Holland & Knight Health Dose: October 28, 2025

Looking Ahead

The federal government shutdown has now entered its fourth week, making it the third longest in U.S. history. Despite mounting pressure from both parties, no agreement has been reached to reopen the government. Lawmakers remain entrenched in their positions, with Democrats insisting that any continuing resolution (CR) include an extension of the Affordable Care Act's (ACA) enhanced Advance Premium Tax Credits (APTCs), which are set to expire at the end of 2025.

In a notable development, a group of moderate Republican members of the U.S. House of Representatives sent a letter to Speaker Mike Johnson (R-La.), urging him to initiate negotiations on extending the APTCs but only after the government has reopened. This position aligns with the broader Republican stance that subsidy negotiations should not be tied to the immediate funding debate.

Meanwhile, bipartisan interest in an extension of the APTCs has grown. Some GOP senators have floated proposals for a one-year extension of the enhanced credits, potentially coupled with a phase-out plan or reforms to limit eligibility and reduce federal costs. Despite this, there remains no clear legislative path forward. Republicans in the U.S. Senate would need support from at least five Democrats to overcome a filibuster, and though a few have expressed openness to compromise, others remain firm in their opposition.

In addition, it is expected that the Centers for Medicare & Medicaid Services (CMS) will begin issuing final rules as soon as Nov. 1, 2025, with the Medicare Physician Fee Schedule, Outpatient Prospective Payment System, Home Health and certain other rules having been transmitted to the Office of Management and Budget (OMB).

Upcoming Events

The Senate Committee on Health, Education, Labor and Pensions (HELP) will hold a hearing on Oct. 29, 2025, titled "The Future of Biotech: Maintaining U.S. Competitiveness and Delivering Lifesaving Cures to Patients."

The Senate HELP Committee will also hold a hearing on Oct. 30, 2025, on the nomination of Casey Means to be medical director in the regular corps of the Public Health Service and U.S. Surgeon General of the Public Health Service.

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.

President Trump Weighs Section 301 Investigation into Pharmaceutical Products

President Donald Trump announced on Oct. 22, 2025, that he was considering launching a Section 301 investigation into pharmaceutical products. Such an investigation would fall under Section 301 of the Trade Act of 1974 and, should he agree with the investigation's findings, would allow President Trump to levy tariffs in response to trade measures taken by foreign nations that are discriminatory to U.S. businesses or in violation of U.S. rights under various trade agreements. A Section 301 investigation would bolster President Trump's efforts to lower prescription drug prices through implementation of a most-favored-nation (MFN) program. Stakeholder reactions to the announcement have been mixed: Some praise the potential for tariffs on foreign nations instead of companies operating in the U.S., and others have expressed concerns with the further compounding of instability in drug prices.

Personnel Updates

• Alicia Jackson has been appointed as director of the Advanced Research Projects Agency for Health (ARPA-H). She previously worked at the Defense Advanced Research Projects Agency (DARPA) and has held various roles as an entrepreneur.

Legislative Updates

Senate Aging Committee Releases Report on Generic Drug Supply Chain

The Senate Special Committee on Aging released a report on Oct. 21, 2025, titled "Protecting Seniors' Access to Essential Medications: Securing the Foreign Generic Pharmaceutical Supply Chain." The report was developed by the majority and minority staff of Committee Chair Rick Scott (R-Fla.) and Ranking Member Kirsten Gillibrand (D-N.Y.). The report details the importance of generic medicines to patients in the U.S. but highlights that a vast majority of the active pharmaceutical ingredients (APIs) needed to manufacture them are produced overseas by entities in India or China. The report also details how long-standing supply chain vulnerabilities, limited incentives for domestic manufacturing and other structural factors have contributed to a reliance on foreign entities for essential medicines. In addition, the report levies criticism about the quality of drugs and their ingredients produced overseas.

