Ardelyx Lawsuit: HHS Over Xphozah, FDA and TDAPA Fraud Suits

Ardelyx, Inc. is fighting three lawsuits tied to its kidney drug Xphozah. The active one is an Ardelyx lawsuit against the U.S. Department of Health and Human Services challenging Medicare’s decision to fold Xphozah into a bundled payment for dialysis facilities; a federal judge dismissed it in November 2024 for lack of jurisdiction, and the appeal is pending at the D.C. Circuit. Two separate securities fraud class actions brought by investors have both been dismissed, though one is now on appeal to the First Circuit.

The Lawsuit Against HHS Over Xphozah

Xphozah (tenapanor) is an oral drug approved by the FDA in October 2023 to lower phosphate levels in adults with chronic kidney disease on dialysis. It is taken twice daily near meals and is not given during dialysis sessions.

On July 17, 2024, Ardelyx sued HHS in the U.S. District Court for the District of Columbia, joined by the American Association of Kidney Patients and the National Minority Quality Forum. The case, Ardelyx, Inc., et al. v. Becerra, et al. (No. 1:24-cv-02095), was assigned to Judge Beryl A. Howell.¹

The dispute is about how Medicare pays for the drug. Until January 1, 2025, Xphozah was covered under Medicare Part D, so patients filled prescriptions at pharmacies. A CMS rule finalized in late 2024 moved oral-only phosphate-lowering drugs into the End-Stage Renal Disease Prospective Payment System, the bundled payment dialysis facilities receive to cover dialysis-related services and medications. After that date, facilities became responsible for furnishing Xphozah directly or through pharmacy arrangements, and Medicare stopped reimbursing it separately under Part D.²

Ardelyx argued that the Medicare Improvements for Patients and Providers Act (MIPPA) only authorizes CMS to bundle drugs “furnished for the treatment of ESRD” that have injectable or non-oral equivalents. Xphozah, the plaintiffs said, is oral-only, has no injectable counterpart, treats hyperphosphatemia rather than end-stage renal disease itself, and is not administered in dialysis units or during treatment. Under the Administrative Procedure Act, they asked the court to find the classification arbitrary and beyond CMS’s statutory authority, and they sought a preliminary injunction to block the policy before January 1, 2025.³⁴

The patient-access piece of the complaint argued that the existing bundle barely covers basic dialysis services, and that adding Xphozah’s cost would create a financial disincentive for facilities to stock and prescribe it. The plaintiffs said the effect would fall hardest on rural, low-income, and minority patients. AAKP called the policy “federal statutory and regulatory overreach.”⁵⁶

Dismissal for Lack of Jurisdiction

The government moved to dismiss, pointing to 42 U.S.C. § 1395rr(b)(14)(G), which bars administrative or judicial review of “the identification of renal dialysis services included in the bundled payment.” On November 8, 2024, Judge Howell agreed and dismissed the case for lack of subject matter jurisdiction. She read “identification” broadly enough to cover both general regulations and the specific letter-decision classifying Xphozah as a renal dialysis service. She rejected the government’s broader position that an agency’s own say-so could trigger the bar, calling that argument “preposterous,” but still found CMS’s classification protected from review. The pending motions for preliminary injunction and expedited summary judgment were denied as moot.⁷⁵

The Pending D.C. Circuit Appeal

Ardelyx appealed to the U.S. Court of Appeals for the D.C. Circuit, No. 24-5290. The case was re-captioned Ardelyx, Inc. v. Robert F. Kennedy Jr. after Kennedy became HHS Secretary, and later filings added Mehmet Oz as an appellee. Briefing wrapped in April 2025, and the court heard oral argument on September 25, 2025.⁸

At argument, Ardelyx’s counsel pressed the position that the jurisdictional bar and the merits “merge,” relying on the Amgen precedent for the proposition that a judicial-review bar extends only to actions within an agency’s statutory authority. The government defended its classification as a proper exercise of authority under the statute’s definition of renal dialysis services.⁹

