Healthcare Case Spotlight: The D.C. Circuit Joins the Broad Reading of the Anti-Kickback Statute — and Strikes OIG’s Advisory-Opinion Timing Rules

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Vertex Pharmaceuticals Incorporated v. United States Department of Health and Human Services, No. 25-5133, ___ F.4th ___, 2026 WL 2617588 (D.C. Cir. Sept. 4, 2026) | affirming in part and reversing in part Vertex Pharms. Inc. v. U.S. Dep’t of Health & Hum. Servs., 774 F. Supp. 3d 211 (D.D.C. 2025)

Healthcare / Anti-Kickback Statute · Beneficiary Inducement Statute · HHS-OIG Advisory Opinions

Introduction

Patient-support programs test the outer edge of the Anti-Kickback Statute, with those offering such seemingly beneficial services to patients arguing that, as a criminal bribery statute, the terms “remuneration” and “induce” must be read narrowly to mean corrupt payments and quid-pro-quo dealing, not ordinary financial help that happens to make a treatment easier to choose. The Second Circuit rejected that reading in Pfizer, Inc. v. U.S. Department of Health & Human Services, 42 F.4th 67 (2d Cir. 2022), cert. denied, 143 S. Ct. 626 (2023), and the Fourth Circuit rejected it in Pharmaceutical Coalition for Patient Access v. United States, 126 F.4th 947 (4th Cir. 2025). On September 4, 2026, the D.C. Circuit made it three, in a case about an advisory opinion issued by the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services concerning a gene therapy for sickle cell disease and a program offering patients up to $70,000 toward fertility services that chemotherapy may cost them. In addition to joining its sister circuits in giving “remuneration” and “induce” their ordinary meanings, the court made two other rulings under the Administrative Procedure Act. First, it held that OIG acted arbitrarily and capriciously by brushing past a statutory exception with the observation that it “lack[ed] data.” Second, it held that OIG had no authority to issue regulations allowing it to determine when the 60-day statutory deadline for issuing advisory opinions began and could be tolled.

Executive Summary

Vertex makes Casgevy, a gene therapy for sickle cell disease and transfusion-dependent beta-thalassemia. The treatment requires intensive chemotherapy that can impair fertility, so Vertex created a Fertility Support Program offering patients up to $70,000 toward fertility services. It opened the program to privately insured patients and, in June 2023, asked OIG for an advisory opinion on whether extending it to federally insured patients would violate the Anti-Kickback Statute or the Beneficiary Inducement Statute. OIG didn’t issue its opinion for more than a year, and only did so three days after Vertex sued to compel it, concluding that the program would violate both statutes. The district court sided with OIG on every issue. The D.C. Circuit affirmed in part, reversed in part, and remanded. On the AKS, it held that “induce” and “remuneration” carry their ordinary meanings — to influence or prevail upon a person, and valuable compensation in any form — rather than a narrower sense drawn from criminal solicitation and facilitation, joining the Second Circuit in Pfizer and the Fourth Circuit in Pharmaceutical Coalition for Patient Access. On that reading, the program is remuneration to induce the purchase of Casgevy. But the court set aside OIG’s conclusion that the program would also violate the Beneficiary Inducement Statute, holding that the agency failed to engage with the evidence that the statutory Promotes Access to Care Exception applied. And it held that OIG’s regulations — which start the 60-day advisory-opinion clock at “formal acceptance” rather than receipt, and toll it while the agency seeks more information — are contrary to law.

Background

The two statutes

The AKS criminalizes knowingly and willfully offering or paying “any remuneration (including any kickback, bribe, or rebate) … to any person to induce such person … to purchase” an item or service reimbursable under a federal healthcare program. 42 U.S.C. § 1320a-7b(b)(2)(B). Violations are felonies, and the statute carries an extensive set of safe harbors, with authority in the Secretary to create more. The BIS is the civil counterpart, reaching remuneration offered to a beneficiary that the offeror “knows or should know is likely to influence” the beneficiary’s choice of provider, practitioner or supplier. Id. § 1320a-7a(a)(5). Among the BIS’s own exceptions is one for remuneration that “promotes access to care and poses a low risk of harm to patients and Federal health care programs.” Id. § 1320a-7a(i)(6)(F). Parties may ask OIG for an advisory opinion on whether proposed conduct would violate either statute; the opinion binds both the agency and the requester.

