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One Size Does Not Fit All: An Analysis of LTSS Subpopulations

Date: July 27, 2026

Most Medicaid proposals on long-term services and supports (LTSS) carry an unstated assumption that the primary users of LTSS are older adults aging in place. In reality, many others use LTSS including individuals with Intellectual and Developmental Disabilities (IDD), Serious Mental Illness (SMI), Traumatic Brain Injury (TBI), and children with complex medical needs.

The people who rely on LTSS don’t fit neatly into one box. Each group has unique needs and policymakers face distinct challenges in meeting those needs, and are all navigating a Medicaid system under significant pressure. This blog looks at four of these subpopulations, what they need, and what’s standing in the way.

Background on LTSS

LTSS care is largely provided through Medicaid coverage that is a mix of institutionalization and home- and community-based services (HCBS). HCBS was not originally written into Medicaid policy, which has led to gaps across states and policies centered around only older adults, primarily people aged 65 and older who need help with daily activities due to age-related decline.

People with Intellectual and Developmental Disabilities (IDD)

People with IDD require a lifetime of support and face waiver waitlists that can last more than a decade, the longest delays of any LTSS subpopulation.

The One Big Beautiful Bill Act (OBBBA), signed into law July 4, 2025, created a new 1915(c) waiver category allowing states to serve individuals before they hit the institutional level-of-care (LOC) threshold, with $50M for FY26 and $100M for FY27. It sounds meaningful, but the math is less encouraging. According to an analysis using 2020 average per-capita HCBS spending, that $50M divided across 50 states covers roughly 27 people per state. The authority also doesn’t kick in until July 2028, and per-capita spending is capped at state institutional care rates, which limits how far states can go.

The real test of this new waiver authority is whether states use the next two years to build it into something impactful, a decision is being made in state budget offices right now.

People with Serious Mental Illness (SMI)

SMI impairments are episodic and cognitive, manifesting in the inability to consistently manage medications, maintain housing, or navigate a crisis. Standard LOC assessments were not built to capture that, so those who genuinely need support get turned away from care and cycle through ERs, jails, and shelters instead.

This is primarily a state-level problem as each state designs its own assessment instrument. Any state can adopt a more comprehensive tool that accounts for cognitive and episodic limitations, though budget neutrality requirements create a real constraint. On the federal side, H.R. 3320, the Strengthening Medicaid for SMI Act would increase the federal match for intensive community-based SMI services. It likely won’t pass this Congress, as there is only one cosponsor, there is no Senate bill, and the sponsor (Rep. Goldman (D-NY-10)) lost his re-election bid. However, it’s a clear marker of where reform is headed.

Children with Complex Medical Needs

Children with complex medical needs don’t automatically age out of their conditions at 19, but they can age out of the Medicaid coverage keeping them stable.

Many qualify for coverage through the Katie Beckett Program, created under the Tax Equity and Fiscal Responsibility Act (TEFRA) in 1982, which allows children with significant disabilities to access Medicaid regardless of family income. But the transitions out of pediatric coverage are a gauntlet and lead to a potential break in coverage due to the long waiver waitlists and inconsistent requirements.

The Medicaid and CHIP Payment and Access Commission’s (MACPAC) June 2026 report to Congress includes a chapter on this problem. The Commission provided recommendations, including requiring states to send advance notice of aging and implementing a 12-month continuous eligibility to account for waiting time. The chapter provides a solid baseline for advocates to influence congressional action.

People with Traumatic Brain Injury (TBI)

Around 5.3 million Americans live with a lifelong disability as a result of a brain injury; however, TBI-specific HCBS waivers exist in only about 20 states. In the rest, individuals are misclassified under other waiver categories or fall through the gaps entirely, ending up in shelters, jails, or ERs that aren’t equipped to help them.

CMS recognized TBI as a chronic condition in the Contract Year 2025 (CY25) Medicare Advantage and Part D Final Rule, a federal precedent advocates can point to when making the Medicaid parity argument. However, the more immediate action is at the state level as North Carolina, Maryland, and Nebraska are actively expanding TBI-specific waivers. For advocates in states without them, these are the types of models to bring to your state Medicaid director.

