Programming Note: Value Report will take a one-week break in observance of U.S. Independence Day. We’ll return on July 10 with fresh insights on health policy and prescription drugs. Thank you for being a valued reader.

Taking cues from Damian Lillard, HHS is shooting a deep three-point shot at a new goal: catching up to China in clinical trial starts.

While ‘America First’ innovation has long been a priority for the Trump administration, health agencies are now codifying a “coordinated department-wide effort” dubbed Operation TrialBlazer to regain ground on China’s early-stage clinical development capabilities

As part of the initiative’s Monday launch, the FDA debuted a pilot program designed to accelerate early stages of clinical trials with the goal of slashing months off drug development timelines. The agency also issued guidance clarifying that a single, high-quality late-stage clinical trial with accompanying confirmatory evidence can be sufficient to support a drug’s approval.

TrialBlazer extends beyond the FDA to incorporate other U.S. agencies. The NIH is tasked with advancing the “responsible use” of AI, real-world data and human cell-based models to speed drug development while maintaining scientific rigor. The National Cancer Institute will liaise with cancer centers and researchers to boost enrollment in oncology studies, while the Inspector General’s office is asking for input on safe harbor regulations and remuneration for trial participants.

Early reaction to TrialBlazer is positive but tempered. Writing for BioCentury, Steve Usdin notes that HHS’ proposed reforms, if successful, would not enable the U.S. to fully eclipse China’s status quo.

“The timeline in the U.S. would, in the best-case scenario, decrease to about 15 months. This is less than half the current U.S. worst-case scenario, according to FDA — and about seven months longer than the Chinese timeline.”

– Andrew Wishon, Editor-in-Chief

This week, the Centers for Medicare & Medicaid Services published its annual report on U.S. health expenditures. Last year, Americans spent $5.7 trillion on healthcare – a 7.3% jump from 2024.

Here’s a breakdown of the key numbers:

• This is the third consecutive year that health spending rose above 7%, adding fuel to Americans’ ongoing affordability concerns.
• The rate of health spending growth is outpacing U.S. GDP growth (5% in 2025).
• Prescription drug spending rose by 11.1% year over year, largely driven by the boom of GLP-1 medications and higher cost cancer medicines.
• CMS anticipates healthcare spending will reach nearly $9 trillion by 2034, which would represent almost 21% of the total U.S. economy.
• Prescription drugs are expected to be one of the fastest growing spending categories, surpassing hospital and physician services.

Amid this rapid spending growth, there are important macro trends – influenced by demographic and policy shifts – to keep in mind.

First, as America’s aging population and usage of home health services strains Medicare, CMS anticipates an average increase of 9% in federal spending on the program through 2034. The report also incorporates its first-ever analysis on the impact of MFN and Medicare drug price negotiations. Taken together: While patients’ costs are lower due to the IRA’s reforms to drug benefits, overall spending on Medicare is increasing as the government picks up the tab for more drug costs.

Second, while healthcare spending is growing, at least 3 million Americans are projected to lose health insurance because of Medicaid changes under the One Big Beautiful Bill Act and the expiration of Affordable Care Act subsidies. This could create a compounding affordability problem as costs exceed uninsured Americans’ ability to pay for medications and services.

– Rachel Bridges, Senior Director

The biotech industry arrived at BIO International Convention 2026 with renewed optimism around financing and dealmaking. Yet one theme repeatedly surfaced throughout the week: policy uncertainty is increasingly shaping business decisions.

Most-favored nation drug pricing in the U.S. was a focal point of discussions, with executives describing how pricing policy is now influencing transaction structures, valuation assumptions and commercialization strategies. Some companies are building renegotiation provisions into agreements to account for future pricing changes, while others warn that attempts to preserve U.S. pricing could affect decisions around ex-U.S. market access.

China was another recurring topic. Industry leaders voiced concern that potential restrictions on U.S.-China biotech partnerships could limit access to innovation and create additional uncertainty for investors and business development teams. Several speakers suggested the uncertainty itself is already affecting partnership discussions.

