Texas sues Lilly over alleged kickbacks tied to its drugs

Texas Attorney General Ken Paxton and co-plaintiff Health Choice Alliance have filed a lawsuit against Eli Lilly, accusing the company of running illegal kickback schemes that pushed doctors to prescribe its drugs, including the tirzepatide medications Mounjaro and Zepbound ^[1].

The lawsuit claims Lilly used two programs to influence prescribing. One, called the "Free Nurse Program," allegedly gave providers free patient-care services either directly or through third parties. The other, the "Support Services Program," allegedly offered reimbursement support to providers as a form of kickback ^[1]. Paxton's office says these arrangements caused millions of dollars in Medicaid claims to be "tainted by Eli Lilly's illegal marketing and quid pro quo arrangements" ^[1].

Beyond Mounjaro and Zepbound, the suit says the scheme touched other Lilly products, including the diabetes drug Basaglar, the eczema treatment Ebglyss, the migraine drug Emgality, several insulin products, and the inflammatory drug Taltz ^[1]. "Big Pharma compromised medical decision-making by engaging in an illegal kickback scheme," Paxton said in a statement, adding that he would not allow corporations to "manipulate our healthcare system to line their own pockets" ^[1].

Lilly says it will "vigorously defend against these allegations" ^[1]. A company spokesperson noted that Health Choice Alliance has brought similar claims against Lilly before, and that "multiple courts and the federal government have rejected claims by this same corporate relator against Lilly as meritless" ^[1]. Health Choice Alliance first sued Lilly in 2017 over an alleged multi-tiered kickback scheme tied to free nursing services in exchange for prescriptions of Humalog, Humulin, and the osteoporosis drug Forteo ^[1]. A federal judge in Texas dismissed that case in August 2018, finding the allegations were not specific enough, though the plaintiff was allowed to refile ^[1]. The Fifth Circuit Court of Appeals upheld the dismissal in 2021 ^[1]. Lilly's spokesperson also said the federal government previously concluded the relator's allegations "lack sufficient factual and legal support," and that programs helping patients access basic product support after a doctor prescribes a medication serve a legitimate purpose for federal healthcare programs ^[1].

This case follows an earlier Texas lawsuit filed last October against several pharmacy benefit managers along with Lilly, Novo Nordisk, and Sanofi, alleging an insulin pricing conspiracy in which drugmakers raised list prices and paid money back to PBMs in exchange for preferred formulary placement ^[1].

Why it matters for patients

This lawsuit is a legal and business dispute, not a finding about whether Mounjaro or Zepbound are safe or effective for patients who take them. The allegations concern how the drugs were marketed to prescribers and how those arrangements may have affected Medicaid billing, not the medications' clinical performance ^[1].

Still, patients who rely on these drugs may want to watch how the case develops, since litigation over pricing and marketing practices can eventually affect insurance coverage, program integrity reviews, or how manufacturers structure the support services that some patients use to manage costs ^[1]. Because Health Choice Alliance's earlier claims against Lilly were dismissed in multiple courts, it is not yet known whether this new Texas-led case will proceed further or meet a similar fate ^[1].

What happens next

The case is newly filed as of August 12, 2025, and Lilly has said it plans to contest the claims ^[1]. No court schedule, ruling, or additional details about next steps are included in the available reporting, so it is not yet known when the case will move forward or how it might be resolved ^[1].