Gilead Will Pay Texas $45 Million in a Medicaid Kickback Case. Lululemon Agrees to Chemical Testing Rules

Two settlements announced by the Texas attorney general's office on Thursday reach into places most families never think about: the reasons a doctor picks one drug over another, and what goes into the fabric of workout clothes.

Drugmaker Gilead Sciences will pay Texas $45 million to resolve claims that it used illegal incentives to steer Medicaid prescriptions, according to the attorney general's office. Separately, Lululemon agreed to keep enforcing chemical safety standards across its supply chain, including testing related to so-called forever chemicals, under a three-year agreement.

The Gilead case

Texas sued Gilead in October 2023. The state said the company offered medical providers "free nurses" and reimbursement support services to encourage them to prescribe its drugs over competitors'. Many of those prescriptions were paid for by Texas Medicaid, the state said, which led to millions of dollars in claims it called tainted. The state brought the claims under the Texas Health Care Program Fraud Prevention Act.

"Doctors ought to prescribe medication in accordance with what is in the best interest of the patient," Attorney General Ken Paxton said. "When Big Pharma attempts to bribe providers by offering kickbacks, the integrity of our healthcare system is jeopardized."

Gilead tells a very different story. In a company statement, it said it "expressly denies the allegations which never went to trial, and no judge or jury in this case found that Gilead's patient support programs violate the law." The company said the case was first brought by Health Choice Advocates, "an entity formed to file lawsuits against pharmaceutical companies," and that Texas joined later. Gilead said it settled "to avoid the cost and distraction of prolonged litigation" and that the agreement is not an admission of wrongdoing.

What it means for patients

If you take a Gilead medicine, the company says nothing changes for you. Gilead said the settlement "ensures Texas patients can continue to access the Gilead medicines they rely on" and that it will keep offering its patient support programs in Texas and across the country.

The deeper issue is trust. Patient support programs can help people start and stay on a medicine. They can also become a way to win a doctor's loyalty. The line between the two is what this case was about, and it was never decided by a court.

The attorney general's office said it previously reached a settlement with AstraZeneca over a similar kickback scheme, and has taken legal action against Eli Lilly, Sanofi-Aventis and other drugmakers.

The Lululemon agreement

In April, the attorney general opened an investigation into whether Lululemon misled consumers about the safety and health effects of its products, including the possible presence of per- and polyfluoroalkyl substances, or PFAS. The office said those chemicals, often found in synthetic fabrics, have raised concerns over a possible link to cancer, infertility and hormone disruption.

Under the agreement, Lululemon must keep requiring vendors to prove they comply with its restricted substances list, through independent lab testing or valid third-party certifications. It must check that certifications are valid, require new testing when they expire and take corrective action when vendors fall short. The office's announcement did not include a response from the company, and it did not say whether any PFAS were found.

The office said it is also investigating other clothing brands, such as Hanes and Fruit of the Loom, over chemicals in children's clothing.

Keep it in perspective

These announcements come from an attorney general who is also the Republican nominee for U.S. Senate, with Election Day nine days away. Paxton has been especially active against big companies this fall, including his lawsuit against OpenAI. Voters can weigh the timing for themselves.

The underlying questions are still worth asking. Medicaid is paid for by taxpayers, and money spent on influenced prescriptions is money not spent on care. Parents have every right to know what is in the clothes their children wear.

Scripture calls the body a temple (1 Corinthians 6:19), and caring for it is part of faithful living. That includes asking your doctor why a drug was chosen, reading labels and supporting honest dealing in the businesses that serve your family.