Vertex Pharmaceuticals v. HHS: Implications for Patient Support Programs and OIG Advisory Opinions

Key Takeaways

• The D.C. Circuit read the Anti-Kickback Statute (AKS) broadly, holding that a program intended to remove a barrier to care can still implicate the statute. The court concluded that Vertex Pharmaceuticals’ proposed Fertility Support Program for federal health care program enrollees prescribed Casgevy, its sickle cell disease therapy, would constitute prohibited remuneration if offered with the requisite intent. It held that “induce” under the statute means to influence and “remuneration” includes anything of value, not only corrupt payments such as kickbacks or bribes.
• OIG must meaningfully address a requestor’s evidence when evaluating a statutory exception. OIG rejected the Promotes Access to Care Exception under the Beneficiary Inducement Provision by stating only that it lacked sufficient data to conclude that Vertex’s program would improve access to Casgevy. The court set aside that determination because OIG did not identify what additional evidence it needed or explain why Vertex’s submission was insufficient.
• The statutory 60-day deadline for an advisory opinion runs from OIG’s receipt of a request, and OIG cannot create additional time through regulation. OIG issued its opinion more than a year after Vertex’s request, relying on regulations that delayed the clock until “formal acceptance” and permitted tolling. Citing Loper Bright, the court held that the reasonableness of those policies could not expand OIG’s statutory authority and set the regulations aside.

Background

Vertex Pharmaceuticals (“Vertex”) developed , a gene therapy for sickle cell disease and transfusion-dependent beta-thalassemia. Treatment requires intensive chemotherapy, which younger patients generally tolerate better.

Many of those patients are in their reproductive years, however, and chemotherapy can impair fertility. The loss of fertility, and the high cost of fertility preservation, may deter patients, including federal health care program beneficiaries, from undergoing therapy with Casgevy and other gene therapies.

To address this barrier, Vertex created a Fertility Support Program offering up to $70,000 per patient for fertility preservation services. Concerned about the AKS and the Beneficiary Inducement Provision, Vertex confined the program to privately insured patients.

On June 13, 2023, Vertex asked OIG for an advisory opinion on expanding the program to Medicaid, Medicare and TRICARE patients. OIG formally accepted the request on June 26, 2023 and tolled the 60-day statutory deadline while seeking additional information. In November 2023, OIG informed Vertex that it could not issue a favorable opinion. After months of follow-up, and after Vertex on July 15, 2024, OIG issued an concluding that the program would generate prohibited remuneration under both statutes.

Under the AKS, OIG reasoned that the fertility funding would remove patients’ financial barrier to treatment and could give physicians and treatment centers an incentive to prescribe or refer. Under the Beneficiary Inducement Provision, OIG found the program likely to influence patients to select Vertex-approved physicians and treatment centers and declined to apply the Promotes Access to Care Exception for lack of data showing the program improved access. OIG noted that it does not assess intent in the advisory opinion process and that an unfavorable opinion does not itself bar Vertex from proceeding.

Vertex filed an amended complaint on August 1, 2024, asking the court to set the opinion aside under the Administrative Procedure Act (APA). It argued that OIG misconstrued both statutes, failed to explain why Vertex’s evidence was insufficient under the Promotes Access to Care Exception and relied on timing regulations contrary to the statute. The district court summary judgment to HHS on every claim. On September 4, 2026, the affirmed in part, reversed in part and remanded.

The Laws at Issue

The Anti-Kickback Statute (AKS). The AKS prohibits offering, paying, soliciting or receiving remuneration to induce or reward referrals or other federally reimbursable business, and it can be implicated whenever one purpose of an arrangement is to generate federal health care program business. A violation is a felony. Safe harbors protect arrangements satisfying each of the applicable conditions; failure to fit within one does not make an arrangement per se unlawful, but the arrangement is evaluated based on the totality of the facts and circumstances, including the parties’ intent.

Beneficiary Inducement Provision. The Beneficiary Inducement Provision prohibits offering remuneration to a Medicare or Medicaid beneficiary that the offeror knows or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier for an item or service, and it carries civil monetary penalties.

