In this edition of AcademyHealth’s Situation Report, we examine ongoing debates over state implementation of Medicaid work requirements, FDA actions that could reshape vaccine oversight, and a legal battle that threatens the future of the 340B drug discount program. We also highlight mounting concern over federal grantmaking changes at NIH and NSF that are reducing research grants, especially for studies focused on underserved populations, and bipartisan scrutiny of the FDA Commissioner’s National Priority Voucher program. These developments have far-reaching implications for public health, health care access, and the research community.
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In today’s issue:
- Policy Changes in Federal Grant Awards Leads to Less Research Across Medicine & Science
- FDA to Make Additional Changes to Vaccine Regulations, Reaching Far Beyond COVID-19 Shots
- States Challenged to Define Medical Fragility for Work Requirements
- Lawsuit Filed to Halt 340B Drug Discount Pilot Program
- Lawmakers Voice Concerns Over FDA’s Commissioner's National Priority Voucher Program
Policy Changes in Federal Grant Awards Leads to Less Research Across Medicine & Science
A policy change at the National Institutes of Health (NIH) and the National Science Foundation (NSF) is leading to fewer grants being awarded to study areas like aging, cancer, and mental health. Rather than providing grant funding in five yearly installments, the new policy from the White House’s Office of Management and Budget is to provide a lump sum for four years of research. The previous policy allowed researchers an additional two years to spend the funding, while the new policy only provides a one-year extension to spend remaining funds. These changes mean less funding on average and less time to spend the award. Lump grant payments also result in greater competition, less total awards, and less issues studied. If grants are fully funded upfront, then the agency cannot spread money across various research needs, resulting in less issues being studied. In fiscal year 2025, NIH and NSF awarded 3,500 and 3,000 less grants than the 2015-2024 yearly average, respectively. Areas with the biggest decline in the number of awards include minority health, nursing, alcohol use and alcoholism, and social, behavior, and economic sciences. A New York Times analysis found a large reduction in the share of NIH grants whose titles or abstracts were flagged as containing DEI-related words or phrases like “equity,” “racial minority” or “underserved patient.” New and future researchers were especially impacted; NIH awarded 24 percent fewer grants to new researchers (R01 grants), and NSF’s prestigious graduate research fellowship program was cut by 30 percent.
This trend is not limited to NIH and NSF. AcademyHealth’s analysis shows that AHRQ’s grantmaking has effectively stalled since April 1. The agency issued no new grant awards during this period—compared to nearly $6 million in new grants at the same time last year—and continuing awards fell by more than half. These delays stem from the agency’s loss of staff capacity following the April 1 RIF and have halted congressionally funded initiatives, including the Healthcare Extension Service.
This policy will continue to affect researchers and their work, for the Trump Administration plans to have the same policy for fiscal year 2026 and has proposed slashing NIH’s budget by 40 percent and NSF’s budget by 56 percent.
FDA to Make Additional Changes to Vaccine Regulations, Reaching Far Beyond COVID-19 Shots
The Food and Drug Administration (FDA) has called for stricter government vaccine regulations, including for new vaccines and flu shots, following an internal agency review that claimed 10 children’s death were associated with COVID-19 vaccines. Notably, these findings were not published in a peer reviewed medical journal but rather in an internal FDA memo from vaccine regulator Vinay Prasad. The review is likely to result in another change to the vaccine policy landscape, which poses several consequences to the nation’s public health and to the field of health services research.
The memo will inform a meeting next week contemplating the future of children’s vaccine schedule. The key decision makers are vaccine advisors selected by Health Secretary Robert F. Kennedy Jr. after firing the previous panel. Notably, the committee will be meeting under the new chair Dr. Kirk Milhoan after Martin Kulldorff’s resigned from the advisory committee. Milhoan is known for his departure from evidence-based recommendations.
The doubt that the memo has cast on the public regarding the safety of vaccines has been deeply concerning to vaccine experts such as Paul Offit, director of the Vaccine Education Center, who has described the situation as “science ‘by press release’.” This development has far-reaching consequences to the field as the public increasingly begins to look to news sources and memos, rather than peer reviewed academic journals, to access public health information.
