AstraZeneca Pays $34 Million To Resolve AG Paxton’s Kickback Allegations: The “Cost of Doing Business”
Updated
Texas Attorney General Ken Paxton secured a $34 million settlement with AstraZeneca related to claims that the company provided free services as an illegal kickback for increased prescriptions of its drugs through Texas Medicaid. The company has not yet released a statement and has not admitted any wrongdoing, as is typical of large corporate settlements.
“I will not allow Big Pharma to misuse taxpayer dollars to put profit ahead of Texans’ health,” said Attorney General Paxton. “My office will continue aggressively pursuing healthcare fraud to protect taxpayer dollars and the integrity of our healthcare system.”
The case was filed as a qui tam action under the Texas Health Care Program Fraud Prevention Act (THFPA) and the Texas Anti-Kickback Statute (TAKS), centered on three programs AstraZeneca operated for certain covered drugs. Paxton’s office alleged these initiatives served as disguised kickbacks and violated federal and state laws in the process.
AstraZeneca offered a Free Nurse Program for healthcare professionals, which included patient management support. The services allegedly subsidized staff time and resources for doctors’ offices and reduced their administrative and financial burdens. In doing so, the offices had financial incentives to prescribe AstraZeneca drugs over alternatives, including non-medical options. These prescriptions were often subsidized by Texas Medicaid, indicating that taxpayer dollars supported value-added perks such as the Free Nurse Program.
Reimbursement and administrative tasks were handled by AstraZeneca staff as part of its Support Services Program. This included navigating prior authorizations, coordinating copay assistance, and handling paperwork for insured patients. Again, this was a valuable program that reduced administrative staff costs for doctors’ offices.
AstraZeneca is alleged to have paid third parties to send clinical nurse educators and other health professionals to offices. The program, which Paxton called the “White Coat Marketing Program,” was disguised as an education or counseling program, but ultimately served as a promotional activity to recommend AstraZeneca drugs to doctors’ offices. This program allegedly encourages doctors to prescribe AstraZeneca drugs under the guise of education while masking the commercial intent.
The allegations focused primarily on anti-kickback laws and utilized internal documents, prescribing data patterns, and the Medicaid claims for covered AstraZeneca drugs during the time period. The settlement covers any conduct related to these programs up to the effective date.
These kinds of “white coat marketing” programs have been used by many pharmaceutical companies, but they have always denied that there is any marketing purpose to these services. Stat News and Medscape published articles in 2018 and 2019 suggesting that nurse ambassador programs are not merely a value-added service that provides benefits to patients, but rather a method by which pharma companies can save doctors’ offices money in administrative fees in exchange for prescribing their drugs.
Georgetown University Professor Adriane Fugh-Berman, MD, told Medscape in 2019 that she has been aware of this type of marketing for at least six years. Despite the $34 million settlement, AstraZeneca is still operating its Access 360 program, which includes the nurse educator program and the reimbursement support program.
AstraZeneca has previously paid settlements to resolve kickback schemes and illegal marketing tactics. In 2010, the company paid $520 million for promoting the off-label usage of the antipsychotic drug Seroquel. Texas AG Paxton secured a $110 million settlement with AstraZeneca in 2018 for its off-label promotion of Seroquel and Crestor.
The company continues to face several ongoing lawsuits for antitrust issues, white coat marketing programs, and drug injuries. One lawsuit alleges that its SGLT2 inhibitor diabetes drugs, Farxiga (dapagliflozin) and Xigduo XR (dapagliflozin plus metformin), caused severe injuries, including Fournier’s Gangrene and necrotizing fasciitis. The company reached a settlement in a case that it describes as “immaterial” while another case is scheduled for trial in September 2026.
AstraZeneca is also defending a whistleblower lawsuit in a California federal court related to its participation in the 340B Drug Pricing Program. The relator alleges violations involving the company’s handling of discounted drugs sold to covered entities. The case was dismissed in 2024, but revived by the Ninth Circuit in March 2026.
A JAMA study published in March 2026 examined anti-kickback statute (AKS) resolutions from 2000 to 2025. In the cross-sectional study, the authors found that pharma manufacturers paid “only 2.2% of US revenue accrued from selling implicated drugs during years of alleged violations.” This includes the conduct of direct payments to physicians to prescribe federally reimbursed drugs.
The authors said criminal AKS cases are uncommon, and the likely reason is that they are difficult to prove. AKS settlements are predictable for pharmaceutical companies that are “economically tolerable” and “function as a cost of doing business,” according to the authors.
The HighWire reported in 2024 about several AstraZeneca executives in China who were sentenced to more than a decade in prison each for their role in defrauding China’s national medical insurance. They were falsifying genetic tests to make patients eligible for insurance reimbursement in China.