Holland & Knight Health Dose: November 18, 2025

Looking Ahead

The longest-ever government shutdown ended after 43 days on Nov. 12, 2025, with federal employees returning to work and many furloughed and excepted employees receiving backpay over the weekend. The government is now funded through at least Jan. 30, 2026, if not longer per the continuing resolution (CR), which included three full-year appropriations bills for the Legislative Branch, Agriculture-Food and Drug Administration, and Military Construction-Veterans' Affairs.

The U.S. Senate and U.S. House of Representatives are scheduled to be in session this week. The Senate is expected to begin consideration of additional appropriations bills, including the bill to fund the U.S. Department of Health and Human Services (HHS), among others. Meanwhile, the House is expected to consider several resolutions of congressional disapproval related to the Bureau of Land Management (BLM) and other items.

In addition, committees will consider alternatives to an extension of the advanced premium tax credits (APTCs) this week, with informal working groups also considering and developing alternatives that would meet President Donald Trump's directive for a mechanism to put money directly into the hands of patients to support their healthcare needs, such as through a health savings account (HSA) or flexible spending account (FSA). The APTCs were a key item not addressed in the CR signed into law last week, meaning there is likely to be continued attention on the APTCs as the end of the year draws closer and the APTCs near closer to expiring.

Upcoming Events

The House Committee on Energy and Commerce's Subcommittee on Oversight and Investigations will hold a hearing titled "Innovation with Integrity: Examining the Risks and Benefits of AI Chatbots" on Nov. 18, 2025, at 2 p.m. ET.

The Senate Committee on Finance will hold a full committee hearing titled "The Rising Cost of Health Care: Considering Meaningful Solutions for All Americans" on Nov. 19, 2025, at 10 a.m.

The House Committee on Ways and Means' Subcommittee on Health will hold a hearing titled "Modernizing Care Coordination to Prevent and Treat Chronic Disease" on Nov. 19, 2025, at 2 p.m.

The Senate Special Committee on Aging will hold a full committee hearing titled "Made in America: Restoring Trust in Our Medicines" on Nov. 19, 2025, at 3:45 p.m.

The House Committee on Veterans' Affairs' Subcommittee on Disability Assistance and Memorial Affairs will hold a hearing titled "Improving Outcomes for Disabled Veterans: Oversight of VA's Medical Disability Examination Office" on Nov. 20, 2025, at 12 p.m.

The Senate Committee on Finance postponed a full committee hearing titled "Hearings to Examine the Future of the U.S. Organ Procurement and Transplantation Network." A future hearing date has yet to be announced.

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.

White House Expands MFN Program to GLP-1 Therapies

The White House announced new most-favored-nation (MFN) agreements with two major manufacturers of anti-obesity medications (AOMs), among other drug products, extending the Trump Administration's pricing initiative to include GLP-1 drugs such as Ozempic, Wegovy, Trulicity and Zepbound. These are the fourth and fifth MFN deals executed to date and the first to include a Medicare Part D component. During the press conference, President Trump emphasized his readiness to use tariff authority and "TrumpRx" pricing tools to lower drug costs and confirmed additional MFN deals are in development.

Notably, Medicare was featured prominently in the announcement. In addition to extending lower prices to Medicare and Medicaid beneficiaries, the Trump Administration signaled its intent to expand Medicare coverage for these products. Currently, GLP-1 therapies may be covered for specific chronic conditions but remain excluded for obesity treatment. According to the White House, the Trump Administration "will cover Wegovy and Zepbound for patients with obesity and related comorbidities for the first time."

