With Congress barreling toward a Memorial Day recess, health policy debates are intensifying. This week’s spotlight is on the revived House GOP megabill, a major court ruling on the 340B drug discount program, and growing bipartisan pressure for PBM reform. We’re also watching executive shakeups in the insurance world and high-stakes R&D moves across the pharmaceutical sector. Let’s dive in.

In this week’s Nimitz Health:

• Federal News: Congress moves forward on sweeping Medicaid changes, drug discount oversight, and PBM reform, while the Trump administration pushes a plan for deep federal workforce cuts.

• State News: States brace for downstream effects of new federal Medicaid policy proposals.

• Industry News: Leadership shifts shake up UnitedHealth, and major players like Novo Nordisk and GSK ramp up investment in next-gen obesity and liver disease drugs.

WHO’S HAVING EVENTS THIS WEEK?

Tuesday, May 20th

• Senate Appropriations Committee: “Hearings to Examine Proposed Budget Estimates for FY26 for the Department of Health and Human Services” at 10am. Watch here.

• House Committee on Oversight and Government Reform: “Mandates Meddling and Mismanagement: The IRA’s Threat to Energy and Medicine” at 10am. Watch here.

Wednesday, May 21st

• Senate Homeland Security and Government Affairs Committee: Hearings to Examine Science and Federal Health Agencies, Focusing on Myocarditis and Other Events Associated with the COVID-19 Vaccines” at 2pm. Watch here. 

Thursday, May 22nd

• Senate Appropriations Committee: “Heatings to Examine Proposed Budget Estimates for FY26 for the Food and Drug Administration” at 10:30am. Watch here.

NEWS DRIVING THE WEEK

Federal News

On Capitol Hill, Republican leadership successfully revived its sweeping “One Big Beautiful Bill” after an embarrassing Budget Committee failure earlier in the week. The initial vote stalled when five Republicans, including Reps. Chip Roy and Ralph Norman, opposed the package over concerns it front-loaded spending while delaying deficit savings. Following negotiations, the bill was cleared with concessions including accelerated Medicaid work requirements and the revocation of benefits for undocumented immigrants. However, ongoing talks with moderates in the Main Street Caucus signal turbulence ahead, especially on issues like green energy credits and low-income supports. GOP leaders still aim for House floor action by Memorial Day.

Meanwhile, bipartisan momentum is building again in the Senate for pharmacy benefit manager (PBM) reform. At a Judiciary Committee hearing, members from both parties denounced PBMs for practices that inflate drug prices and threaten access for patients and independent pharmacies. Citing a recent FTC report, Senators slammed the three dominant PBMs—Caremark, Express Scripts, and Optum Rx—for using vertical integration to direct profits to affiliated entities at the expense of transparency and affordability. Proposals on the table include banning spread pricing in Medicaid and potentially forcing divestment from vertically integrated business models.

The Trump administration is escalating its effort to reshape the federal workforce, asking the Supreme Court to lift a lower-court order blocking mass layoffs across 21 agencies, including HHS and the VA. The layoffs are part of a February executive order calling for “large-scale reductions in force.” A district court ruled that the administration had not followed required legal and procedural safeguards, including Congressional involvement. If allowed to proceed, this sweeping move would have significant implications for federal health agency operations.

Finally, a federal judge handed the Health Resources and Services Administration (HRSA) a major legal victory in the ongoing battle over the 340B drug discount program. The court ruled that pharmaceutical companies must obtain HHS approval before altering discount models, upholding HRSA's authority amid industry efforts to move toward more burdensome rebate schemes.

State News

Several states are sounding alarms over the potential fallout from House Republicans’ proposed Medicaid overhaul. In Virginia, Rep. Jennifer McClellan warned that work requirements and $625 billion in federal cuts could jeopardize coverage for over 630,000 residents, with Governor Youngkin setting aside $900 million in case of funding disruptions. Illinois health officials fear hundreds of thousands may lose care, particularly in vulnerable communities. In Maine, providers say new restrictions could defund key family planning clinics that serve rural patients through Medicaid, prompting calls for emergency state-level support.

Industry News

A wave of instability hit one of the healthcare industry's biggest players as UnitedHealth CEO Andrew Witty stepped down unexpectedly amid escalating financial and operational challenges. Witty’s resignation comes after the company pulled its 2025 earnings guidance, citing uncontrolled medical costs and heightened scrutiny from both lawmakers and regulators. Longtime former CEO Stephen Hemsley returns to lead the company through what could become a defining chapter in UnitedHealth’s future.

On the drug development front, Novo Nordisk announced a $2.2 billion collaboration with U.S. biotech Septerna to expand its pipeline of next-generation obesity and diabetes treatments. The partnership focuses on oral drug development amid concerns that existing blockbusters like Ozempic and Wegovy may lose market exclusivity later this decade.

Finally, a new Financial Times analysis critiques the U.S. health sector as a “sickness economy,” noting that healthcare spending—now nearing 20% of GDP—artificially boosts economic growth despite delivering poor health outcomes. The piece highlights the high costs of administrative waste, over-treatment, and pricing opacity, suggesting that structural reform could paradoxically reduce GDP in the short term while improving public health in the long term. Read more here. 

FOR FUN

On Tuesday, May 20th, 2025 at 11:30am, the Food is Medicine Institute at Tufts University and Food Tank will host a special Capitol Hill Luncheon titled, "Improving Health While Managing Healthcare Spending: Enter Food is Medicine." It is free to attend, and speakers will include lawmakers like Reps. Buddy Carter, Chellie Pingree, Vern Buchanan, Greg Murphy, and Robin Kelly. Register here!

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