G2G Bioscience Bulletin – January 12, 2026

FY 2026 Appropriations: Congress faces a January 30 deadline to complete the remaining nine funding bills. A minibus of three bills, negotiated on a bipartisan, bicameral basis was released earlier this week, and notably:

• Includes the CJS bill that funds NIST, which has been appropriated $1.85 B, or ~$400 M more from FY 2025. Most of this goes to R&D activity, including $10 M to expand AI standards development.
• Excludes the two bills that fund most HHS agencies and Defense, which are expected to be combined in a separate package.
• The measure passed the House by a bipartisan margin of 397-28. It will head to the Senate where it is expected to pass next week.

• On Thursday, the House voted 230-196 to extend ACA subsidies for three years, with 17 Republicans joining all Democrats to support the measure. As is, this will not pass the Senate but is expected to influence a compromise bill to extend subsidies, with income caps and other restrictions, that could be released next week.

• The agency announced a reduction in oversight over two classes of products:
  • Digital Health: Clinical decision support software, that includes AI and offer a single diagnostic or treatment recommendation will no longer require FDA review, if they also meet certain other criteria. This supersedes a 2022 guidance, which treated such tools as medical devices. An uptick of non-validated AI tools in medical practice, may eventuate.
  • Low-Risk General Devices: Non-invasive devices that measure medical parameters and meet other requirements can be classed as general wellness products that are not subject to regulation.
• The agency issued a request for information, with the goal of potentially developing a new contracting approach, where VC firms would serve as prime contractors, with their portfolio companies serving as subcontractors to directly meet FDA needs. Responses are due January 18.

• Indirect Costs: Last week a federal appeals court affirmed a lower court ruling, barring the agency from implementing its proposal to cap indirect cost payments at 15%, citing violations of federal statute.
• Grants: Paused DEI linked grants are being reconsidered on merit, following recent court decision. However, NIH Director Bhattacharya indicated that these awards will not be renewed further.
• NINDS: Director Dr. Walter Koroshetz, was denied reappointment. He will serve through January 24, when Amy Adams the acting deputy will take charge. No announcement has been made about a permanent replacement. Director Bhattacharya lauded Dr. Koroshetz’s tenure but indicated the need for leadership transition.

• Last week, the agency and HHS Secretary Kennedy announced substantial changes to the childhood vaccination schedule, including narrowing recommendations for flu and COVID shots. The decision has been widely criticized by physicians, including Senate HELP Committee Chair Dr. Bill Cassidy (R-LA). A federal judge has permitted a challenge to these changes brought forth by medical groups to proceed.

• Innovation Models: Several coverage pilots were announced in late December, to follow the previously announced ACCESS and MAHA ELEVATE proposals. They include:
  • Mandatory models to reduce Medicare payments for drugs by using manufacturing rebates when US prices exceed those in peer nations. The GUARD (Guarding US Medicare Against Rising Drug Costs)  and GLOBE (Global Benchmark for Efficient Drug Pricing) Models would apply this approach to Medicare Parts D and B, respectively. Public comment periods are open through February 23. Of note, major pharmaceutical companies that have already struck pricing deals with the Administration, have indicated that they are exempt from these pilots.
  • A voluntary model, BALANCE (Better Approaches to Lifestyle and Nutrition for Comprehensive hEalth), would allow CMS to negotiate pricing and coverage of GLP-1 drugs with manufacturers on behalf of state Medicaid agencies and Part D plans. States and Part D plans can join the plan in May and next January, respectively. Eli Lilly has already indicated it will participate in this model.
• Rural Health Transformation Fund: The Administration announced the first tranche of awards under the $50 billion fund, set up by the One Big Beautiful Bill Act (OBBA). All states received funding, with larger and more rural states receiving larger shares. These awards are part of the discretionary half of the fund, and CMS will re-score programs every year to ensure compliance with Administration policy.

• 340B Program: A federal circuit judge ruled issued an injunction, halting implementation of Rebate Model Pilot Program starting January 1, in response to a lawsuit filed by hospitals associations, who indicated that shifting from an upfront discount model to a rebate model, would financially cripple providers. This injunction was affirmed by a federal appeals court this week.
• Newborn Screening: Last month, HHS Secretary Kennedy added Duchenne Muscular Dystrophy (DMD) and Metachromatic Leukodystrophy (MLD), to the Recommended Uniform Screening Panel (RUSP) for newborns.
• Nutrition: The Administration released the 2025–2030 Dietary Guidelines for Americans, overhauling federal nutrition policy to emphasize consumption of “real food”.
• Defense Health: Earlier this week, the Senate confirmed Keith Bass to be the Assistant Secretary of Defense for Health Affairs