Details on how this coverage expansion will be implemented are not yet available beyond Centers for Medicare & Medicaid Services (CMS) Administrator Mehmet Oz, who stated that the Center for Medicare & Medicaid Innovation (CMMI) is launching a new model, and Director Chris Klomp added that there is a $50 cap in Medicare. Notably, there has been growing discussion around the potential use of the CMMI's authority to broaden Medicare coverage for these therapies. Director Klomp described the "customary MFN terms" now standard across all five MFN agreements:

• participation in TrumpRx and related CMMI models
• Medicaid portfolios priced at MFN levels
• launch price harmonization and shared-savings provisions
• investment commitments linked to domestic manufacturing and research and development (R&D)

Personnel Updates

• A hearing to consider the nomination of Dr. Casey Means to be U.S. surgeon general was postponed. A rescheduled date is yet to be announced.
• Richard Pazdur, a longtime U.S. Food and Drug Administration (FDA) veteran, has been named director of the Center for Drug Evaluation and Research (CDER). He will continue to lead the Oncology Center of Excellence until a replacement for that post is named.
• The Senate Finance Committee will vote on the nomination of Thomas Bell to be HHS inspector general on Nov. 19, 2025. He would be advanced to the floor for consideration, should his nomination be favorably reported out of the committee.

Congressional Updates

Status of APTCs Remain Up in the Air

A notable policy missing from the CR passed on Nov. 12, 2025, and signed into law on the same day was an extension of the enhanced APTCs. As of Nov. 17, 2025, the APTCs remain on track to expire at the end of this year, should Congress not act. While a provision to extend the APTCs was not included in the CR, Senate Majority Leader John Thune (R-S.D.) gave a commitment to Senate Minority Leader Chuck Schumer (D-N.Y.) that a vote on the APTCs will be held at some point in December 2025, on a bill of Democrats' choosing. Importantly, a vote on passing a clean extension of the APTCs was held on Nov. 10, 2025, but failed along party lines, emphasizing the uphill battle facing Democrats in meeting the 60-vote threshold that will be required for passage of an APTCs bill in the Senate. In addition, the commitment to hold a vote in the Senate does not appear to extend to the House, with Speaker Mike Johnson (R-La.) not committing to bringing a bill that passes the Senate up for a vote.

As Dec. 31, 2025, nears closer, Republicans are in the process of considering potential alternative solutions to the APTCs. Namely, President Trump shared his support on social media for a solution that pays individuals directly, potentially in the form of putting money into HSAs or FSAs instead of extending the APTCs. While Republicans in the Senate and House brainstorm ideas, several existing pieces of legislation provide insights into how Republicans may pursue the significant shift in how healthcare costs are covered, such as the 2017 "Better Choices for Affordable Health Care Act" introduced by Sen. Bill Cassidy (R-La.), as well as the "Affordable Care and Comprehensive Economic Support through Savings Act," previously introduced by Reps. Kat Cammack (R-Fla.) and Greg Steube (R-Fla.). These are two potential foundations for additional changes and may constitute the beginnings of a Republican alternative to the APTCs. It is expected that both Senate Republicans and Democrats will lay out their arguments during the Senate Committee on Finance hearing on healthcare costs this week.

Senate Special Committee on Aging Leaders Send Letters to Major U.S. Pharmacies on Drug Supply Chain

The Senate Special Committee on Aging sent letters to the chief executive officers of three large U.S. pharmacy chains on Nov. 11, 2025, requesting details on how pharmacies source certain active pharmaceutical ingredients (APIs), how pharmacies ensure drugs and their ingredients are of the highest quality and plans for country-of-origin labeling to improve transparency for consumers and patients. The letters build on efforts led by Chair Rick Scott (R-Fla.) and Ranking Member Kirsten Gillibrand (D-N.Y.), who have sent similar letters to other entities within the drug supply chain. The letters request information on improving the security and stability of the U.S. drug supply chain, as well as reducing U.S. reliance on drug products and APIs from foreign nations.

Regulatory Updates

AHIP Schedules December Meeting

America's Health Insurance Plans (AHIP) is preparing for its December policy discussions, which are expected to focus on cost containment strategies and payer priorities heading into 2026. While the formal agenda has not been released, stakeholders anticipate updates on Medicare Advantage, prescription drug pricing and interoperability initiatives.