The Common Thread

Each of the subpopulations experiences the same blind spot: Medicaid HCBS was designed around, and for, older adults aging in place and then extended to other populations through inconsistent waivers and state amendments.

The direct care workforce shortage reflects the mismatch there are not enough caregivers to serve every population in need. Providers turn away over 25% of referrals due to staffing shortages. When formal care is unavailable, family members become caregivers and often leave the workforce to do so.

The fragmentation has confined each population to its own waiver structure, agency contact, and advocacy community. As a result, the four subpopulations are fighting the same underlying fight in isolation.

Most pressing of all, HCBS remains an optional Medicaid benefit rather than a guaranteed one, making it a prime target when states cut budgets. This means each of these subpopulations’ care is first to go if money gets tight.

Where to Go from Here

Just as these programs were built state by state, the policy levers to change them rest primarily with the states. IDD waiver implementation, SMI assessment redesign, and TBI waiver expansion are each determined at the state level. Only the children’s transition issue is squarely a federal ask, addressed through MACPAC recommendations and congressional action.

That means the most consequential near-term decisions are happening in state budget negotiations, as states absorb the fiscal pressure from OBBBA and decide what to implement with the new authorities it created.

That does not mean the federal level is quiet. On May 20, 2026, Senate Finance Committee ranking member Ron Wyden (D-OR) and 16 Senate Democrats issued a dear colleague letter signaling interest in policies to make long-term care more affordable and accessible for seniors and people with disabilities. Requests for Information comment periods, and staff briefings are all on the table as avenues to raise these populations’ visibility with congressional staff before legislative text is drafted.

These four populations are not fighting different battles. They are fighting one battle, alone, inside a system that was never built to hold them together. The workforce shortage, the optional status of HCBS, and the fragmentation of policy levers across fifty states are not separate problems. They are the same exclusion, appearing in different forms. As Congress and state legislatures shape the next round of Medicaid decisions, the populations with the most at stake have the least shared voice in the room. That imbalance needs to change before the decisions do.

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Week Ahead: The Final Stretch

Date: July 27, 2026

Remember when you were a kid, and someone else’s school got out for summer before yours? That same deeply unfair feeling is settling over the Senate right about now. The House has packed its bags and headed home for summer break, while senators are still stuck at their desks watching their colleagues disappear into the sunshine while feeling the heat from the President on the SAVE Act. So, let’s get into it. Welcome to the Week Ahead!

The Administration

President Trump has announced his next set of tariffs on the pharmaceutical sector with a 100% tariff on imported generic drugs beginning in August 2028. John Murphy III, the President and CEO of the Association for Accessible Medicines (AAM)has said they need to see more specifics about the policy, but that the generics industry is committed to policies that stabilize the industry and patient access to affordable medications. On the Hill, Senate Finance Committee Ranking Member Ron Wyden (D-OR) introduced legislation to require congressional approval of tariffs before they take effect.

Attention is divided at the Centers for Disease Control and Prevention (CDC) as the agency deals with rising measles cases and the cyclosporiasis outbreak. Measles was declared eliminated in the US in 2000, but cases have been on the rise over the past few years. Over halfway through 2026, and the number of reported cases has surpassed 2025 levels, which was the most reported since 1991. Cyclosporiasis is also hitting new milestones as 9 states are now battling outbreaks. The Food and Drug Administration (FDA) is working with the CDC to investigate sources of the parasite and contain its spread. The simultaneous public health threats have fueled criticisms about public health funding levels and staffing cuts at the agencies. The lack of permanent leadership at the CDC and FDA is likely not helping the administration to contain the issues and will mean that any nominee will have a lot to clean up.

The Senate

The Senate must now pick up where the House left off and decide on the direction for Reconciliation 3.0. Senate Majority Leader John Thune (R-SD) has said he doesn’t have the votes to pass the House resolution and that his focus is on government funding. Thune has said that he plans to bring the House-passed continuing resolution (CR), which extends existing government funding through December 4, up for a vote before the Senate’s August recess. However, he has also said he would consider using Reconciliation to fund the government and avoid a shutdown if a CR cannot be passed. Notably, the CR does not include health care extenders, such as telehealth flexibilities and funding for Medicare-dependent and low-volume hospitals, that often accompany government funding bills because most of them are already extended until at least the end of the year.