The program and the request

Because older patients often cannot tolerate the chemotherapy regimen, Casgevy is best taken young — by patients with their childbearing years ahead of them, who may then need fertility treatments costing tens of thousands of dollars. That is the concern the Fertility Support Program was designed to address, and Vertex withheld it from federally insured patients until OIG ruled.

Vertex requested the advisory opinion on June 13, 2023. OIG formally accepted it on June 26, requested more information, and tolled the deadline until Vertex responded on October 10. OIG said at a November teleconference that it could not issue a favorable opinion, then did not publish. Vertex asked repeatedly over the following months. On July 15, 2024, Vertex sued to compel issuance. Three days later — more than a year after the request and nine months after the supplemental information — OIG issued the opinion, concluding the program would provide prohibited remuneration under both statutes and that the Promotes Access to Care Exception did not apply because the agency “lack[ed] data.” The district court granted summary judgment for OIG on every issue and held the challenge to the timing regulations nonjusticiable once the opinion had issued.

Legal Analysis

“Induce” means to influence, not to solicit a crime. Statutes sometimes use “induce” in a specialized criminal-law sense carrying common-law solicitation and facilitation. The court held the AKS does not, and the distinguishing feature is what is being induced. In United States v. Hansen, 143 S. Ct. 1932 (2023), the induced act — illegal immigration — was itself a crime. Under the AKS, the act induced is a beneficiary’s selection of medical services, which is lawful. With no unlawful act at the end of the chain, the presumption that Congress imported the common-law sense weakens considerably.
The safe harbors are what settle it. The AKS’s safe harbors cover prosaic transactions — a hospital paying its physicians, a health center waiving coinsurance for a patient who qualifies for subsidized services, a pharmacy waiving a co-pay for a patient in good-faith financial need. If “induce” meant criminal solicitation, none of those would ever have needed excepting, and the safe harbors would be largely surplus. The court quoted the Fourth Circuit’s formulation that the narrow reading would “create vast superfluity in the statute.” Pharm. Coal. for Patient Access, 126 F.4th at 958.
“Remuneration” is not confined to corrupt payments. Vertex argued that the parenthetical — “(including any kickback, bribe, or rebate)” — colors the term under noscitur a sociis (the canon that a word is known by the company it keeps). The court answered on the list’s own contents: a kickback and a bribe carry corrupt connotations, but a rebate is simply a discount or refund. A list that is not uniformly corrupt cannot narrow the general term to corruption. The court also noted the repeated “any” and the illustrative “including,” both signals of breadth.
Lenity and vagueness got no traction. Neither the rule of lenity nor constitutional avoidance has a role, the court held, where text, context and structure resolve the question. On vagueness, the possibility of close cases does not make a statute vague, and the AKS’s knowing-and-willful scienter requirement alleviates the concern — a point on which the court noted the First, Ninth and Eleventh Circuits have come out the same way.
The BIS ruling is an administrative-law ruling. The court held that OIG never explained why the Fertility Support Program does not qualify under the statutory exception promoting access to care. Vertex had submitted studies that infertility risk leads sickle cell patients to forgo potentially lifesaving treatment, evidence that many patients cannot afford fertility services, CMS guidance describing lack of access to fertility preservation as a significant access barrier for gene therapy candidates, and program controls limiting eligibility to patients already prescribed the therapy. OIG’s entire response was that it lacked data to determine that the program improves access. It did not say what data, why it could not obtain it, or why Vertex’s showing fell short. The district court’s view that the agency’s “path may reasonably be discerned” did not survive.
A statutory deadline is a deadline. Congress specified, as part of the required contents of the advisory-opinion regulations, that the Secretary “shall be required to issue” an advisory opinion “not later than 60 days after the request is received.” 42 U.S.C. § 1320a-7d(b)(5)(B)(i). OIG’s regulations started the clock at formal acceptance — up to ten business days after receipt — and tolled it while the agency sought additional information or outside expert advice. Neither provision is authorized by the statute. Drawing on its en banc decision in Allegheny Defense Project v. FERC, 964 F.3d 1 (D.C. Cir. 2020), the court held that OIG has no “unwritten and unilateral power to indefinitely evade” the deadline, that an agency’s practical need for more time does not license tolling, and that a general grant of procedural authority cannot displace specific statutory text. That the statute attaches no consequence to missing the deadline does not imply permission to regulate around it.
Mootness did not shield the regulations. Issuing the opinion mooted the claim that it was being unlawfully withheld, but not the challenge to the underlying policy. Vertex, which has sought advisory opinions before and credibly represents that it will again, is a repeat player likely to be subject to the same practice — enough for standing, and the purely legal question was ripe.