States Challenged to Define Medical Fragility for Work Requirements
A recent KFF Health News article outlines the challenges states face in implementing the new federal Medicaid work requirements, particularly concerning the exemption for individuals classified as
medically frail.” The budget reconciliation bill (HR1) passed in July requires over 18 million Medicaid enrollees to demonstrate engagement in work, education, or volunteer activities for at least 80 hours a month to maintain their coverage. Those deemed medically frail are exempt from these requirements. However, federal law leaves the definition of “serious or complex medical condition” up to state interpretation, introducing ambiguity and challenges for states to uniformly apply the exemption. Without specific federal guidance, state Medicaid agencies must develop their own criteria.
Patients and policy researchers alike emphasize the high stakes to ensure that people who rightfully qualify for Medicaid coverage retain access to medical care. There are concerns that even with a more specific definition of medically frail, patients may face the demanding task of having to regularly vouch for their status, which is challenging without reliable care access. In early November, the Medicaid Health Plans of America and the Association for Community Affiliated Plans submitted a letter to federal officials advocating enrollees be permitted to self-identify as medically frail on their applications. This would ensure that key populations are not left out of state-defined exemption requirements.
Lawsuit Filed to Halt 340B Drug Discount Pilot Program
The American Hospital Association and several hospital systems have filed a lawsuit against the Trump administration to halt an upcoming pilot program that would alter payment structures within the 340B Drug Pricing Program. The 340B discount program requires pharmaceutical companies taking part in Medicare or Medicaid provide discounted medications to hospitals and clinics serving low-income and rural populations. Historically, companies generally provided discounts at the time of purchase, but last year, many companies sought to change the payment terms so that hospitals would pay the full pricing initially and receive rebates later. The Health Resources and Services Administration (HRSA) pushed back against drug companies that tried to implement this payment structure because it violated federal law—as evidenced by the sanctions HRSA threatened Johnson & Johnson with in September 2024.
After pharmaceutical industry lobbying, the Trump administration unveiled a pilot program in August, which is set to begin next month, that deploys the rebate payment systems for a select number of medications. This move was met with concern as hospital groups argued that having to purchase certain high-cost drugs at the full wholesale prices and wait for rebates will place significant financial strain, especially on facilities under pressure. Under this payment structure, the ability of participating 340B hospitals and clinics to provide care to vulnerable populations might be affected.
Lawmakers Voice Concerns Over FDA’s Commissioner's National Priority Voucher Program
Two lawmakers, Rep. Frank Pallone Jr. (NJ-D) and Sen. Bernie Sanders (VT-I), sent a letter to Food and Drug Administration (FDA) Commissioner Dr. Martin Makary, voicing their concerns about the agency’s Commissioner’s National Priority Voucher (CNPV) program, which grants an expedited review process to selected applicants seeking review and approval of their products. Lawmakers have “deep concerns” that the program lacks congressional authorization, opens the door for corruption, and may lead to “rushed reviews.” The FDA intends the program, which was introduced by the FDA in June and began accepting applications in July, to speed up the development and review of products aligned with “national health priorities.” Rather than a 10-month review timeline, CNPV winners’ process is up to two months, with a central component of the process being a one-day meeting for "team-based review.” The FDA says it will prioritize vouchers to companies with “national health priorities" of addressing a health crisis, delivering innovative cures, addressing unmet public health needs, and increasing domestic drug manufacturing through a national security lens. There is little information about the nuances of the program’s processes, and the lawmakers’ letter voiced concern regarding the “lack of meaningful transparency” about CNPV selection, the scope of the prioritized areas, and that the Commissioner determines what is in the “national health priorities”—all without congressional authorization. Experts in government, policy, and medicine raised similar concerns about the program’s potential for corruption, including the FDA’s current and previous director for its Center for Drug Evaluation and Research. The letter included 16 requests and questions for Markay, and his response may provide stakeholders with more information about the CNPV program.
Previous Editions
This is the latest in a series of Situation Report updates from AcademyHealth. You can find prior issues here.
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