FDA Digital Health Advisory Committee Meeting

FDA's Digital Health Advisory Committee recently convened to examine regulatory pathways for emerging technologies, including generative artificial intelligence (AI)-enabled mental health devices, digital therapeutics and diagnostics. Advisors urged caution on over-the-counter use and pediatric applications, signaling that future guidance may tighten premarket and post-market requirements for these products.

CMS Issues Preliminary Guidance on State-Directed Payment Programs

The Center for Medicaid and CHIP Services (CMCS) issued preliminary guidance on Nov. 14, 2025, on changes to state-directed payment programs, which were included in H.R.1, the One Big Beautiful Bill Act. Effective Oct. 1, 2026, new indirect hold-harmless thresholds will be instituted, which will be equal to the applicable percent of net patient revenue for taxes that are enacted and imposed as of July 4, 2025 – the date of H.R.1's enactment. The guidance details what CMS defines as "enacted," which CMS notes is when the applicable state or local government has completed the entire legislative process necessary to advance – and therefore authorize – the tax either initially or in the form of an amendment to an existing tax, or CMS approved a waiver for the tax as of July 4, 2025. Notably, the CMS guidance stipulates it will not consider "enacted" an administrative change effectuated through a state budget office or legislative adjustments to a tax structure, such as revenue increase, "even if retroactively applicable."

In the guidance, CMS also defines what it views "imposed" to mean, defining it to mean a "state or local government [...] actively collecting revenue, as of July 4, 2025, associated with the specific enacted tax structure in effect on that date." In addition, the guidance states that "revenues associated with tax waiver proposals that were pending on or submitted after July 4, 2025, will not be included in the new indirect hold harmless threshold."

Finally, CMS details there will be a transition period for states with non-compliant provider taxes. States with healthcare-related taxes on services of managed care organizations for a tax waiver approved before the date of enactment of H.R.1 will have until the end of a state's fiscal year ending in calendar year 2026. For states with all other taxes on permissible classes with a waiver approved before the date of enactment of H.R.1, a state will have until the end of its applicable fiscal year in calendar year 2028, but no later than Oct. 1, 2028. CMS intends to address information and issues identified in the guidance document through notice-and-comment rulemaking, which stakeholders should monitor in the weeks ahead.

CMS Returns Some Telehealth Claims to Physicians, Asks Them to Resubmit

CMS announced on Nov. 7, 2025, that it will return batches of claims for mental and behavioral health services furnished via telehealth during the government shutdown, including claims submitted by Accountable Care Organizations (ACOs). The affected claims were submitted without the required mental health diagnosis codes. The agency's move reflects broader challenges providers have faced in billing for mental health services when specific diagnosis codes are unavailable or omitted to protect patient privacy. These system limitations have prevented CMS from identifying all telehealth mental health claims eligible for reimbursement under current law.

CMS guidance clarifies that providers may resubmit returned claims and submit new claims going forward as long as the services meet all statutory requirements. In its Nov. 7, 2025, notice, CMS stated: "Due to systems limitations and recognizing that not all telehealth claims for behavioral and mental health services necessarily include a diagnosis code ... we have not been able to identify all claims that are payable under current law."

Notably, the CR includes a provision to retroactively cover telehealth claims that expired during the government shutdown. It is expected that CMS will issue additional guidance outlining how those claims may be submitted by providers.

CMS Announces New Payment Model for Drugs in Medicaid

CMS announced on Nov. 6, 2025, the GENErating cost Reductions for U.S. Medicaid (GENEROUS) Model, designed to allow direct price negotiations with drug manufacturers to reduce costs for Medicaid programs serving low-income and medically vulnerable populations. The model allows CMS to engage manufacturers directly and negotiate U.S. Medicaid prices closer to those paid in other developed nations. This approach aims to reduce state fiscal burdens and expand capacity for states to reinvest in health priorities.

