D.C. Circuit Affirms Broad Reach of the Anti-Kickback Statute, Impacting Manufacturer-Sponsored Patient Assistance Programs, and Mandates Changes to HHS Rules Governing the Advisory Opinion Process

On September 4, 2026, the U.S. Court of Appeals for the D.C. Circuit issued a significant opinion in Vertex Pharmaceuticals, Inc. v. U.S. Dep’t of Health and Human Services, addressing the scope of the federal Anti-Kickback Statute (“AKS”) and the beneficiary inducement prohibition under the Civil Monetary Penalties Law (“CMPL”) in the context of a pharmaceutical patient assistance program.¹

In a three-part ruling, the court (1) affirmed a determination by the Department of Health and Human Services (HHS) that Vertex’s Fertility Support Program (which offered up to $70,000 in financial support for fertility services to patients prescribed Vertex’s gene therapy, Casgevy) (the “Program”) would violate the AKS; (2) reversed HHS’s conclusion that the Program would violate the CMPL, finding the agency’s reasoning arbitrary and capricious; and (3) struck down HHS regulations that effectively tolled the statutory 60-day deadline for issuing advisory opinions. The D.C. Circuit now joins the Second and Fourth Circuits in adopting a broader construction of the meaning of “remuneration” under the AKS.

Background on the AKS and CMPL

As relevant here, the AKS criminalizes “knowingly and willfully offer[ing] or pay[ing] any remuneration (including any kickback, bribe, or rebate) …to any person to induce such person …to purchase” a federally reimbursable item or service.² The law was enacted to prevent payments from influencing medical decision-making and inflating federal healthcare costs. The AKS also provides for a number of statutory exceptions and regulatory safe harbors for certain activities to ensure the broad reach of the law did not ensnare certain activities and subject them to criminal enforcement.

Similarly, the CMPL imposes civil penalties for offering or transferring remuneration to a Medicare or Medicaid beneficiary that a person “knows or should know is likely to influence such individual to order or receive from a particular provider, practitioner, or supplier any item or service for which payment may be made under government healthcare programs.³ The CMPL has a “Promotes Access to Care Exception” which protects remuneration that “promotes access to care and poses a low risk of harm to patients and Federal health care programs.”⁴

Parties may seek advisory opinions from HHS on whether proposed activities violate the AKS or CMPL. The opinion is only binding as to HHS and the requesting party, and the governing statute requires that HHS issue an opinion within 60 days of receiving a party’s request for such an opinion.⁵

Factual Background and Procedural History of the Vertex Case

Biotechnology company Vertex developed Casgevy, a novel gene therapy for sickle cell disease and transfusion-dependent beta-thalassemia, two hereditary blood disorders. Because treatment requires intensive chemotherapy that can impair fertility, Vertex expected fertility concerns and treatment costs—often tens of thousands of dollars—to deter eligible patients.

Recognizing these concerns, Vertex created the Program, offering up to $70,000 for fertility services to Casgevy patients. The Program covered privately insured patients. Vertex’s Program specifically excluded patients with federal healthcare coverage.⁶

In June of 2023, Vertex requested an HHS advisory opinion confirming that inclusion of federally insured patients in the Program would not violate the AKS or CMPL or, alternatively, would satisfy the CMPL’s Promotes Access to Care Exception. HHS sought additional information and did not issue an opinion for more than a year. After Vertex sued in July 2024 to compel a decision and challenge HHS’s timing regulations,⁷ HHS issued an unfavorable opinion later that month, concluding that the Program would violate both statutes and finding the CMPL exception did not apply because HHS “lack[ed] data.”⁸

On March 31, 2025, the district court granted summary judgment to HHS on all issues.⁹ Vertex appealed the decision.

The D.C. Circuit’s Opinion on Appeal

On September 4, 2026, the D.C. Circuit Court of Appeals issued an opinion with three key holdings.

