Health Brief from The Washington Post

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By Megan R. Wilson

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In today’s issue:

Regulators overhauled the quality ratings program for Medicare Advantage plans, which is estimated to result in a windfall for health insurance plans over the next decade
The White House’s fiscal 2027 health budget revives last year’s proposed cuts and agency reshuffle, setting up a potential fight with appropriators on Capitol Hill
What Eli Lilly CEO Dave Ricks is saying about the Trump administration’s efforts to codify most-favored-nation drug-pricing deals

… And more.

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Regulators overhauled the Medicare Advantage star ratings program, which gives health plans one to five stars based on quality metrics. (iStock)


	The Lead Brief

Medicare Advantage plans, which offer private Medicare coverage, are expected to see a nearly $19 billion pay bump over the next decade thanks to new federal rules.

The Centers for Medicare and Medicaid Services on Thursday released its updated regulations that made sweeping changes to how Medicare Advantage quality is measured and reported.

→ The rule significantly trims the number of quality and performance measures plans are judged on, removing 11 metrics from the star ratings system that CMS said were mostly focused on administrative processes or measures that showed little variation among plans.

This includes scrapping a measure that rated the performance of an insurer’s call centers. Multiple health insurers have successfully sued the government for including these metrics in the ratings, arguing that they are an unfair gauge of quality.

Why it matters: The star ratings program — which awards Medicare Advantage plans one to five stars based on about two dozen different metrics — helps beneficiaries compare different plans and impacts how much insurers are paid.

What this means for industry: With fewer hurdles in the ratings, more plans may be positioned to achieve the four‑star threshold that unlocks quality bonus payments. In November, the administration calculated that the proposal to overhaul the star ratings system would cost taxpayers by $13 billion over 10 years — and increase payments to insurers by as much.

When CMS finalized the changes, the estimated increase in payments jumped to $18.6 billion over 10 years. It’s a big number, but represents approximately 0.21 percent of Medicare payments to private health plans during the decade-long period.

The timing: Health insurers are anxiously waiting for CMS to finalize updated federal Medicare Advantage payment policies, which are due by Monday. The agency had proposed a minor — 0.09 percent — payment increase for plans, which the industry argues is effectively a cut due to rising health costs and a sicker population.

Analysts expect regulators to boost the reimbursement rate slightly, but not as much as insurers would hope.

→ The star ratings overhaul added a new depression screening and a follow‑up measure to the quality metrics, aimed at strengthening behavioral health accountability. They will start being reflected in the star ratings in 2029.

“This isn’t just about adjusting measures; it’s about redefining success,” said Chris Klomp, who leads Medicare and serves as chief counselor at the Department of Health and Human Services. “We are moving away from a system that incentivizes administrative box-checking and are instead laser-focused on what truly matters: the clinical outcomes and health of our beneficiaries.”

Updates from CMS also included other changes to the ratings system, new anti-fraud measures and changes to Medicare’s prescription drug benefit program required by the Inflation Reduction Act.


	Executive Health Brief

The White House’s fiscal 2027 budget request largely mirrors what President Donald Trump had asked Congress to finalize last year: large health funding cuts accompanied by the creation of a new agency called the Administration for a Healthy America.

→ Lawmakers broadly rejected the administration’s plans to slash federal research funding and cuts to other initiatives, and snubbed the reorganization effort that would have eliminated some health programs and consolidated others into the new agency.

Although the budget process is in the early stages, many expect Capitol Hill to resist deep funding cuts, particularly to medical research.

Here are some of the key details in Trump’s budget request:

The $111.1 billion the White House is requesting for HHS is more than the $94.7 billion Trump proposed last year. But it’s nearly 16 percent less than the $125.8 billion in funding the department received from Congress in fiscal 2026.
The White House is proposing a $5 billion cut to the National Institutes of Health, which has already prompted blowback from research and patient advocacy organizations, including the Association of American Medical Colleges (AAMC), Families USA, Research!America, and United for Cures.
Establishing the Administration for a Healthy America would save about $5 billion, the White House says, by “creating efficiencies” in consolidating certain programs from various other agencies. The White House said that savings would also stem from eliminating federal programs it has deemed duplicative or inconsistent with the president’s agenda.
The White House wants to cut $336 million from the Administration for Strategic Preparedness and Response, an agency that leads the federal government’s medical and public health preparedness and response efforts. This includes eliminating ASPR’s Hospital Preparedness Program, a $240 million federal grant program that helps health systems prepare for emergencies.
The budget calls for providing $55 million to fund new initiatives at the Centers for Disease Control and Prevention that are focused on infection protection and food safety issues, including efforts to tackle antimicrobial-resistant threats and microplastics in food and drinking water.