Holding

Affirmed in part, reversed in part, and remanded. The court held that OIG correctly concluded that the Fertility Support Program would provide remuneration to induce the purchase of Casgevy within the meaning of the AKS. OIG’s determination that the program would violate the BIS was arbitrary and capricious and is set aside. The advisory-opinion timing provisions are contrary to law: the rules starting the 60-day clock at formal acceptance rather than receipt, 42 C.F.R. §§ 1008.41(b), 1008.43(c)(1), and the tolling provisions, which the court set aside, id. §§ 1008.39(a) (second sentence), 1008.41(e), 1008.43(c).

What to Watch

What the court expressly left open. There are three. The court did not decide how much influence is required to constitute inducement — it did not need to, given the size and design of this program. It did not decide whether “induce” in the AKS is identical in meaning to “influence” in the BIS. And it did not reach OIG’s alternative theory that the program provides prohibited remuneration to physicians and treatment centers through the opportunity to earn treatment-related fees.
The remand at OIG. The agency must reconsider the Promotes Access to Care Exception and explain its conclusion. The court also noted that OIG may take a different view on remand of whether to grant prospective immunity under the AKS, a question Vertex did not press on appeal. A reasoned denial remains available; a conclusory one does not.
Whether the AKS question goes further. Three circuits now read “remuneration” and “induce” broadly and none has held otherwise, which makes this an unlikely vehicle for Supreme Court review and a diminishing argument at the district-court level. Watch for a rehearing or certiorari petition on the ordinary timeline; none had been reported as of this writing.
Advisory opinions as a usable tool. If the 60-day clock runs from receipt and cannot be tolled, the advisory opinion process becomes something a company can plan around rather than an open-ended wait — Vertex’s own took more than a year. OIG’s response to the compressed deadline it now faces will be interesting to watch.
Program design in the meantime. Patient-support programs tied to a specific product or service remain exposed under the AKS regardless of the benevolence of their purpose. The defensible space has moved to the exceptions and safe harbors, and to the scienter element — which OIG, following its usual practice, did not formally analyze in the advisory opinion at all.

What This Means for Resolving Disputes Involving the AKS

For parties trying to resolve a dispute involving the meaning and scope of the AKS — disputes that most often arise in False Claims Act litigation — the useful observation is that the range of outcomes on the AKS question has narrowed considerably, and narrowing is what makes matters resolvable. A defendant arguing that “remuneration” reaches only corrupt transactions is now arguing against three circuits and none in the other direction. That argument has gone from a plausible dispositive defense to a discount.

The contested space has shifted to ground that is inherently more negotiable. Whether an activity alleged to violate the AKS is in fact legitimate is a highly factual question, not a clean question of statutory construction. Whether conduct was knowing and willful is a fact question too. Disputes that turn on evidentiary judgments of that kind are the ones where a neutral can be useful, because both sides can see the range and neither can be confident of the ends of it. Disputes that turn on a pure question of law, by contrast, tend to be litigated to a decision — which is what the last several years of AKS scope litigation produced, and what this decision brings closer to a close.

John Libby is an arbitrator, mediator, and settlement counsel with LibbyADR LLC. This post contains his own summaries of the decisions discussed, prepared for general informational purposes only. The summaries are not intended to be a complete statement of any court’s reasoning, nor should they be taken to indicate how he would rule as an arbitrator in any particular case. In addition, the summaries are not legal advice, nor should they be construed as legal advice. Readers should not act on these posts, but should review the decisions themselves and consult with legal counsel.