On March 2, 2026, Judge Patti B. Saris of the District Court for the District of Massachusetts partially ruled in favor of Regeneron Pharmaceuticals on its motion to amend its answer in a qui tam case to assert contingent counterclaims for recoupment, offset, and unjust enrichment against state plaintiffs, but not the federal government.
The government in the underlying suit alleges that Regeneron improperly treated credit card processing fees related to its sales of the drug Eylea as bona fide service fees rather than as price concessions. That treatment resulted in a higher average sales price being reported for Eylea as the fees were not deducted, which resulted in higher Medicare part B reimbursement for the drug to physicians from the federal government and a higher reimbursement from Medicaid from the state governments.
In its motion, Regeneron argued that because the fees were treated as bona fide services fees rather than price concessions, Regeneron also reported a lower average manufacturer price for Eylea, resulting in a higher rebate amount paid by Regeneron in the form of Medicaid rebates. Regeneron argued that if the fees were found to have been improperly classified and that therefore the rebates it paid were inflated, it should be entitled to a reduction in any recovery for the amounts it overpaid.
In its holding, the Court ruled that the federal government enjoyed sovereign immunity with respect to the asserted counterclaims because they did not arise out of the same transaction since the government’s claims arose from a transaction between the federal government and physicians being reimbursed, while Regeneron’s counterclaim arose from a transaction between the federal government and the states. However, the Court held the state plaintiffs had waived their sovereign immunity to any compulsory counterclaims by voluntarily invoking the jurisdiction of the federal court, and that because the claims were logically related or based on the same aggregate of operative facts, Regeneron was entitled to bring its counterclaims against the states. Finally, the Court credited Regeneron’s argument that disallowing its counterclaims would be unfair, as it could “face unmitigated liability no matter how it decided to categorize its credit card processing fees” if it could not bring counterclaims against the states.
The case is U.S. et al. v. Regeneron Pharmaceuticals Inc., case number 1:20-cv-11401, in the U.S. District Court for the District of Massachusetts. A copy of Judge Saris’ opinion and order is available here.
