Last Friday, President Trump issued his FY27 budget request to Congress. Under the proposal, federal health agencies’ budgets would be slashed by 12%, including steep cuts to the NIH, while requested spending for defense grew to $1.5 trillion.

No president’s budget proposal survives the gauntlet of Congressional appropriations intact. Still, proposed budget levels and requested provisions do help provide a clear signal of where the administration’s priorities lie.

For health care, the following areas of importance emerged:

• Increased DTC advertising enforcement: For FY27, the FDA requested “additional authorities to more effectively address direct-to-consumer advertising that lacks fair balance,” calling on Congress to grant them the powers to regulate ads via legislation.
• Keeping up with China: The FY27 budget proposal earmarks funds for the FDA to support expedited clinical trials, accelerated approvals and new incentives for companies to onshore manufacturing in America. Taken together, these measures represent an effort to close the sizeable gap emerging between the U.S. and China in biotech innovation.
• MAHA agenda front and center: Food safety and nutrition, two key priorities for the MAHA movement and the administration ahead of the midterms, got a significant boost with $57 million to the FDA to strengthen its food safety programs and $19 million for additional nutrition services at community health centers. The budget also once again proposed creating the “Administration for a Health America,” an effort that Congress rejected in last year’s appropriations.
• 340B reform efforts: Trump has again proposed dismantling HRSA and shifting the 340B Drug Pricing Program to CMS as part of larger HHS reorganization efforts. Notably, Congress did not support those efforts in the official FY26 budget.

– Rachel Bridges, Senior Director

As the opening salvo of a big week in payer policy, CMS finalized the Medicare Advantage and Part D rate notice for 2027, with a 2.48% average payment increase.

This was a relief to the industry, which had expressed concerns about the sustainability of the program following the administration’s initial proposed increase of only 0.09%. After accounting for risk adjustment, the effective increase could reach 4.98%, sending more than $13 billion in additional payments to plans in 2027. The announcement also kicked the can down the road on revising risk adjustment, following significant backlash from insurers.

But the industry knows that it remains under political pressure to deliver better outcomes at lower costs. AHIP and the Blue Cross Blue Shield Association provided an update on their June 2025 commitments to streamline prior authorization, reporting that participating plans have eliminated 11% of prior authorization requirements overall. That decrease equates to 6.5 million fewer requests, including a 15% reduction in Medicare Advantage. Analysis of the prior authorization data submitted to CMS is reportedly harder to interpret, making it difficult to see how different payers stack up on continued prior authorization requirements.

N.B. Of course, CMS announced a proposed rule to reduce prior authorizations for prescription drugs right as this edition was being finalized. More to come from us next week.

– Megan Hickey, Managing Director

The breaking news of U.S. pharmaceutical tariffs largely overshadowed the announcement of one of its major exemptions. On April 2, the U.S. and the United Kingdom announced an “arrangement” that will reshape drug pricing, spending and access in Britain.

While principles for the partnership were established four months ago, last week’s update confirmed and clarified key details.

• Tariffs: The U.K. becomes the first country to secure a 0% tariff rate on its biopharma exports to the U.S., an exemption good for at least three years.
• Spending: The National Health Service commits to incrementally raise spending on new medicines from 0.3% of GDP to at least 0.6% by the end of 2036. NHS will also increase the percentage of its budget spent on medicines to 12% by 2036, up from 10% at present.
• Rebate Cap: The agreement places a cap of 15% on rebates applied through the nation’s voluntary pricing scheme. The maximum rate was previously 23%, and the reduced rate will apply until renegotiations in 2028.
• NICE: The U.K.’s HTA body, NICE, has increased cost-effectiveness thresholds from between £20,000 and £30,000 ($26,912 and $40,368) to between £25,000 and £35,000 ($33,640 and $47,096). Two cancer medicines have already received authorization in the U.K. under the revised approach.
• MFN: In terms still open for interpretation, the U.S. commits that new most-favored nation drug pricing models will not be “designed in a way that uniquely disadvantages the United Kingdom.” In kind, the U.S. “expects pharmaceutical companies to continue to launch new medicines” in Britain despite concerns from drugmakers.

With a deal in hand and changes underway, U.K. officials are urging pharmaceutical firms to resume investment in the region after several high-profile withdrawals last year. Hailed by proponents as a “win for British patients and the economy, critics warn that increased spending may not reap intended results. Said one expert: “The maths simply does not add up.”

– Andrew Wishon, Editor-in-Chief

• April 16 – hearing on lowering the cost of prescription drugs by increasing competition, Senate HELP
• April 16 – HHS Secretary Kennedy testifies at budget hearings, House Ways & Means / House Appropriations
• April 17 – hearing to examine HHS policies and priorities, House Education & Workforce
• April 17-22 – annual meeting on advancing cancer science, American Association for Cancer Research

• “If we want to build a healthcare system that is accessible, affordable and worthy of our friends and family, we need to band together – consumers, patients, employers and every level of government – to make it clear that the status quo is unacceptable.” – Paul Markovich, MarketWatch
• “Those of us working in HIV immediately feared that lenacapavir would become another medical miracle whose impact on the epidemic would be delayed for years while access slowly expanded and prices gradually fell. History has taught us this pattern well. But history also offers another path: subscription pricing.” – Dr. Michael Rose, STAT
• “The correct answer to the question of why spending levels in the U.S. are higher than in other countries may be, ‘It’s the prices, stupid.’ But that may be the wrong answer to the question of why spending in the U.S. is rising.” – Michael E. Chernew, Health Affairs Forefront

• European trade associations say new U.S. pharmaceutical tariffs on EU and Swiss exports mark a turning point for global medicine trade, warning that companies will face pressure to abandon the U.S. market, raise prices or move operations stateside. Pink Sheet: US Tariffs Bring ‘Turning Point’ For Global Trade Of Pharmaceuticals.
• HHS’ leading man announced “The Secretary Kennedy Podcast,” which he described as a vehicle for “radical transparency in government” to expose “lies” that have made Americans sick. AP News: RFK Jr is launching a podcast to expose ‘lies’ that have made Americans sick.
• AbbVie is suing the Trump administration to narrow the definition of an eligible patient in the 340B program, arguing that the current standard is overly broad and allows providers to claim discounts on more medications than intended. Axios: Exclusive: AbbVie sues to narrow drug discount patient definition.
• HHS published a revised charter for the Advisory Committee on Immunization Practices that would broaden membership criteria, a move viewed as a response to a federal ruling which called recent appointees “distinctly unqualified.” The New York Times: H.H.S. Takes a First Step Toward Restoring Vaccine Advisory Committee.
• PhRMA CEO Steve Ubl announced he will step down at the end of 2026 after a decade leading the brand-name drug lobby. Politico: Top drug lobbyist to depart PhRMA at year end.
• A JAMA Internal Medicine study of Medicare Part D patients found that the $35 monthly insulin cap cut average quarterly out-of-pocket insulin spending in half by the end of 2023. Endpoints News: Study suggests $35 monthly insulin cap has increased patient access.
• Obesity medicine specialists say the new oral GLP-1 options – Novo Nordisk’s Wegovy pill and Eli Lilly’s just-launched Foundayo – are drawing in first-time users who prefer pills for their lower cost and needle-free administration. Reuters: Americans want weight-loss pills for cost and convenience.
• Each of the three largest PBMs excluded more than 600 drugs from their 2026 formularies while continuing to favor private-label biosimilars tied to their parent companies over lower-priced alternatives. Becker’s Hospital Review: PBM formulary exclusions top 600 drugs amid pricing shift.