Holland & Knight Health Dose: October 7, 2025

Looking Ahead

The government is a week into the first federal shutdown in seven years. Congressional negotiations remain at an impasse, and lawmakers have repeatedly failed to pass a stopgap spending bill despite the U.S. Senate holding repeated votes on the U.S. House of Representatives-passed continuing resolution (CR) and the CR proposed by Senate Democrats. Large portions of the federal government remain shuttered, and hundreds of thousands of workers have been furloughed. Senators returned to Washington, D.C., on Oct. 6, 2025, as discussion around a potential extension of the advanced premium tax credits (APTCs) under the Affordable Care Act (ACA) continue to be the main sticking point. Democrats are pushing to tie ACA provisions to any CR, while Republicans insist policy talks wait until the government reopens.

Upcoming Events

The Senate Committee on Health, Education, Labor, and Pensions (HELP) will hold a hearing on Oct. 9, 2025, titled "AI's Potential to Support Patients, Workers, Children, and Families."

The Senate Committee on the Judiciary's Subcommittee on Intellectual Property will hold a hearing on Oct. 8, 2025, titled "The Patent Eligibility Restoration Act - Restoring Clarity, Certainty, and Predictability to the U.S. Patent System."

The Senate Special Committee on Aging will hold a hearing on Oct. 8, 2025, titled "Bad Medicine: Closing Loopholes that Kill American Patients."

Administrative Updates

Executive Order Updates

The Trump Administration has continued to release wide-ranging executive orders (EOs). For the latest updates, see our "Trump's 2025 Executive Orders: Updates and Summaries" tracking chart.

• An EO titled "Unlocking Cures for Pediatric Cancer with Artificial Intelligence," issued on Sept. 30, 2025, seeks to drive innovation in the prevention and treatment of childhood diseases. The EO directs the Make America Healthy Again (MAHA) Commission – in coordination with the U.S. Department of Health and Human Services (HHS) secretary, Assistant to the President for Science and Technology (ASTP) and Special Advisor for Artificial Intelligence (AI) and Crypto – to develop ways to incorporate the use of advanced technologies such as AI to support the improved diagnosis, treatment, cure and prevention of childhood cancer. The EO calls for an expansion of pediatric cancer research using existing federal funding for projects that prioritize improved data infrastructure, enhanced data analysis and improved clinical trial designs through incorporation of AI.

Regulatory Updates

VA Releases M-25-21 AI Compliance Plan

The U.S. Department of Veterans Affairs (VA) has released its M-25-21 AI Compliance plan, becoming the first agency to make its plan public under the Trump Administration's management memo M-25-21, which required agencies to outline how they will govern and deploy AI by Oct. 1, 2025. The U.S. Food and Drug Administration (FDA), Centers for Disease Control and Prevention (CDC) and Centers for Medicare & Medicaid Services (CMS) plans have not yet been released. The VA's plan says certain use cases, including AI tools for clinical documentation and predictive analytics, will inform adoption in its new electronic health record system. While all agencies were due to submit similar strategies, no other HHS agencies' plans have been publicly released so far.

ARPA-H Announces Funding Under POSEIDON Program

The Advanced Research Projects Agency for Health (ARPA-H) announced on Sept. 30, 2025, that four research and development teams would receive a total of $147 million in funding awards under its Platform Optimizing SynBio for Early Intervention and Detection in Oncology (POSEIDON) program. Funding will support the development of sensitive and specific first-in-class, at-home, over-the-counter, synthetic Multi-Cancer-Early Detection (MCED) tests to identify more than 30 stage 1 solid tumors using only breath or urine samples.

According to the National Cancer Institute, more than two million new cases of cancer will be diagnosed in the U.S. in 2025. Currently, there is not a recommended screening test for nearly 60 percent of diagnosed cancers, such as brain, pancreatic and ovarian cancer. Current multi-cancer detection (MCD) tests can't accurately identify stage 1 solid tumors, which is critical to effectively diagnosing and treating cancers. Additionally, the cost of late-stage, non-curative cancer treatment is two to three times higher than early-stage, potentially curative treatment. POSEIDON has the potential to make significant, lasting healthcare and economic contributions to the future of cancer care for all Americans.