OIG Advisory Opinions. Parties may request an OIG advisory opinion on a proposed arrangement under the AKS and the Beneficiary Inducement Provision. An advisory opinion binds only the requestor and the facts presented, but published opinions signal the safeguards and risk factors OIG weighs. The governing statute, 42 U.S.C. § 1320a-7d(b), directs OIG to promulgate regulations governing the advisory opinion process, including the timeframe for OIG’s response.

The D.C. Circuit’s Three Holdings

1.  “Induce” and “remuneration” carry broad, ordinary meanings under the AKS. 

Vertex argued that both terms should be read narrowly, such that the AKS prohibits only quid pro quo transactions that corrupt medical decision-making. The court disagreed.

The court held that “induce” carries its ordinary meaning: to influence or prevail upon a person. A narrower reading would render the AKS’s many safe harbors largely superfluous.

The court further held that “remuneration” covers anything of value. The statutory parenthetical in 42 U.S.C. § 1320a-7b(b)(2), “including any kickback, bribe or rebate,” is illustrative, not limiting.

The court also rejected Vertex’s lenity and constitutional avoidance arguments. It concluded that offering up to $70,000 to patients prescribed Casgevy would be prohibited remuneration under the AKS if offered with the requisite intent.

2. OIG’s rejection of the Promotes Access to Care Exception was arbitrary and capricious.

To demonstrate that it met the exception, Vertex submitted significant documentation, including studies showing that infertility risk and the cost of fertility care may deter patients from treatment, and CMS guidance recognizing limited access to fertility preservation as a barrier to gene therapy. Vertex also pointed to safeguards, such as offering the program only after a patient had been prescribed Casgevy.

OIG responded with a single statement: it lacked sufficient data to conclude that the program would improve access. The court held that an agency must provide a reasoned explanation, not merely a conclusion, and meaningfully address the requestor’s evidence. Because OIG did not identify what evidence it needed, explain why it could not readily obtain that evidence, or state why Vertex’s evidence fell short, the court set aside the Beneficiary Inducement Provision determination and remanded for OIG to reconsider whether the exception applies.

3. Congress’s clock starts when OIG receives the request, and OIG has no authority to pause it.

The statute requires OIG to issue an advisory opinion within 60 days after receiving a request. OIG’s 1997 regulations at 42 C.F.R. Part 1008 extended this timeframe in two ways: by starting the 60-day clock upon “formal acceptance,” which could occur up to ten business days after receipt, and by tolling the clock while OIG awaited additional information from the requestor.

The court rejected HHS’s argument that tolling was reasonable and necessary to address complex requests. Citing , 144 S. Ct. 2244, 2266–67 (2024), the court emphasized that “the reasonableness of a policy” cannot expand an agency’s statutory authority. Because Congress required OIG to issue an opinion within 60 days after receiving a request, OIG could not use its general procedural authority to create additional time. The court set aside the tolling provisions and confirmed that the 60-day clock runs from receipt.

Implications

1. A well-supported record does not guarantee that the Promotes Access to Care Exception applies, but OIG cannot disregard evidence merely because it disfavors the program. The court treated OIG’s advisory opinion as agency action subject to ordinary APA review and refused to accept a conclusory statement that OIG lacked data where the requestor had submitted substantial evidence. OIG must engage with the record and provide a reasoned explanation for any adverse conclusion.
2. Health care stakeholders are likely to receive OIG opinions more quickly, but a hard 60-day deadline may come at a cost. A shorter timeframe may encourage more requests, since requestors can get an answer sooner. But OIG’s lengthy, informal back-and-forth historically gave requestors a window to sense an unfavorable result and withdraw before OIG issued a public, written opinion. A strict 60-day clock compresses that runway, and stakeholders should weigh the tradeoff: a faster answer, but less room to retreat.
3. OIG and other HHS agencies may be more cautious about extending statutory deadlines, and stakeholders may be more willing to challenge agency-imposed delays where Congress has prescribed a clear timeframe. The court’s post-Loper Bright scrutiny of OIG’s tolling regulations may invite similar challenges to other HHS timing rules that lack express statutory authorization.