Health Law Advisor

On July 2, 2025, the Department of Health and Human Services Office of Inspector General (OIG) issued Advisory Opinion 25-07 (AO 25-07), a favorable advisory opinion involving sponsored tests.

Sponsored tests are medical diagnostic tests or laboratory services whose cost is directly or indirectly paid for, in whole or in part, by a third party (often a pharmaceutical manufacturer or medical device company or related company), rather than by the patient, their insurance, or the health care provider performing the test. Typically, companies agree to pay for sponsored tests because they are necessary for a patient to access or use the company’s therapy but pose high out of pocket costs on the patient. Sponsored tests are frequently used to help match a patient to a specific drug or therapy available from the pharmaceutical manufacturer or medical device company, including true companion diagnostics, or to monitor therapeutic efficacy or to identify dangerous side effects of a prescribed therapy.  

The OIG previously issued two opinions, AO 24-12  and AO 22-06, that approved sponsored test arrangements in which pharmaceutical manufacturers offered free genetic testing and genetic counseling services to patients suspected of having rare conditions for which the manufacturers produced approved medications. Under the facts in these opinions, the genetic test results alone did not directly determine whether the manufacturer's drug would be prescribed.

Since day one, a policy priority of the Administration has been to discourage and prevent gender-affirming care for children and adolescents that involves surgery or medication. Recent actions show a concerted effort across multiple federal agencies to achieve this goal.

Among the earliest actions by the Administration were two Executive Orders directed at transgender health care: EO 14168, “Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government,” and EO 14187, “Protecting Children From Chemical and Surgical Mutilation.” These Executive Orders immediately were challenged in federal courts. Ultimately, permanent injunctions were entered in the Western District of Washington and the District of Maryland against portions of the Executive Orders. Those injunctions are on appeal in the Ninth and Fourth Circuits.

Nevertheless, the Administration has continued to pursue its policy objectives through a mix of agency actions and communications, often disclaiming reliance on the Executive Orders and referring to other legal sources as the basis for a variety of agency actions.

Those waiting anxiously for the rules expanding the prescribing of buprenorphine via telemedicine and the controlled substance prescribing for patients at the Department of Veterans Affairs to officially go into effect will now have to wait until New Year’s Eve—December 31, 2025.

Practitioners will, however, be allowed to continue prescribing via telemedicine without first having an in-person visit with the patient, owing to COVID-19 Telemedicine Flexibilities for Prescription of Controlled Medications, in effect through the same end-of-year date.

A seven-page document released by the Department of Justice’s Drug Enforcement Administration (DOJ, DEA) and Department of Health and Human Services (HHS)—scheduled to be published in the Federal Register on March 24—further delays the effective dates of the “Expansion of Buprenorphine Treatment via Telemedicine Encounter” Final Rule and the “Continuity of Care for Veterans Affairs Patients” Final Rule, both dated January 17, 2025 .

On January 8, 2025, Massachusetts Governor Maura Healey signed into law House Bill No. 5159, “An Act enhancing the health care market review process” (“H. 5159”), which was passed by the Massachusetts legislature in the last few days of 2024. The bill, which takes effect April 8, will implement greater scrutiny of certain health care entities and affiliated companies—including private equity sponsors, significant equity investors, health care real estate investment trusts (“REITs”), and management services organizations (“MSOs”)—as well as pharmaceutical companies and pharmacy benefit management companies (“PBMs”) in the Commonwealth. 

The passage of H. 5159 follows debate between the House and Senate earlier in 2024 over similar bills, which failed to pass during the summer legislative session. Notably, similar bills included debt limitations on certain private investor-backed entities and bans of certain private equity investments, as well as significant restrictions on the MSO business model. However, these restrictions (among various others) were stripped from H. 5159.

Although H. 5159 has widespread implications for health care entities in the Commonwealth, a significant portion of the bill is clearly aimed at increasing regulatory oversight of for-profit-backed health care organizations through increased regulatory oversight of certain health care transactions and expanded reporting obligations. The bill also seeks to contain health care costs, including by increasing oversight of pharmaceutical company and PBM arrangements.

On December 27, 2024, the U.S. Court of Appeals for the Second Circuit held in U.S. ex rel. Camburn v. Novartis Pharmaceuticals Corporation that a relator adequately pleads a False Claims Act (“FCA”) cause of action premised on violation of the Anti-Kickback Statute (“AKS”) by alleging, with sufficient particularity under Federal Rule of Civil Procedure 9(b) (“Rule 9(b)”), that at least one purpose (rather than the sole or primary purpose) of the alleged kickback scheme was to induce the purchase of federally reimbursable health care products or services.^[1] In doing so, the Second Circuit joins seven other Circuit Courts—the First, Third, Fourth, Fifth, Seventh, Ninth, and Tenth Circuits—in adopting the “at least one purpose” rule. This ruling lowers the bar in the Second Circuit for relators pleading AKS-based FCA claims. 

Interplay Between FCA and AKS Violations

Under the AKS, “a claim that includes items or services resulting from a violation [of the AKS] … constitutes a false or fraudulent claim” under the FCA.^[2]

The AKS prohibits persons from, among other things, “knowingly and willfully” soliciting or receiving “any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind—

Whether a consumer is taking calcium carbonate for strong bones, magnesium to fall asleep, or high-dose caffeine to stay awake, the U.S. Food and Drug Administration (FDA) does not approve dietary supplements for safety and effectiveness. So how do consumers know if a product is safe, and how can manufacturers protect themselves in the case of a problem?

In response to stakeholder feedback, the FDA on February 21, 2024, released its updated directory of FDA actions and communications with respect to “Information on Select Dietary Supplement Ingredients and Other Substances.”

The latest attempt to expand the psychedelic world is making its way through Congress. On September 21, 2023, Congressmen Robert Garcia (CA-42)  and Earl Blumenauer (D-OR) introduced the “Validating Independence for State Initiatives on Organic Natural Substances Act of 2023”. Aptly titled the VISIONS Act, this legislation would, if enacted, protect legal psilocybin use from federal law enforcement intervention in any state or locality where psilocybin is legally permitted. The language in the Act specifically states that it aims to prohibit any federal funds from being ...