Axios

The Trump administration on Friday scrapped a Biden administration proposal to have Medicare cover anti-obesity drugs, including GLP-1s.

Why it matters: The decision sidelines a politically popular idea that had big implications for the program's finances.

Driving the news: A Medicare payment rule issued Friday would maintain a long-standing prohibition on covering drugs for weight loss.

• The Biden administration argued that reinterpreting the existing policy would have made the drugs more accessible to millions of Americans and potentially lower the prevalence of obesity-related illnesses.
• Medicare administrators may revisit the policy in the future, according to a fact sheet on the rule.

Catch up quick: Requiring Medicare and Medicaid to cover GLP-1s like Wegovy for weight loss would have cost the government nearly $40 billion over 10 years.

• Medicare currently covers the drugs to treat diabetes and heart disease.
• In nearly 25,000 comments to CMS on the policy, many individuals described their own positive experiences with the drugs. But insurers urged CMS not to finalize the change.

Between the lines: Prior to being nominated, HHS Secretary Robert F. Kennedy Jr. panned the use of Ozempic and other GLP-1 drugs for weight-loss.

• But he took a softer stance during his Senate confirmation hearings, calling the products "miracle drugs" for obesity and diabetes while saying they shouldn't be prescribed without exercise.

Zoom out: The rule issued Friday also didn't adopt Biden administration proposals on health equity analyses of how health services are managed, and guardrails for using artificial intelligence in Medicare Advantage.

• The administration did finalize technical updates to Medicare Advantage risk adjustment data collection and other smaller proposals.

What they're saying: "As we continue to review the final rule, we are encouraged that the administration took a measured approach and declined to make major changes at this time," Mary Beth Donahue, CEO of the Better Medicare Alliance, said in a statement.

President Trump's decision to target transgender care in a proclamation declaring April National Child Abuse Prevention Month "betrays" the month's purpose, LGBTQ advocates said.

Why it matters: Framing the trans youth experience as "abuse" further stigmatizes an already vulnerable community, as the Trump administration tries to erase trans people from American life through policies limiting access to health care, careers, sports, education and more.

A federal judge in Rhode Island froze a Trump administration plan to cut more than $11 billion in public health grants to state and local health departments that Congress allocated during the pandemic.

Why it matters: The Health and Human Services Department said the move was on the grounds that the pandemic was over. But it cast doubt on states' ability to contain infectious diseases, ensure access to vaccines and continue substance use disorder programs, among other efforts.

Driving the news: Judge Mary S. McElroy granted a temporary restraining order Thursday in response to a lawsuit filed by 23 states and the District of Columbia.

• The states had argued HHS "arbitrarily" stopped the funding without advance notice.
• "This funding provides essential support for a wide range of urgent public health needs," they wrote.
• The cuts endanger the public and violate the Administrative Procedure Act by exceeding the agency's regulatory authority, they wrote.

HHS declined to comment, citing ongoing litigation.

Catch up quick: States have also sued to block caps on NIH grants covering overhead at universities and medical research centers. A judge also granted a temporary freeze in that case.

States and cities are losing over $2 billion in childhood immunization and vaccination funding as part of broader cancellations of pandemic-era federal public health spending, per government data.

Why it matters: Federal money helps fight preventable and sometimes deadly diseases like measles, which is now spreading in several parts of the country.

The Senate on Thursday confirmed Mehmet Oz to be administrator of the Centers for Medicare and Medicaid Services in a 53-45 party line vote.

Why it matters: It puts the former heart surgeon and TV talk show host in charge of an agency that oversees health care for 160 million Americans.

• Oz will take the helm amid sweeping staff cuts throughout federal health agencies, though CMS was spared from the brunt of the DOGE-directed reductions.

State of play: Oz ducked questions about possible Medicaid cuts and how DOGE could affect the big health programs during a relatively smooth confirmation hearing in the Senate Finance Committee last month.

• He said that he supported Medicaid work requirements and also signaled he could be open to looking at changes to eligibility for some higher-income beneficiaries of the safety net program.
• Oz also said he would "defend" and "use" Democrats' Medicare drug price negotiation program, authorized in the Inflation Reduction Act.
• Despite past support for Medicare Advantage, he was critical of some insurers' practice of "upcoding," or categorizing patients as sicker to get higher payments, vowing he would "go after it."

Addressing DOGE cuts, Oz said that he planned to be "speaking to the staff, raising morale, getting people excited" once confirmed.

• CMS has reportedly cut about 300 jobs, including in areas like minority health, program operations and local engagement.

Catch up quick: Oz, who unsuccessfully ran for Senate in 2022 against Sen. John Fetterman (D-Pa.), has no prior experience running a big government agency like CMS.

• He's drawn criticism in the past from other medical professionals for promoting treatments with no documented efficacy.
• Working under HHS Secretary Robert F. Kennedy Jr., he could have wide latitude within his new role — including to enact policy more in line with GOP orthodoxy.
• CMS could grant waiver requests from conservative-led states intent on reshaping Medicaid and also make key changes to Affordable Care Act markets.

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The Trump administration has paused the Federal Trade Commission's lawsuit against major pharmacy benefit managers after two Democratic commissioners were fired earlier this month.

Why it matters: The lawsuit, originally filed last year under the Biden administration, was considered a major challenge to the PBM industry after the agency accused the drug middlemen of inflating the price of insulin and driving up costs to diabetes patients.

Mass layoffs at the Department of Health and Human Services are leaving a communications gulf within the federal health system that millions of Americans rely on for information about drug safety, product recalls, disease outbreaks and other public health threats.

Why it matters: HHS Secretary Robert F. Kennedy Jr. frequently says he's bringing "radical transparency" to the agency. But as the government health establishment is turned on its head, there's the real prospect of a lingering information vacuum.

A day after deep Food and Drug Administration cuts rocked their world, drug and med tech companies faced another potentially big hit when President Trump announced a baseline 10% tariff on U.S. imports.

Why it matters: The life sciences are heavily reliant on foreign countries for raw materials and manufacturing, most of it duty-free. Experts said a radical shift away from free-trade policies could bring higher drug prices, supply chain disruptions and weaker margins for big industry players.

Pharmaceutical companies are growing increasingly concerned widespread cuts at the Food and Drug Administration could set the agency back as crucial review deadlines loom.

Why it matters: Health industries pay billions developing and shepherding drugs through the regulatory process, including user fees that help ensure there are enough staff to evaluate products on a predictable timeline.