Tariffs
President Trump announced sweeping tariffs this week. The tariffs are expected to have a significant impact on the US economy. While pharmaceutical was exempt from the current round, there is the potential for additional tariffs on this specific sector. However other medical supplies were impacted which is likely to increase prices on medical goods. More generally impacts of the tariffs, in the short term, are expected to include a decrease in disposable household income, which could negatively impact consumer medical utilization, as well as reduction in GDP growth, which would result in decreases in employment. Yale labs has a good summary of the aggregate effects on the economy. Beyond that tariffs have introduced significant stock and bond market volatility which could influence company decisions.
HHS Reorganization/Layoffs
HHS implemented sweeping changes to the Agency’s workforce this week. HHS laid off approximately 10,000 employees. Particularly hard hit was the FDA, NIH, and CDC. There is concern that layoffs could slow down the pace of approving new drugs and medical devices. Additionally large-scale reorganization happened for multiple agencies within HHS. Of note that within CMS there were changes such as shifting the CMS duals and PACE divisions to being under CMMI. For a more in-depth analysis of all the changes please see HMA’s summary here
Congress
The Senate is schedule to vote on a budget blueprint that would allow for the reconciliation bill to move forward. The Senate version of the blueprint is far vaguer than the House version and as currently constructed would allow the Senate more flexibility to not include large Medicaid cuts. While House leadership would like passage of a bill by Memorial Day several observers think the bill is more likely to occur late Summer (August/September) around the time of the debt ceiling would be needed to be raised.
MA Rules
HHS is expected to release final Medicare Advantage rules in the coming days. It will provide the first window into potential changes from the current Administration’s views towards Medicare Advantage.
