This newsletter summarizes the top five recent regulatory updates and policy changes impacting the U.S. life sciences and healthcare industries.

1. New State Laws Create a Patchwork of AI Regulation in Healthcare

While U.S. Congress failed to pass a federal moratorium on Artificial Intelligence (AI) legislation, states are aggressively moving forward with new regulatory regimes, particularly in healthcare:

• Texas: Enacted two laws: the Texas Responsible AI Governance Act (TRAIGA), which broadly regulates commercial AI, and the Electronic Health Record Requirements Act. The healthcare-specific law mandates that all electronic health records containing patient data be stored physically in the U.S. (by Jan 1, 2026) and requires licensed practitioners to disclose AI diagnostic use to patients.
• Illinois: Passed the Wellness and Oversight for Psychological Resources Act, which is highly restrictive. It prohibits AI from making independent therapeutic decisions, directly engaging with clients in therapeutic communication, or generating treatment plans without a licensed professional’s review and approval.
• Colorado: The compliance date for the Colorado AI Act, which imposes obligations like risk-management programs and algorithmic discrimination prevention, was postponed from February 1, 2026, to June 30, 2026.

2. “TrumpRx” Platform and Most Favored Nation (MFN) Pricing

The Trump administration advanced its drug pricing efforts with the announcement of TrumpRx.gov, a proposed direct-to-consumer (DTC) website.

• Mechanism: TrumpRx is designed to bypass pharmaceutical middlemen (like PBMs) by allowing U.S. patients to purchase certain prescription drugs directly from manufacturers at deeply discounted cash-pay prices (savings as high as 85% off list price, averaging 50%).
• Policy Linkage: This platform is intrinsically linked to the administration’s “Most Favored Nation” (MFN) pricing initiative, which seeks to align U.S. drug prices with the lowest prices paid in other wealthy countries (referred to as the Global Benchmark for Efficient Drug Pricing (GLOBE) Model).
• Manufacturer Compliance: Major manufacturers like Pfizer and AstraZeneca have agreed to participate in TrumpRx and offer MFN pricing to State Medicaid programs in exchange for a temporary exemption from new drug tariffs and commitments to increase U.S. manufacturing investment.

3. Threat of 100% Tariff on Branded/Patented Drugs

In an effort to incentivize domestic pharmaceutical production, the Trump administration announced a major trade policy shift:

• The Tariff: Effective October 1, 2025, a 100% tariff is to be imposed on imported branded or patented pharmaceutical products.
• Exemption: The only primary exemption is for companies that are actively “building” a manufacturing facility in the U.S. (defined as having “broken ground” or being “under construction”).
• Context: The tariff threat is part of a broader Section 232 “national security” investigation into pharmaceutical imports and serves as leverage to compel manufacturers to negotiate drug pricing deals (as seen with TrumpRx). The tariff’s interaction with existing trade deals (e.g., potential 15% cap for EU-origin products) remains an area of uncertainty for importers.

4. District Court Narrows False Claims Act Liability in Kickback Cases

A recent federal district court decision, United States, et al., ex rel. Nolan, et al. v. HCA Healthcare, Inc., signals a potential limitation on the scope of liability under the False Claims Act (FCA) for violations of the Anti-Kickback Statute (AKS).

• Remuneration Ruling: The court held that an arrangement did not constitute illegal “remuneration” because the hospitals had no pre-existing legal obligation to pay for the technical component of pathology services for non-Medicare Advantage patients. The hospitals were not “saving” money they were legally required to pay.
• Causation Standard: Most significantly, the court affirmed a strict “but for” causation standard. For an FCA claim to succeed, the plaintiff must prove that “but for” the kickback, the provider would not have submitted the claim to the government. Alleging that a claim was merely “tainted by” a kickback resulting in patient referrals is now considered insufficient and “too attenuated.”

5. FDA Commits to Prompt, Public Disclosure of Complete Response Letters

The U.S. Food and Drug Administration (FDA) is moving toward “radical transparency” by accelerating the release of Complete Response Letters (CRLs).

• New Policy: The FDA has committed to the prompt, real-time public release of newly issued CRLs shortly after they are sent to drug sponsors. A CRL is a letter the agency issues when it cannot approve an application (NDA or BLA) in its current form.
• Scope: This disclosure effort includes CRLs associated with both pending and withdrawn applications, a new development for the agency.
• Goal: The FDA believes that publicizing these letters, which are redacted to protect confidential commercial information, will provide developers with tools to avoid common mistakes and help bring new technologies to market more efficiently, ultimately benefiting public health.