Evolving Impacts: How the Government Shutdown and HHS Layoffs Are Shaping Healthcare Access and Innovation

By Kathy Pendergrass

In early October, the federal government entered a shutdown as Congress continued its funding battle, creating widespread uncertainty across healthcare programs and regulatory operations. While our previous update examined short-term effects of the government shutdown on patients and healthcare providers, new developments — particularly staffing reductions within the Department of Health and Human Services (HHS) — are beginning to reveal broader implications for drug development, access and affordability.

Within HHS, the agency announced plans to eliminate approximately 32,460 positions as part of its contingency operations. These cuts represent more than 40% of HHS’s total workforce, signaling a significant operational slowdown across key divisions including the Food and Drug Administration (FDA), National Institutes of Health (NIH), Substance Abuse and Mental Health Services Administration (SAMHSA) and Centers for Medicare & Medicaid Services (CMS). Combined with continued debate over Medicare funding and Affordable Care Act (ACA) subsidies, the disruption is influencing everything from regulatory review timelines to clinical research progress and patient support program strategy.

Broader Operational Impacts Across HHS Agencies

FDA: Delays and Uncertainty in the Drug Review Pipeline

The FDA continues to operate with limited capacity, leading to extended review timelines and slower communication with sponsors. While the agency continues to review existing New Drug Applications (NDAs) and Biologics License Applications (BLAs) supported by previously collected user fees, it has paused acceptance of new submissions requiring payment until funding is restored.

Essential activities — such as issuing safety guidance and ensuring continued access to approved drugs, diagnostics and vaccines — remain active, but decreased staffing introduces uncertainty for life sciences organizations manufacturing therapies currently in development or awaiting approval. The FDA has outlined its contingency operations and guidance for manufacturers in this public update.

If the shutdown continues, these operational delays could cascade through the drug pipeline — slowing new drug launches, delaying new indication approvals and creating a temporary dip in clinical innovation. Life sciences organizations designing drug commercialization and patient support programs may need to plan for delayed timelines while awaiting PDUFA decisions. Those seeking a patient support program partner should also review vendor contracts for flexibility related to PDUFA delays and ensure their partner has scalable staffing models that can flex up or pause based on approval timing.

Additionally, the certification and validation of manufacturing facilities are increasingly delayed due to fewer FDA personnel available to process inspections and clearances. As such, backlogs are expected to grow, and furloughed FDA staff seeking and obtaining alternative employment may extend these delays even after operations resume.

NIH: Research Progress Slows Amid Funding Holds

At NIH, existing clinical trial grants remain funded, but new grant approvals are paused until further notice. Patients enrolled in ongoing studies continue to receive care, though recruitment for new participants is restricted to limited or special circumstances. Thus, those who could have accessed experimental therapies through NIH-funded trials may experience delays in treatment, which could worsen disease progression.

Life sciences organizations may need to reassess development schedules and align internal and external support infrastructures to ensure readiness once delayed clinical studies and regulatory reviews resume.

SAMHSA: Behavioral Health Programs Affected by Funding Cuts

SAMHSA has also faced notable staffing reductions and suspended funding for several community health and behavioral programs. These notable grants historically sustained local mental health and substance-use clinics, many of which provide critical access points for vulnerable patients seeking care and social services.

With local programs facing funding interruptions, patients may encounter new barriers to accessing behavioral health support. Technology-enabled access and affordability solutions — such as electronic benefit verification, prior authorization automation and affordability programs — can help life sciences organizations and healthcare providers maintain continuity of care and streamline access pathways, even as community-based resources are constrained.

Medicare, Medicaid and ACA Subsidy Considerations

Medicare and Medicaid operations continue with active funding, though reduced staffing may slow certain administrative functions, including issuing new cards and data updates. However, another growing concern involves payment delays to healthcare providers and sites of care, which may cause some to temporarily stop accepting Medicare and Medicaid patients. Without assurance of reimbursement, providers and sites of care could be hesitant to take on financial strain, leading to limited access among government-insured patients in certain areas.

Meanwhile, longer-term policy uncertainty looms around the ACA’s enhanced premium tax credits, which are scheduled to expire at the end of 2025 unless extended by Congress. These subsidies limit premium costs based on income, with the federal government covering the remainder. If not renewed, premiums could increase by an estimated 114%, raising financial pressure on millions of Americans.

As costs rise, healthy ACA enrollees who face relatively low healthcare expenses and/or deem themselves healthy enough to forgo health insurance may drop their coverage altogether, while patients who continue their enrollment in ACA plans could find themselves underinsured for certain therapies. These shifts will likely increase patient reliance on patient assistance programs to maintain therapy access. Life sciences organizations will need partners capable of scaling patient assistance program operations, rapidly adapting program eligibility, and navigating complex affordability pathways to prevent therapy disruption.