Meanwhile, new Senate Budget Committee Chairman Ron Johnson (R-WI) shared that he has directed Budget Committee staff to begin drafting two Senate budget resolutions, with the goal to pass one of them before the August recess. The first would mirror the House resolution, and the second would be more expansive to ensure GOP funding priorities are met. Chairman Johnson also said he supports a fourth reconciliation package focused on addressing fraud. In discussing this, he cited Centers for Medicare and Medicaid Services actions against hospice providers in Los Angeles as an example of the sort of rampant fraud that needs to be addressed.

Also on our radar: Senate Health, Education, Labor, and Pensions (HELP) Committee Chairman Bill Cassidy (R-LA) is looking to move on the Committee vote to advance the nomination of Dr. Erica Schwartz to be Director of the Centers for Disease Control and Prevention (CDC). This vote had to be delayed, despite Cassidy’s support, due to a family emergency affecting Sen. Lisa Murkowski (R-AK). Along with Dr. Schwartz’s nomination, the Committee also delayed a vote on the nomination of Sean Kaufman to serve as Assistant Secretary for Preparedness and Response (ASPR). During his nomination hearing, bipartisan concerns were raised about his views on vaccines. A HELP Committee spokesperson has shared that “there are ongoing conversations with the administration on the path forward for Mr. Kaufman’s nomination.” The Committee is scheduled to vote on his nomination, as well as bill from Chairman Cassidy on health privacy, during the July 30 executive session.

Other Health Care Hearings This Week

July 29: Senate Homeland Security Committee hearing with Dr. Anthony Fauci

The House

House Members are out of session until August 31.

There You Have It

What was your final week of school like when you were little? Field days, yearbook signings, class parties? Let us know your favorites! Make it a great week.

Summary of Select Health Care Bills from House Energy and Commerce Committee Markup

Date: July 24, 2026

On July 20-21, 2026, the House Energy and Commerce Committee held a markup that included several pieces of legislation related to Medicare Advantage, health care price transparency, and illicit drugs. The Improving Seniors’ Timely Access to Care Act, along with several other bills, were incorporated by an amendment into the larger Lower Costs, More Transparency Act. All the bills passed unanimously, except for the Prices on the Wall Act. Democratic members of the Committee opposed this bill because of concerns that the bill’s requirements would cause confusion for patients and deter them from seeking care. You can see a list of select bills included in the markup below, along with any notable discussion and the vote tallies.

OPENING STATEMENTS

Chairman Brett Guthrie (R-KY-2)
Ranking Member Frank Pallone (D-NJ-6)

SELECT LEGISLATION INCLUDED IN THE MARKUP

H.R. 2004, Tyler’s Law (Reps. Ted Lieu (D-CA-36) and Robert Latta (R-OH-5)), to direct the Secretary of Health and Human Services to issue guidance on whether hospital emergency departments should implement fentanyl testing as a routine procedure for patients experiencing an overdose.

The bill passed out of Committee by a vote of 46-0

H.R. 9390, the Prices on the Wall Act (Rep. Mariannette Miller-Meeks (R-IA-2)), to require hospitals, ambulatory surgical centers, and labs to post the discounted cash price in dollar amount on the wall for each service they provide.

Ranking Member Pallone stated that while he supports price transparency, he has strong concerns that implementation of the bill will be impractical, will cause more confusion for patients, and will deter patients from seeking care. Ranking Member Pallone highlighted H.R. 9393, the Lower Costs, More Transparency Act, as a more useful approach to price transparency.
The bill passed out of Committee by a vote of 24-21, along party lines, with Republicans voting for the bill and Democrats voting against it.

H.R. 9393, the Lower Costs, More Transparency Act of 2026 (Reps. Guthrie (R-KY-2) and Pallone (D-NJ-6)), to require hospitals, surgical centers, labs, and imaging providers to post prices and require health plans to disclose negotiated rates, cost-sharing estimates, and pharmacy benefit manager (PBM) spread pricing.

