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Texas Attorney General Ken Paxton is accusing Eli Lilly and Co. of a kickback scheme to induce medical providers to prescribe the Indianapolis-based company’s drugs including blockbuster GLP-1 medications Mounjaro and Zepbound, according to a recent lawsuit.
Paxton alleges that, to enhance profits, Lilly offered illegal incentives such as nursing and reimbursement support services to influence Texas providers to prescribe Lilly medications such as Mounjaro, approved to treat patients with Type 2 diabetes, and weight-loss drug Zepbound.
“Big Pharma compromised medical decision-making by engaging in an illegal kickback scheme,” Paxton said in a written statement. “Eli Lilly fraudulently sought to maximize profits at taxpayer expense and put corporate greed over people’s health.”
Beyond Mounjaro and Zepbound, the lawsuit named multiple other Lilly medications including Forteo, for osteoporosis, and Verzenio, a breast cancer treatment.
A Tuesday new release from Paxton’s office said many of the prescriptions were covered by Medicaid, resulting in millions of dollars in claims “tainted by Eli Lilly’s illegal marketing and quid pro quo arrangements, in violation of the Texas Health Care Program Fraud Prevention Act.” The complaint also lists Health Choice Alliance LLC as a plaintiff.
Lilly said it intends to vigorously defend against the allegations.
“Multiple courts and the federal government have rejected claims by this same corporate relator against Lilly as meritless,” a Lilly spokesperson told IBJ in an email. “In fact, the United States government determined that ‘the relators’ allegations lack sufficient factual and legal support’ 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.”
According to the filing, Lilly offered what the plaintiffs characterized as a Free Nurse Program to providers, “seeking to capitalize on the fact that follow-up and patient monitoring work is unprofitable for Providers” because government programs such as Medicaid typically reimburse at low rates.
Emphasis on GLP-1s
This is not the first time Paxton, a Republican, has targeted Lilly with litigation. In October, he sued major insulin manufacturers and pharmacy benefit managers, or PBMs, including Lilly, Express Scripts and CVS Pharmacy, alleging a conspiracy to increase insulin prices.
In a Tuesday news release, Paxton emphasized GLP-1s Zepbound and Mounjaro, which have been key drivers of Lilly’s recent growth and profitability.
The company said last week that during the second quarter of 2025, Mounjaro had U.S. revenue of $3.3 billion and Zepbound had U.S. revenue of $3.38 billion. Both drugs have the same active ingredient, tirzepatide.
For Q2 2025, U.S. Zepbound revenue increased 172% to $3.38 billion, compared with $1.24 billion in Q2 2024, primarily driven by increased demand, partially offset by lower realized prices.
Lilly faces other legal challenges related to its popular GLP-1 drugs.
More than two dozen patients have filed lawsuits in Marion County against Eli Lilly and Co. over its marketing of GLP-1 drugs Trulicity and Mounjaro, claiming the treatments have had adverse side effects that the company downplayed or failed to include in its advertising. Seventeen of the lawsuits also name Lilly rival Novo Nordisk Inc. as a defendant and make similar allegations about the marketing of GLP-1 drug Ozempic.
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