On April 3, President Trump submitted his fiscal year (FY) 2027 budget request to Congress, with $111.1 billion requested in discretionary budget authority for HHS for FY 2027, a $15.8 billion or 12.5 percent decrease from the FY 2026 enacted level. The President’s budget for HHS continues to advance the Administration’s MAHA vision through proposals to establish the Administration for a Healthy America and eliminate programs that are viewed as inconsistent with MAHA goals. 

As with the FY 2026 budget request, HHS once again proposes to reorganize the department in the FY 2027 budget request, though the approach varies slightly from that proposed last year. As previously proposed, HHS seeks to consolidate the Office of the Assistant Secretary for Health (OASH), the Health Resources and Services Administration (HRSA), the Substance Abuse and Mental Health Services Administration (SAMHSA), and several centers and programs from the Centers for Disease Control and Prevention (CDC) into a new Administration for a Healthy America (AHA). Under this proposal, AHA would receive $14.7 billion in discretionary funding, reducing the funding of the consolidated programs by a total of $5 billion. Additionally, as in the FY 2026 budget, the FY 2027 budget proposes to combine the Administration for Children and Families (ACF) and the Administration for Community Living (ACL) into a new Administration for Children, Families, and Communities (ACFC) with $28.7 billion in funding, a reduction of $7 billion from the current combined levels for the two programs. 

Differing from last year’s proposed organization, the budget proposes to consolidate the Agency for Toxic Substances and Disease Registry, CDC’s National Institute for Occupational Safety and Health and National Center for Environmental Health, FDA’s National Center for Toxicological Research, and the NIH’s National Institute for Environmental Health Sciences into a new “National Center for Chemicals and Toxins.” The Center would receive $1 billion in funding. The budget also differs from last year’s proposal in that it funds ASPR and ARPA-H as their own divisions. 

As currently organized, the budget proposes the following amounts in discretionary funding for key HHS agencies: 

• $3.3 billion for FDA, a decrease of 3.3 percent from FY 2026; 
• $5.3 billion for CDC, a decrease of 42 percent from FY 2026; 
• $9.1 billion for IHS, an increase of 14 percent from FY 2026; and 
• $41.2 billion for NIH, a decrease of 11 percent from FY 2026. 

Notably, HHS is not proposing to reorganize the current structure of NIH as it did in the FY 2026 budget request. However, the budget does propose to eliminate the National Center for Complementary and Integrative Health, the Fogarty International Center, and the National Institute on Minority Health and Health Disparities, and to consolidate the National Institute of Drug Abuse and the National Institute on Alcohol Abuse and Alcoholism into a new National Institute of Substance Use and Addiction Research. 

In response to the budget, Senate Appropriations Chair Susan Collins issued a statement, saying, “The President’s Budget Request is just that, a request…. While there are some improvements over last year’s domestic discretionary budget request, including full support for the Pell Grant program, the request has several shortcomings. For example, the proposal includes unwarranted funding cuts in biomedical research. After careful review, Congress decisively rejected these particular cuts last year. While the Administration proposes a budget, Congress holds the power of the purse. The Senate Appropriations Committee will now hold hearings with cabinet members and agency heads to review these recommendations and to explore other fiscally responsible proposals.” 

In addition to appropriations hearings, HHS Secretary Robert F. Kennedy, Jr. is expected to testify before the House Ways and Means Committee on April 16, followed by the House Energy and Commerce Committee on April 21, and the Senate HELP and Finance Committees on April 22. Additional hearings are expected to be announced in the upcoming weeks. 

On April 2, President Trump issued a proclamation imposing a 100 percent tariff on certain patented pharmaceuticals and associated pharmaceutical ingredients. The proclamation states that, through this investigation, the Secretary of Commerce has determined “the present quantities and circumstances of imports of pharmaceuticals and pharmaceutical ingredients threaten to impair the national security and economy,” via overreliance on foreign supply chains. As such, the proclamation imposes a 100 percent ad valorem duty rate on the import of certain patented pharmaceuticals and associated pharmaceutical ingredients, listed in Annex I of the proclamation, and “except as otherwise detailed” in the proclamation, which goes on to make several specific categorical exceptions. 

