It’s a high-stakes week in Washington as Senate Republicans work furiously to finalize their budget reconciliation bill and as Republicans’ self-imposed July 4 deadline gets ever closer. Meanwhile, the Trump administration continues to work on drug pricing reform. Let’s get into it. Welcome to the Week Ahead!
The Administration
The Trump administration is looking at advancing its “Most Favored Nation” (MFN) policy as a demonstration through the Center for Medicare and Medicaid Innovation (CMMI). The proposal would tie the price of blockbuster drugs in the U.S. to the lowest prices paid in OECD countries, adjusted for rebates.
The possibility of this new model comes as manufacturers were dealt an ultimatum: cut prices voluntarily by June 12 or face regulatory roulette. The price benchmark? The lowest among countries with a GDP per capita of at least 60% of the U.S.—a move that could shake up the entire pricing deck. Discussions among pharmaceutical executives and administration officials are taking place behind closed doors. However, the policy is still being shuffled, and no one is yet sure who will emerge with the winning hand
But that’s not the only game in town. The Trump administration is also seeking to turn the tables on foreign players who they feel are freeloading off U.S. innovation. Specifically, they’re eyeing trade tools such as those found under Section 301 of the Trade Act of 1974. Additionally, a report is expected soon on an investigation into the effects of pharmaceutical imports on national security (aka a “Section 232 report”). Both of these actions could result in the administration dealing out tariffs or other retaliatory actions against countries with strict price controls.
The Senate
Over in the Senate, the stakes couldn’t be higher as lawmakers head into what’s shaping up to be a critical week for meeting the self-imposed July 4 deadline for passage of a budget reconciliation bill. Senate Finance Committee Chair Mike Crapo (R-ID) is set to present on the committee’s provisions, including the tax and health care provisions, on June 16 at a GOP conference meeting. Meanwhile, the Senate Parliamentarian is playing the role of dealer, making sure every provision of the legislative text comports with the complex Byrd Rule. The July 4th recess is looming over the whole game, and lawmakers are racing the clock to wrap negotiations before the fireworks fly.
One of the biggest issues in the negotiations is over State and Local Income Tax (SALT) deductions. Negotiators are caught between a rock and a hard place: a $30,000 cap can’t clear the House, but a $40,000 cap can’t make it through the Senate. On one side of the table, you have blue state Republicans, like Rep. Mike Lawler (R-NY), threatening to vote no if the Senate does not preserve enough of a deduction. On the other side of the Capitol, Republican Senators, who don’t represent many constituents impacted by high state and local income taxes, but have voiced concerns over the house passed cap. Will the Senate jam the House, or can they come to an agreement during a truncated conference committee process?
For health care, many Republicans like Senators Josh Hawley (R-MO), Susan Collins (R-ME), Lisa Murkowski (R-AK), and Jim Justice (R-WV) are concerned about the Medicaid provisions, such as limits on provider taxes, work requirements, and new copays. On the other side, Sens. Rand Paul (R-KY), Rick Scott (R-FL), and Mike Lee (R-UT) are wanting to up the ante on spending cuts. Senate Republican leadership can’t lose more than three members if they want to pass the bill.
Some Republican members, such as Rep. Young Kim (R-CA), have a stake in both the SALT and Medicaid games. It’s possible that Senate Republican leadership tries to make reductions to SALT easier to swallow by pushing back work requirements or grandfathering existing provider tax rates. However, that will no doubt anger conservatives in both chambers. Balancing both interests has turned this into a real high-wire act, with leadership trying to keep the coalition together without losing key votes. Much like a table full of pros waiting for someone to blink, everyone’s watching for tells, backroom deals, and surprise plays that could shift the momentum before time runs out.
The House
The House may be in recess, but the players aren’t far from the table. House members are watching the Senate’s every move, trying to influence things, and getting ready to receive the Senate’s revised bill. Even Speaker Johnson is waiting to see how the Senate plays its hand and is constantly reminding the Senate that the House passed its version by a single vote.
Meanwhile, the government funding for FY 26 remains in the air. The House Appropriations Committee has advanced legislation to fund the Department of Defense and the Department of Veterans Affairs. However, a June 11 Appropriations markup of the Ag-FDA funding bill ended after 11 hours when committee Chair Cole (R-OK) realized they wouldn’t be able to finish ahead of the scheduled markup of the defense bill due to numerous amendments that were filed. The House also passed a rescissions package before leaving town with cuts to global HIV/AIDS prevention funding. However, that’s for already approved funding and is considered a dead hand by many in the Senate, including some Republicans.
There you Have It
New NBA and Stanley Cup champions could both be crowned this week—who’s your pick to take it all? Make it a great week!