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HHS launches “Operation Trailblazer” initiative, seeks to dramatically change U.S. clinical trial infrastructure
On June 22, the federal government announced “Operation Trailblazer”, a department-wide initiative aimed at reversing the trend of early-stage clinical trials moving overseas (especially to China) and making the U.S. the preferred location for drug development and clinical research. HHS said it would introduce measures under the Operation Trailblazer banner to speed up drug research by reducing unnecessary delays to studies, increase participation in clinical research, and strengthen domestic research capacity. It’s a direct response to China’s increasing role in biotech/biopharma research and development. China’s global share of early phase clinical studies surpassed the U.S. in 2021, and its total registered clinical trials surpassed the U.S. as well. The multi-department effort is headed by the FDA and includes the National Cancer Institute (NCI), NIH, and the Advanced Research Projects Agency for Health (ARPA-H). HHS will also partner with its Office of the Inspector General and other relevant HHS components. Some key components of the initiative:
- The FDA is proposing a pilot program to make it quicker to run first-in-human clinical trials, with a stated goal to reduce early trial timelines by six to 12 months. This builds off previously announced plans to allow drug approval with one pivotal trial instead of two;
- An expedited Investigational New Drug pilot program to shorten time from drug identification to first-in-human study, plus draft guidance on a quantitative systems pharmacology approach for determining minimum biological effect dose levels. FDA also launched a new webpage called “The Phase 1 IND Navigator”;
- HHS’s Office of Inspector General simultaneously published a Request for Information (RFI) on whether anti-kickback safe harbors should be updated to cover clinical trial participant compensation;
- NIH will strengthen support for clinical trials in areas like AI and human cell-based models.
Various HHS agencies will release more detailed proposals in the coming weeks, with public comment periods.
In an opinion piece published on Fox News, HHS Secretary Robert F. Kennedy Jr. said America should be the best place in the world to develop new medicines, but the current system drives too much clinical research overseas. He stated “we are losing ground” and “Under President Trump’s leadership, HHS is restoring America’s position in clinical research.” Responses to the initiative were relatively tepid. Industry stakeholders were cautiously optimistic, while some in the scientific community are expressing concern that safety will be deprioritized in a quest for speedier approvals. The Association of Clinical Research Organizations (ACRO) said it’s encouraged by the momentum behind the initiative and remains committed to helping shape a more agile, patient-centered clinical research ecosystem, with one ACRO board leader framing it as an important step in how the industry delivers innovation and gets treatments to patients faster. Major patient organizations have been relatively silent on the proposal since its release.
Gridiron’s take: Operational Trailblazer is evidence that the education and direct lobbying (from the industry as well as key members of Congress) of the White House is having an impact. We’ve long argued that a negative U.S. regulatory and policy environment further emboldens China and other countries, disrupting the U.S.’ medical innovation leadership position. While implementation details are critically important (the devil is always in the details), much of this work could result in fundamental changes to a clinical trial infrastructure that urgently needs an update. Many of the proposals would likely garner bipartisan support, making some components of Operation Trailblazer durable enough to last beyond the Trump Administration.
Medicaid’s new “community engagement” requirements approach finalization; Democrat attorneys general file lawsuit
The controversy about who will be exempt from Medicaid “community engagement” (commonly referred to as work requirements) continues to rage as implementation looms. Earlier in June, CMS published the work requirements as an interim final rule (IFR), rather than going through standard notice-and-comment rulemaking. In passing the One Big Beautiful Bill Act (OBBBA), Congress authorized CMS to issue this as an interim final rule, letting the agency bypass traditional rulemaking so the rule can take effect July 31, 2026. CMS is still accepting public comments through July 31, but that comment period won’t delay implementation — it’s essentially symbolic at this point. The work requirements themselves apply to all 41 Medicaid expansion states (40 states plus DC), with full implementation required by January 1, 2027 (though states may be able to get temporary extensions through 2028). Patient advocates and many Democrats are most concerned about how CMS is interpreting the “medically frail” exemption within the requirements. The underlying law requires most Medicaid expansion enrollees aged 19–64 to document 80 hours/month of work, school, or community service. The current political and legal fight is over how CMS has defined who’s exempt from it. The law said medically frail people include those with substance use disorders, disabilities, or serious medical conditions. But the CMS rule went further, requiring that someone’s condition must “significantly impair” their ability to work, volunteer, or attend school at the required rates in order to qualify for the exemption. Some states argue this is a narrower standard than Congress wrote into the statute. In response, 25 Democratic-led states and DC (led by a coalition of attorneys general) filed a lawsuit on June 22, specifically challenging the interim final rule, arguing it unlawfully narrows Congress’s protections for medically frail Medicaid recipients and adopts a new interpretation of key statutory terms. CMS Administrator Dr. Mehmet Oz defended the agency’s actions, “This rule helps Americans build skills and independence through work, education, job training, or community service, creating new opportunities for themselves and their families.” Disability rights groups, medical associations, and patient advocates have been critical of CMS’ current interpretation, but for different reasons. While all these stakeholders object to tying the medical frailty exemption to a person’s inability to work at all, rather than just the existence of their condition, physicians are raising concerns about documentation burdens and other groups worry that the implementation mechanics (and individuals’ lack of understanding of the process) could quietly strip protections away even from people who are nominally exempt. Democratic AGs say they’re committed to fighting the CMS interpretation. Rhode Island AG Peter Neronha (D) stated, “This eleventh-hour attempt to further narrow protections for medically frail Medicaid recipients seeks to punish those who cannot fend for themselves. Further, this Administration is once again attempting to sidestep Congress by unlawfully reinterpreting the law, and coercing the states to rush to implement their last-minute changes or face penalties.” The Kaiser Family Foundation (KFF)—an outspoken opponent of Medicaid work requirements—released a summary of the IFR this week.
