January 21, 2026

The need-to-know this morning

Johnson & Johnson kicked off the fourth-quarter earnings season with in-line profits and revenue slightly higher than the consensus estimate. For 2026, J&J guided to an earnings range that brackets consensus and a better-than-expected revenue forecast. You want actual numbers? Check them out here.

politics

PBM reform revived in new health care bill

Congress has reached a deal on several health care policies that are part of a sweeping bill to fund the Health and Human Services Department. Many of these proposals were part of a deal Congress struck in December 2024 that quickly fell apart after then President-elect Trump and Elon Musk attacked it.

Notably, the bill targets pharmacy benefit managers, commonly known as drug middlemen. Currently, PBMs use the prices of drugs to determine the fees they charge private insurers that administer Medicare plans, but the bill would prohibit them from doing that.

It would also ban PBMs from charging Medicaid more than they pay for drugs, a practice called spread pricing. And in the commercial market, the bill would require PBMs to pass through 100% of rebates to employer-sponsored insurance plans.

These policies aren't final, though. Both the Senate and the House still must vote on the legislation, and details could change before then.

Read more from STAT's John Wilkerson and Daniel Payne.

CANCER

Congress also aims to give Grail a win

From STAT's Matthew Herper: The bill will deliver a win to one company: Grail, which sells a blood test aimed at detecting multiple types of cancers.

The company’s test is already available, but in order to succeed Grail must leap multiple hurdles, including receiving approval from the FDA and delivering data that convince skeptics of the test's utility for screening. Another key step: The company needs Congress to pass a law so that Medicare can cover the test.

Under the bill, Medicare coverage for “multi-cancer early detection” tests like Grail’s would be phased in, starting in 2029 with 65-year-olds and increasing by one year of age each subsequent year.

This is the latest development in the firm's dramatic history — from its original spinout from DNA sequencing firm Illumina with funding from investors including Jeff Bezos and Bill Gates to Illumina’s failed effort to buy it for $9 billion. The company’s shares rose 448% over the past year — and were up nearly 5% yesterday.

research

New bill increases NIH funding, rebuking Trump plan

The new health care bill also increases funding for the NIH, in a near-total rebuke of Trump's proposal to downsize the agency.

Congress set NIH's budget to $48.7 billion, a $415 million increase from the previous fiscal year. The bill also keeps language that would prevent the Trump administration from cutting support for research overhead.

The bill does contain a win for Trump, though. It allows the government to continue to use a new funding strategy for multiyear grants that resulted in several thousand fewer awards for scientists in 2025.

Read more from STAT's Anil Oza and Jonathan Wosen.

pharma

Novo strikes deal for diabetes cell therapies

Novo Nordisk said yesterday it's reached a deal with Canada-based Aspect Biosystems to develop potentially curative medicines for diabetes.

Novo, which was founded to make medicines for diabetes, had eliminated its cell therapy R&D unit last year when the company underwent a massive reorganization under its new CEO. But under the partnership, Novo will provide investment and research funding to Aspect, which has acquired rights to Novo's cell engineering technologies and will lead development and commercialization.

Meanwhile, Novo has defined rights to expand its role in later-stage development and commercialization, and it's eligible to receive royalties and milestone payments on future product sales.

Aspect is working to develop an islet replacement therapy for type 1 diabetes that doesn't require chronic immune suppression.

The companies did not disclose financial terms of the deal.

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