First, the court affirmed HHS’s conclusion that the Program would violate the AKS. The central dispute was whether the statutory terms “induce” and “remuneration” should be read broadly or narrowly. On “induce,” the court held that the AKS uses the term’s ordinary meaning: “to influence or prevail on a person.” With respect to “remuneration,” the court also adopted the broad meaning: anything of value, including payments or services below fair market value. Applying this broad language, the court held that $70,000 in fertility support constitutes remuneration intended to induce patients to choose Casgevy, as opposed to other treatments stating: “the entire point of the Program is to encourage patients to choose Casgevy, as opposed to other treatments, by promising to pay for fertility services that may be necessary to address the treatment’s side effects.”¹⁰

Second, the court reversed HHS’s determination that the Program would violate the CMPL, finding the agency’s reasoning in the issued advisory opinion to be arbitrary and capricious. HHS concluded the Program would not qualify for the Promotes Access to Care Exception, because HHS lacked data to determine whether the Program improved patient access to Casgevy without offering any discussion. The court found this single-sentence conclusion inadequate, citing to evidence submitted by Vertex indicating that fertility risks and treatment costs deter patients from pursuing Casgevy, CMS guidance identifying fertility preservation as an access barrier, and program controls limiting abuse. In addition, the court found HHS’s failure to meaningfully address the application of the Promotes Access to Care Exception to be “inconsistent with HHS’s statutory obligation and unreasonable.”¹¹ The court remanded for reconsideration.

Finally, the court emphasized that HHS is statutorily required to issue advisory opinions no later than 60 days after the request is received. HHS regulations instead started the clock at “formal acceptance” and tolled it when the agency requested additional information. The court held that HHS “has no authority to pause the clock and grant itself more time,”¹² setting aside the challenged tolling provisions.

Key Takeaways

The D.C. Circuit’s long-awaited opinion in Vertex imparts several key takeaways upon the industry and health law practitioners:

• The AKS’s broad reach is now confirmed by three circuits. The D.C. Circuit joins the Second and Fourth Circuits in reading “induce” as influence and “remuneration” as anything of value, not merely corrupt payments.
  
  
• The decision aligns with previous OIG advisory opinions and case law indicating that manufacturer-sponsored patient assistance programs face heightened scrutiny and that programs that subsidize side-effect costs or other treatment-related expenses to encourage use of a specific product may constitute prohibited remuneration. Companies involved in sponsoring or administering patient assistance programs may wish to reassess patient support programs in light of this decision.
  
  
• The ability for patient support programs to utilize the CMPL Promotes Access to Care Exception remains a live issue on remand. In the absence of a clear ruling, industry stakeholders should exercise caution in relying on the exception as a basis to include federal health care beneficiary participation in patient assistance programs.
  
  
• Industry stakeholders can likely look forward to faster issuance of advisory opinions because HHS must now issue advisory opinions within 60 days, a time period that may not be extended by HHS’s tolling regulations. 

For any questions on the D.C. Circuit's recent decision or any other healthcare related matters, contact your Quarles attorney or:

• Simone Colgan Dunlap: 602-229-5510 / simone.colgandunlap@quarles.com
• Kiel Zillmer: 414-277-5437 / kiel.zillmer@quarles.com
• Theresa DeAngelis: 202-372-9522 / theresa.deangelis@quarles.com

END NOTES

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¹ Vertex Pharms. Inc. v. U.S. Dep’t of Health & Hum. Servs., No. 25-5133 (D.C. Cir. Sept. 4, 2026)(“Vertex Opinion”).

² 42 U.S.C. § 1320a-7b(b)(2)(B).

³ Id. § 1320a-7a(a)(5).

⁴ Id. § 1320a-7a(i)(6)(F).

⁵ Id. § 1320a-7d(b).

⁶ Vertex Opinion at 5.

⁷ As noted above, HHS is statutorily directed to issue an advisory opinion within 60 days of receiving a request. Vertex challenged HHS regulations that extended the statutory 60-day deadline for issuing advisory opinions by starting the clock at “formal acceptance” rather than receipt and tolling it whenever HHS requested additional information.

⁸ Vertex Opinion at 7.

⁹ Vertex Pharms. Inc. v. U.S. Dep’t of Health & Hum. Servs., 774 F. Supp. 3d 211 (D.D.C. 2025).

¹⁰ Vertex Opinion at 17-18.

¹¹ Id. at 20.

¹² Id. at 26.