JONES DAY LIFE SCIENCES NEWSLETTER – POLICY UPDATES

Executive Orders and Policy Updates

Over the last few months, governmental agencies in the United States and Europe have released a number of policy and regulatory actions that will impact the life sciences industry. There have been developments in several areas, including drug pricing, artificial intelligence, and medical device reform. Some of the actions below remain the subject of ongoing litigation.

• White House Issues U.S. Government Policy for Stopping High-Risk Life Sciences Research: On July 20, 2026, the White House Office of Science and Technology Policy issued the "United States Government Policy for Stopping High-Risk Life Sciences Research," as directed by Executive Order 14292. The policy defines two categories of high-risk life sciences research—dangerous gain-of-function ("DGOF") research and international research of concern ("IROC")—and establishes federal funding limitations and a compliance framework. The policy notes that "additional statutory action is required to ensure all DGOF research and funding of DGOF from all U.S. entities are stopped," and an interagency working group will explore additional regulatory and legislative actions to manage risks associated with research with DGOF potential, including when privately funded.
• United Kingdom Life Sciences Sector Plan Published: On July 9, 2026, the UK government published its Life Sciences Sector Plan, backed by over £2 billion of government funding, to position the UK as the leading life sciences economy in Europe by 2030 and the third globally by 2035. The plan includes commitments to deliver the Medicines and Healthcare products Regulatory Agency's ("MHRA") digital transformation, create a reformed medical device regulatory framework with an innovation-friendly domestic route to UKCA certification, introduce an International Reliance Framework to Parliament by fall 2026, launch the Health Data Research Service (backed by up to £600 million alongside the Wellcome Trust), and reform the Health Service (Control of Patient Information, COPI) Regulations of 2002 by end of 2026. The plan also commits up to £520 million through the Life Sciences Innovative Manufacturing Fund and introduces a novel accountability framework with named senior responsible officers for each action and an annual Implementation Update.
• Executive Proclamation Imposes New Tariffs on Pharmaceuticals: On April 2, 2026, President Trump issued a proclamation, "Adjusting Imports of Pharmaceuticals and Pharmaceutical Ingredients Into the United States," under section 232 of the Trade Expansion Act of 1962, which imposes tariffs on imports of patented pharmaceuticals and associated active pharmaceutical ingredients. The proclamation imposes a 100% ad valorem duty rate for certain patented pharmaceuticals and associated ingredients, with the potential for reduced rates for companies with approved onshoring plans (20%), products from trade-deal jurisdictions such as the European Union, Japan, and the Republic of Korea (15%), and a zero rate for orphan drugs, certain specialty products, and companies with most-favored-nation pricing and onshoring agreements. On September 23, 2026, the Department of Commerce issued guidance defining products potentially eligible for a 0% tariff, identifying qualifying jurisdictions, and establishing a process for manufacturers to seek zero-tariff treatment based on an "urgent U.S. health need."

