WASHINGTON, D.C.: Texas Attorney General Ken Paxton has filed a lawsuit against U.S. pharmaceutical giant Eli Lilly, alleging the company engaged in an illegal scheme to pay kickbacks to healthcare providers to encourage prescriptions of its most profitable medications.

According to Paxton's office, the alleged scheme targeted drugs such as Mounjaro and Zepbound, GLP-1 medications used to treat diabetes and aid weight loss, with financial inducements designed to sway medical decision-making in the company's favor.

"Big Pharma compromised medical decision-making by engaging in an illegal kickback scheme," Paxton said in a statement, adding that the case builds on previous efforts to hold drugmakers accountable for fraud and abuse.

The lawsuit follows earlier legal action by Paxton's office against insulin manufacturers, including Lilly, and pharmacy benefit managers (PBMs). That case claimed manufacturers inflated insulin prices and then funneled a significant, undisclosed share back to PBMs in exchange for preferential placement on drug formularies.

Eli Lilly denied wrongdoing, saying the new claims come from the same corporate whistleblower whose allegations have been dismissed by multiple courts and rejected by the federal government.

"We intend to vigorously defend against these allegations," a company spokesperson said, citing prior rulings that found the accusations lacked factual and legal merit.