Texas Attorney General, Ken Paxton, is after pharma once again—invoking a very familiar theory. Last month, in a suit almost identical to the suit filed against Eli Lilly last year, Paxton filed suit against Sanofi-Aventis US LLC (“Sanofi”) in state court for Sanofi’s alleged kickbacks to providers in violation of the Texas Health Care Program Fraud Prevention Act (“THFPA”). This action, like the former against Eli Lilly, is part of a broader enforcement trend against the pharmaceutical industry in Texas, which encompasses several key lessons for pharmaceutical industry participants doing business in the state. These actions collectively come at a time during which, curiously, the state’s major population centers in Houston, Dallas, and Austin all strive to become the next Bay Area/Boston biotech hub.
A. The Suit
The 19-page petition claims that Sanofi, which manufactures and markets numerous prescription drugs, offers two provider-facing support programs—the “Free Nurse Program” and “Support Services Program”—that allegedly constitute in-kind remuneration intended to induce providers to prescribe Sanofi products over alternatives. In public statements, Paxton characterizes the programs as an “unlawful scheme to offer providers with nurse services and reimbursement support services were intentionally done to influence which drugs Texans receive” and elaborates that “[b]ecause some of the Sanofi drugs are used to treat chronic illnesses, these kickbacks have established years-long sources of revenue for Sanofi even if the drugs prescribed weren’t the best option for the patient.” On the merits, the state’s theory is that these programs—although marketed as patient support programs—technically function as kickbacks because they reduce providers’ costs and administrative burdens (especially around ongoing patient care logistics and navigating reimbursement/prior-authorization hurdles), creating a financial incentive to choose Sanofi products.
Here, Paxton seeks not only monetary relief in excess of $1,000,000, but also an injunction to suspend the programs. However, Sanofi has publicly rejected the characterization of these programs as bribes, insisting that the services are structured to comply with federal and state law and are intended to support patients, not influence prescribing.
B. The Trend
This matter fits squarely within the Attorney General’s broader pharmaceutical enforcement strategy: Paxton has gone after the pharmaceutical industry in the recent past on a variety of legal theories. Last fall, Paxton sued Johnson & Johnson, alleging deceptive marketing and fraudulent financial moves related to Tylenol (acetaminophen) and, a month later, sued Sanofi and Bristol Myers Squibb over alleged non-disclosure about the effectiveness of Plavix in certain patient populations. The year before, he sued Sanofi, Eli Lilly, and several Pharmacy Benefit Managers (“PBMs”) for allegedly collaborating to inflate the cost of insulin.
However, the petition Paxton filed against Eli Lilly last summer is a much closer analogue. In August 2025, Paxton sued Eli Lilly, too, over its “Free Nurse Program” and “Support Services Program,” again alleging that they constitute in-kind remuneration to induce providers to prescribe Lilly drugs (including GLP-1 drugs such as Mounjaro and Zepbound), in violation of the THFPA.
C. The Takeaways
The central compliance question emerging from this recent Sanofi suit, as well as previous enforcement action, is whether—and if so, when—manufacturer-sponsored services like nurse educator programs cross the line from permissible patient support to unlawful remuneration to providers. Federal courts wrestled with this back in the late 2010s, with the Department of Justice (“DOJ”) ultimately moving to dismiss a series of cases brought by relators on the grounds that the nurse educator programs served an important role in patient health and safety. The State of California dealt with something similar in 2020, which ultimately settled in favor of the State.
Under Paxton’s theory, value is not limited to direct payments; rather, it includes services that reduce administrative burden, supply staff support, assist with prior authorizations, or otherwise make prescribing a manufacturer’s product easier or more economically attractive. This framing, which is part of the standard compliance analysis framework these days at most companies, analyzes whether the “thing of value” constitutes operational substitution—i.e., whether the manufacturer is absorbing tasks that would otherwise be performed (and paid for) by the provider. The inquiry focuses on whether any one program, in concert with others provided by the company, could constitute prohibited remuneration under the law.
Neither the California nor federal case reached the merits as to whether these programs, in concert with the ecosystem of manufacturer-provided support programs, rose to the level of constituting a violation of law. In fact, the DOJ in dismissal briefing actually extoled the virtues of nurse educator programs. This comes as no surprise to anyone who has worked in the rare disease and/or specialty spaces and knows how critical these programs are for patient education and safe product use/administration. Moreover, it is likely that the California case was more focused on other, “traditional” kickback concerns like free meals, gifts, and entertainment.
Paxton’s most recent suit, and the broader enforcement trend, highlight the continuing interplay between state anti-kickback enforcement and federal Anti-Kickback Statute (“AKS”) jurisprudence. Even where a program is structured to comply with federal safe harbor principles, states may adopt broader interpretations under their own Medicaid fraud statutes (such as the THFPA). However, the federal courts’ willingness to dismiss these types of suits signals that not all manufacture-sponsored nurse/professional support programs are, de facto, suspect (and that some degree of support can be beneficial and consistent with federal program interests). It remains to be seen how Paxton will fare against that backdrop.