Texas Attorney General Ken Paxton sued Eli Lilly on Tuesday, accusing the pharmaceutical giant of allegedly “bribing and illegally inducing medical providers to prescribe its most profitable drug.”
Paxton specifically cited the company’s “high-demand” GLP-1 medications Mounjaro and Zepbound that are used for weight loss and diabetes treatment.
According to the court filing, Lilly “devised two programs” that were aimed at incentivizing medical providers to use its drugs because “in a marketplace saturated with medications that deliver—or claim to deliver—similar therapeutic results, Lilly needed a compelling promotional strategy to support them.”
In the first program, Lilly allegedly provided free patient-care services to “induce” medical providers to recommend or prescribe its drugs to their patients.
With the second one, Paxton accuses Lilly of providing reimbursement support services to providers who prescribed their drugs.
“Big Pharma compromised medical decision-making by engaging in an illegal kickback scheme,” Paxton said in a statement. “Eli Lilly fraudulently sought to maximize profits at taxpayer expense and put corporate greed over people’s health.”
The claim against Lilly notes that some of the prescriptions were covered by Medicaid insurance policies, “resulting in millions of dollars in claims to Texas Medicaid that were tainted by Eli Lilly’s illegal marketing and quid pro quo arrangements.”
The attorney general said that this was in violation of the Texas Health Care Program Fraud Prevention Act.
“I will not stand by while corporations unlawfully manipulate our healthcare system to line their own pockets,” Paxton added.
Lilly’s shares closed up slightly by 0.7% on Tuesday, so the lawsuit from Texas has not rattled investors thus far.
However, the company’s stock is down 17.2% for the year.
A Lilly spokesperson told Reuters that the claim includes allegations that have already “been dismissed by multiple courts and the federal government.”
Prior rulings found that the allegations lacked the factual and legal merit to prosecute the company.
"We intend to vigorously defend against these allegations," the spokesperson said.
Paxton previously sued Lilly and other major insulin manufacturers and pharmacy benefit managers (PBMs) last year.
In that claim, Paxton accused the insulin manufacturers like Lilly of artificially raising the prices of insulin and then “paid a significant, undisclosed portion back to the PBMs as a quid pro quo for inclusion in the PBMs’ standard offerings.”
The PBMs then allegedly gave preferential status to the manufacturer whose drug has the highest list price while excluding lower priced drugs.
Those allegations were dismissed in both the courts and by the federal government, as Lilly’s spokesperson noted.
Paxton is currently running in a contentious Republican primary Senate race in Texas against incumbent Senator John Cornyn.
The attorney general himself has faced his own legal problems, settling a criminal securities fraud case last year that had been ongoing for nearly a decade.
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