The Court of Appeals for the Second Circuit ruled Monday that Pfizer’s program to make its drug tafamidis more affordable violated the federal Anti-Kickback Statute (“AKS”), 42 U.S.C. § 1320a-7(b)(2)(B).

The drug is currently the only drug approved by the United States to treat transthyretin amyloid cardiomyopathy, a rare and progressive heart condition, and costs about $225,000 per year. Because the condition primarily affects older Americans, most patients are covered by Medicare. However, patients are still responsible for a co-pay of about $13,000 per year. Pfizer’s proposed program would have directly covered a patient’s co-pay if they met certain criteria.

Pfizer initially consulted HHS for an advisory opinion. The Department determined that Pfizer’s proposal would violate the AKS, which prohibits “knowingly and willfully” offering or paying any “remuneration” to “induce” an individual to purchase a federally reimbursable healthcare product. Pfizer brought suit in the United States District Court for the Southern District of New York under the Administrative Procedure Act, challenging the agency’s interpretation of the AKS. The court granted summary judgment for the government, rejecting Pfizer’s argument which would require an element of “corrupt” intent to impose liability under the statute. The Court of Appeals for the 2nd Circuit affirmed the district court judgment.