If successful, the over-the-counter, at-home MCED test device kit will be fully integrated into clinical care through electronic health record and telemedicine-capabilities. The kit aims to ensure that individuals will connect with a healthcare professional via a telemedicine call within 96 hours and will receive their results either virtually or in-person at the clinician's discretion. In cases of a positive result (e.g., presence of cancer), individuals will be connected to the nearest medical center for an official diagnostic work-up and continued care.

POSEIDON's emphasis on translation and market penetration ensures the resulting tests will be available to all Americans if they so choose. Further, POSEIDON's commercial focus is reflected in each team's structure, which requires that all teams have a clearly defined commercial entity responsible for bringing these cutting-edge technologies to the market.

CMS Projects Medicare Advantage, Medicare Part D Prescription Drug Plans Expected to Remain Stable in 2026

CMS announced on Sept. 26, 2025, that average premiums, benefits and plan choices for Medicare Advantage (MA) and Medicare Part D Prescription Drug Plans are projected to remain stable in 2026. CMS released its projections in advance of the upcoming Medicare Open Enrollment Period, which begins Oct. 15, 2025, and runs through Dec. 7, 2025.

The average MA plan is expected to decrease from $16.40 to $14 in 2026, including MA plans that provide prescription drug coverage and special needs plans (SNPs). CMS projects that 34 million beneficiaries will be enrolled in an MA plan in 2026, a decrease from 34.9 million beneficiaries in 2025. MA enrollment is expected to represent about 48 percent of all individuals enrolled in Medicare. The total number of MA plans available nationwide will decrease from 5,633 in 2025 to 5,600 in 2026.

The average standalone Part D plan premium is projected to decrease from $38.31 in 2025 to $34.50 in 2026. The average Part D total premium for MA plans with prescription drug coverage is projected to decrease from $13.32 in 2025 to $11.50 in 2026.

CMS Releases IPAY 2028 Final Guidance

CMS released the final Initial Price Applicability Year (IPAY) 2028 guidance for the next round of Medicare drug price negotiation on Oct. 1, 2025. The guidance details the requirements and parameters for the third cycle of Medicare drug price negotiation. CMS will select up to 15 additional drugs under Part D or Part B that are eligible for drug price negotiation. Under the Inflation Reduction Act (IRA), IPAY 2028 will include drugs or biological products payable under Part B as eligible for negotiation.

Notably, CMS chose not to finalize changes related to fixed combination drugs that it had proposed in the draft IPAY 2028 guidance. However, CMS notes its "intent to address this program's integrity risk and that it is continuing to consider the appropriate policy to implement in rulemaking beginning initial price applicability year 2029." In the draft guidance, CMS proposed changing its interpretation of when a combination drug would qualify as a single source drug, which may have resulted in certain drug formulations being subject to Medicare negotiation, but CMS opted against finalizing the change in the final guidance.

DEA Proposes Adjusted Manufacturer Quotas for Certain Ingredients

The Drug Enforcement Administration (DEA) published a notice in the Federal Register on Oct. 1, 2025, outlining new proposed adjusted manufacturer quotas for 2025 for d-amphetamine and methylphenidate, two ingredients that can be used in the manufacturing of medications to treat attention-deficit/hyperactivity disorder (ADHD). The current quota for d-amphetamine is 21,200,000 grams of anhydrous acid or base, and the adjusted quota is 26,450,000. The current quota for methylphenidate is 53,283,000, and the adjusted quota is 58,283,000. Each year, the DEA sets the annual production quotas (APQs) to set the quantities of certain ingredients of Schedule I and II substances that may be manufactured to meet research, clinical and industrial needs of the U.S.

FDA Expands Early Alert to Include All Medical Devices

FDA announced on Sept. 29, 2025, that it would expand the Early Alert communications for all medical devices following the completion of a successful pilot program announced on Nov. 21, 2024. The Early Alert communications seek to minimize the time between FDA being notified of potentially high-risk medical device removals or corrections and that notification being made publicly. The initial pilot focused on a limited number of device areas but has now been expanded to include all device areas. At this time, FDA has not announced further guidance on the process for Early Alerts being issued or what criteria must be met for inclusion.