Artificial Intelligence and Digital Health

• United Kingdom National Commission on AI in Healthcare Publishes Recommendations: The National Commission into the Regulation of AI in Healthcare published its recommendations on September 10, 2026, setting out 44 proposals across three areas—proportionate lifecycle regulation, system-wide responsibility, and trust and transparency—for how the UK should regulate AI used in patient care. The Commission's central conclusion is that the regulation and assurance of AI in healthcare must become more proportionate, lifecycle-based, and system-wide, with continuous monitoring of AI-enabled products once deployed. The recommendations call for risk-and-benefit-based regulation, stronger use of real-world evidence, and flexible mechanisms for updating regulatory approaches as the technology evolves. These recommendations are expected to inform the MHRA's forthcoming regulatory framework for AI in healthcare, which the Life Sciences Sector Plan committed to publishing in 2026.
• European Union Amends the AI Act Via Digital Omnibus: On July 27, 2026, the new European Union law aiming to streamline and simplify certain rules regarding AI entered into force. This new law, often called the "Digital Omnibus," is part of the European Union's broader simplification agenda, which encompasses a series of legislative packages intended to simplify existing EU rules to ease regulatory burdens for businesses across areas including digital regulation and AI. Among other things, the new law delayed the application of high-risk rules from August 2, 2026, to December 2, 2027, for standalone high-risk AI systems; and to August 2, 2028, for high-risk AI systems embedded in products. With regard to the interplay of AI rules with sectoral legislation in sectors such as medical devices, the law provides a mechanism to resolve situations in which sectoral law has AI-specific requirements that are similar to those in the AI Act, by limiting the latter's application in those specific cases through implementing acts. The law also requires the Commission to provide guidance to assist economic operators of high-risk AI systems covered by sectoral harmonization legislation in complying with the high-risk requirements of the AI Act in a manner that minimizes the compliance burden.
• CMS Establishes New Office of Health Technology and Products: On June 11, 2026, the Centers for Medicare & Medicaid Services ("CMS") and the U.S. Department of Health and Human Services ("HHS") announced the establishment of the CMS Office of Health Technology and Products ("OHTP"). OHTP's functions will broadly cover technology and digital product strategy, information technology, and cybersecurity, including specific functions such as leading enterprise strategy and implementation of AI across CMS digital products and platforms, advising the CMS Administrator and senior leadership on AI, and advancing the use of AI to improve service delivery to patients.
• President Trump Signs Executive Order Seeking to Target AI Security Considerations: On June 2, 2026, President Trump issued Executive Order 14409, "Promoting Advanced Artificial Intelligence Innovation and Security," which aims to address the national security considerations that advanced AI capabilities introduce. Among other topics, the order contemplates collaboration between the federal government and AI developers, including determining whether models under development should meet the definition of a "covered frontier model," selecting "trusted partners" who will receive early access to covered frontier models, and providing the federal government with early access to covered frontier models for a period of up to 30 days before planned release of the models to trusted partners.
• European Commission Publishes New Guidance on High-Risk AI Systems: The EU Artificial Intelligence Act (the "AI Act"), adopted in 2024, creates a risk-based framework for AI systems in the European Union. The most demanding obligations apply to systems treated as "high risk." On May 19, 2026, the European Commission Draft Guidelines on the Classification of High-Risk AI Systems explaining how companies should decide whether an AI system falls into that high-risk category. The guidance is not legally binding, but it reflects the European Commission's interpretation and is expected to influence how regulators assess AI systems.

