Health Law Daily Wrap Up, FALSE CLAIMS ACT—9th Cir.: Public disclosure bar did not apply where Relators added pertinent details indicating Regeneron’s intent to unlawfully induce referrals, (Aug 25, 2026)

By Jeffrey H. Brochin, J.D.

When a payment is made directly to a doctor who is making the referral, the payment induces the referral by the very fact that the payment itself is by definition unlawful under AKS.

The United States Court of Appeals for the Ninth Circuit has reversed the part of the District Court’s judgement which dismissed the Relators’ Complaint pursuant to the public disclosure bar; but affirmed the District Court’s decision denying Regeneron’s Motion to Dismiss for failure to state a claim because the Complaint was rife with particulars as to violations of the Anti-kickback Statute (AKS) thereby satisfying Rule 9(b)’s particularity requirement (U.S. ex rel. Moore v. Regeneron Pharmaceuticals, Inc. No. 24-5569 (9th Cir. Aug. 19, 2026)).

Overall nature of appeals. The Relators filed suit against Regeneron Pharmaceuticals, Inc. and Regeneron Healthcare Solutions, Inc. (jointly, Regeneron), alleging violations of the AKS based on remuneration paid to doctors to write prescriptions for Regeneron’s products. The District Court dismissed the Complaint, citing the public disclosure bar, and the Relators took the instant appeal. The District Court also denied Regeneron’s Motion to Dismiss under Rule 9(b) after finding the Relators satisfied the particularity requirements and Regeneron therefore also appealed.

Public disclosure bar. The False Claims Act (FCA) provides that courts shall dismiss an FCA suit if substantially the same allegations or transactions as alleged in the action or claim were publicly disclosed through certain channels, unless the Relator is “an original source of the information.” The bar seeks to discourage litigation by parties who have no significant information of their own. Whether a particular disclosure triggers the public disclosure bar is a mixed question of law and fact.

The publicly disclosed information in the instant case consisted of high-level transactional data showing that Regeneron made payments to physicians, sometimes specifying that certain payments were made for things like ‘Food and Beverage’ or ‘Travel and Lodging.’ However, the Appeals Court found that those data revealed only ‘a piece of the puzzle’; they did not clearly show the full picture of the allegedly fraudulent scheme, which was filled in by Relators’ allegations about Regeneron’s internal business operations and the substructure underlying those payments. For example, one could not glean from the mere fact that payments were made, that Regeneron frequently deviated, without justification, from its own tiered system for assigning fair-market value to physician payments, or that reports from both an internal Regeneron audit and an external consulting firm concluded that Regeneron may “be inappropriately compensating” doctors. The Relators further added to the public disclosure that Regeneron used scorecards to track its return on investment in doctors, that it dropped one doctor when his prescription volume went down, and that it capitulated to one doctor’s threat to cancel a speaker event if Regeneron did not pay to stay him in a luxury resort. Furthermore, some doctors were paid for sham programs or for some programs that never even occurred. Accordingly, the Appeals Court found that the District Court erred in dismissing the Complaint pursuant to the public disclosure bar and they therefore reversed the dismissal.

Rule 9(b) motion denial. The Appeals Court next turned to Regeneron’s appeal of the District Court’s denial of their Rule9(b) motion to dismiss. Regeneron argued that the District Court improperly denied its motion to dismiss Relators’ FCA allegations for failure to state a claim. The Appeals Court noted that the Relators’ FCA claims were premised on alleged violations of the AKS, and that to plead a violation of the AKS, the Relators needed to plausibly allege that Regeneron ‘knowingly and willfully offered or paid any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind to any person to induce’ the purchase or provision of a federally reimbursed good or service.

The allegations needed to show that Regeneron offered renumeration with the intent to exert undue influence over the reason or judgment of another. Notably, the AKS requires only that one purpose of the payment is to induce future referrals, even if the payments were also intended to compensate for professional services. To satisfy Rule 9(b)’s particularity requirement, the Relators had to identify the ‘who, what, when, where, and how of the misconduct charged.’ Here, the Appeals Court found that the Relators’ Complaint was rife with factual allegations pleaded with sufficient particularity to survive Regeneron’s motion to dismiss: they identified specific examples of multiple doctors across various states to whom Regeneron allegedly made direct payments to induce referrals, and they alleged that many of those doctors were paid at rates far above fair market value without justification, including stays at luxury hotels, and reimbursement for a first-class plane ticket, both in violation of Regeneron’s own written policies. Accordingly, the District Court did not err in denying Regeneron’s Motion to Dismiss for failure to state a claim.

Alleged conspiracy with Sanofi. As to the Relators’ claims of FCA conspiracy between Regeneron and Sanofi, the Appeals Court found that the District Court properly dismissed the FCA conspiracy claims. Although the Complaint contained allegations of co-promotion agreements between Sanofi and Regeneron, the Relators never pleaded with any particularity that Regeneron and Sanofi agreed to do anything other than jointly market certain products. The Relators’ claims essentially amounted to an allegation of parallel conduct between Regeneron and Sanofi and a bare assertion of conspiracy, but without any allegations regarding the particulars of ‘when, where, or how’ the alleged conspiracy occurred. The Relators’ conspiracy claim therefore failed to satisfy Rule 9(b), and it was properly dismissed by the District Court.

Judge Lee’s partial dissent. In his partially dissenting opinion, Judge Lee opined that the allegations fell short of stating a plausible claim under the AKS, because, among other things, most of them consisted of vague language without concrete examples. The data showing a correlation between pharmaceutical companies’ payments and increased prescription volume was just that—a correlation only. Rather, scientific evidence suggested that the prescribed drugs were effective in treating eye ailments, high cholesterol, arthritis, and eczema. To violate the AKS, the allegations needed to go further—they needed show that the exchange amounted to undue influence, and this, the Relators failed to do. At most, they showed that pharmaceutical companies and physicians have a cozy relationship, but that is not illegal, even if it may seem distasteful, nor is this type of business practice uncommon in other industries. Perhaps offering some of the more extravagant benefits might seem a bit much--especially in the medical context—but Judge Lee did not find that to be unlawful under the AKS.

The case is No. 24-5569.

Judge: Per curiam.

Attorneys: Celine Cutter (Cutter Law, PC) for the U.S. Matthew Rowen (Clement & Murphy, PLLC) for Regeneron Pharmaceuticals, Inc.

Companies: Regeneron Pharmaceuticals, Inc.

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