As part of the new model, CMS will issue a Request for Applications (RFA) for manufacturers interested in participating in price negotiations. Participating manufacturers whose applications are accepted will enter negotiated agreements with CMS to provide set pricing on their portfolio of covered outpatient drugs. Pricing for participating state Medicaid programs will be calculated based upon select international pricing data. Under agreements with states, participating manufacturers will be invoiced by states for supplemental rebates to effectuate international prices. CMS will monitor accuracy of the payments and share in rebates with states via a reduction in the federal share of Medicaid payments.

By participating in the GENEROUS Model, drug manufacturers whose applications are accepted will have standardized coverage criteria for their drugs in state Medicaid programs as negotiated between CMS and the manufacturer. A letter of intent process will follow for state Medicaid agencies. The GENEROUS Model will launch in 2026, with states enrolling on a rolling basis through Aug. 31, 2026.

CMS Releases 2026 Premiums, Deductibles, Coinsurance Amounts for Medicare Parts A, B and Information for Part D

CMS released the 2026 premiums, deductibles and coinsurance amounts for the Medicare Part A and Part B programs on Nov. 16, 2025, as well as the 2026 Medicare Part D income-related monthly adjustment amounts. Each year, Medicare Part B premiums, deductibles and coinsurance rates are updated in accordance with the Social Security Act. For 2026, the standard monthly premium for Part B enrollees will be $202.90, an increase of $17.90 from $185 in 2025. The annual Part B deductible will rise to $283 in 2026 – an increase of $26 from the 2025 amount of $257. The primary drivers of these increases are projected price growth and expected utilization trends consistent with prior years.

FDA Announces Second Round of CNPV Recipients

FDA announced on Nov. 6, 2025, the second round of sponsors that will receive a Commissioner's National Priority Voucher (CNPV). An additional six products, outlined below, were selected either by internal nomination from an FDA reviewer or following an application to the program submitted by sponsors:

• Zongertinib for HER2 lung cancer
• Bedaquiline for drug-resistant tuberculosis in young children
• Dostarlimab for rectal cancer
• Casgevy for sickle cell disease
• Orforglipron for obesity and related health conditions
• Wegovy for obesity and related health conditions

Notably, two of the selected products (Orforglipron and Wegovy) received vouchers following the announcement of drug price agreements announced by the White House on Nov. 6, 2025. FDA Commissioner Marty Makary intimated that FDA intends to grant future vouchers, though he didn't specify the timing or number of additional vouchers to be granted.

FDA Initiates Removal of Warning Labels from Certain Hormone Replacement Therapies

FDA announced on Nov. 10, 2025, that it has initiated a process to remove "black box" warning labels from certain hormone replacement therapies used to treat menopause, citing a comprehensive review of existing scientific literature an expert panel conducted over the summer, as well as a public comment period. As part of the process, FDA has requested various sponsors initiate changes to their drug labels to remove references to risks of cardiovascular disease, breast cancer and probable dementia. FDA also announced it had approved two drugs: one generic mixture of estrogen hormones and one non-hormonal treatment for severe vasomotor symptoms.

FDA Issues Final Guidance on Patient-Focused Drug Development

FDA issued final guidance on Nov. 17, 2025, on patient-focused drug development titled "Patient Focused Drug Development: Selecting, Developing, or Modifying Fit-for-Purpose Clinical Outcome Assessments." This guidance document is the third of four documents outlining how entities may submit patient experience information for use in medical product development and regulatory decision-making. The guidance is intended to help sponsors use high-quality measures of patient health in the development of medical product programs. Included in the guidance document is a model roadmap to patient-focused outcome measurement in clinical trials to be used as a guide for sponsors, with the caveat that sponsors seek FDA's input as early as possible and throughout the development process.

