| The Pentagon has initiated an agreement with the National Institutes of Health that could give the Defense Department access to some of the health agency’s funding. Now, it could become an unexpected flashpoint in the congressional appropriations process. According to people familiar with the agreement, no money has been transferred, and the framework is intended to finance future collaborative research projects. But it has alarmed patient advocates and Democratic appropriators, who fear it could allow money Congress set aside for medical research to be redirected toward Pentagon priorities. “This outrageous agreement must be terminated immediately,” said Senate Appropriations Committee Vice Chair Patty Murray (D-Washington). In a release, Murray’s office said the agreement was “not proactively shared with Congress” and that it allows the Pentagon “to potentially tap billions of dollars in funding that Congress provided specifically for NIH’s National Institute of Allergy and Infectious Diseases (NIAID) in order to fund DOD initiatives instead.” A spokesperson for NIH tells me that the agreement is a “research partnership” that allows the two agencies “to collaborate on research projects to benefit both the public and members of the military.” “There are many emerging health problems — such as biological, radiological, or chemical challenges — that affect both civilian and military populations. It makes sense for the NIH and [the Department of Defense] to share expertise and partner on research in these areas,” the spokesperson said in an emailed statement. “This partnership will only take place on a project-by-project basis, and all research will be within the scope of NIH’s mission.” No money will be transferred outside of those research projects, the spokesperson added. → Still, the House’s top Democratic appropriator is skeptical. “DoD already has programs, funded by Congress, to research and develop medical countermeasures to chemical, biological, and nuclear threats, and does not need NIH funding to do so,” said Rep. Rosa DeLauro (Connecticut), the ranking member of the House Appropriations Committee. “The administration must provide Congress with a full accounting of how this interagency agreement was developed and exactly how much taxpayer money it is trying to transfer to DoD,” DeLauro said, pointing to the rising cost of the Trump administration’s war with Iran. A GOP aide, who spoke on the condition of anonymity to talk about internal discussions, told me that lawmakers are looking into the matter, but so far have learned that the agreement establishes a collaboration framework for fiscal 2027. The agreement does not specify which projects could be pursued or how much money could be involved, in part because Congress has not yet finalized fiscal 2027 funding. (NIAID, which is part of NIH, has an annual budget of more than $6 billion.) People familiar with the agreement said NIH would have veto power over project funding, and could decline to transfer money to the Pentagon. But one of the people, a Democratic staffer, said that is not a powerful enough safeguard. “NIH needs to agree to the projects, but NIH works for the Trump administration. We cannot possibly think that NIH would have the power under this administration to say no to DoD,” the staffer said. → Patient advocacy groups also want lawmakers to investigate the arrangement. “Congressionally appropriated funding for NIH research to save lives and improve the health of Americans should not be treated like a slush fund,” said Erika Sward, executive director of United for Cures. House GOP leadership on Thursday announced that the chamber will no longer be in session during the final two weeks of September, giving members more time to return to their districts and campaign. Both chambers are out for essentially all of October as well, leaving even fewer days on the legislative calendar to funnel preferred policies through the committee process as lawmakers are expected to cobble together a big spending package at the end of the year. Then, after the November election, there are fewer than 20 legislative days before government funding is set to expire on Dec. 12. So, I want to take a step back and look at the landscape. → Many of the policies to watch largely revolve around lawmakers’ desire to try and make health care more affordable for Americans. This includes dueling House and Senate bills that aim to bring more pricing transparency to health insurance and hospital offerings. Congress has moved bills that aim to make biosimilars cheaper to develop and easier to substitute, in an effort to bolster competition and, ultimately, lower the cost of expensive biologic drugs. There’s also been a sudden burst of activity around legislation that would cap out-of-pocket insulin costs at $35 a month for people with private insurance. A bipartisan Senate version advanced out of committee this summer, and a bipartisan group of House lawmakers on Thursday introduced a companion bill. → But don’t forget: Any year-end package that shores up the federal government’s budget will also deal with the annual “health care” extenders — including funding for the Community Health Center Program, which represents about 70 percent of federal funding for health centers, and whether to extend a delay on Medicare reimbursement cuts for lab services. How much — and how ambitious — lawmakers will be on policy depends on the outcome of November’s midterm elections. If Democrats win back control of one or both chambers, they may feel less incentivized to make deals with their GOP counterparts and hold out for the brand-new legislative session. Which brings me to a scoopy piece from The Post’s Jarrell Dillard and Rachel Roubein about how Democrats have already set their sights on 2027. And lawmakers have got ambitious plans. Here are the key things under discussion among House Democrats: - A major expansion of Medicare coverage to also include dental, vision and hearing aid benefits, in addition to lowering the age of eligibility for the program
- Adding other government-run insurance options for Americans, such as a government plan to compete with private health insurance and public health care coverage for all young people until the age of 26
- Expanding the number of medications subject to Medicare’s drug-negotiation program set up by the Inflation Reduction Act
- Using a crackdown on federal payments to Medicare Advantage plans, the privately run version of Medicare, as a way to pay for some of the proposals.