Drug Development and Pricing

• CMS Finalizes GLOBE Model: On October 2, 2026, CMS issued the final rule for the Global Benchmark for Efficient Drug Pricing ("GLOBE") Model, a mandatory CMS Innovation Center model that tests most-favored-nation ("MFN") methodologies for calculating Part B drug inflation rebates for certain separately payable Part B drugs and biologicals. The GLOBE Model is slated to launch on January 1, 2027, with a five-year performance period beginning April 1, 2027. For additional details, see our GLOBE Model Alert.
• CMS Announces GENEROUS Model Updates: On September 18, 2026, CMS announced that all 50 states, plus the District of Columbia and Puerto Rico, have applied to participate in the "GENErating Cost Reductions for U.S. Medicaid" ("GENEROUS") Model, a CMS Innovation Center initiative providing MFN pricing for certain prescription drugs to Medicaid enrollees. Under the model, participating manufacturers will make covered outpatient drugs available at MFN pricing to participating state Medicaid programs, and states will invoice participating manufacturers for supplemental rebates to effectuate international prices. CMS will monitor pricing accuracy and share in rebates with states via a reduction in the federal share of Medicaid payments. The GENEROUS Model initially launched in January 2026 and runs for five years.
• HRSA Announces Revised 340B Rebate Model Pilot Program: On July 31, 2026, the Health Resources and Services Administration ("HRSA") announced a revised 340B Rebate Model Pilot Program, providing qualifying drug manufacturers with a voluntary pathway to provide the 340B ceiling price to covered entities through rebates rather than upfront discounts. The revised model is limited to active selected drugs on the CMS Medicare Drug Price Negotiation Selected Drug List for initial price applicability years 2026 and 2027. Participation is also voluntary for manufacturers, who were required to submit rebate plans to HRSA by August 24, 2026. On October 1, 2026, HRSA approved the rebate plans of 10 manufacturers, which are slated to become effective January 1, 2027.
• FDA Proposes Rule to Modernize Drug Manufacturing Registration: On July 13, 2026, FDA proposed a rule to amend the drug establishment registration and drug listing requirements with respect to establishments engaged in distributed manufacturing. The rule, if finalized, would provide a pathway for a distributed manufacturing establishment that manufactures drugs at multiple physical locations to register as a single drug manufacturing establishment. Additionally, the proposed rule would clarify that drug establishment registration and drug listing requirements "apply to each foreign establishment that manufactures, repacks, relabels, or salvages a drug" imported or offered for import into the United States, regardless of whether the drug undergoes further manufacture or processing at a "separate foreign establishment" before importation.
• FDA Issues Revised Draft Guidance on Demonstrating Substantial Evidence of Effectiveness for Human Drug and Biological Products: On June 24, 2026, FDA issued revised draft guidance clarifying the circumstances under which developers can rely on "one scientifically rigorous adequate and well-controlled clinical investigation with confirmatory evidence" to support drug approvals. The draft guidance also discusses regulatory flexibility that may be warranted in certain clinical circumstances and outlines safety considerations relevant to demonstrating effectiveness.
• FDA Issues Revised Draft Guidance on Master Protocols for Drug and Biological Product Development: On June 24, 2026, FDA issued revised draft guidance titled "Master Protocols for Drug and Biological Product Development." The draft guidance revises and replaces the previous draft guidance of the same name issued December 21, 2023, and provides recommendations on the design and analysis of trials conducted under a master protocol, including basket trials (evaluating a drug across multiple diseases or subtypes), umbrella trials, and platform trials. FDA states that well-designed trials using master protocols can accelerate drug development in comparison to stand-alone trials under separate protocols by maximizing information obtained from the research effort and leveraging shared protocol elements, shared infrastructure, and shared oversight.
• HHS Launches Operation TrialBlazer to Accelerate Clinical Development: On June 22, 2026, HHS announced Operation TrialBlazer, a coordinated initiative among various HHS operating divisions, including the Food and Drug Administration ("FDA") and the National Institutes of Health, to modernize and accelerate clinical drug development by reducing unnecessary regulatory burden. The initiative includes, among other things, an Expedited Investigational New Drug (IND) Pilot Program that enlists Qualified Research Institutions to collaborate with sponsors on first-in-human trial submissions (the program began accepting applications on September 15); use of computational tools for dose selection; and potential integration between certified electronic health records ("EHRs") and the ClinicalTrials.gov API to promote patient eligibility screening during routine care.
• CMS Issues Proposed Rule to Establish Permanent Framework for the Medicare Drug Price Negotiation Program: On June 16, 2026, CMS proposed a rule to establish a permanent regulatory framework for the Medicare Drug Price Negotiation Program, transitioning the program from annual guidance-based implementation to a codified structure beginning with initial price applicability year 2029. The rule would allow CMS to select up to 20 additional negotiation-eligible drugs per cycle under Part D and Part B, implement a temporary pricing floor for small biotech drugs, and codify formulary inclusion and "negotiated price" requirements for Part D plans. The proposal also includes a narrow modification to the criteria for identifying qualifying single-source drugs to address program integrity concerns related to certain new formulations.
• GUARD Model Final Rule Submitted to OMB for Review: On June 15, 2026, the final rule for the Guarding U.S. Medicare Against Rising Drug Costs ("GUARD") Model was submitted to the Office of Management and Budget ("OMB") for final review. GUARD is a mandatory CMS Innovation Center model that would assess rebates on certain drugs under Medicare Part D if U.S. prices exceed those in economically comparable countries.
• European Commission Publishes Analysis Underpinning the Biotech Act and European Parliament Advances Legislative Review: On May 26, 2026, the European Commission published a Staff Working Document containing the analysis underpinning the proposed European Biotech Act. The Biotech Act, proposed in December 2025, aims to strengthen Europe's health biotechnology and biomanufacturing sectors by simplifying regulatory processes for clinical trials and cell and gene therapies, promoting innovation, easing access to funding for startups and small- and medium-sized enterprises ("SMEs"), facilitating the use of AI and digital solutions, and decreasing time-to-market. On June 30, 2026, the European Parliament published its amendments to the proposed Biotech Act. A second, broader European Biotech Act focused on industrial biotechnologies beyond the health sector is expected later in 2026.
• European Parliament and Council Reach Political Agreement on Critical Medicines Act: On May 12, 2026, the European Parliament and the Council reached a political agreement on the Critical Medicines Act ("CMA"). The CMA aims to strengthen the resilience of Europe's health sector by preventing medicine shortages and improving the security of supply of critical medicines across the European Union. Key elements include obligations for contracting authorities to diversify and incentivize resilience in medicine supply chains during public procurement, with a preference for EU manufacturing in cases of high dependency on third countries; the creation of Strategic Projects to boost EU manufacturing capacity for critical medicines and active substances through easier access to funding and fast-tracked administrative support; harmonized rules on contingency stocks to prevent negative spillover effects on other Member States; and the availability of collaborative procurement to address availability and access disparities. The political agreement is subject to formal approval by the European Parliament and the Council.
• United Kingdom Amends Clinical Trials Regulations: On April 28, 2026, amendments to the Medicines for Human Use (Clinical Trials) Regulations 2004, together with the implementation of ICH E6(R3) Good Clinical Practice ("GCP"), came into force across England, Wales, Scotland, and Northern Ireland. Key measures include: (i) embedding the combined review process (coordinated MHRA and Research Ethics Committee ("REC") approval within 30 calendar days) as the standard route, with a new 14-day notification scheme for lower-risk trials using authorized medicines within licensed indications; (ii) introducing mandatory clinical trial registration on a public registry, publication of results within 12 months of completion, and provision of lay summaries to participants; (iii) converting previous policy expectations into enforceable legal obligations; (iv) simplifying safety reporting by removing duplicative SUSAR and annual safety reporting to both the MHRA and RECs (now MHRA only); and (v) embedding quality-by-design and risk-proportional monitoring principles through the updated ICH-GCP E6(R3) guidelines. Trials submitted before April 28, 2026, will generally continue under existing regulations for certain purposes, although most GCP conduct changes apply to all clinical trials of an investigational medicinal product ("CTIMPs") from that date. The MHRA and HRA have published comprehensive guidance to support the transition.
• CMS Proposes Extending Prior Authorization Rule to Cover Drugs: On April 10, 2026, CMS released a proposed rule (CMS-0062-P) extending its interoperability and prior authorization framework to cover prescription drugs for the first time. The proposed rule builds on the 2020 CMS Interoperability and Patient Access final rule and the 2024 CMS Interoperability and Prior Authorization final rule, which required Medicare Advantage plans, state Medicaid and Children's Health Insurance Program ("CHIP") programs, Medicaid and CHIP managed care plans, and Affordable Care Act ("ACA") plans to implement Patient Access, Provider Directory, Provider Access, Payer-to-Payer, and Prior Authorization Application Programming Interfaces. The proposed rule would require Medicare Advantage organizations, state Medicaid and CHIP programs, Medicaid and CHIP managed care plans, and Qualified Health Plan issuers on the Federally-facilitated Exchanges to support electronic prior authorization for drugs, make prior authorization decisions within shortened and aligned timeframes, and publicly report prior authorization metrics for drugs, with proposed compliance dates beginning October 1, 2027.

