Gilead Sciences will pay $45 million to the State of Texas to resolve claims that it ran an illegal kickback scheme that improperly influenced prescriptions paid for by Texas Medicaid, Attorney General Ken Paxton announced on October 22. Paxton’s office sued Gilead in October 2023, alleging unlawful marketing practices designed to incentivize providers to prescribe Gilead’s drugs over competitors’ products. The inducements alleged included providing free nurses and reimbursement support services to Texas medical providers. Many of the resulting prescriptions were covered by Medicaid, and the state argued the claims submitted were tainted by the inducements, in violation of the Texas Health Care Program Fraud Prevention Act.
Gilead denied the state’s fraud allegations in a statement and said it accepted the agreement to avoid the cost and distraction of prolonged litigation, Bloomberg Law reported. The $45 million sum includes attorneys’ fees, costs and expenses for the state. The case was litigated alongside a whistleblower. Paxton framed the payment in deterrent terms: doctors ought to prescribe in the patient’s best interest, and companies that jeopardize the health of Texans or abuse taxpayer dollars will pay.
The settlement is one of a series rather than an isolated event. Paxton’s office previously secured a settlement with AstraZeneca over a similar alleged kickback scheme and has taken legal action against Eli Lilly and Sanofi-Aventis, among others, on Medicaid fraud theories. The enforcement theory treats services wrapped around a prescription, nursing support and reimbursement help provided free by the manufacturer, as inducements rather than patient support, and each settlement on that theory raises the compliance cost of the support-program model across the industry.