There is a divide among progressives and moderates in the Democratic Party about how far to go on some of these policies, so the proposals are likely to undergo debate. But efforts are already underway to resolve differences on policy. The House Democrats’ Cost of Living Healthcare Working Group, established by the party’s leadership, features Reps. Alexandria Ocasio-Cortez (New York), a progressive Democrat, and Terri Sewell (Alabama), a member of the centrist New Democrat Coalition, playing a leading role. Democrats have also targeted reversing the Medicaid cuts included in the GOP domestic policy law, the One Big Beautiful Bill, enacted last year, and reviving the enhanced Affordable Care Act subsidies that expired at the end of 2025. That’s a major area of consensus for Democrats, and two policies that could be quickly introduced under a potential Democratic majority. However, even if Democrats win back both chambers of Congress, President Donald Trump is likely to veto any proposals that advance on Capitol Hill. All of them are also likely to face intense scrutiny from health industry players. Still, next year could prove to be a formative year for Democrats’ health policy development as the 2028 presidential election approaches. ICYMI: My WP Intelligence colleague Benjamin Guggenheim covered a crucial House Veterans’ Affairs Committee hearing this week, where there was bipartisan criticism of Oracle’s work modernizing the health records system at the Department of Veterans Affairs. What happened: The VA awarded Cerner — later acquired by Oracle in 2022 — $10 billion for the project in 2018. An August award notice shows the agency has since given Oracle another $17 billion to complete it. - The VA’s Oracle electronic health records rollout has been plagued by delays and technical problems. By 2020, just six of 170 medical centers had launched the system — and the VA paused the project in 2023 amid outages and other issues.
- Earlier this year, the agency resumed deployments and has brought the system to 11 hospitals so far in 2026, with another two planned for October. The VA wants the systems at all VA sites by 2031, but it’s unclear whether the current funding will be enough to outfit more than 100 medical centers and clinics remaining.
- Groups representing nurses and federal employees told lawmakers the system has suffered from frequent outages and incomplete functions — while criticizing the VA’s training of health professionals, which they argue has hampered veterans’ access to health care.
“This has been the biggest boondoggle I have ever seen,” House Veterans’ Affairs Chair Mike Bost (R-Illinois) said at the hearing. “And the frustration we feel is beyond measure.” → Oracle’s absence from the hearing was palpable. The committee also voted 19-0 to subpoena Oracle co-founder Larry Ellison after the company declined an invitation to testify. Oracle defended the project, pointing to recent deployments in Indiana, Ohio and Michigan. “The recent deployments provide important evidence of the progress the program has made,” Seema Verma, executive vice president and general manager of Oracle Health and Life Sciences, and former leader of the Centers for Medicare and Medicaid Services during the first Trump administration, wrote in a statement for the record. Zoom out: The blowup comes as the venture capital firms and tech companies are pushing to disrupt a federal contracting system they argue is wasteful and incentivized to be risk-averse. One tool getting more attention is the Trump administration’s use of the Other Transaction Agreement (OTA), a special authority that allows agencies to bypass some traditional procurement rules. The approach has helped fuel a wave of tech companies competing for government contracts — particularly with the Pentagon — and could increasingly shape how Washington purchases technology. “HHS Cancels Infant Mortality, Postpartum Grants to Focus on Sperm Counts, ED,” report Paige Winfield Cunningham and Eric Katz at NOTUS. “The Cancer Vaccine Gold Rush Has Begun. So Has the Race for Picks and Shovels.,” the Wall Street Journal’s David Wainer reports. “AI Speeds Drug Ideas But Creates Costly Testing Bottlenecks,” writes Sonja Wind at Bloomberg. “US refusals of crucial newborn vitamin spike, raising risk of dangerous bleeding,” Julie Steenhuysen reports at Reuters.
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