FDA Releases Paper Outlining New "Plausible Mechanism" Pathway

FDA unveiled in The New England Journal of Medicine on Nov. 12, 2025, a description of its new approach to approving certain products, specifically referred to as a "New Plausible Mechanism Pathway." The article was authored by FDA Commissioner Makary and Center for Biologics Evaluation and Research (CBER) Director Vinay Prasad. The article details how FDA will consider and approve "bespoke, personalized therapies" moving forward without requiring randomized clinical trials and describes the recent study of a baby born with symptoms of a certain deficiency who was ultimately cured with a personalized gene-editing therapy that corrected specific mutations in the baby's genome. The plausible mechanism pathway is described as having multiple parts:

1. a specific molecular or cellular abnormality is identified for which the biological cause is known
2. a medical product is in development to target the underlying biological factor
3. a natural history of a disease in untreated population is known
4. a confirmation that a "target" is specifically "drugged, edited, or both," noting success in treatment
5. an improvement in clinical outcome or course is observed, either consistent improvement or in periods of "waxing and waning," FDA will look for prolonged periods of disease remission

FDA's efforts to improve the application, review and approval of products designed for individual patients indicate a desire to extend similar principles to other drug products over time, potentially providing a new avenue for rare diseases or conditions to find pathways to approval. Noted in the article is the intent to "prioritize rare diseases, particularly those that are fatal or associated with severe disability in childhood, a plausible mechanism pathway will be also available for common diseases, particularly diseases for which there are no proven alternative treatments or in which there is considerable unmet need after use of available therapy."

Legal Updates

Supreme Court Hears Arguments in Tariffs Case

The U.S. Supreme Court held oral arguments on Nov. 5, 2025, in consolidated cases related to President Trump's use of emergency powers to levy sweeping tariffs from foreign nations. A majority of the justices appeared skeptical that President Trump's use of the International Emergency Economic Powers Act (IEEPA) to levy tariffs on imports is lawful.

This skepticism cut across judicial leanings, including Chief Justice John Roberts, conservative Justices Amy Coney Barrett, Neil Gorsuch and Brett Kavanaugh, as well as the more liberal Justices Kentanji Brown-Jackson and Sonia Sotomayor. All asked questions critical of the government's position, with Justice Barrett asking whether there was any portion of Federal Code or a time in history where IEEPA had been used to regulate imports of goods through use of emergency tariff. The U.S. solicitor general cited two instances, one of which was an appellate court decision. The examples did not appear to sway Justice Barrett.

Chief Justice Roberts pressed the solicitor general to explain why, absent explicit congressional action, President Trump would be allowed to use emergency tariff authority. The Trump Administration felt secure in its position given the "major questions doctrine." The major questions doctrine is a legal principle requiring Congress to grant federal agencies explicit authority for actions of economic and political significance. The solicitor general responded that IEEPA is an emergency power, therefore the major questions doctrine would not apply, noting "one would expect Congress to confer" powers to President Trump to address crises or emergencies, and that President Trump's authority under Article II of the Constitution, which allows the president to act as commander in chief, would also ensure make the major questions doctrine moot. Justice Gorsuch suggested he has concerns with expanding the executive's power, noting that reading IEEPA to give the president sweeping authority would create "a one-way ratchet toward the gradual but continual accretion of power in the executive branch and away from the people's representatives" in Congress.

Justices did, however, press the challengers regarding the "remedy" – essentially what would happen should the tariffs be deemed invalid by the court and entities who previously paid tariffs need to seek reimbursement or repayment. Justice Barrett shared a concern that the process to reimburse entities who paid tariffs would be a disaster to implement, despite long-standing trade and compliance laws on the books.

A ruling in the case is expected to be handed down by the end of the court's current term; however, it is anticipated the ruling could come as soon as by the end of this year, given the significant impact on entities in the U.S. and abroad. (See Holland & Knight's previous alert, "Supreme Court Oral Arguments Signal Skepticism Toward Presidential Tariff Authority Under IEEPA," Nov. 7, 2025.)

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.