David J. Skorton, AAMC’s president and CEO, also pushed back on a proposed $1 billion reduction in federal funding for health workforce programs. He called the elimination of two such programs "particularly troubling, given ongoing shortages of health professionals in both rural and urban communities nationwide.”

KEY BUDGET DOCUMENTS

— The president’s budget request

— The HHS budget in brief

— The congressional justification of the Administration for a Healthy America


	Agency alert

The Food and Drug Administration put out a reminder regarding when pharmacies and outsourcing facilities are allowed to compound drugs, specifically clarifying that many popular GLP-1 copycats don’t meet the rules.

Here are the key takeaways:

Outsourcing facilities are effectively blocked: Regulators are reminding these facilities, which make custom drugs in larger batches than compound pharmacies, that they can’t produce copycat versions of semaglutide and tirzepatide — the active ingredients in Wegovy and Zepbound, respectively. Under federal law, bulk outsourcing facilities can make copies of commercially available drugs if they are identified to be in shortage or there is a clinical need for additional supply.
Compound pharmacies face tighter guardrails: These pharmacies are smaller and overseen by state pharmacy boards. Many have been combining the main ingredient in GLP-1 weight-loss medications with other components, such as vitamin B12, to make a “personalized” drug. The FDA warns that these are likely to be treated as unapproved copies unless doctors document a true patient-specific need — and, even then, pharmacies are only safe if they dispense very small volumes.
Market impact: This notice makes clear the narrow pathways for making compounded GLP-1s and signals the FDA is preparing to further tighten enforcement, which could reduce availability of compounded versions and shift demand back toward commercial products.

Some large telehealth companies, such as Hims & Hers Health, have already stopped offering compounded versions of GLP-1 weight-loss medications following a lawsuit from Novo Nordisk, which makes Wegovy. The two companies have made up, though, and consumers can receive Novo Nordisk’s GLP-1 medications on the platform.

→ The FDA’s alert is the latest in the agency’s efforts to crack down on drugs being improperly compounded. Earlier this month, regulators sent warning letters to 30 telehealth companies alleging that they’ve made false or misleading claims about compounded GLP-1 products offered on their websites.

While compound pharmacies do have some regulatory oversight, their products do not have to go through safety or efficacy testing with the FDA.

“Compounded drugs can be important for overcoming shortages or meeting unique patient needs — but compounders should not try to compound drugs in a way that circumvents FDA’s approval process,” FDA Commissioner Marty Makary said in a statement at the time.


	Industry Rx

Eli Lilly CEO Dave Ricks is publicly disavowing the Trump administration’s efforts to codify the principles behind the most-favored-nation (MFN) drug-pricing deals.

The company plans to use “all the tools we have to combat bad policy, and we think it would be bad policy,” Ricks told CNBC this week.

→ Eli Lilly is among the 16 pharma giants that have made confidential agreements with the administration to lower certain prices and expand investment in the United States.

Why it matters: Trump has made codifying the most-favored-nation pricing policies, which involve requiring drug companies to lower their prices in the U.S. to align with what peer countries pay, a high priority ahead of November’s midterm elections.

The policies are a key part of Trump’s affordability pitch to voters. Yet, Republicans on Capitol Hill are wary of turning these policies into law, and several of the drugmakers that have cut deals are privately pushing back on the idea.

“I don’t think that’s a great idea, and we’ve been pretty clear with the administration and the congressional leaders about that,” Ricks said regarding codifying the policies. He expressed skepticism that Congress will move forward with an MFN bill, “but we’re vocal about it.”


	Jobs Report

Do you want to be the nation’s top vaccine regulator? It’s the last day to apply for the gig with the FDA.

→ Vinay Prasad, the current director of the Center for Biologics Evaluation and Research, is stepping down at the end of the month. His approach to regulating vaccines and rare-disease drugs has rankled the pharmaceutical industry and patient advocacy groups.

(h/t: The application deadline was spotted by AgencyIQ’s Alexander Gaffney.)