As the federal government shuts down following the failure of Congress to agree on how to fund the government (with healthcare standing out as a flashpoint), and after the Trump Administration instructed federal agencies to prepare reduction-in-force plans that would go beyond standard shutdown furloughs, other industry-specific news continues to break: 

• Branded Pharmaceutical Tariffs 
• Most-Favored-Nation Deal and a New Drug Pricing Proposal 
• Section 232 Investigation into Medtech 
• No SBIR/STTR Extension 
• Closure of the Denver USPTO Regional Office 
• Shutdown Impacts on HHS Operations 
• Shutdown Impacts on Antitrust Enforcement 

Branded Pharmaceutical Tariffs 

On September 25, President Trump announced on Truth Social that, starting just six days later, tariffs of 100% will apply to brand-name pharmaceuticals unless a company is actively building a plant in the U.S. 

John F. Crowley, President and CEO of the Biotechnology Innovation Organization (BIO) released a statement on the potential for 100% tariffs on branded or patented medicines in the U.S. 

“The immediacy of punitive, 100% tariffs on innovative medicines for any company without ‘shovels in the ground’ would devastate our nation’s small and mid-sized biotechnology companies.” 

“Immediate tariffs in the biotechnology industry threaten America’s health, national security, economic stability, and place as the world’s leader in biotechnology. They would also devastate our industry and accelerate China’s path to biotech dominance – which we cannot see happen.”  

It’s unclear how this tariff would impact companies that use contract development and manufacturing organizations, or CDMOs, to produce their products instead of making medicines themselves. BIO has prepared a document that includes recommendations to increase domestic manufacturing, which has been shared with a wide swath of individuals across the Administration and Congress. 

However, Administration officials have apparently clarified that these pharmaceutical tariffs will not apply to U.S. imports from countries with negotiated agreements with the U.S. that contain drug provisions. Notably, this appears to mean that tariffs on exports from the E.U. and Japan will be capped at 15%. 

Drug Pricing News 

On September 30, the White House held a press conference with Pfizer CEO Albert Bourla announcing a drug pricing deal: Fact Sheet: President Donald J. Trump Announces First Deal to Bring Most-Favored-Nation Pricing to American Patients. Politico reports that President Trump has struck a multi-pronged, voluntary deal with Pfizer to lower the price of some of its medicines, while giving Pfizer a three-year reprieve from certain tariffs. Pfizer “will participate in a new direct purchasing platform named TrumpRx.gov that will let American patients buy a ‘large majority’ of its primary care treatments and ‘some select specialty brands’ at a discount.” 

Also on September 30, BIO released the following statement on Most Favored Nation policies: 

“For too many years, Americans have subsidized the research and development necessary to bring newer and better medicines to patients around the world. As we saw with defense spending and NATO, the solution is not to weaken a strategically important American industry, but for other countries to pay their fair share.” 

“Today’s announcement in the Oval Office highlights the problems with a drug delivery system where half of the cost of innovative medicines goes to middlemen and distributors, and where the supply chain distorts prices paid by the American people. We support a new framework that addresses the cost of medicines by simplifying the system - and making medicines directly available to patients.” 

“But importing socialist price controls through most-favored nation policies fundamentally does not address the imbalance in international pricing for innovative medicines. MFN will not lower the out-of-pocket prices that most Americans pay for medicines.  Even worse, it will jeopardize the entrepreneurial spirit and deter the capital necessary for a vibrant and essential American biotechnology industry to thrive and may cause most harm to small and midsize biotech companies, which are responsible for discovering more than half of all new treatments.” 

“Without these biotech innovators and a free-market system, we risk slower scientific progress, decreased access to new medicines, compromised national security, fewer American jobs and perhaps most tragically, a diminished hope for those suffering with illness and disease.  There are much better ways to address this problem than MFN.” 

In addition, on September 25, the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) published a notice of a new drug pricing policy proposal called Global Benchmark for Efficient Drug Pricing (GLOBE) Model (CMS-5545), which is currently pending regulatory review. Although there are not many details available yet, this is likely the “latest effort” in the Trump Administration’s “campaign to bring drug prices down to the same level as economically similar countries.” 

BIO has launched a campaign that shines a light on the true drivers of medicine costs in the U.S.—the complex delivery system populated by middlemen, hospital markups, and health insurers that distort what consumers ultimately pay. The campaign aims to communicate the uniquely American problem of drug supply chain markups and offer viable alternative solutions. 