The report lays out six overarching policy recommendations, which the report argues are needed to address generic drug supply chain vulnerabilities:

• Establish a federal buyer's market for essential medications that prioritizes American-made APIs and key starting materials (KSMs). If no American APIs and KSMs are available, prioritize Trade Agreements Act (TAA)-compliant APIs and KSMs (nearshoring/friendshoring).
  • Allow a five- to 10-year phase-in to allow for manufacturing capacity to be stood up before requiring federal purchasers to buy drugs manufactured in the U.S. using American-made APIs and KSMs.
• Map generic drug supply chains and require companies to disclose the country of origin for finished dose manufacturing, APIs and KSMs.
• Pass country of origin labeling legislation.
• Utilize trade levers such as the Trump Administration's Section 232 investigation.
• Pass clarifying language to close loopholes associated with the Acetris ruling.
• Provide support for U.S. biotechnology.

Congressional Budget Office Releases Updated Report on Orphan Drug Provisions from H.R.1

The Congressional Budget Office (CBO) released a revised estimate on Oct. 20, 2025, of the budgetary impact that changes in H.R.1, the One Big Beautiful Bill Act (OBBB), related to orphan drugs will have. The report estimates that provisions to exempt drugs to treat rare diseases or conditions from the Medicare Drug Price Negotiation Program, as well as shield certain drugs from negotiation for longer based on approval or licensing date, are estimated to cost $8.8 billion over 10 years – an increase from previous estimates of $4.9 billion over 10 years. The update is attributed to the additional expense of exempting three drugs from Medicare Drug Price Negotiation, which would have otherwise been potentially selected for negotiation based on volume of spending within Medicare. Those three drugs were not originally included in CBO's initial estimates.

Following this release, several democratic members introduced a bill that aims to "reverse Republicans' policies" in H.R.1 "that block Medicare from negotiating the price of blockbuster drugs."

Regulatory Updates

Commerce Launches AI Export Promotion Program

Building off an EO issued July 23, 2025, to advance efforts in support of American artificial intelligence (AI) companies, the U.S. Department of Commerce announced on Oct. 21, 2025, the creation of a full-stack AI export promotion program to advance U.S. leadership in AI. The program will select industry-led export packages to include AI hardware, software, models and applications for promotion to countries around the world. In conjunction with the Commerce Department's announcement, the International Trade Administration (ITA) issued a request for information (RFI) to solicit public comments on questions related to the program. Public comments must be submitted within 30 days and should seek to provide background information on and answers to more than 28 questions.

FDA Issues Final Guidance on Expanded Access to Investigational Drugs for Treatment Use

The U.S. Food and Drug Administration (FDA) issued final guidance on Oct. 23, 2025, titled "Expanded Access to Investigational Drugs for Treatment Use: Questions and Answers." The guidance seeks to update guidance issued in 2017 following questions regarding implementation of statutory changes included in the 21st Century Cures Act and FDA Reauthorization Act of 2017. The final guidance document features questions and answers to topics such as safeguards in place for expanded access use of an unapproved drug, when expanded access protocol submission should be used, submission processes and how the FDA reviews and approves requests for expanded access.

FDA Publishes Filing Checklist to Enhance Transparency

FDA made public a checklist used internally by staff from the Center for Drug Evaluation and Research (CDER) on Oct. 23, 2025, when determining whether a submitted application is complete and eligible for review. The publishing of the checklist seeks to reduce the number of applications FDA will refuse to file (RTF) new drug applications (NDAs) following findings of serious deficiencies. Checklists were published in the Manual of Policies and Procedures update.

Legal Updates

HHS RIF Litigation

The U.S. Department of Health & Human Services (HHS) reductions in force (RIFs) triggered by the government shutdown drew legal scrutiny beginning Oct. 10, 2025, when the agency issued layoff notices to 1,760 employees, later admitting that 800 were mistakenly targeted due to data errors. Between Oct. 11, 2025, and Oct. 14, 2025, HHS began rescinding notices, particularly for Centers for Disease Control and Prevention (CDC) staff. On Oct. 17, 2025, a federal judge in San Francisco expanded a temporary restraining order to halt further terminations. By Oct. 25, 2025, HHS confirmed it would proceed with only 954 layoffs in compliance with the court order. The CDC was the largest target, with additional layoffs affecting the Substance Abuse and Mental Health Services Administration (SAMHSA), Health Resources and Services Administration (HRSA), Administration for Strategic Preparedness and Response (ASPR) and Office of Population Affairs. A preliminary injunction hearing is expected within two weeks.

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