As of mid-2026, the D.C. Circuit has not issued a decision.⁸

What the Reclassification Has Cost Ardelyx

The stakes of the appeal are visible in Ardelyx’s revenue. Xphozah generated about $160.9 million in net U.S. revenue in 2024, when Medicare Part D patients made up roughly 60% of the drug’s patient base.¹⁰

Full-year 2025 Xphozah revenue fell to $103.6 million, a drop of more than 35%. Fourth-quarter 2025 revenue was $27.8 million, down from $57.2 million in Q4 2024. Total dispenses actually rose 9% year over year, powered by a 41% increase in paid dispenses to non-Medicare patients. Ardelyx projected 2026 revenue between $110 million and $120 million.¹¹ In SEC filings, the company said the continued absence of Medicare Part D coverage “will result in a materially lower pace of revenue” and that bundling “creates additional uncertainty as to the commercial opportunity for XPHOZAH.”¹²

The 2021 Securities Fraud Suit Over FDA Approval

Investors filed a class action in 2021 alleging Ardelyx made materially false and misleading statements about tenapanor’s chances of FDA approval between August 6, 2020, and July 19, 2021. The trigger was an FDA letter received on July 13, 2021, identifying “deficiencies” in the application and flagging concerns about “the size of the treatment effect and its clinical relevance.” The complaint alleged executives knew or should have known the submitted data was insufficient.¹³

The consolidated case (No. 21-CV-05868), before Judge Haywood S. Gilliam Jr., cycled through multiple dismissals and amended complaints. On September 12, 2024, the court dismissed the third amended complaint and entered judgment for the defendants. The lead plaintiff appealed in October 2024 but voluntarily dismissed the appeal on March 7, 2025, ending the case.¹³

The 2024 Securities Fraud Suit Over TDAPA Statements

A second investor suit, Yarborough v. Ardelyx Inc. (No. 1:24-cv-12119), was filed in the U.S. District Court for the District of Massachusetts. Plaintiffs alleged that between February and July 2024, Ardelyx executives misled the market by saying the company intended to apply for the Transitional Drug Add-on Payment Adjustment (TDAPA), a temporary separate-reimbursement program for newly bundled drugs, when they had already concluded the program was unworkable. The complaint cited CEO Michael Raab’s May 2024 earnings-call statement that “our intent is to enter TDAPA” and contrasted it with lobbying documents submitted to CMS that plaintiffs said showed the company had already decided TDAPA would not preserve patient access.¹⁴

Judge Leo T. Sorokin dismissed the case in December 2025. He found the plaintiffs had not offered contemporaneous evidence that executives had decided against applying for TDAPA, or seriously doubted it, when they made the public statements at issue, and he concluded the inference of fraud was not plausible on the facts alleged. The plaintiffs filed a notice of appeal to the First Circuit in January 2026, and that appeal is pending.¹⁵

1
CourtListener. Ardelyx, Inc. v. Becerra Docket
2
CMS.gov. Calendar Year 2025 End-Stage Renal Disease Prospective Payment System Final Rule
3
STAT News. Ardelyx v. Becerra Complaint
4
Ardelyx Investor Relations. Ardelyx, AAKP, and NMQF File Lawsuit to Protect Dialysis Patient Access
5
GovInfo. Ardelyx v. Becerra, Memorandum Opinion
6
AAKP. AAKP Legal Action Statement
7
Bloomberg Law. Ardelyx Loses Bid to Block HHS Classification of Kidney Drug
8
CourtListener. Ardelyx, Inc. v. Robert F. Kennedy Jr. Docket
9
CourtListener. Ardelyx, Inc. v. Robert F. Kennedy Jr., Oral Argument
10
StockLight. Ardelyx 2025 Annual Report
11
GlobeNewsWire. Ardelyx Reports Fourth Quarter and Full Year 2025 Financial Results
12
SEC. Ardelyx Annual Report Filing
13
Stanford Securities Class Action Clearinghouse. Ardelyx Inc. Securities Litigation
14
ALM Media. Yarborough v. Ardelyx, Memorandum and Order
15
Bloomberg Law. Ardelyx Investors Appeal Dismissal of Medicare Program Lawsuit