The D.C. Circuit gave us just one administrative-law decision this week, one dealing with new biotechnology, potential bribery, and more!

But first, a programming note: In my post several weeks ago, I drew a musical analogy between Queen’s 1984 hit “Radio Ga Ga” and the court’s review of the FCC’s attempt to reinvigorate part of the radio frequency spectrum. It has come to my attention that (1) far too few Notice & Comment readers have plumbed the depths of Queen’s discography, and (2) many of you felt the ba dum tsh would have been better served by reference to The Buggles’ “Video Killed the Radio Star.” While this one-hit wonder was also my first thought when brainstorming how to jazz up an administrative-law opinion about public safety broadcasts, I feel I came to the only defensible conclusion that it just didn’t fit. “Video Killed the Radio Star” is a synth-pop track grappling with the demise of outdated technology. It evokes a nostalgia for the classic sound of radio, while itself kicking off a new way of listening to music. (The music video for the song was the first music video to be aired on MTV.) This is not the song for an opinion evaluating the FCC’s decision to try to inject new life into a radio frequency used by only 3.5% of potential licensees. The FCC “still loves” radio. It believes that radio has “yet to have [its] finest hour.” All it wants to hear is “radio goo goo, radio ga ga, radio blah blah!” The musical pun would have been disserved by reference to anything other than “Radio Ga Ga.”

Now on to Vertex Pharmaceuticals Inc. v. HHS. In this decision, the court reviewed a challenge to an unfavorable advisory opinion issued by the Department of Health and Human Services (HHS) to Vertex Pharmaceuticals. In 2023, Vertex became the first company with an FDA-approved gene therapy to treat sickle cell disease. Sickle cell disease, or sickle cell anemia, comprises a group of inherited blood disorders that affect the shape of red blood cells. Red blood cells, which carry oxygen throughout the body, are typically disc-shaped and flexible—imagine a jelly donut. These cells slip and slide in the bloodstream with no problem. People with sickle cell disease have a gene mutation that causes their red blood cells to be sickle-shaped, like someone took a big ol’ bite out of the jelly donut. Their sickle-shaped red blood cells tend to get stuck in the body, blocking blood flow and causing severe pain and organ damage. Sickle cell disease affects roughly 100,000 people in the United States, almost all of them African American or Hispanic, and it is notoriously hard to manage. Vertex’s drug, Casgevy, offers a potential cure to the disease. Casgevy uses CRISPR/Cas9, a genome editing technology, to permanently modify red blood cell production in the body and prevent the sickling of those cells.

In order to do that, however, patients’ current red blood cell production system must first be wiped out, to leave a clean slate. That wipe out is achieved through an intensive course of chemotherapy, which brings with it significant negative effects, especially on fertility. Because Casgevy is approved for use in patients two and older, and because patients are better able to tolerate the chemotherapy regimen when they’re young, the treatment can put at risk any childbearing capacity or at the very least force patients to seek expensive fertility treatments. In an attempt to allay patient concerns about fertility and the costs of any associated treatment, Vertex created the Fertility Support Program. Available only to privately insured patients, the Program provides up to $70,000 to each Casgevy patient for fertility services. Vertex, however, wants to extend the Program to patients with federally provided healthcare—Medicare and Medicaid patients.

As a general rule, healthcare providers face criminal and civil consequences for attempting to influence the medical decisionmaking of Medicare or Medicaid patients via money or gifts. Under the Anti-Kickback Statute, it constitutes a felony to knowingly and willfully offer or pay “any remuneration (including any kickback, bribe, or rebate)” to induce a purchase. 42 U.S.C. § 1320a-7b(b)(2). And the Beneficiary Inducement Statute imposes civil penalties for the same. Id. § 1320a-7a(a)(5). But the Anti-Kickback Statute contains a number of safe harbors for otherwise routine transactions, and the Beneficiary Inducement Statute adds its own exceptions, including for inducement that “promotes access to care.” Id. §§ 1320a-7b(b)(3), 1320a-7a(i)(6)(F).

In 2023, Vertex sought an advisory opinion from HHS regarding whether extension of its Fertility Support Program to Medicare and Medicaid patients would violate either the Anti-Kickback Statute or the Beneficiary Inducement Statute, whether HHS would exercise its discretion to withhold enforcement of the Anti-Kickback Statute, and whether the Program fits the Beneficiary Inducement Statute’s “access to care” exception. After an extended administrative back and forth that dragged on well past the statutory deadline, HHS issued its advisory opinion concluding that the Program would violate both statutes, HHS would not provide Vertex with prospective immunity, and the Program did not qualify for the “access to care” exception. Vertex sought review under the APA, arguing HHS’s interpretation of the statutes was contrary to law and that it offered insufficient evidence to clear the arbitrary and capricious standard. Vertex also argued that HHS’s internal regulations, which ostensibly permitted it to circumvent the 60-day timeline for advisory opinions, were unlawful. The district court granted summary judgment to HHS on all issues, and Vertex appealed.

The court first grappled with the meaning of “induce” in the Anti-Kickback Statute. Although Vertex argued the term should be read to prohibit only corrupt quid-pro-quo transactions, the court rejected this narrower specialized reading. Instead, the court read “induce” according to its ordinary meaning—to influence or prevail on a person—finding support for this reading in the long list of statutory safe harbors created by Congress. The court “[drew] meaning from superfluity,” reasoning that there would be no need for many of the safe harbors unless “induce” swept broadly. Similarly, the court declined to read “remuneration” in the statute to pertain only to corrupt payments and transactions, joining the Second and Fourth Circuits to conclude that “remuneration” reaches beyond dishonest dealing. Applying these interpretations, the court held that HHS correctly concluded that Vertex’s Program would violate the Anti-Kickback Statute.

As to the Beneficiary Inducement Statute, however, the court reached a different result. In its advisory opinion, HHS concluded that Vertex’s Program would not qualify for the “access to care” exception because HHS “lack[ed] data” that would allow it to determine whether the Program actually improved the ability of patients to access Casgevy. The court held that this portion of the advisory opinion was conclusory, failing to engage with Vertex’s evidence that the risk of infertility from chemotherapy is a reason why sickle cell disease patients forgo treatment and CMS guidance that lack of access to fertility preservation services presents a significant access barrier. Accordingly, the court set aside the portion of HHS’s advisory opinion pertaining to the Beneficiary Inducement Statute.

Finally, the court turned to administrative law’s bread and butter: procedure. By statute, HHS must provide advisory opinions within 60 days. But the agency had issued two regulations that allow it to stall almost indefinitely, by giving HHS a ten-day window to “formally accept” a request before the clock starts, and by allowing open-ended tolling whenever HHS asks for more information or consults an outside expert. Drawing on the en banc decision in Allegheny Defense Project v. FERC, the court held that an agency has no “unwritten and unilateral power to indefinitely evade” a congressional deadline. The court invalidated both regulations as contrary to law.

In the end, the court affirmed HHS’s conclusion that the Fertility Support Program would violate the Anti-Kickback Statute, so Vertex cannot yet open the Program to Medicare and Medicaid patients.

Alexis J. Abboud is a Harry A. Bigelow Teaching Fellow and Lecturer in Law at the University of Chicago. Her research lies at the intersection of contract, administrative, and constitutional law.