The United States Court of Appeals for the First Circuit issued a pivotal ruling earlier this week, finding that in order to establish falsity in a False Claims Act (“FCA”) case premised on Anti-Kickback Statute (“AKS”) liability, the kickback must have been the “but-for” cause of the submission of the claim. The court’s decision hinged on the meaning of the phrase “resulting from” within the 2010 amendment to the AKS, which provided that a claim that includes items or services “resulting from” a violation of the AKS constitutes a false or fraudulent claim for purposes of the FCA. The meaning of “resulting from” for purposes of establishing such FCA liability has been hotly debated by courts. The First Circuit now joins the Sixth and Eighth Circuits in adopting this stricter but-for standard, while the Third Circuit has opted for a much looser approach.

This case, United States of America v. Regeneron Pharmaceuticals, Inc., centered on whether Medicare claims for the drug Eylea, which were allegedly influenced by AKS violations through copayment coverages, constituted false or fraudulent claims under the FCA.  On the question of causation under the AKS, Regeneron claimed that the 2010 amendment imposed a “but-for” causation standard and urged the court to adopt the standards applied by the Eight and Sixth Circuits.  Regeneron argued that the government “b[ore] the burden of proving that an AKS violation . . . actually caused [a] physician to provide different medical treatment (and thus caused the false claims).” United States v. Regeneron Pharms., Inc., No. 20-11217, 2023 WL 6296393, at *10 (D. Mass. Sept. 27, 2023).  The government, on the other hand, urged the court to adopt the Third Circuit’s view that the AKS only requires proof of a causal link between a claim submitted to the government and medical care that was provided in violation of the AKS. Id.

The First Circuit’s adoption of the but-for causation standard is expected to have broad implications on the FCA landscape, potentially narrowing the field of actionable claims under the FCA, impacting both the government’s and whistleblowers’ ability to pursue damages for AKS violations that result in false claims to federal healthcare programs.

“Note: Our lawyers leveraged AI in creating this blog post, including using a transcript summary created by generative AI. As we explore the potential of generative AI in the legal space, it is our intention and our practice to be transparent with our readers and to showcase the results we are achieving using generative AI with publicly available resources. Crowell’s AI group is comprised of lawyers and professionals across our global offices, including from Crowell Global Advisors (CGA), our international public policy entity, with decades of sector-specific experience. We intend to lead by example in our own responsible use of AI, as it pertains to both the risks and benefits. Should you have questions about the use of generative AI in the legal sector or Crowell’s use of AI, please contact innovation@crowell.com.”

On December 17, 2024, the House Task Force on Artificial Intelligence (Task Force) released a highly-anticipated report titled, “Bipartisan House Task Force Report on Artificial Intelligence,” (the Report) which establishes guiding principles and issues recommendations to guide U.S. innovation in artificial intelligence (AI), including in the healthcare sector. The Report is intended to serve as a blueprint for Members of Congress as they conduct oversight and introduce legislation to address advances in AI technologies, including the regulation of health-specific AI applications.

Continue Reading House Task Force on AI Issues Report and Proposes Healthcare Recommendations

On November 21st, the Food and Drug Administration (FDA) released final guidance for the 510(k) Third Party Review Program and Third Party Emergency Use Authorization (EUA) Review processes, which clarifies how the FDA will use third party review organizations (ROs) to review 510(k) submissions and EUA requests during a public health emergency. The guidance provides guidance on the FDA’s conduct of both the 510(k) Third Party Review Program and EUA third party review, including guidance on device eligibility and procedures for 510(k) Third Party Review Organizations, and expectations for Third Party review to ensure quality, consistency, and conflict prevention.

Continue Reading FDA releases final guidance on 510(k) Third Party Review Program and Third Party Emergency Use Authorization (EUA) Review

FDA approved drugs and medical devices are often studied further by sponsors and other firms to generate additional scientific information around other potential benefits and uses of those products.  Providing the results of this additional scientific activity to health care providers (“HCPs”) has led to enforcement from the U.S. Food and Drug Administration (“FDA), as those additional uses and benefits have not been evaluated by the FDA. If a firm communicates information about unapproved uses of an approved product, it could lead to a determination by FDA that the firm is promoting an unapproved intended use, which could lead to enforcement action for distributing a misbranded or adulterated product.  In an effort to provide recommendations on how to avoid FDA enforcement activity when providing the results of this additional scientific activity, FDA recently issued final guidance on how to communicate scientific information on unapproved uses (“SIUU”) of approved or cleared medical products to HCPs while avoiding FDA enforcement action.

