Health Law Daily Wrap Up, ANTI-KICKBACK PROHIBITION—D.C. Cir.: Fertility-preservation payments tied to gene therapy violate anti-kickback law, (Sep 10, 2026)

By Patricia K. Ruiz, J.D.

The court upheld HHS's anti-kickback analysis but revived the company's challenge under the Beneficiary Inducement Statute.

A biotechnology company's proposed program to provide up to $70,000 in fertility-preservation assistance to patients receiving a gene therapy violates the federal Anti-Kickback Statute (AKS), the U.S. Court of Appeals for the District of Columbia Circuit held. The court concluded that HHS properly determined that the payments would constitute remuneration intended to induce patients to select the treatment. The court, however, set aside HHS's determination under the Beneficiary Inducement Statute (BIS), finding the agency failed to adequately explain why the program did not qualify for a statutory exception, and also invalidated HHS regulations that tolled the statutory deadline for issuing advisory opinions (Vertex Pharmaceuticals, Inc. v. HHS, No. 25-5133 (D.C. Cir. Sept. 4, 2026)).

Background. Vertex Pharmaceuticals developed Casgevy, a gene therapy used to treat sickle cell disease and transfusion-dependent beta-thalassemia. The treatment requires chemotherapy that can adversely affect fertility. To address those concerns, Vertex created a Fertility Support Program that would provide up to $70,000 for fertility-related services and sought an HHS advisory opinion regarding whether extending the program to federally insured patients would violate the AKS or BIS.

The advisory opinion request followed a 2024 Office of Inspector General (OIG) advisory opinion involving gene therapies. In that matter, OIG concluded it would not impose sanctions for a manufacturer's proposed travel-support program because the arrangement removed barriers to medically necessary treatment available at only a limited number of treatment centers. The OIG, however, declined to issue a favorable opinion regarding fertility-support payments because it lacked sufficient information to assess the risk of fraud and abuse associated with that arrangement.

After an extended exchange of information with Vertex, HHS issued an unfavorable advisory opinion in July 2024. The agency concluded that the Fertility Support Program implicated both the AKS and BIS and further determined that it lacked sufficient data to conclude the arrangement qualified for the BIS's Promotes Access to Care Exception (see Travel expenses for gene therapy treatment would not be grounds for sanctions, but fertility treatment support payment would, Jul. 25, 2024). Vertex challenged both the advisory opinion and the regulations governing advisory opinion timing.

AKS interpretation. The court agreed with HHS that the proposed program would violate the AKS. Vertex argued that the statute should be interpreted narrowly and reach only quid pro quo arrangements involving corrupt medical decision-making. According to Vertex, the terms "induce" and "remuneration" should be given specialized meanings that would not encompass the proposed fertility-support payments.

The court rejected that argument. Examining the statutory text and structure, the court held that "induce" carries its ordinary meaning of influencing or persuading a person and is not limited to criminal solicitation or facilitation. The court also held that "remuneration" means valuable compensation, including payments, goods, or services, and is not restricted to bribes, kickbacks, or other corrupt transactions.

Applying those definitions, the court found that the Fertility Support Program would provide remuneration to patients who might otherwise decline treatment because of fertility concerns. The court noted that the purpose of the program was to encourage patients to choose Casgevy by paying for services that could address the treatment's fertility-related side effects. As a result, HHS correctly concluded that the proposed arrangement would run afoul of the AKS, according to the court.

The court also declined Vertex's invitation to adopt limiting constructions based on the rule of lenity or constitutional concerns, concluding that the statute's text, context, and structure resolved the issue.

BIS analysis. The court reached a different conclusion regarding HHS's determination under the BIS. Although the court did not dispute that the program implicated the statute's prohibition on remuneration likely to influence a beneficiary's choice of provider, it found that HHS failed to adequately explain its conclusion that the Promotes Access to Care Exception did not apply.

Vertex submitted evidence showing that infertility concerns may discourage patients from pursuing gene therapy and that the cost of fertility-preservation services may prevent some patients from obtaining treatment. The company also cited agency guidance recognizing that lack of access to fertility-preservation services presents a significant barrier for individuals considering gene therapies. Vertex further presented evidence intended to show that the program posed a low risk of harm to patients and federal health care programs.

In response, HHS stated only that it lacked sufficient data to determine whether the program improved patients' ability to access Casgevy. The court found the explanation inadequate because the agency did not identify what data was missing, explain why Vertex's submissions were insufficient, or meaningfully engage with the evidence presented. The advisory opinion therefore did not satisfy the agency's obligation to provide a reasoned explanation for its decision, the court said.

Because HHS failed to adequately justify its conclusion regarding the Promotes Access to Care Exception, the court set aside the agency's determination that the program would violate the BIS and remanded the issue for further consideration.

Timing regulations. The court also addressed Vertex's challenge to HHS regulations governing the advisory opinion process. Under those regulations, the 60-day period for issuing an advisory opinion does not begin until HHS formally accepts a request, and the deadline may be tolled while the agency seeks additional information or outside input.

The court first concluded that Vertex had standing to pursue the challenge. The company had requested advisory opinions in the past and represented that it expected to seek additional opinions in the future as it developed programs potentially implicating the AKS and BIS. According to the court, that ongoing relationship with the advisory opinion process was sufficient to establish a continuing injury.

On the merits, the court held that the regulations conflicted with the governing statute. The statute requires HHS to issue an advisory opinion no later than 60 days after a request is received. The court concluded that HHS lacked authority to delay the start of the statutory period through a formal acceptance process or to toll the deadline while gathering additional information. Those regulatory provisions effectively expanded the timeline established by Congress and therefore were contrary to law, the court held.

The court affirmed the district court's judgment insofar as it upheld HHS's AKS determination, reversed the judgment regarding the BIS determination and the advisory opinion timing regulations, and remanded for further proceedings.

The case is No. 25-5133.

Judge: Rao, N.

Attorneys: Douglas Hallward-Driemeier (Ropes & Gray LLP) for Vertex Pharmaceuticals Inc. Daniel Winik, U.S. Department of Justice, for U.S. Department of Health and Human Services.

Companies: Vertex Pharmaceuticals Inc.; U.S. Department of Health and Human Services

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