Despite posting record Q2 growth for its blockbuster weight loss and diabetes drug tirzepatide, Eli Lilly is facing legal challenge from a lawsuit filed in Texas that accuses the pharma company of bribing providers to prescribe its drugs.
Attorney General for Texas Ken Paxton and Health Choice Alliance claim Eli Lilly 鈥渙ffered illegal incentives鈥� to medical providers in the southern state so its most profitable drugs, including popular glucagon-like peptide-1 receptor agonist (GLP-1RA) medications tirzepatide, marketed as Mounjaro and Zepbound, would be preferentially prescribed to patients.
The marks the latest legal assault by the attorney general鈥檚 office, having previously sued Eli Lilly over an industry conspiracy to increase insulin prices. Health Choice Alliance has also filed previous legal action against Eli Lilly in the past.
In the latest filing, Paxton and Health Choice Alliance claim that Eli Lilly鈥檚 actions cost Texas Medicaid 鈥渕illions of dollars鈥�. The claimants argue that prescriptions were covered by the government insurance programme, resulting in claims to Texas Medicaid that were 鈥渢ainted by Eli Lilly鈥檚 illegal marketing and quid pro quo arrangements鈥�.
As per the filing, Lilly is alleged to have participated in two schemes to induce and influence providers. In the first, the pharma company, with the help of third parties, apparently provided free nursing services. The second scheme alleges that Lilly continues to offer reimbursement support services to get their drugs prescribed over rivals. 聽
An Eli Lilly spokesperson told 色界吧 Technology that it intends to 鈥渧igorously defend against these allegations鈥�.
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By GlobalDataThe spokesperson added: 鈥淢ultiple courts and the federal government have rejected claims by this same corporate relator against Lilly as meritless. In fact, the United States Government determined that 鈥榯he relators鈥� allegations lack sufficient factual and legal support鈥� in a prior case, explaining that federal healthcare programs have a strong interest in ensuring that, after a physician has appropriately prescribed a medication, patients have access to basic product support relating to their medication.”
This referred to similar kickback claims previously made by Health Choice Alliance. Lilly was originally sued by the organisation in 2017,聽alleged to have participated in a 鈥渕ulti-tiered kickback scheme鈥� along with other pharma companies, including Bayer. This involved offering free nursing services in exchange for preferential drug prescriptions.
The case was dismissed a year later by a judge in Texas. In 2021, a court of appeals upheld the prior decision to scrap the case amid attempts to revive the lawsuit.
It is also not the first time the state of Texas has accused Lilly of unlawful activities. In October 2024, the attorney general鈥檚 office sued several drugmakers and pharmacy benefit managers (PBMs) over insulin product prices. According to a statement at the time, Paxton accused manufacturers of a 鈥渃onspiracy鈥� to artificially and willingly raise insulin prices and then pay an undisclosed amount back to PBMs in a quid pro quo arrangement.
Lilly had a strong Q2 as it extended its lead over rival Novo Nordisk in the GLP-1RA treatment space. The company reported growth of 172% and 68% for Zepbound and Mounjaro, respectively. The two drugs brought in combined sales of $8.57bn in the quarter.
