Congress is back: Let the Budget Reconciliation battle begin

Congress returned from its Easter recess with a sense of urgency to advance a budget reconciliation package that will address President Trump’s top legislative priorities. While there is little disagreement among Republicans on those policies (extending 2017 tax cuts and border security, for example), how to pay for the proposals remains an issue House and Senate Republicans need to address…and the two chambers aren’t necessarily singing from the same song sheet. Republicans can lose only 3 votes in the House to pass the bill (assuming all Democrats will oppose the bill). This reality leaves House Speaker Mike Johnson (R-LA) in the unenviable position of trying to strike a deal between his more conservative members (who argue that steep cuts in various government programs are necessary in order to reduce the federal budget deficit) and more moderate members (such as the 12 GOP House members who sent a letter two weeks ago to House leadership stating they would not vote for a bill that included drastic cuts to Medicaid). Now that Congress is back in session, key committees will begin putting meat on the bones of the legislation, sharing details about what will be “reformed” or cut to meet the savings goals. Given the political dynamics, it’s highly unlikely that massive cuts to government programs such as Medicaid will be included in a package. More likely, the GOP House will include reform proposals seeking to require some able-bodied Medicaid recipients to “work” (with the definition of “work requirement” being extremely broad) and potentially reducing federal funding for those who became eligible due to state initiatives to expand Medicaid, which the Affordable Care Act incentivized. 40 states (and D.C.) chose to expand Medicaid and draw down the federal match (which is currently about 90%). That amount may be reduced. There is also chatter about implementing financial penalties for states that elect to allow undocumented individuals to receive Medicaid services. According to the National Immigration Law Center, 7 states presently offer such coverage. Regardless, the noise on potential Medicaid cuts (along with fallout from the massive workforce reductions that were implemented throughout the federal government) made for some contentious town hall meetings for members during the break. Meanwhile, the Coalition to Strengthen America’s Healthcare launched a multi-million dollar television advertising campaign, with a focus in swing states. Expect the committee activity to be robust in May as Republican leaders attempt to push an aggressive timeframe that would result in floor votes on the budget reconciliation package by the end of May or early June (Gridiron says…don’t hold your breath!).

President Trump’s budget proposal “leaked”, causing furor on Capitol Hill

As analysts dive deep into a leaked version of the President’s 2026 budget document, Democrats are sounding the alarm. The budget document, which the White House has not shot down as inauthentic, includes further reductions in federal spending, including additional workforce reductions, the end to many federal grant programs and massive reorganization of many departments (including HHS). The document prompted some Democratic congressional leaders to stage a live-streamed sit-in on the Capitol steps to draw attention to the enormity of the proposed cuts. The Office of Management & Budget (OMB) issued a statement saying that the leaked document was a “passback” (a draft version that is shared with agencies to gain feedback before final decisions are made). While the political furor continues, it’s important to remember that the President’s budget is essentially a wish list. Congress ultimately controls the budget (it has the “power of the purse”), and presidential budgets often consist more of policy statements and positioning. That being said, we’re operating in unique times, and the Trump Administration has clearly pushed the envelope in its first 100 days. If Republicans had massive (or even comfortable) majorities in both the House and Senate, the budget proposal would carry more weight. However, passing a federal budget bill has been a challenge for both political parties when they are in control, and given the slim margins (and looming 2026 mid-term elections), Gridiron encourages everyone to take a deep breath, do the homework/confirm the details and weigh in appropriately with policymakers—while also recognizing that not everything that garners a headline is a reason to panic. 

Biopharmaceutical companies prepare for Administration action on tariffs and other potential issues

After breathing a sigh of relief after President Trump’s broad tariff announcement in early April, biopharmaceutical companies are bracing for the potential announcement of pharmaceutical-specific tariffs in May. The President has never been a close ally of the biopharma community, proposing extensive international reference pricing demonstrations during his first term and issuing a mid-April Executive Order on drug pricing which covered a variety of topics, from expressing his support for some changes to the Inflation Reduction Act’s drug pricing provisions and the Medicare drug price negotiation program to PBM reform. Most of the order focused on instructions to HHS to assemble various reports to provide to the White House in coming months with specific recommendations on how to drive down prescription drug costs. As the threat of pharmaceutical tariffs continue, many companies have made public commitments to expand investment in the U.S., primarily through the addition of more U.S. production sites. The list of companies making announcements in the last few months include Eli Lilly, Regeneron, AbbVie, Novartis and Roche. Last week, Amgen joined the list, announcing a $900M investment in its New Albany, Ohio facility. Whether these announcements are enough to appease the Administration remains to be seen. Observers are also concerned that the Administration could potentially be looking at other drug pricing proposals focused on the differential in prices between the U.S. and foreign countries. The President has long criticized how many U.S. patients pay more for the same medicine as patients in other developed nations. Given the President’s broader focus on addressing “freeloading” from foreign nations, his unabashed support for the IRA’s Medicare drug negotiation program, polls continuing to show strong public support for proposals to “drive down the cost of pharmaceuticals” and the growing number of voices in conservative circles calling for aggressive action, the biopharma community is rightfully on edge. 

Rare disease advocates express alarm about elimination of federal newborn screening panel; New FDA leader discusses potential new approval pathway for rare diseases

As part of the massive reorganization within the U.S. Department of Health & Human Services (HHS), the Trump Administration has terminated the Advisory Committee on Heritable Disorders in Newborns and Children (ACHDNC). The voluntary committee’s central role was to make recommendations to the HHS secretary about which conditions should be included on a universal screening panel for newborns (the Recommended Uniform Screening Panel or RUSP). Many states—although not all—rely on the RUSP to update state newborn screening protocols. The RUSP is not going away, and the list of 64 disorders remains in place. While the move drew outrage from many in the rare disease community, some are committing to work with the Administration to put an alternative structure in place. Advocates had previously criticized the ACHDNC as overly bureaucratic and slow in its recommendations. 

Just two weeks later, new FDA commissioner Dr. Marty Makary raised hopes for many in the rare disease community when he told journalist Megyn Kelly that the FDA is eyeing a “new pathway” for rare disease drugs, potentially allowing for drug approval without data from a randomized, controlled clinical trial. Makary explained that the potential new regulatory pathway would be based on a “plausible mechanism” focusing on rare or incurable diseases that impact a small population. The concept of a new pathway for rare and incurable diseases is similar to legislation that had previously been introduced in the U.S. Senate, but did not advance.

Health Policy Snippets

1.  HHS Secretary provides update on CMS Cell & Gene Therapy Access Model. 
   Secretary Kennedy provided state legislators with an update on the Centers for Medicare & Medicaid Services’ CMMI Cell & Gene Therapy Access Model last week, stating that 35 states have indicated they plan to participate in the model, which permits CMS to negotiate with cell and gene therapy manufacturers on the states’ behalf. Kennedy touted advancements in sickle cell disease and stated that if all 35 states (the list of states is not publicly available and won’t be until later this year) finalize their participation in the model, it would cover 84% of Medicaid beneficiaries living with sickle cell disease. 
2. Maryland moves to expand its Prescription Drug Advisory Board (PDAB) and implement payment caps in commercial market. 
   Maryland is on the verge of expanding the authority of its PDAB as the House and Senate passed HB 424. The bill expands the existing board’s authority to set upper-payment limits (UPLs) on prescription drugs in the commercial market. Previous PDABs that include UPLs could only set limits what state-run programs could pay for drugs that are identified as “unaffordable”. Governor Wes Moore (D) has expressed his support for the bill, while some patient advocates are urging him not to sign the bill, citing concerns that the expansion will lead to reduced access to life-changing therapies.