
S. 4110, EMPOWER for Health Act;
S. 1874, Title VIII Nursing Workforce Reauthorization Act of 2025;
S. 380, Rural Obstetrics Readiness Act; and
S. 3097, Health Information Privacy Reform Act.
July 23; 10:00 AM EST; 430 Dirksen
Health care nominations under consideration: Sean Kaufman to be HHS’ Assistant Secretary for Preparedness and Response; Erica Schwartz to be Director of the Centers for Disease Control and Prevention
REPORTS
Office of Inspector General (OIG)
On July 16, HHS OIG released its annual audit report on NIH's National Institute of Environmental Health Sciences' administration of Superfund (CERCLA) appropriations in FY2025. The report found that NIH obligated and disbursed funds in accordance with federal requirements and in proportions consistent with prior years, and that grant monitoring ensured recipients generally met financial, performance, and audit reporting requirements. The report contained no recommendations.
Government Accountability Office (GAO)
On July 13, GAO released a report finding that CMS' controls do not adequately protect federal Affordable Care Act Marketplace consumers from unauthorized activity by agents and brokers. Specific weaknesses include insufficient consumer consent verification, unrestricted access to consumer records by non-agent-of-record brokers, inadequate consumer notification of agent and broker actions, and fourfold growth in consumer complaints of unauthorized enrollments and plan switches from 2023 through 2025. GAO recommended that CMS implement stronger controls to verify consumer consent to agent and broker actions, restrict access to consumer information to the agent of record, notify consumers of agent and broker activity, and periodically review control effectiveness. HHS concurred with the recommendations.
ADDITIONAL POLICY NEWS
On July 10, the National Association of Manufacturers (NAM) released a report examining the economic effects of declining vaccination rates on manufacturers. The report, based on NAM analysis of CDC vaccination data, Bureau of Labor Statistics (BLS) employment figures, and Census population data, estimated that declining measles, mumps, and rubella vaccination rates cost U.S. manufacturers approximately $275 million annually in lost production as parents miss work to care for sick children. The report recommended that policymakers provide regulatory certainty for vaccine manufacturers, safeguard the Vaccine Injury Compensation Program (VICP), and reinforce the safety and effectiveness of vaccines in public communications.
On July 13, a coalition of 195 patient advocacy, public health, and provider organizations sent a letter to Senate Banking, Housing, and Urban Affairs Committee Chairman Tim Scott (R-SC) and Ranking Member Mark Warner (D-VA) expressing support for the Clinical Trial Modernization Act. The coalition asserted the bill would allow trial sponsors to provide financial support for patients' medical and non-medical costs, enable sponsors to furnish remote patient monitoring tools at no cost, authorize HHS to issue grants for community outreach and recruitment, and exclude up to $2,000 in non-reimbursed financial support from federal income tax and from safety net program eligibility determinations. The coalition also claimed that the legislation would reduce financial and administrative barriers to clinical trial participation, particularly among rural, low-income, and other underrepresented populations.