Medical Devices

• Four Modules of the European Database on Medical Devices (EUDAMED) Become Mandatory: As of May 28, 2026, the following four modules of EUDAMED, the European Database on Medical Devices established by Regulation (EU) 2017/745 (MDR) and Regulation (EU) 2017/746 (IVDR), became mandatory to use: (i) Actor Registration; (ii) UDI/Device Registration; (iii) Notified Bodies and Certificates; and (iv) Market Surveillance. The two remaining modules (Post-Market Surveillance and Vigilance, and Clinical Investigation and Performance Studies) remain under development.
• United Kingdom's MHRA Publishes Medical Devices Reform Draft: The MHRA published the draft Medical Devices (Amendment) Regulations 2026 on May 8, 2026, setting out new pre-market regulatory requirements for medical devices and in vitro diagnostic devices entering the GB market. Key reforms include an International Reliance scheme for devices authorized in the United States, Canada, and Australia; alignment of IVD classification with IMDRF standards; mandatory Unique Device Identifiers; a Predetermined Change Control Plan pathway for software medical devices; and explicit cybersecurity obligations. A stakeholder impact survey launched alongside the draft regulations closed on June 19, 2026. Adoption is anticipated in late 2026, with provisions expected to enter into force in June 2027 and the International Reliance Pathway from mid-2028. Separately, the MHRA consulted on indefinite recognition of CE-marked devices.

• CMS and FDA Announce RAPID Coverage Pathway to Accelerate Patient Access to Breakthrough Medical Devices: Following an initial announcement by CMS and FDA on April 23, 2026, CMS issued a proposed procedural notice on August 7, 2026, establishing the Regulatory Alignment for Predictable and Immediate Device (RAPID) Coverage Pathway, designed to align CMS and FDA evidence expectations earlier in device development. For devices successfully completing the pathway, CMS would issue a proposed National Coverage Determination ("NCD") on the same day as FDA market authorization, with a goal of finalizing coverage approximately 60 days after authorization for Class II devices and 90 days for Class III devices.

• United Kingdom and United States Announce Regulatory Cooperation on Medical Devices: On April 2, 2026, the MHRA and FDA announcedstrengthened cooperation on medical device regulation, as part of a broader S.–UK pharmaceutical partnership that removes tariffs on UK medicines exports and encourages earlier UK launches of new treatments. The two regulators will work together on options to improve and align medical device regulations, including exploring future mutual recognition mechanisms to reduce duplication for manufacturers and streamline approval processes, while maintaining independent decision-making and strict safety standards. Technical work between the MHRA and FDA is expected to continue over the coming months to assess opportunities for closer alignment.