Imagine suing a company so hard the stock moons…

Texas Attorney General Ken Paxton woke up Tuesday and chose violence by dropping a fresh lawsuit on Eli Lilly for being a baby back b*tch juicing sales of its hottest moneymakers, including Mounjaro and Zepbound. How? By showering Texas medical providers with illegal perks like “free nurses” and reimbursement support.

(Source: Giphy) 

In short, according to Paxton, this is less charity and more a corporate Tinder for prescriptions… hooking providers up with goodies to steer patients toward Lilly’s products, then letting Texas Medicaid pick up the tab. Millions in allegedly tainted claims later, Paxton says taxpayers got fleeced, medical decision-making got compromised, and Big Pharma got richer. “Murica!

(Source: Benzinga) 

The legal filing drags in a laundry list of Lilly’s blockbusters… insulin brands like Humalog and Humulin, migraine med Emgality, eczema drug Ebglyss, cancer fighter Verzenio, and more which paint a picture of a broad kickback culture. Whereas, the “Free Nurse Program” and “Support Services Program” are named as the key delivery systems for these inducements. Of course, Lilly, for its part, says it’s seen this movie before… and won. Savage.

A spokesperson dismissed the claims as recycled garbage from Health Choice Alliance (Paxton’s co-plaintiff), which has been trying to make these accusations stick since 2017 without success in multiple courts and with federal regulators. Translation: nice try, see you in discovery.

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But, but, but… this is more than a one-off Texas dust-up. Paxton’s office has been gunning for pharma’s margins for a while, suing insulin makers and PBMs last year over alleged price inflation schemes, and joining a revived federal case accusing Lilly and three other drugmakers of trying to choke out a federal drug discount program. If nothing else, it’s a reminder that when it comes to high-priced meds, the battlefield isn’t just in labs and boardrooms… it’s in MF courtrooms, baby.

Meaning, whether this suit ends in a big payout, a quiet settlement, or just another dismissed case file, the optics are already doing work. In a year where GLP-1 drugs are minting billion-dollar quarters, the idea of Big Pharma allegedly buying influence with freebies is catnip for politicians looking to score points on their favorite motto of all-time: “Greed is good.” 

(Source: Giphy) 

Now obviously, this suit is still in its early stages, so we’ll see what more details come out. But considering that Eli Litlly is 1-0 on this type of shindig, means they believe Paxton’s argument is a wet blanket. And so do investors as shares are mooning +2.72% on the day so far. So with that, keep your head on the swivel and place your bets accordingly… especially if you hold Eli Lilly. Until next time, friends… 

At the time of publishing, Stocks.News does not hold positions in companies mentioned in the article.