Chairman Guthrie offered an amendment, which was adopted by voice vote, to include the following legislation as part of this bill:
- H.R. 9397, the Premium Transparency Act (Reps. August Pfluger (R-TX-11) and Nathanial Moran (R-TX-1)), to ensure health insurer accountability through publishing of overhead costs and claim payments.
- H.R. 9396, the Prior Authorization Accountability Act (Rep. Craig Goldman (R-TX-12)), to require insurers to display which services were subject to prior authorization, the percentage of requests approved or denied, and the average amount of time between the request submission and determination.
- H.R. 3514, Improving Seniors’ Timely Access to Care Act of 2025 (Reps. Mike Kelly (R-PA-16) and Suzan DelBene (D-WA-1)), to require plans to establish, and evaluate the implementation of, an electronic prior authorization.
- H.R. 9392, the Medicare Advantage Cost Transparency Act (Reps. Diana DeGette (D-CO-1) and John Joyce (R-PA-13)), to require the inclusion of certain information in Medicare Advantage encounter data.
- H.R. 5243, to require each Medicare Advantage plan to submit eligibility for supplemental benefits, types of benefit categories offered, and data on utilization of and payments for such benefits (Rep. Jennifer McClellan (D-VA-4)).
The amendment pushed back dates for certain provisions within these bills. For example, the amendment changed the Improving Seniors’ Timely Access to Care Act so the prior authorization requirements would be in effect for any applicable item or service during a plan year beginning on or after January 1, 2029, instead of January 1, 2028, for the electronic prior authorization program and January 1, 2027, for the transparency requirements.
Rep. Jake Auchincloss (D-MA-4) spoke positively of the amendment but requested that the Committee consider more pharmacy benefit manager (PBM) reforms.
Rep. John James (R-MI-10) offered an amendment to include H.R. 5582, the Patients Deserve Price Tags Act, as he believes that would improve price transparency for consumers more than H.R. 9393. However, the amendment was withdrawn.
The Lower Costs, More Transparency Act, as amended by Chairman Guthrie, was passed out of Committee by a vote of 45-0.

Summary of Hearings on Pharmaceutical Supply Chain Security and Biomedical Innovation

Date: July 20, 2026

On July 15, 2026, the House Select Committee on China, the House Energy and Commerce Health Subcommittee, and the Senate Aging Committee held hearings on the Federal Research Security Enterprise, the role of the Food and Drug Administration (FDA) in biomedical innovation, and foreign control of America’s drug supply. The hearings provided useful context on how members of these committees view the issues surrounding drug development and the threats posed by overreliance on foreign countries for the nation’s pharmaceutical supply chain.

HOUSE SELECT COMMITTEE ON CHINA HEARING ON THE FEDERAL RESEARCH SECURITY ENTERPRISE

Opening Statements

Chairman John Moolenar (R-MI-2)
Ranking Member Ro Khanna (D-CA-17)

Witness Testimony

Jeremy Ison, Chief of Staff to the Under Secretary for Science, U.S. Department of Energy (DOE)
Dr. Patricia Valdez, Chief Extramural Research Integrity Officer, National Institutes of Health (NIH)
Dr. Rebecca Keiser, Acting Chief of Staff and Chief of Research Security Policy and Strategy, National Science Foundation (NSF)

Member Discussion

Throughout the hearing, members from both parties expressed concerns that the Chinese Communist Party is exploiting American taxpayer-funded research by leveraging universities, labs, and researchers to accelerate their own developments. Questions centered around research security protocols and the impact of funding and workforce cuts.

