AstraZeneca to Pay Nearly $34 Million to Texas Over Alleged Medicaid Kickback Scheme

Attorney General Ken Paxton (R-TX) announced Sunday that his office reached a nearly $34 million settlement with AstraZeneca Pharmaceuticals, resolving allegations that the company ran a covert scheme to influence which medications Texas doctors prescribed to their patients.

According to Paxton's office, the arrangement worked through three distinct programs. One involved providing free nursing services directly to medical providers and their patients.

A second had the company absorbing reimbursement and administrative tasks that would normally fall to prescribers. The third involved paying outside contractors to send clinical nurse educators and other healthcare professionals into medical settings, where they would recommend AstraZeneca products while presenting themselves as offering neutral, non-branded guidance.

Paxton's office argued that all three programs functioned as illegal inducements under the Texas Health Care Program Fraud Prevention Act and the Texas Anti-Kickback Statute.

Growing Concern

As a significant number of the resulting prescriptions were covered by Texas Medicaid, the state contends that taxpayer-funded healthcare dollars ended up subsidizing what were essentially marketing efforts dressed up as patient care.

The settlement agreement, which was signed in mid-June, requires AstraZeneca to pay $33,998,000 to the state. The company did not admit wrongdoing as part of the agreement, and the settlement document notes it represents a compromise on disputed facts and legal questions.

Furthermore, AstraZeneca also disputed the characterization of its programs by name in the settlement documents.

Of the total amount, roughly $22.9 million has been designated as restitution. A portion will also be shared with the federal government in accordance with state and federal law, given the Medicaid program's joint funding structure.

"I will not allow Big Pharma to misuse taxpayer dollars to put profit ahead of Texans' health," Paxton said. "My office will continue aggressively pursuing healthcare fraud to protect taxpayer dollars and the integrity of our healthcare system."