United States v. Regeneron Pharmaceuticals, Inc., 780 F.Supp.3d 336

The United States and several states allege that Regeneron Pharmaceuticals unlawfully inflated the Medicare reimbursement price (ASP) for Eylea, a high-cost prescription drug, by not deducting certain credit card fee reimbursements to distributors from ASP calculations.
Medical practices buying Eylea from third-party distributors would have typically paid a higher price if using credit cards, but Regeneron reimbursed distributors the credit card processing fees, ensuring all practices paid the same regardless of payment method.
The plaintiffs argue this amounted to a non-reported price concession, artificially raising Eylea's ASP and Medicare/Medicaid payments to providers.
Regeneron characterized these payments as “bona fide service fees” (BFSFs), which under regulations need not be deducted from ASP, and so did not account for them in ASP calculations.
The United States (joined by multiple states) intervened in a qui tam suit under the False Claims Act and state analogues. Regeneron moved to dismiss for failure to state a claim and insufficient particularity.
The Court denied Regeneron's motion to dismiss, allowing the case to proceed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Are credit card fee reimbursements "price concessions" that should be deducted from ASP?	Yes, these lower the provider's net price and fit within the regulatory category or its spirit.	No, the reimbursements are not explicitly covered by the regulation's list of price concessions.	Yes, the regulatory list is illustrative, not exhaustive; these could plausibly be concessions.
Do credit card fee reimbursements qualify as BFSFs exempt from ASP deduction?	No, because they are not bona fide services performed for the manufacturer.	Yes, these are distribution-related service fees similar to shipping costs.	No, not a BFSF; credit card fees are not performed on behalf of the manufacturer nor necessary for distribution.
Did Regeneron act with sufficient scienter under the FCA?	Yes, Regeneron knew or recklessly disregarded that fees should be deducted, citing internal reports and Deloitte advice.	No, the rule is ambiguous; company's interpretation was at least reasonable and made in good faith.	Yes, plausible Regeneron knowingly or recklessly omitted these amounts to gain an advantage.
Were false or fraudulent claims submitted to Medicare?	Yes, inflated ASPs led to inflated government reimbursements; compliance certifications were false.	No, the claims themselves were not facially false; ASP reporting errors are not in the claims.	Yes, the FCA covers such fraud; actual claim need not contain the falsehood itself.

Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading standard for Rule 12(b)(6) motion)
Ashcroft v. Iqbal, 556 U.S. 662 (framework for evaluating plausibility of claims at motion to dismiss)
Universal Health Services, Inc. v. United States ex rel. Escobar, 579 U.S. 176 (liability for implied false certification under FCA)
United States ex rel. Booker v. Pfizer, Inc., 847 F.3d 52 (theory of FCA liability for schemes that result in false claims)
United States ex rel. Hutcheson v. Blackstone Med., Inc., 647 F.3d 377 (FCA liability can extend to parties not submitting claims themselves)
United States ex rel. Schutte v. SuperValu Inc., 598 U.S. 739 (FCA scienter is subjective; actual knowledge or recklessness suffices)
Germanowski v. Harris, 854 F.3d 68 (application of plausibility pleading standard in FCA context)