Research Security Protocols

Republicans focused on how the Department of Energy (DOE), National Institutes of Health (NIH), and National Science Foundation (NSF) utilize the Restricted Entity List to protect American advancements from foreign entities. Chairman John Moolenar (R-MI-2) opened by asking the witnesses about the current policies at their respective agencies for ensuring federal funding does not fund research involving entities on the list. Dr. Keiser described NSF’s Dear Colleague Letter from July 8 notifying the research community of a forthcoming policy to prohibit entities from using NSF funds to collaborate with entities on the restricted parties lists. However, Dr. Keiser said they are waiting on the comment period to finalize before moving forward. Dr. Valdez and Mr. Ison explained that NIH and DOE do not have their own policy, but they are actively reviewing NSF’s and have a series of risk mitigations in place. Rep. Darin LaHood (R-IL-16) and Rep. Ashley Hinson (R-IA-2) asked Mr. Ison to go into more detail about the current DOE guidance in place. He explained that they use physical and cyber security, counterintelligence, and a layered approach to assess conflict of interest and prior commitments. Mr. Ison further stated that they have an escalation clause to bring any findings to the correct federal office should they find high-risk influence.

Funding and Workforce

Democrats largely used their time to highlight funding and workforce cuts at NSF, DOE, and NIH. Ranking Member Ro Khanna (D-CA-17) and Rep. Tom Suozzi (D-NY-3) asked whether the witnesses were concerned about workforce and funding cuts affecting their agencies. Dr. Keiser explained that NSF has had 5 employees choose to leave since 2024, and they are currently working on rebuilding and ensuring all the research community takes responsibility for safe research practices. Dr. Valdez stated that NIH security team has not experienced any cuts, but she understands there have been cuts elsewhere. Mr. Ison explained DOE is executing the President’s budget and is adequately addressing security concerns.

HOUSE ENERGY AND COMMERCE HEALTH SUBCOMMITTEE HEARING ON FDA’S ROLE IN BIOMEDICAL INNOVATION

Opening Statements

Health Subcommittee Chairman Morgan Griffith (R-VA-9)
Health Subcommittee Ranking Member Diana DeGette (D-CO-1)
Full Committee Chairman Brett Guthrie (R-KY-2)
Full Committee Ranking Member Frank Pallone (D-NJ-6)

Witness Testimony

Cynthia Verst, PharmD, MS, President, Design and Delivery Innovation, R&D Solutions, IQVIA
Susan C. Winckler, RPh, Esq., CEO, Reagan-Udall Foundation for the FDA
Aaron J. Kowalski, Ph.D., CEO, Breakthrough T1D
Thomas Hwang, MD, Assistant Professor of Medicine, Brigham and Women’s Hospital and Harvard Medical School
Thomas K. Bollyky, JD, Bloomberg Chair in Global Health, Senior Fellow for International Economics, Law, and Development; and Director of the Global Health Program, Council on Foreign Relations

Member Discussion

There was bipartisan support for increasing patient access to clinical trials as well as concerns about the impacts of drug research and development overseas. There was also bipartisan concern raised about uncertainty at the FDA and how it may be hurting pharmaceutical innovation.

Risks of Reduced US Innovation

There were bipartisan concerns raised about the impacts of drug research and development moving overseas, specifically to China. Full Committee Chairman Brett Guthrie (R-KY-2) asked what was risky about the US failing to remain competitive in clinical trials. Dr. Verst highlighted that while clinical trials are needed, the US also needs to encourage translational science and collaboration with biotech companies to ensure research and development remains domestic. Full Committee Ranking Member Frank Pallone (D-NJ-6) asked how important it was for the US to support biomedical innovation. Dr. Hwang highlighted that almost every new drug application includes research supported by the NIH and that increased Chinese investment will shift clinical trials overseas. Rep. Buddy Carter (R-GA-1) wanted to know which policies can ensure the US holds on to its competitive edge. Dr. Verst highlighted Operation TrialBlazer, a plan from the Department of Health and Human Services (HHS) to maintain U.S. leadership in early clinical research and development, and the importance of ensuring cooperative work across federal agencies.

Health Subcommittee Vice Chair Diana Harshbarger (R-TN-1) and Rep. Kim Schrier (D-WA-8) were especially worried about the effects of foreign-generated clinical data on drug safety and development. Dr. Hwang noted that foreign governments often have different data standards and that the FDA should be empowered to inspect foreign clinical sites to ensure US data standards are upheld. Ms. Winckler highlighted that when data is collected domestically, local researchers have a much better understanding of the product and better control of data procedures. Mr. Bollyky shared that foreign data needs to be scrutinized and held to high standards.