Companies that have fully executed agreements with the White House to provide for “most-favored-nation” pricing and to onshore domestic manufacturing of their products are fully exempt from the tariffs. Those that have not made these full agreements but have plans to onshore production of their products will see a 20 percent ad valorem duty rate on imports of pharmaceuticals and APIs. Rates for these companies will increase to 100 percent four years after the date of the proclamation. 

Additionally, the proclamation recognizes “pharmaceutical-related commitments in existing trade deals with the European Union, Japan, the Republic of Korea, and Switzerland and Liechtenstein jointly, as well as a future pharmaceutical-related deal with the United Kingdom (on which the United States and the United Kingdom have reached an agreement in principle as of December 1, 2025).” The White House fact sheet accompanying the proclamation clarifies that products from the EU, Japan, Korea, or Switzerland and Liechtenstein will see a rate of 15 percent, while “a lower tariff” will apply to the U.K. 

Finally, the proclamation makes a broad exception for generic pharmaceuticals and APIs, including biosimilars from tariffs, which the fact sheet states will be reassessed in one year. The proclamation also institutes exemptions for a number of specific product types, including orphan drugs with exclusively orphan indications, nuclear medicines, plasma-derived therapies, fertility treatments, cell and gene therapies, and medical countermeasures, among other categories. 

The tariffs will go into effect on July 31, 2026, for larger companies listed in Annex III, and September 29, 2026, for smaller companies. 

On Monday, April 6, CMS released the Calendar Year (CY) 2027 Medicare Advantage (MA) and Part D Rate Announcement, finalizing policies that “are projected to result in an increase of 2.48% or over $13 billion in payments to MA plans in CY 2027,” in contrast with the much more modest 0.09 percent increase the agency had proposed in its initial Advance Notice. Despite a higher rate increase, however, CMS did finalize certain policies expected to reduce payments for certain plans, including by excluding diagnoses from unlinked chart review records from risk adjustment, subject to an exception for enrollees transitioning to new plans. 

Additionally, on April 2, CMS issued several annual payment rules, including: 

• The Contract Year (CY) 2027 Medicare Advantage and Part D Final Rule, which revises the Medicare Advantage (MA) Program, Medicare Prescription Drug Benefit Program (Part D), and Medicare Cost Plan Program for CY 2027. Notably, in the final rule, CMS finalized proposed MA and PD Star Ratings changes that are projected to result, on net, in an additional $18.56 billion paid to plans between 2027 and 2036. CMS also finalized several changes intended to reduce administrative burden, in accordance with Executive Order 14192, such as by rescinding the requirement that MA plans send certain mid-year notices about unused supplemental benefits. 
• The Fiscal Year (FY) 2027 Medicare Inpatient Psychiatric Facility (IPF) Prospective Payment System (PPS) Proposed Rule, which proposes to increase IPF PPS payment rates by 2.3 percent; 
• The FY Skilled Nursing Facility Prospective Payment System Proposed Rule, which proposes to increase SNF PPS rates by 2.4 percent; 
• The FY 2027 Inpatient Rehabilitation Facility Prospective Payment System Proposed Rule, which proposes in increase IRF PPS rates by 2.4 percent; and 
• The FY 2027 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Program Requirements Proposed Rule, which proposes to increase the hospice payment rate by 2.4 percent. 

On April 2, ARPA-H announced the launch of the Systemic Targeting of Microplastics (STOMP) program to develop tools for measuring, researching, and removing microplastics and nanoplastics from the human body. The program is structured in two phases. The first phase will focus on developing “gold-standard” measurement methods for microplastics in human organs, including a clinical test to quantify individual microplastic burden at scale, as well as a risk stratification mechanism to rank plastic materials by biological harm. CDC will serve as an independent validator of the measurement methods. The second phase will focus on developing interventions to remove harmful microplastics from the body, drawing on pharmaceutical biology and bioremediation science. ARPA-H noted that, while researchers have detected microplastics in human lungs, arterial plaques, and brain tissue, current measurement techniques produce inconsistent results across laboratories, limiting the ability to develop targeted interventions. The program is designed to prioritize tools that are affordable and broadly available, with particular focus on vulnerable populations, including pregnant women, children, patients with chronic disease, and highly exposed workers. ARPA-H is seeking multidisciplinary performer teams and has opened a solicitation, with initial summaries due Monday, May 6 and full proposals due Monday, June 22. ARPA-H will hold a “Proposers’ Day” event on April 22 for proposers to learn more about the opportunity.