The Regulator

Arizona became the 25th state to sue over a Medicaid work rule that strips coverage from some cancer and HIV patients starting July 31. Arizona Attorney General Kris Mayes joined the multistate lawsuit on July 5, 2026, adding Arizona to a case 24 other states and the District of Columbia filed June 29 in federal court in Massachusetts. At issue is a Centers for Medicare and Medicaid Services interim final rule, published June 3, 2026, that requires most Medicaid expansion adults ages 19 to 64 to log 80 hours a month of work or other community engagement starting January 1, 2027. The rule also narrows who qualifies as medically frail and exempt: instead of accepting a qualifying condition such as cancer, a serious mental illness, or HIV on its own, CMS now requires proof that the condition “significantly impairs” a person’s ability to complete those 80 monthly hours, a second test the states say Congress never wrote into law. Beneficiaries can self-declare medical frailty only through January 2028 and generally just once; after that they need provider certification or medical records. The rule and its comment period both run through July 31, 2026. Confidence: High on the rule’s terms and the lawsuit’s filing; Medium on how many people nationally could lose coverage, a figure not yet quantified in the litigation. Sources: Medicaid Community Engagement Requirement interim final rule, Federal Register, CMS fact sheet on the interim final rule, Massachusetts Attorney General Campbell lawsuit announcement.

Medicare beneficiaries can now get GLP-1 weight-loss drugs for a 50-dollar copay under a demonstration that went live July 1. The Medicare GLP-1 Bridge, run by the CMS Innovation Center, covers Wegovy, Zepbound in its KwikPen formulation, and Foundayo for Part D enrollees who meet clinical criteria, with manufacturers agreeing to a 245-dollar monthly net price the government pays outside the normal Part D benefit structure. The bridge runs through December 31, 2027, does not count toward the Part D deductible or true out-of-pocket costs, and is not available to low-income subsidy enrollees, who get no additional discount under it. It is meant to hold beneficiaries over until CMS’s planned BALANCE model, launched in Medicaid in May 2026, extends similar coverage more broadly. Confidence: High. Source: Medicare GLP-1 Bridge program overview, CMS.

All three major pharmacy benefit managers have now closed out FTC insulin-pricing cases, a settlement wave regulators say will save patients up to 7 billion dollars over a decade. The 8th U.S. Circuit Court of Appeals dismissed CVS Caremark, Express Scripts, and Optum Rx’s countersuit against the Federal Trade Commission on July 1, 2026, one day after the parties jointly asked the court to drop it following settlements. Express Scripts settled first, in February 2026, agreeing to stop steering formularies toward higher-rebate drugs and to delink its compensation from negotiated savings; Caremark proposed matching terms in March, and Optum Rx followed in June, becoming the last of the three to settle. The FTC had accused the PBMs and their group purchasing organizations of rebate practices that inflated insulin list prices. Confidence: High on the dismissal and settlement sequence; Medium on the 7-billion-dollar patient savings estimate, which is the FTC’s own projection tied to the Express Scripts deal. Sources: FTC case docket, Caremark Rx, Zinc Health Services, et al., FTC Express Scripts settlement announcement.

New York’s independent nurse practitioner law lapsed July 1 after Albany adjourned without renewing it, meaning any of the state’s 34,000-plus NPs practicing without a physician tie now face reverting to collaborative agreements. The provision, part of the 2022 Nurse Practitioner Modernization Act, let NPs with more than 3,600 practice hours skip a written collaboration agreement with a physician; it carried a sunset date of July 1, 2026 that lawmakers had planned to remove permanently through companion bills S2360 and A1220. Both bills remained stuck in committee when the legislature adjourned June 5 without a floor vote. The state has not yet issued enforcement guidance on what a compliant collaborative arrangement now requires, leaving practices that dropped physician agreements in reliance on the 2022 law in an undefined compliance gap until lawmakers act or the Department of Health clarifies. Confidence: Medium; the practical enforcement posture during the gap has not been officially stated. Source: S2360, New York State Senate.

FDA approved the first BAFF/APRIL dual inhibitor for a common kidney disease on July 7, giving patients a new option as two competitors also chase the same market. The agency granted accelerated approval to Trutakna (atacicept-vymj) for adults with primary immunoglobulin A nephropathy at risk of disease progression, based on interim data from the ongoing ORIGIN 3 trial showing a 46 percent reduction in proteinuria from baseline and a 42 percent reduction versus placebo at 36 weeks. The drug, a once-weekly self-injection, has not yet been shown to slow long-term kidney function decline, and continued approval depends on confirmatory trial results. Vera Therapeutics has not disclosed a list price. The approval sets up a three-way fight in IgA nephropathy alongside existing therapies from Novartis and Otsuka, a disease that leads to kidney failure in up to 40 percent of patients within 10 to 20 years of diagnosis. Confidence: High on the approval; Low on pricing, which is undisclosed. Source: FDA approves new treatment to reduce proteinuria in adults with primary immunoglobulin A nephropathy.

HHS reopened a data-matching program with the VA that checks whether veterans’ Medicaid applicants already have other coverage, with comments due August 6. CMS published notice July 7, 2026 of a re-established computer matching program between itself and the Department of Veterans Affairs’ Veterans Health Administration, titled verification of eligibility for minimum essential coverage. The program, running an initial 18 months from roughly June 15, 2026 to December 15, 2027, lets the two agencies cross-check VA health coverage data against Medicaid eligibility files. It can renew automatically for another year if neither side changes the terms. The notice does not itself change anyone’s eligibility; it authorizes the ongoing data exchange that state Medicaid agencies use to verify applicants are not double-covered. Confidence: High. Source: Privacy Act of 1974; Matching Program, Federal Register.