Clinical Trials

There was bipartisan support for increasing patient access to clinical trials, especially for those from rural areas and underrepresented populations. Subcommittee Chairman Morgan Griffith (R-VA-9) asked how to get more rural care sites involved in clinical trials. Ms. Winckler emphasized the positive impacts of hub-and-spoke models in allowing rural providers to engage their patients in clinical trials without many of the administrative burdens that follow trial design, as well as the potential positive impacts of remote patient monitoring technologies.

Reps. Raul Ruiz (D-CA-25) and Robin Kelly (D-IL-2) wanted to highlight the importance of diverse patient populations in clinical trials and how to best ensure minority communities are represented. Ms. Winckler shared that often the challenge is that community providers are not aware of what clinical trials their patients are eligible to participate in. Dr. Verst emphasized that diversity in clinical trials is critical for good science and results in increased success for drugs and that community physicians need increased support for improving the process of referring their patients to potential clinical trial investigators. Dr. Kowalski highlighted that Breakthrough T1D mandates representative trials with clear methods to ensure representation as part of its grant-agreement process. Rep. Kat Cammack (R-Fl-3) questioned how to improve the underrepresentation of women in clinical trials. Ms. Winckler suggested that clinical trial designs should be clear about how sponsors plan to address potential sex-based differences in their participant mix. Rep. Troy Balderson (D-LA-2) asked the panel what actions they would like to see Congress take to improve enrolling patients in clinical trials. Dr. Verst emphasized that guidance on patients’ access and standard of care for clinical trials, as well as the need for simple trial designs, are the most critical steps that Congress could take.

Federal Rulemaking

Multiple Democratic members took the opportunity to express concerns about the potential impacts of a rule proposed by the Office of Management and Budget (OMB) that expands agencies’ authority to suspend or terminate discretionary grant awards if it is determined that the grant no longer aligns with agency priorities or national interest. Subcommittee Ranking Member Diana DeGette (D-CO-1), as well as Reps. Lori Trahan (D-MA-3) and Troy Carter (D-LA-2) all asked witnesses to explain how this proposed rule could affect the grantmaking and peer review process. Dr. Kowalski highlighted that merit-based peer review is imperative for science and drives clinical benefits. Dr. Hwang shared that the proposed rule could potentially disrupt current clinical trials and could make it much harder for international collaboration and argued the proposed rule should be withdrawn.

FDA Uncertainty and the Impact on Drug Development

Members highlighted the ongoing uncertainty at the FDA. Rep. Debbie Dingell (D-MI-6) asked Dr. Kowalski if companies shared concerns about getting new therapies approved by the FDA. Dr. Kowalski shared that he is aware of multiple companies making contingency plans to get therapies approved in other countries if they cannot reach agreements with FDA regulators.

Reps. Tom Kean (R-NJ-7), Jake Auchincloss (D-MA-4), and Kevin Mullin (D-CA-15) asked for witness input on how to improve the FDA and modernize FDA processes. Ms. Winckler said we should encourage use of and conversations with patients about clinical trial endpoints as well as clarifications from the FDA on how to operationalize hub and spoke models. Ms. Winckler also emphasized the need for consistent messaging across the FDA, Congress, and stakeholders about what is expected during the drug development process. Dr. Verst shared that biotech companies are looking for greater certainty, clarity, and guidance on FDA processes.

SENATE AGING COMMITTEE HEARING ON FOREIGN CONTROL OF AMERICA’S DRUG SUPPLY CHAIN

Opening Statements

Chairman Rick Scott (R-FL)

Witness Testimony

Nazak Nikakhtar, Partner & Chair of the National Security Practice, Wiley Rein LLP
Stephen Ezell, Vice President for Global Innovation Policy, Information Technology and Innovation Foundation (ITIF)
Edward You, Founder & Principal Consultant, EHY Consulting LLC
Rush Doshi, Ph.D., C.V. Starr Senior Fellow for Asia Studies and Director of the China Strategy Initiative, Council on Foreign Relations, Assistant Professor, Georgetown School of Foreign Service

Member Discussion

Throughout the hearing, members from both parties expressed alarm that foreign ownership and investment, particularly from China, have created hidden vulnerabilities across the pharmaceutical and biotechnology supply chain, extending beyond visible drug ingredients to clinical trial data, corporate ownership structures, and biomanufacturing capacity. Committee Chairman Rick Scott (R-FL) and Committee Ranking Member Kirsten Gillibrand (D-NY) both emphasized that current law is not sufficient to identify these risks, and members discussed the newly introduced Pharmaceutical Investment Oversight and Accountability Act as a first step toward addressing the gap.

