Major DC Circuit Decision To Reshape the HHS-OIG Advisory Opinion Process

On September 4, 2026, the D.C. Circuit issued its opinion in Vertex Pharmaceuticals Inc. v. HHS, confirming the broad scope of the federal Anti-Kickback Statute (AKS), requiring the government to provide more support for its application of the Beneficiary Inducements Statute (BIS) and imposing strict timing requirements on Office of Inspector General (OIG) issuance of advisory opinion. The decision signals important developments for life sciences and healthcare companies seeking regulatory guidance and compliance with federal healthcare fraud and abuse laws.

Factual and Procedural Background

Vertex Pharmaceuticals Inc. developed Casgevy, a gene therapy for sickle cell disease and transfusion-dependent beta-thalassemia requiring intensive chemotherapy. Casgevy treatment can significantly impair fertility. To address this potentially devastating fertility impact of its treatment, Vertex created the Fertility Support Program, offering up to $70,000 to help cover fertility services for patients prescribed Casgevy. To mitigate the risk that the Program could violate federal law by improperly incentivizing patients to receive Casgevy, Vertex initially excluded federal healthcare program beneficiaries, including Medicare and Medicaid beneficiaries, from the Program. In June 2023, Vertex requested an advisory opinion from the Department of Health and Human Services (HHS) OIG on whether extending the Program to federally insured patients would comply with the AKS and the BIS.

By statute, OIG must issue an advisory opinion within 60 days of receiving the request.¹ OIG received Vertex’s request on June 13, 2023, and formally accepted the request on June 26, 2023. OIG then sought additional information from Vertex, tolling its deadline until Vertex responded in October 2023. OIG informed Vertex during a November 2023 teleconference that it would not issue a favorable opinion.

In July 2024, Vertex filed suit in the US District Court for the District of Columbia to compel issuance of the advisory opinion and challenge the lawfulness of OIG’s regulations. Three days later, more than a year after Vertex’s initial request and nine months after Vertex provided the additional information, OIG issued an unfavorable advisory opinion concluding that the Fertility Support Program would violate both the AKS and the BIS. The district court subsequently granted summary judgment for OIG on all claims, deferring to OIG’s reasoning on both statutes and finding Vertex’s timing-regulation challenge nonjusticiable.

On appeal, the D.C. Circuit affirmed in part and reversed in part. The court found: 

1. OIG correctly determined that the Fertility Support Program “would violate the AKS.” 
2. OIG failed to adequately explain why the Program would violate the BIS.
3. OIG’s regulations regarding advisory opinion timing unlawfully evade the statutory 60-day deadline.

Three Key Developments from the D.C. Circuit Opinion

The D.C. Circuit’s decision signals developments in three key areas.

Number 1: Federal Courts Continue to Broadly Interpret Key AKS Terms. The D.C. Circuit adopted a broad, plain-meaning interpretation of “induce” and “remuneration” as used in the AKS. In doing so, the D.C. Circuit joined the Second and Fourth Circuits in rejecting recent similar challenges to unfavorable OIG advisory opinions.

The AKS prohibits, in part, “knowingly and willfully offer[ing] or pay[ing] any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind to any person to induce such person … to purchase” a medical product or service reimbursable by a federal healthcare program.ⁱ The court’s analysis focused on the meaning of “induce” and “remuneration” in the context of the Fertility Support Program.

Vertex argued that “induce” and “remuneration” should be read narrowly, such that the AKS prohibits “only quid pro quo transactions that corrupt medical decision-making.” The D.C. Circuit disagreed, looking to congressional intent and the breadth of the AKS safe harbors to conclude that the ordinary meanings of these terms give effect to the statute’s purpose. Under this broad interpretation, the court held, Vertex’s Fertility Support Program constitutes remuneration intended to induce patients to purchase Casgevy.

Key Takeaway #1: OIG issued advisory opinions for decades without any court challenges. Over the past few years, however, three cases have sought to overturn OIG negative advisory opinions related to pharmaceutical patient-support programs. The D.C. Circuit is now the third separate Federal Circuit Court of Appeals to have reached the same conclusion: The AKS’s prohibitions are broad, and the terms “induce” and “remuneration” should be read broadly consistent with their general meaning.ⁱⁱ This consensus among federal circuits provides helpful guidance to life sciences and healthcare companies about the breadth of the statute. This consensus is also consistent with prior OIG advisory opinions and case law subjecting manufacturer-sponsored patient-assistance programs to close scrutiny, particularly where a program subsidizes the costs of side effects or other treatment-related expenses in a manner intended to influence patients’ selection of a particular product.

Number 2: OIG’s Analysis Regarding the Access to Care Exception to the BIS. The D.C. Circuit also found that HHS failed to provide sufficient explanation for its determination that the Promotes Access to Care Exception to the BIS does not apply to the Fertility Support Program.

