DOJ memo identifies False Claims Act and enforcement risks related to gender transition medication and procedures
Attorney General (AG) Pam Bondi has issued a memorandum titled “Preventing the Mutilation of American Children” (the Memo) to select Component Heads of the Department of Justice (DOJ).
Released on April 22, 2025, the Memo seeks to provide guidance on the implementation of the Trump Administration’s Executive Order, "Protecting Children from Chemical and Surgical Mutilation" (EO 14187), which reversed several Biden Administration policies supporting gender transition treatments and procedures.
In the Memo, AG Bondi, among other things:
- Announced that the DOJ will investigate pharmaceutical companies and medical providers for “misleading” and “off-label” statements about the effects of chemical and surgical procedures used in gender transitions as potential violations of Food, Drug, and Cosmetic Act (FDCA) prohibitions against misbranding.
- Announced that the DOJ will investigate claims submitted for reimbursement to federal healthcare programs for services related to “radical gender experimentation” for potential False Claims Act (FCA) liability. For example, if a provider prescribes puberty blockers for a child for an “illegitimate reason,” like gender dysphoria, but reports a “legitimate purpose,” like early onset puberty, or if a provider performs a surgery to remove or modify a child’s sex organs but bills Centers for Medicare and Medicaid Services (CMS) for a different procedure, the Memo would direct DOJ to act.
- Notified the public of the DOJ’s “eager[ness]” to work with qui tam whistleblowers with knowledge of any of the above violations.
- Announced the creation of the AG’s Coalition Against Child Mutilation, which will share intelligence with state attorneys general and support state-level prosecutions.
- Noted that she has directed the drafting of new legislation to create a private right of action for children and parents of children whose bodies have been damaged by medical professionals through gender transition procedures.
- Announced that the DOJ will no longer rely on guidelines from the World Professional Association for Transgender Health (WPATH) related to minimum age and other requirements for performing gender transition procedures.
Off-label promotion
The FDCA does not explicitly prohibit the promotion of drugs or devices for “off-label” uses, but the DOJ and the Federal Drug Administration (FDA) have pursued both civil and criminal enforcement against so-called “off-label promotion” as prohibited “misbranding” under the FDCA, which carries criminal penalties.[1] The FDCA requires that a medical product be authorized, approved, or cleared for its intended use before distribution. The government’s stated theory is that a company’s promotional communications and materials, among other things, may reflect the product’s intended use and that “off-label promotion” constitutes misbranding because that use is unauthorized.
Although the government historically pursued such conduct regularly, the number of investigations and enforcement actions decreased significantly following several successful challenges to the government’s theories on First Amendment grounds in the 2010s.[2] Caronia, Amarin, and similar cases established that the government cannot prove misbranding under the FDCA based solely on truthful, non-misleading speech promoting the off-label use of an approved medication. Notwithstanding the steep decline in activity, the government has not abandoned misbranding cases because “misleading” off-label speech may still constitute misconduct.
The FCA
The FCA provides that any person who knowingly submits, or causes to submit, false claims for payment to the government is liable for three times the government’s damages plus a sizable penalty for each false claim. The government uses the FCA to pursue claims against life sciences and healthcare companies and individuals for explicitly or implicitly making materially false or misleading statements concerning products for which the government receives claims for reimbursement, including for alleged “off-label” promotion. The FCA is also unique because it allows private citizens (called relators) to file suits on behalf of the government (called qui tam suits) against those who have defrauded the government and to recover a portion of the government’s recovery. When a relator files a qui tam lawsuit, the government must investigate and decide to either intervene in the action or decline to do so. Relators can continue to litigate on their own even if the government declines to intervene.[3]
In her memo, AG Bondi indicates that the government considers gender transition medication and procedures illegitimate reasons for reimbursement.
Key takeaways for healthcare and life sciences companies
Although previous Executive Orders established the government’s broad stance against transgender identity, the Memo is a clear statement of the DOJ’s intention to pursue enforcement against life sciences companies and providers that support gender transitions through their products or services. Given the AG’s directive that the department investigate suspected violations of the FCA and FDCA, companies should consider:
Reviewing promotional materials for off-label uses of gender transition medication:
In her Memo, AG Bondi specifically admonishes that, “[e]ven if otherwise truthful, the promotion of off-label uses of hormones—including through informal campaigns like those conducted by sales reps or under the guise of sponsored continuing medical education courses—run afoul of the FDA's prohibitions on misbranding and mislabeling,” an indication that the DOJ is likely to revert to more frequent enforcement using these grounds.[4]
Given this explicit warning, companies that provide any products or services used in gender transition or related treatments should consider closely reviewing any promotional content and conduct for potential misbranding risks. Similarly, such companies should consider new or refreshed compliance training for employees concerning such risks.
Notwithstanding the products described in the Memo, companies may also consider evaluating promotion related to other products that have been the subject of criticism by the new administration, such as ADHD medications, vaccines, mifepristone, and other similar products.
Reviewing billing practices:
The government is likely to apply additional scrutiny to claims for reimbursement for medications and procedures that have legitimate medical uses but that can also be used to facilitate gender transitions. Healthcare providers and any entities submitting reimbursements to the CMS and other federal programs should review their billing practices to ensure any reimbursement claims are accurate and do not falsely represent gender transition treatments as legitimate procedures.
Reviewing and strengthening internal whistleblowing procedures:
The FCA’s qui tam provisions allow whistleblowers with knowledge of fraud against the government to initiate lawsuits on the government’s behalf. AG Bondi’s encouragement of whistleblowers to take advantage of the FCA’s qui tam provisions signals that the DOJ is highly receptive to entertaining qui tam actions addressing gender transition treatments. The statement could spur an increase in whistleblower/relator lawsuits, heightening enforcement risks for companies. Companies should consider reviewing their internal systems and procedures to ensure that employees are properly informed and guided to report any suspected policy violations internally, allowing for thorough and appropriate investigation and remediation.
For more information, please contact the authors.
[1] See United States v. Facteau, No. 15-cr-10076-ADB, 2020 U.S. Dist. LEXIS 167169 (D. Mass. Sep. 14, 2020).
[2] See United States v. Caronia, 703 F.3d 149 (2d Cir. 2012); and Amarin Pharma, Inc. v. FDA, 119 F. Supp. 3d 196 (S.D.N.Y. 2015).
[3] Plaintiffs law firms typically pre-finance the costs of qui tam lawsuits and represent relators on a “contingency fee” basis – ie, with the expectation of being paid once the relator is paid a percentage of the government’s recovery. Relators are entitled to up to 30 percent of amounts the government recovers due to their lawsuit. See 31 U.S.C. § 3730 (d).
[4] See Section II of the Memo.