Foreign Investment and CFIUS Oversight Gaps

Chairman Scott, Ranking Member Gillibrand, and Sen. Elizabeth Warren (D-MA) announced the Pharmaceutical Investment Oversight and Accountability Act, which would require the Federal Trade Commission (FTC) and the Committee on Foreign Investment in the United States (CFIUS) to report annually to Congress on foreign investment in pharmaceutical manufacturing and related technologies. Ms. Nikakhtar testified that CFIUS jurisdiction does not extend to most greenfield investments and joint ventures, board seats obtained without an equity stake, or licensing and data-access deals that involve no investment, and that many qualifying transactions are simply never filed for review. She recommended a presumption of denial for Chinese biotech transactions that do fall under CFIUS jurisdiction and urged Congress to pass legislation to close the greenfield and joint-venture gap. Senator Warren pressed Ms. Nikakhtar on why biotech acquisitions continue to escape review despite 2018 reforms expanding CFIUS’s scope; Ms. Nikakhtar attributed the gap to voluntary filing, executive branch self-limiting of its own authority, and China’s use of legal counsel to structure deals around CFIUS jurisdiction.

Supply Chain Dependency and Weaponization Risk

Chairman Scott and Mr. Ezell highlighted that China controls 94% of the key starting materials (KSMs) for amoxicillin, 74% of heparin, and effectively all of the KSMs for common blood pressure medications, and that nearly 700 medicines approved for use in the United States depend on at least one upstream input produced solely in China. Dr. Doshi warned that “Made in America” labeling can mask upstream dependency on Chinese-sourced KSMs and active pharmaceutical ingredients (APIs). Mr. Ezell, Ms. Nikakhtar, and Mr. You each warned that China is positioning these chokepoints as leverage over the United States, comparable to its dominance in rare earths and critical minerals, and could restrict supply at a time of its choosing.

Biotech Innovation and Clinical Trial Data

Mr. You testified that clinical trial data generated by American patients in FDA-authorized trials can legally flow to Chinese-linked companies with no federal agency able to stop it, citing FDA-cleared Chinese CAR-T cell therapy startups whose U.S. trial data feeds back into Chinese drug development while U.S. companies license and Medicare reimburses the resulting products. Dr. Doshi added that China’s looser regulatory requirements for first-in-human trials let American pharmaceutical companies obtain de-risked clinical data faster from Chinese assets than from domestic ones, a dynamic that has driven $53 billion in U.S. licensing deals with Chinese biotech over the past five years that now account for one-third of new drug pipelines. Mr. Ezell and Mr. You both flagged Chinese “brand obfuscation,” citing BGI’s Complete Genomics and WuXi AppTec as companies with undisclosed ties to the Chinese Communist Party (CCP) and the People’s Liberation Army (PLA) that operate within the U.S. pharmaceutical supply chain.

Legislative and Policy Responses

Senator Warren discussed her broader Pharmaceutical Supply Chain Defense and Enhancement Act, which would pair the Pharmaceutical Investment Oversight and Accountability Act’s investment transparency requirements with greater use of federal procurement power to build sustained domestic demand for allied-sourced medicines. Witnesses recommended complementary measures, including passage of the Biotech Investment National Security Act (BINSA), expanded export controls on biological materials and data, “clear labels” legislation to expose upstream KSM and API dependencies, tariff and reimbursement incentives favoring allied inputs, and a Manufacturing USA institute for critical minerals and APIs. Several witnesses urged deeper coordination with allies, including South Korea, Mexico, and India, to diversify away from Chinese-controlled inputs.