Continue Reading FDA Clarifies Enforcement Policy Around Communications of Scientific Information on Unapproved Uses of Drugs and Medical Devices

On January 7, 2025, in the last weeks of the Biden Administration and before President Trump returned to the White House, the Food and Drug Administration (FDA) issued draft guidance, entitled “Considerations for the Use of Artificial Intelligence To Support Regulatory Decision-Making for Drug and Biological Products.” This guidance provides recommendations on the use of AI intended to support a regulatory decision about a drug or biological product’s safety, effectiveness, or quality. The guidance discusses the use of AI models in the nonclinical, clinical, post-marketing, and manufacturing phases of the drug product life cycle. This is the first time FDA has proposed draft guidance on the use of AI for the development of drug and biological products and may provide insight on how AI models in medical product regulation should be assessed. The FDA is seeking public comment on the proposed guidance by April 7, 2025.     

Continue Reading FDA Proposes Framework to Assess AI Model Output Credibility to Support Regulatory Decision-Making

Federal policy efforts to advance health data exchange and interoperability are continuing to change rapidly. The latest changes are the publication of two final rules by the Assistant Secretary for Technology Policy/Office of the National Coordinator for Health Information Technology (ASTP/ONC) finalizing parts of the Health Data, Technology, and Interoperability (HTI-2) Proposed Rule. These rules adopt requirements regarding the Trusted Exchange Framework and Common Agreement (TEFCA) (HTI-2 Final Rule), and create a new Information Blocking exception under Protecting Care Access (HTI-3 Final Rule), published on December 16th and 17th, respectively.

Continue Reading End of Year Regulations on Interoperability

On October 2, the U.S. Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS) released final guidance outlining the process for the second cycle of negotiations through the Medicare Drug Price Negotiation Program. This guidance provides additional information for manufacturer effectuation of negotiated prices for drugs, which the statute refers to as Maximum Fair Prices (MFPs). Within this guidance, CMS intends to ensure that individuals with Medicare can access drugs at negotiated prices from both cycles in 2026 and 2027.

Continue Reading HHS Releases Final Guidance for the Second Cycle of the Medicare Drug Price Negotiation Program

Dr. John Pepe and Dr. Richard Sherman (“Relators”), acting as whistleblowers, brought a qui tam action against Fresenius Medical Care Holdings, Fresenius Vascular Care, Inc., and Dr. Gregg Miller (“Defendants”).  Relators’ complaint alleged that the Defendants engaged in fraudulent billing practices under the False Claims Act (“FCA”) and analogous state laws.  Last week, the United States District Court for the Eastern District of New York dismissed Relators’ case because they failed to plead their allegations with particularity as required by Federal Rule of Civil Procedure 9(b).

Continue Reading Stringent Requirements for Pleading Fraud Under Rule 9(b).

The United States District Court for the Northern District of Indiana recently dismissed a case involving allegations of fraudulent Medicaid claims and self-referrals.  The case, United States of America and State of Indiana ex rel. Bradley A. Stephens v. Nuclear Cardiology Associates (“NCA”), serves as a critical reminder of the stringent requirements for pleading fraud under the False Claims Act (FCA) and the Stark Law.

Continue Reading General Allegations Without Representative Examples Are Insufficient to Survive a Motion to Dismiss

The FDA recently provided its opinion on a pharmaceutical television ad that should help other pharmaceutical companies in their own advertisements.  The Office of Prescription Drug Promotion (OPDP) of the U.S. Food and Drug Administration (FDA) informed pharmaceutical company AbbVie that their television ad for migraine medication, Ubrelvy, featuring Serena Williams “…makes false or misleading representations and suggestions about the efficacy of Ubrelvy.” The letter focused on efficacy claims made in the advertisement.  The 30-second ad shows Serena Williams experiencing symptoms of a migraine while getting ready to go on stage. The ad then goes on to show how one dose of Ubrelvy helped Serena feel better, and she is later shown smiling and laughing as she walks onto a talk show stage. The FDA’s letter explains that in the original storyboard for the ad, Serena experiences migraine pain in the afternoon and feels better before her talk show appearance in the evening. The FDA contends that the televised ad does not accurately portray the time lapse that was in the storyboard version. The FDA stated that, “This compelling before-and-after presentation in conjunction with claims such as, “One dose works fast to eliminate migraine pain” and “UBRELVY QUICKLY ELIMINATES MIGRAINE PAIN” (emphasis added) misleadingly suggests that Ubrelvy eliminates migraine pain and symptoms more quickly than was demonstrated in the clinical trials.” The letter also claims that the ad “…misleadingly suggests that Ubrelvy will provide a greater treatment benefit to patients suffering from migraine headache than has been demonstrated.” 

Continue Reading FDA Calls Out a Migraine TV Ad for Misleading Viewers