The regulatory environment also remained front and center. BIO CEO John Crowley praised the Trump administration’s Operation TrialBlazer initiative to accelerate clinical development but argued that greater consistency across FDA review divisions should be the industry’s next priority. Attendees also signaled growing interest in more predictable regulatory pathways, particularly for rare disease therapies. FDA officials at the convention sought to reassure attendees that agency rebuilding efforts are indeeed gaining momentum.

Despite these concerns, the industry’s outlook appeared notably brighter than in recent years. Investors and executives pointed to an improving IPO market, rising deal activity and renewed appetite for biotech assets as evidence that the sector’s financing environment is beginning to recover.

– Addison Bortz, Group Director

• July 1 – launch of the Medicare GLP-1 Bridge program, CMS
• July 1 – hearing on direct contracting as “a prescription for lower healthcare costs,” House Education & Workforce
• July 4 – 250th anniversary of the United States!
• July 4-8 – annual congress for molecular life science in Europe, Federation of European Biochemical Societies

• “But clinical trials do more than generate evidence. They attract investment, scientific talent and the infrastructure that supports future innovation. When clinical research moves overseas, those advantages often move with it.” – HHS Secretary Robert F. Kennedy, Jr., Fox News
• “The American dream, to me, I see it as people can grow without having the barrier of who their parents were. It’s not perfect, the American society, by no means. But in comparison to other societies, it’s like an oasis in a desert.” – Albert Bourla, New York Post
• “If drug companies fear they could lose their patent protections on the small number of products that succeed — all due to paperwork challenges — they’ll be less likely to pursue new research and development projects. And the U.S. will cede our historic role as the world’s leading drug innovator. Patients will ultimately pay the price.” – Merrill Matthews, The Hill
• “MFN policies are not merely a mechanism for cost reduction…The prices set by the other high-income countries’ governments reflect systems that often prioritize budget constraints and populationwide health optimization over ensuring early access to life-saving therapies for the sickest patients.” – Jason Shafrin et al., Health Affairs Forefront

• Germany warned the United States that an investigation into its domestic drug pricing scheme could jeopardize America’s trade deal with the EU. Bloomberg: Merz Pushes Back on US Drug Probe, Citing EU Trade Pact.
• About half of Americans say measures aimed at drug and insurance affordability will likely influence who they’ll vote for in upcoming elections, according to a survey. Axios: Axios-Ipsos poll: Health affordability is shaping the midterms.
• Medicare administrators are seeking to formalize tweaks to drug price negotiations, including a proposal to enter certain types of combination biologics into the program. Fierce Healthcare: CMS Proposes Permanent framework for Medicare drug price negotiations.
• The Trump administration’s pursuit of MFN pricing is forcing Eli Lilly to retool its European rollout strategy for new obesity treatments. Reuters: Eli Lilly says Trump pricing policy will affect obesity drug launches in Europe.
• Hospitals are asking the government to intervene after Eli Lilly began halting 340B program discounts to select providers that fail to comply with data transparency requests. Healthcare Dive: Hospitals irate after Eli Lilly follows through on 340B ultimatum.
• Christopher Klomp, a rising star in the Trump administration, is poised to take on broader authority at HHS after playing a central role in drug pricing initiatives. CNN: Trump nominates Chris Klomp as HHS second-in-command.
• Federal health regulators are expanding the FDA workforce after last year’s staffing reductions raised concerns about the agency’s review capacity. Reuters: US FDA officials say hiring picks up speed with more than 2,000 jobs to start.
• A new iteration of ACIP’s charter would shift the panel’s responsibilities and reignite debate over the future of federal vaccine policy. STAT: New ACIP charter broadens criteria for members, calls for review of alternatives to vaccines.
• Florida is launching an inquiry into CVS Pharmacy and its pharmacy benefit manager to examine the company’s role in prescription drug costs and competition. Politico Pro: Florida attorney general launches inquiry into CVS pharmacy benefit manager.