Life sciences organizations should also prepare for shifting coverage dynamics and consider proactive measures to educate patients and their healthcare providers of their options, sustain continuity of care and safeguard patient access amid changing policy conditions.

AssistRx Solutions

AssistRx’s integrated solutions help life sciences organizations respond dynamically to the unique challenges emerging from the current government shutdown and potential long-term fallout.

Tech-enabled Patient Support Programs

AssistRx’s tech-enabled patient support programs combine tech and talent to deliver advanced access, affordability, adherence and analytics solutions that increase uptake, drive better outcomes and power program performance. Supported by Advanced eServices — such as Advanced Benefit Verification (ABV), eMedical Benefit Verification (eMedBV) and Advanced Prior Authorization (APA) — our expert access and clinical teams empower patients and healthcare providers to achieve optimal treatment outcomes, even as regulatory and political uncertainty impact government programs.

Application: If Medicaid or Medicare payments become delayed, our technology can confirm eligibility for patient assistance programs in real time while our expert teams support coverage continuity through alternative coverage research. Should services offered by government bodies like SAMHSA stall or face delays, our experienced teams leverage our Advanced eServices to rapidly identify access and affordability options for patients and guide them through these transitions until payment cycles and programs resume.

Advanced Insurance Assistance (AIA)

AIA provides hands-on support to help patients and their families find and maintain the best available health coverage — whether through commercial plans, Medicare, Medicaid or the Health Insurance Marketplace options — at no cost to the patient. Our expert patient insurance navigators guide patients through plan comparison, selection and enrollment, helping them identify plans that balance affordability and quality without disrupting continuity of care.

Application: Since the federal funding disruptions began, AIA has become more critical than ever for patients covered by government plans, transitioning to Marketplace plans or impacted by ACA subsidy changes. As competition for limited foundation dollars intensifies, AIA experts help ensure complete and accurate submissions the first time — reducing delays, maximizing approval rates and safeguarding patient access. If patients face financial difficulty due to rising premiums or are rendered underinsured for certain therapies, our teams guide them through their options based on a holistic financial assessment (e.g., all prescribed medications, household income, assets).

Comprehensive Patient Assistance Program Offerings

AssistRx solutions ensure eligible patients continue to access their prescribed therapies through real-time screening and approval through our ePatient Assistance Program (ePAP) offering and rapid free-drug fulfillment through our non-commercial specialty pharmacy. By providing both ePAP and non-commercial specialty pharmacy services, AssistRx delivers efficiencies with native integrations and an expert, single point of contact with a 365-degree view of the program and holistic reporting on program performance.

Application: For patients losing financial support from paused federal programs or those unable to afford medications due to rising premiums and/or coverage delays, AssistRx delivers comprehensive PAPs through a configurable design that rapidly adjusts eligibility criteria and scales support to sustain therapy access. Additionally, leveraging our Advanced eServices, our experts actively monitor our partners’ patient assistance program volume, track competitor therapy patient assistance program activity and nimbly adapt program business rules to maintain access pathways while ensuring our life sciences organization partners are the payer of last resort.

The AssistRx Difference

The combined effects of the government shutdown, HHS staffing reductions and evolving healthcare funding policies underscore how quickly the access and reimbursement landscape can shift. For life sciences organizations, maintaining flexibility and readiness across program design, regulatory planning and patient-support operations will be essential in the months and years ahead.

AssistRx remains dedicated to patient care and is committed to helping life sciences organizations navigate these evolving conditions to ensure patient access through ongoing uncertainty. Through real-time insights, adaptable program models and integrated access and affordability solutions, we help ensure therapy access and patient support continue uninterrupted — even amid policy uncertainty.

Stay informed with the latest updates and guidance by connecting with our team.

Sources:

Office of the Commissioner, (2025, October 31). FDA FY 2026 Lapse in Funding Information. U.S. Food and Drug Administration. https://www.fda.gov/about-fda/fda-fy-2026-lapse-funding-information

Olsen, E. (2025, October 1). ACA premiums could rise 114% if enhanced subsidies lapse: KFF. Healthcare Dive. https://www.healthcaredive.com/news/aca-premiums-rise-114-percent-enhanced-subsidies-lapse-kff/761615/

Osada, Y. (2025, October 23). FDA operations during the U.S. Government Shutdown. BLA Regulatory. https://bla-regulatory.com/fda-operations-us-government-shutdown-2025/

Swenson, A., & Aleccia, J. (2025, October 14). Federal employees in Mental Health and Disease Control were among targets in weekend firings. Federal News Network. https://federalnewsnetwork.com/government-shutdown/2025/10/federal-employees-in-mental-health-and-disease-control-were-among-targets-in-weekend-firings/

Van Alstin, C. (2025, October 1). With the Federal Government shut down, HHS plans to furlough 40% of its workforce. HealthExec. https://healthexec.com/topics/healthcare-management/healthcare-policy/federal-government-shut-down-hhs-plans-furlough-40-its-workforce