Democrats plan to take control of Congress, provide glimpse of their oversight priorities and drug pricing policy priorities
With polls showing the U.S. House more than likely to flip to Democratic control and control of the U.S. Senate as a “toss up”, key Democrats are speaking openly about their likely priorities for the last two years of the Trump Administration. First on the list: investigations and oversight. The list of potential areas for congressional investigations is vast, ranging from the Trump family’s finances to the White House ballroom funding sources and the never-ending Epstein file drama. “There’s so much that we need to investigate, so I think it’s a matter of trying to figure out where to begin. This is like a coloring book where all the pictures are already colored in. We don’t have to paint anything. The administration is doing it themselves,” said Rep. Wesley Bell (D-MO). On the health care front, the FDA is likely to be the focus of several investigations, including what Democrats call potential “pay to play” activities and the Commissioner’s National Priority Voucher (CNPV) program. Rep. Jake Auchincloss (D-MA), generally a supporter of the life sciences community, has been extremely harsh in his criticism of the FDA. In May, Auchincloss made several accusations regarding former FDA commissioner Dr. Marty Makary and took to social media to encourage FDA staffers to file compmlaints with his office. Auchincloss is a rising health care policy star in the House Democratic caucus. On the drug pricing front, leading Senate Democrats announced their drug pricing blueprint for potential legislative action. Senate Finance Committee Ranking Member Ron Wyden (D-OR) released a formal Request for Information which centered on Senate Democrats’ broader work to make health care affordable and gives us an idea on what legislative proposals will be pushed if Democrats take control of the House and Senate after the midterms. Finance Committee minority staff conducted listening sessions with more than 70 external organizations — patients, consumers, academic researchers, think tanks, health insurers, and pharma companies — ahead of the RFI. The 42-page RFI seeks additional stakeholder input on proposals that would modify Medicare negotiation rules, adjust inflation-based rebate requirements, and increase supply-chain oversight. Bottom line: Democrats want to push through Inflation Reduction Act 2.0 which would drastically expand major aspects of the IRA. House Democrats, led by Energy and Commerce Committee ranking member Frank Pallone (D-NJ), introduced a similar bill on these topics in late 2025. The three main policy areas proposed by Senate Democrats: 1. Lowering Drug Manufacturer Prices: This section covers expanded Medicare drug price negotiations, stronger inflation rebate policies, and potential subscription payment models for medications used by broad populations, including GLP-1 drugs. It recommends expanding the number of Medicare negotiation-eligible drugs beyond the current schedule of 10 drugs in 2026, 15 drugs in 2027 and 2028, and 20 drugs in 2029 and beyond. 2. Reducing Patient Out-of-Pocket Costs: This section covers expanding Medicare cost-sharing caps, increasing eligibility for prescription drug assistance for low-income patients, and addressing pharmacy benefit manager (PBM) practices that may contribute to higher drug spending. Additional proposals include restructuring Medicare Part D cost-sharing, improving access to generic and biosimilar drugs, and increasing transparency around PBM business practices. The document also asked for input on whether to cap cost-sharing for specific medicines like insulin, or for all medicines that qualify as chronic care drugs. 3. Bolstering Biopharmaceutical Innovation: The third section concerns new incentives for academic research, support for small biotechnology companies, increased clinical trial participation, and efforts to recruit and retain scientific talent in the United States. It also details tax incentives, public-private partnerships, and policies intended to strengthen domestic biomedical research and drug development.
CMS sends Most Favored Nation Medicare drug pricing models to the Office of Management and Budget for final review
The Medicare MFN drug pricing models, GLOBE (Part B) and GUARD (Part D) have moved forward to the final step before finalization. Both proposed rules were sent to the White House Office of Management & Budget (OMB) in mid-June for final review. CMS accepted public comments on both models earlier this year. It remains to be seen if the final rules (which will likely be formally issued after OMB review) will differ from the proposed rules. GUARD and GLOBE are mandatory CMS Innovation Center (CMMI) models proposed to lower Medicare prescription drug costs by tethering U.S. reimbursement rates to international prices (Most-Favored-Nation pricing). The GUARD Model (Guarding U.S. Medicare Against Rising Drug Costs) targets certain Medicare Part D drugs. It tests an alternative inflation rebate formula by benchmarking prices against economically comparable countries. The GLOBE Model (Global Benchmark for Efficient Drug Pricing) targets certain Medicare Part B (physician-administered) drugs. It forces manufacturers to pay rebates if U.S. prices exceed an international benchmark. GUARD is slated to begin on January 1, 2027. GLOBE is slated to begin on October 1, 2026.
Health Policy Snippets
- Alliance for Regenerative Medicine (ARM) releases updated Cell & Gene Therapy resource. ARM recently released its latest report (spotlighting Q1 2026) on the status of the cell and gene therapy sector. What do things look like in 2026 and what can we anticipate in 2027? The US currently has two therapeutic products approved, while the EU has one. Notably, the US has 10+ possible regulatory submissions this year, showing the strength of the near-term pipeline. In terms of possible milestones, we could see the first-ever approvals of a CAR-T cell therapy to treat an autoimmune disease and an in-vivo gene editing therapy in 2027.
- Book your pre or post Midterm Elections presentation. This November’s midterm elections are poised to shift the health care landscape in major ways. If you’re interested in booking a Gridiron-hosted pre-Midterms or post-Midterms presentation for your organization, contact us today. The schedule will fill up quickly as the summer draws to a close. Contact Patti Kendall at operations@gridironpublicaffairs.com to book your virtual session.
