On May 12, 2025, President Trump issued an Executive Order entitled “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients,” along with an accompanying Fact Sheet providing additional information. The Executive Order aims to lower the costs of prescription drug pricing in the U.S. by implementing a “most-favored-nation” policy. This would tie U.S. drug prices to the lowest prices paid by other comparable developed countries. The Executive Order directs agencies, including HHS and FDA, to take actions that will lower prescription drug costs for Americans. This would include direct-to-consumer purchasing from drug manufacturers and the development of a pricing index that establishes and communicates price targets comparable with the rest of the developed world. In addition, the Executive Order states that if pharmaceutical manufacturers do not bring down their prices to be in line with the new standards, the agencies must propose new regulations to create a pathway for safe importation of prescription drugs from other developed nations. The Executive Order also directs the U.S. Attorney General to review anticompetitive behavior by prescription drug manufacturers and remedy any violations through the Sherman Act.

On May 6, 2025, Speaker of the House, Mike Johnson stated in a media briefing that there would be no cuts to Medicaid. This came in the wake of a meeting with President Trump and certain House Republicans to discuss an initiative to cut roughly $880 billion from government spending, which was rumored to include funding cuts to Medicaid. In their proposed budget issued on May 2, 2025, there were no cuts to Medicare and Medicaid, although several reforms to change the eligibility standards for Medicaid have been considered.

On May 5, 2025, Attorneys General from New York, Washington, Arizona, Rhode Island, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Michigan, Minnesota, New Jersey, New Mexico, Oregon, Vermont, Wisconsin and the District of Columbia filed suit in a Rhode Island federal district court against the U.S. Department of Health and Human Services (HHS) over the restructuring of HHS and its subagencies. The lawsuit alleges that the restructuring of HHS agencies, including layoffs of key personnel, is unlawful, as it undermines the ability of HHS to fulfill its statutory obligations. The lawsuit also alleges that the restructuring violates the Administrative Procedure Act because there was no period for input prior to these changes being made. Additionally, the lawsuit alleges it violates the Separation of Powers Doctrine of the U.S. Constitution in that the executive branch stepped in and dismantled programs that were authorized by Congress.

On April 25, 2025, a federal district court in Texas ruled that the Department of Health and Human Services (HHS) must certify Employer Shared Responsibility (ESR) penalties (required under § 1411 of the Affordable Care Act (ACA)), and that a § 1411 certification from the Internal Revenue Service (IRS) provided to an employer was insufficient. As a result, the court ordered the IRS to refund the ESR penalties assessed against an employer who was not provided with a certification notice from HHS (only from the IRS). As background, Faulk Co., Inc. (the “Employer”) received an ESR penalty in 2021. They paid under protest, and then later demanded a refund. The IRS never responded to the Employer’s letter, which prompted the Employer to file suit alleging that the ESR penalty assessment was unlawful as it was the responsibility of HHS to provide a certification of the ESR penalty, and that the IRS certification of the ESR penalty ran afoul of the Employer’s right to due process under the ACA. The Employer asked that the ESR penalty be refunded and that there be a declaration made that an HHS delegation of authority to the IRS to certify the ESR penalty was void and unenforceable. The court agreed with the Employer and held that under § 1411 of the ACA, and § 4980H of the Internal Revenue Code, a certification to an employer from HHS is required.

The deadline for filing the 2024 annual reporting form (ARF) for the San Francisco Health Care Security Ordinance (HCSO) is May 2, 2025. The HCSO requires, among other items, that covered employers report on their total healthcare expenditures for employees for each quarter in 2024. As background, employers with at least one employee within the city of San Francisco who works more than 8 hours per week for more than 90 days are required to spend a certain amount (called an expenditure) on healthcare for their covered employees. These funds can be used for employer-sponsored medical, dental or vision insurance, paid to the city, or contributed toward programs that reduce employee out-of-pocket healthcare costs.

On April 15, 2025, President Trump issued an Executive Order entitled “Lowering Drug Prices by Once Again Putting Americans First,” which instructs government agencies to take actions that would lower healthcare and prescription drug prices. As background, in his first presidency, President Trump took actions to lower the cost of healthcare and prescription drugs through the Consolidated Appropriations Act of 2021, a law that aimed to lower the cost of healthcare through increased transparency. His administration also encouraged the development of generic and biosimilar alternatives to higher cost brand name prescription drugs and established a pathway to expand access to lower cost prescription drugs imported from outside of the country. In this new Executive Order, President Trump states that he is now attempting to continue these efforts in his second term. Specifically, this new Executive Order outlines many proposals and actions that government agencies can take to lower the cost of healthcare and prescription drugs, both within Medicare and Medicaid, as well as for the general population. Among other proposals, the Executive Order outlines proposed improvements to Medicare pricing negotiations, increased healthcare transparency by pharmacy benefit managers and actions designed to reduce anti-competitive behavior by pharmaceutical manufacturers.

On April 15, 2025, the Centers for Medicare and Medicaid Services (CMS) published a final rule (entitled “Medicare and Medicaid Programs; Contract Year 2026 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly”) implementing changes to the Medicare Advantage rule proposed by the Biden administration. Notably, CMS removed coverage for GLP-1 weight loss drugs under the Medicare Part D and Medicaid programs, a policy shift that the Biden administration’s proposed rule had included for contract year 2026. Additionally, the new final rule does not include the health equity analysis of utilization management policies and procedures within Medicare that was included in the proposed rule.

On April 8, 2025, President Trump announced that his administration would be putting tariffs in place for pharmaceuticals manufactured outside of the U.S. While the impact of these pharmaceutical tariffs is not yet known, the production of pharmaceuticals, both drugs and devices, is conducted through a web of international connectivity upon which tariffs will have a tremendous impact, potentially driving prices for prescription drugs, including generics, up. President Trump has stated that the goal of this tariff, like others that he has already instituted, is to bring manufacturing back to the U.S., in this instance, for pharmaceuticals.

On April 2, 2025, Kentucky Governor Andy Beshear signed HB 421 (the “Law”) into law. The new Kentucky Law, which goes into effect on January 1, 2026, will expand coverage requirements for colorectal cancer care in the state. Specifically, the new Law will require all health plans in Kentucky to offer first dollar coverage of all colorectal cancer examinations and laboratory tests within the guidelines set forth by the U.S. Multi-Society Task Force on Colorectal Cancer. This coverage requirement will apply for plan participants age 45 and over, or under the age of 45 and at a high risk for colorectal cancer. The Law’s new coverage requirements will not apply to high deductible health plans that would normally be disqualified from health savings account eligibility by providing first dollar coverage of this kind, but it will apply to such plans once the minimum deductible has been satisfied.

On March 29, 2025, Dr. Peter Marks submitted a letter to the U.S. Food and Drug Administration (FDA) Commissioner, Sara Brenner, stating that he would resign by April 5, 2025, as the Director of the Center for Biologics Evaluation and Research. Dr. Marks was responsible for the rapid FDA approval of the COVID-19 vaccines, among other career accomplishments. In his letter, Dr. Marks stated that the Dept. of Health and Human Services Secretary, Robert F. Kennedy Jr., is not allowing sufficient transparency regarding vaccines, and is spreading misinformation.