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On October 11, 2025, California Governor Gavin Newsom signed Senate Bill 41 (SB-41) into law, introducing a comprehensive set of new regulations for pharmacy benefit managers (PBMs) operating in the state. As part of the broader California Prescription Drug Affordability legislative package, SB-41 reflects the state’s effort to combat high drug costs, standardize PBM pricing practices, enhance transparency, and address concerns around access to pharmacies. Among other things, SB-41 imposes fiduciary obligations on PBMs, establishes fee structure requirements and limitations, prohibits the use of spread pricing and steering to PBM-affiliated pharmacies, and requires 100% passthrough of rebates from PBMs and their affiliates and contracted rebate group purchasing organizations (GPOs) to health plan customers.

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The October 2025 edition of FDA in Flux highlights significant developments shaping the regulatory landscape for medical, life sciences, and consumer product sectors.

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California legislative activity focused upon private equity (PE) group and hedge fund health care transactions has continued notwithstanding California Governor Gavin Newsom’s veto last fall of California Assembly Bill 3129 (AB-3129). As we discussed in previous posts here and here, AB-3129 would have authorized the California Attorney General (AG) to review certain PE group and hedge fund health care transactions, but Governor Newsom vetoed the bill based on his view that the California Office of Health Care Affordability (OHCA) rather than the AG should be assessing proposed health care transactions and their cost and market impacts.

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The first week of October 2025 marked a significant shift in U.S. drug pricing policy as the Trump administration unveiled a series of sweeping actions to deliver on his promise to lower drug prices. From President Trump’s announcement of a 100% tariff on imported branded drugs to the Trump administration’s landmark pricing deal with Pfizer and the rollout of the TrumpRx.gov direct-to-consumer (DTC) platform, last week marked an escalation in the White House’s efforts to drive down prescription drug costs and bring pharmaceutical manufacturing back to U.S. soil. Below, we provide an overview of the Trump administration’s new policies and the stakeholder responses already reshaping the broader pharmaceutical landscape.

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On September 30th, 2025, the U.S. Department of Health and Human Services (HHS), Office for Civil Rights (OCR) announced a settlement with Cadia Healthcare Facilities for potential violations of the HIPAA Privacy and Breach Notification Rules. Cadia Healthcare Facilities (Cadia) is a group of five providers that specialize in rehabilitation, skilled nursing, and long-term care services in Delaware. This settlement follows an OCR investigation of Cadia in which Cadia posted a “success story” of a patient to its public website without first receiving a valid HIPAA authorization from the patient. The success story post included PHI such as the patient’s name, their photograph, and information regarding their condition, treatment, and recovery. OCR’s investigation further revealed that, through their “success story” program, Cadia compromised the PHI of 150 total patients.

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Judge vacates CMS’s RADV Extrapolation Rule, raising major implications for Medicare Advantage audits, payments, and future regulatory actions.
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As we’ve covered again and again over the past five years, providers are once more facing the prospect of a telehealth “cliff” if Congress does not take action to extend the Medicare flexibilities for telehealth services that have been in place since March of 2020.  While news is focused on the pending government shutdown, providers and Medicare beneficiaries who have come to rely on the COVID-era waivers and other flexibilities that greatly increased the availability of telehealth are facing the prospect of significantly reduced access to virtual care as of October 1, 2025.  Here is a quick review of what telehealth providers and their patients stand to lose if Congress does not act to extend coverage: 

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Over the 2025 summer, the Department of Health and Human Services’ Office of Inspector General (OIG) issued four advisory opinions—two favorable and two unfavorable—that provide valuable guidance for medical device companies and pharmaceutical manufacturers navigating the federal Anti-Kickback Statute (AKS). These opinions address warranty reimbursements, vendor access fees, physician ownership, and exclusion screening costs. Below is a summary of each.

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The September 2025 edition of FDA in Flux highlights significant developments shaping the regulatory landscape for medical, life sciences, and consumer product sectors.

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GLP-1 receptor agonists (GLP-1s) such as semaglutide, and dual agonists like tirzepatide, are transforming obesity treatment and reshaping the US health care landscape.

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On May 12, 2025, the Centers for Medicare & Medicaid Services (CMS) issued draft guidance for the third cycle of the IRA’s Medicare Drug Price Negotiation Program (Negotiation Program).

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Federal courts continue to uphold the Medicare Drug Price Negotiation Program, with multiple rulings emphasizing the voluntary nature of manufacturer participation. Key legal challenges from AstraZeneca, Boehringer Ingelheim, PhRMA, and others face setbacks as the government remains undefeated.

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CMS finalizes 2026 Medicare Part D changes under the IRA, including new cost limits, subsidy guidance, and updated creditable coverage rules.

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President Trump issues executive orders and letters to curb drug costs, promote MFN pricing, and reform Medicare’s Negotiation Program.

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States and manufacturers clash over 340B contract pharmacy laws as litigation mounts and courts weigh in on the future of pharmacy access protections.

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PhRMA’s 2025 agenda pushes back on drug pricing reforms, calling for innovation-friendly policies, 340B reform, and PBM accountability.

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While the pharmaceutical industry has reacted negatively to President Trump’s May 12 “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients” Executive Order (Executive Order), manufacturers appear to be leveraging one of Trump’s directives in the Executive Order, accelerating the industry’s shift toward a new model of drug delivery: direct-to-consumer (DTC) programs.

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CMS proposes OPPS payment cuts and a drug cost survey, signaling major 340B reimbursement shifts and renewed scrutiny of hospital payment rates.

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HRSA launches 340B rebate pilot tied to Medicare drug negotiations, signaling major program shifts amid legal rulings and stakeholder concerns.

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The CY 2026 Physician Fee Schedule Proposed Rule (PFS Proposed Rule) introduces significant changes to how drug manufacturers must treat Bona Fide Service Fees (BFSFs) when calculating Average Sales Price (ASP) for Medicare Part B drugs.

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