Section 232 Investigation into Medtech 

On September 26, a Notice of Request for Public Comments on Section 232 National Security Investigation of Imports of Personal Protective Equipment, Medical Consumables, and Medical Equipment, Including Devices was published in the Federal Register. According to the notice, the Secretary of Commerce initiated a Section 232 investigation on September 2. The Commerce Department has opened a 21-day comment period for industry stakeholders, with comments due by October 17. 

The Washington Post explains that, “The investigation doesn’t mean that the administration will slap tariffs on these products, but it could lay the groundwork for potentially doing so, if regulators choose to enact them. There are already tariffs on some imported medical equipment, including from actions taken by the Biden administration.” 

AdvaMed, the MedTech Association, released the following statement from President and CEO Scott Whitaker on the Administration’s announcement of its investigation under Section 232 of the Trade Expansion Act into whether the U.S.’s current level of medtech imports has national security implications: 

“Our industry is a uniquely American manufacturing success story and leads the world in medical innovation, providing American hospitals, doctors’ offices, and patients the highest-quality medical technologies in the world. Seventy percent of the medtech that American hospitals and patients rely on are made in America across thousands of manufacturing facilities in all 50 states. Additionally, since 2019 medtech jobs have grown at three times the average manufacturing job rate, thanks in large part to sound tax policies, such as the OBBB, the TCJA, and the medical device tax repeal. We look forward to continuing our work with the Administration, including through the Commerce department’s investigation, to strengthen our already-robust and uniquely American industry. We believe this process will reinforce the fact that U.S. medtech manufacturing is strong and lower tariffs will fuel more manufacturing and job growth in the U.S., which means greater access to lifesaving technologies and lower costs to American hospitals and patients.”  

No SBIR/STTR Extension 

On September 15, the House passed a bipartisan bill (H.R.5100) granting a one-year reauthorization of the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) funding programs, but the legislation has faced political hurdles and did not pass the full Senate before the programs expired on September 30. CBSA and our national partners will continue to advocate for the reauthorization of these critical programs, which provide $4 billion for thousands of small- and medium-sized companies each year. 

“For years, Congress has reauthorized the SBIR program with bipartisan support due to its proven track record of helping innovators,” according to NewYorkBIO CEO Jennifer Hawks Bland, who leads the Council of State Bioscience Associations‘ SBIR working group. “For the sake of our (national) innovation economy and the patients who depend on continued progress, we urge Congress to get this done.”  

“SBIR/STTR awardees as a whole are responsible for 12% of all new FDA-approved drugs,” Bland writes, noting the programs’ effectiveness. “Federal dollars awarded through these programs can [each] lead to over $20 in downstream economic activity,” she says. “Thankfully, the House just passed a bill to reauthorize the program. Now, it’s up to the Senate to get the bill across the finish line by September 30—for the sake of our innovation economy and the patients who depend on continued progress.” 

Closure of the Denver USPTO Regional Office 

Denver’s U.S. Patent and Trademark Office (USPTO) announced it will permanently close its Rocky Mountain Regional Office, located in downtown Denver, though the exact timeline remains unclear. The Denver office, opened in 2014, served patent seekers across nine states and once employed nearly 400 people. While the agency now lists fewer than 30 employees on-site, as many as 185 staff across Colorado could be impacted. Following the closure, patent seekers in the region will need to work remotely with USPTO staff or pay for legal counsel, significantly raising costs for local innovators. Read more in the Denver Business Journal. 

Shutdown Impacts on HHS Operations 

Under the Department of Health and Human Services’ (HHS) FY 2026 contingency plan, agencies like FDA and CMS remain operational but at reduced capacity. The FDA estimates 86% of staff will be retained through carryover user fees and essential public health work, meaning reviews tied to already-paid fees and critical safety functions will continue, but new applications requiring user fees cannot be accepted until the shutdown ends. CMS projects 53% of its staff will continue working, prioritizing provider payments and exempt activities, while certain oversight and certification work will pause or be delayed. The Office of the Inspector General’s health care fraud and abuse activities remain fully operational. Stakeholders should expect slower communications, deferred non-urgent policy work, and selective delays in reviews until appropriations are restored. Read more from Foley Hoag. 

Shutdown Impacts on Antitrust Enforcement 

The federal government shutdown is affecting the DOJ Antitrust Division and the FTC. While HSR filings will still be accepted, reduced staffing (50% at the FTC Bureau of Competition and 60% at DOJ Antitrust) means slower processing, delayed responses, and potential “pull and refile” requests to restart waiting periods. Non-merger investigations, reports, and workshops are largely suspended, and ongoing civil litigation may experience continuances. Parties planning mergers or acquisitions should anticipate longer review times until funding is restored. For more details, see Cooley Alert.