FDA Requests Public Comment on Measuring and Evaluating AI-Enabled Medical Devices

FDA issued a request for public comment on Sept. 30, 2025, on measuring and evaluating AI-enabled medical device performance. The request intends to "obtain comment and feedback from interested parties and the public on a series of questions related to the current, practical approaches to measuring and evaluating the performance of AI-enabled medical devices in the real-world, including strategies for identifying and managing performance drift, such as detecting changes in input and output." The request seeks input on best practices, methodologies and approaches for measuring and evaluating the performance of AI-enabled medical devices. Comments are due by Dec. 30, 2025.

FDA Launches New Pilot Program For Faster Review of ANDAs

FDA announced a new pilot program on Oct. 3, 2025, for the review of abbreviated new drug applications (ANDAs) to provide faster reviews, as well as spur and reward investment in drug manufacturing and research in the U.S. The announcement of the pilot program follows a hybrid event that FDA held regarding its new PreCheck program, which seeks to accelerate and prioritize new drug manufacturing facilities in the U.S. As part of the new pilot, ANDA applications that conduct required bioequivalence testing in the U.S. and make their products in the U.S. using exclusively domestic sources for active pharmaceutical ingredients (APIs) will be eligible for priority ANDA application review.

President Trump, Major Pharmaceutical Company Make MFN Drug Pricing Announcement

President Donald Trump and a major pharmaceutical company announced on Sept. 30, 2025, the first agreement to provide prescription drugs to U.S. patients at a significantly reduced price. The announcement, which took place following President Trump's efforts to implement a most-favored-nations (MFN) drug pricing framework to align the cost of prescription drugs in the U.S. with other developed nations, is expected to be the first of several as companies seek to meet key aims of the Trump Administration's drug pricing strategy. As part of the agreement, the company will offer prescription drugs within its portfolio at reduced prices through a direct-to-consumer platform to be called TrumpRx, with discounts as high as 85 percent off the list price. In addition, the company will price newly approved medications in the U.S. at a price point aligned with that of comparable markets around the world. The company also committed to spending an additional $70 billion to move manufacturing and production of pharmaceutical products back to the U.S. The Trump Administration, following the company's announcement, will not assess tariffs on the company's pharmaceutical imports for three years. The agreement will also ensure that state Medicaid programs may access MFN prices on products made by the manufacturer.

Separately, a trade association representing leading pharmaceutical manufacturers announced its members also plan to invest $500 billion in U.S. infrastructure over the next decade. The trade association will also create a website to highlight direct purchasing options available through individual companies.

Two Mandatory Payment Models at OMB: GLOBE and GUARD

The Office of Management and Budget (OMB) is currently reviewing two mandatory payment models focused on drug pricing: Global Benchmark for Efficient Drug Pricing (GLOBE) and Guarding U.S. Medicare Against Rising Drug Costs (GUARD). These models would likely adjust how payments are made for prescription drugs under Medicare, with the goal of addressing costs and incentivizing value-based care. Specifics on methodology remain to be seen and it is currently unknown when additional information on the models may be released.

With the current federal government shutdown, the review process for these models has been halted. Until the shutdown ends, agencies and industry participants are essentially in a holding pattern regarding these two potential payment models. Further, the recent announcement of TrumpRx may factor into forward movement.

Legal Updates

Federal Employee Unions Challenge Administration For Intent to Carry Out Additional Firings During the Government Shutdown

In a new lawsuit filed on Sept. 30, 2025, unions representing federal, state, county and municipal employees challenged the Trump Administration's threats to conduct additional RIFs while the federal government is shut down. The lawsuit, in part, centers upon guidance issued by the OMB in advance of the shutdown authorizing agency leaders to carry out additional firings of federal employees. The lawsuit seeks an injunction, with the unions claiming that the actions are "contrary to law and arbitrary and capricious" and arguing that the OMB has exceeded its statutory authority by authorizing the RIFs while the government is in a shutdown. The lawsuit also seeks to invalidate actions taken during the shutdown.

New Medication Abortion Case Filed

Legal efforts to limit access to medication abortion continue, with a new case being transferred from Texas to a federal court in Missouri. The case is the next step in a multi-year battle over access to mifepristone following the U.S. Supreme Court's previous decision that a group of physicians and medical organizations lacked legal standing to sue because they could not show they would be directly harmed by the policy. The case demands that the federal government restore previous restrictions on mifepristone and follows HHS Secretary Robert F. Kennedy's announcement on Sept. 25, 2025, that HHS would open a new investigation into the safety of mifepristone.

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