The BIS imposes civil monetary penalties on any person who “offers to or transfers remuneration” to an individual eligible for Medicare or Medicaid “that such 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.”ⁱⁱⁱ The Promotes Access to Care Exception to the BIS exempts remuneration “which promotes access to care and poses a low risk of harm to patients and Federal health care programs.”^iv Notably, BIS exceptions, including this one, immunize against BIS liability, but they do not protect against AKS liability.

While the language of the Promotes Access to Care Exception is broad, HHS has interpreted the exception to apply to:

[i]tems or services that improve a beneficiary’s ability to obtain items and services payable by Medicare or Medicaid, and pose a low risk of harm to Medicare and Medicaid beneficiaries and the Medicare and Medicaid programs by—(i) [b]eing unlikely to interfere with, or skew, clinical decision making; (ii) [b]eing unlikely to increase costs to federal healthcare programs or beneficiaries through overutilization or inappropriate utilization; and (iii) [n]ot raising patient safety or quality-of-care concerns.^v

Under both the statute and regulation, the exception is much more broadly worded than the AKS safe harbors and other BIS exceptions.

Despite the medical and socioeconomic evidence that Vertex offered to demonstrate that the Fertility Support Program improves patients’ ability to access Casgevy, OIG concluded in its advisory opinion that the Program violated the BIS and did not qualify for the exception. OIG stated that it “lack[ed] data that would allow [it] to determine that providing the Proposed Arrangement to eligible patients improves the ability of patients to access the Product.” OIG indicated that gene therapy treatments are still relatively novel, and much is yet unknown about the treatments and about the optimal arrangements for ensuring appropriate access.

The D.C. Circuit reversed, finding OIG’s conclusion “arbitrary and capricious because [OIG] failed to reasonably explain why the Promotes Access to Care Exception does not apply.” The court noted that OIG explained neither what data it needed nor why the evidence Vertex provided — including in response to OIG’s own requests — was insufficient. By failing to engage with Vertex’s evidence, OIG did not meet its statutory obligation to determine whether the Program fits within a BIS exception.

Key Takeaway #2: This holding requires OIG to provide more analysis and explanation about the application of the BIS to particular fact scenarios. In the past, OIG has generally focused most of its advisory opinions on the AKS and provided little additional discussion to any relevant BIS questions. This has been particularly true of advisory opinions involving manufacturer-sponsored patient-assistance programs. The BIS generally does not apply to programs offered by pharmaceutical manufacturers, because manufacturers are not “providers, practitioners, or suppliers” for purposes of the statute,^vi though there are exceptions.^vii The D.C. Circuit’s ruling may prompt OIG to document its BIS analysis more fully in future opinions. Much of that analysis overlaps with factors OIG already considers under the AKS. For example, the Promotes Access to Care Exception’s “low risk of harm” prong calls for an assessment of whether the arrangement is unlikely to skew clinical decision-making, increase costs through overutilization or inappropriate utilization, or raise patient-safety or quality-of-care concerns. OIG typically considers these same risks in its AKS analysis. The ruling may therefore change how fully OIG documents its BIS assessment without changing the factors it considers or the ultimate outcome of a particular opinion.

Number 3: Timeline of OIG Advisory Opinions. The D.C. Circuit held that OIG lacks authority to delay or toll the statutory deadline to issue an advisory opinion within 60 days of receiving the request.

The statute requires HHS to issue an advisory opinion “by not later than 60 days after the request is received.”^vii In its regulations governing the advisory opinion process, OIG stated that the 60-day deadline would: (1) start when OIG “formally accepted” the request (within 10 working days of receipt) and (2) be tolled for the period from when OIG requests information until the requestor provides the information. ^ix

OIG argued that flexibility as to timing allows for collection and assessment of additional information and complex review. Nevertheless, the D.C. Circuit held that OIG “has no authority to pause the clock and grant itself more time” through its regulations, and must issue advisory opinions within the 60-day statutory deadline.

Key Takeaway #3: Although the ruling could ostensibly provide requestors with greater certainty regarding timing, the compressed review period may make the advisory opinion process less flexible and collaborative. Stakeholders have long complained about the length of the advisory opinion process. But requestors have benefited from dialogue with OIG and opportunities to provide more information and change parts of their arrangements. OIG may now be more likely to decline advisory opinion requests that are incomplete, indicate earlier in the process that it expects to issue an unfavorable opinion, or afford requestors less opportunity to supplement the record or modify a proposed arrangement in response to OIG’s concerns. OIG may also issue opinions containing less-detailed analysis when complex factual or legal issues cannot be fully developed within 60 days. Requestors may therefore need to submit more-complete and carefully supported requests at the outset, and the advisory opinion process could become a less useful mechanism for refining novel or complex arrangements through iterative engagement with OIG.

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Goodwin’s Healthcare team will continue to monitor HHS Advisory Opinion developments and the evolving application of the Anti-Kickback Statute and Beneficiary Inducement Statute. For more information on the issues discussed in this alert, please contact the authors; reach out to Goodwin’s Government Investigations, Enforcement & White Collar Defense, False Claims Act, or Healthcare Regulatory & Compliance teams; or contact the Goodwin lawyer with whom you typically consult.

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