Texas Attorney General Ken Paxton alleged that Lilly offered illegal incentives to medical providers in Texas designed to steer providers toward prescribing Lilly’s drugs.
Texas Attorney General Ken Paxton said on Tuesday that he has sued pharmaceutical giant Eli Lilly and Co. (LLY) for “bribing” medical providers to prescribe its profitable drugs, including weight loss medication.
Paxton alleged that Lilly offered illegal incentives to medical providers in Texas, including “free nurses” and reimbursement support services, designed to steer providers toward prescribing Lilly’s drugs, including the high-demand GLP-1 medications Mounjaro and Zepbound that are used for weight loss and diabetes treatment. The Attorney General noted that the prescriptions were covered by Medicaid in many cases.
On Stocktwits, retail sentiment around LLY trended in the ‘extremely bullish’ territory over the past 24 hours, while message volume stayed at ‘extremely high’ levels. According to Stocktwits data, retail chatter around the stock jumped 135% over the last 24 hours, as of Tuesday morning.
A Stocktwits user highlighted the company’s upbeat second-quarter earnings and revised guidance for full-year 2025.
Another user dismissed the lawsuit, noting that such practices have been common in the pharmaceutical industry.
“Big Pharma compromised medical decision-making by engaging in an illegal kickback scheme. Eli Lilly fraudulently sought to maximize profits at taxpayer expense and put corporate greed over people’s health. I will not stand by while corporations unlawfully manipulate our healthcare system to line their own pockets,” Paxton said in a statement.
The Attorney General sued major insulin manufacturers and pharmacy benefit managers, including Eli Lilly, Express Scripts, and CVS Pharmacy, in October 2024, alleging a conspiracy to increase the price of insulin by 1,000%.
According to the statement, the new lawsuit builds on the efforts to hold drug manufacturers accountable for fraud and abuse.
LLY stock is down by 17% this year and by about 28% over the past 12 months.
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