Texas Settlement With AstraZeneca Over Unlawful Patient Support Services: What Manufacturers Need to Know

View the settlement announcement here.

Texas alleged that the conduct resulted in more than one million tainted Medicaid prescription claims, and hundreds of millions of dollars in improper reimbursements. Texas further alleged that AstraZeneca provided expense relief to prescribers through free nurse and reimbursement support services, eliminating costs the prescribers otherwise would have borne. AstraZeneca also allegedly engaged in white coat marketing by deploying nurses to engage in sales activities disguised as educational patient counseling. The US Department of Health and Human Services Office of the Inspector General (OIG) has long cautioned manufacturers against these types of activities and that enforcement can come with high-value penalties. While enforcement in this area has occurred primarily at the state level, manufacturers can assess these programs now.

The federal AKS and many state-law equivalents treat expense relief as a form of remuneration that may implicate those laws. The OIG has long cautioned that providing goods or services that eliminate an expense a prescriber would otherwise incur can constitute impermissible remuneration when tied directly or indirectly to the generation of federal health care program business. In its 2003 compliance program guidance for pharmaceutical manufacturers, the OIG specifically warned that “if goods or services provided by the manufacturer eliminate an expense that the physician would have otherwise incurred … the arrangement may be problematic” when linked to federal health care program business. While state kickback statutes vary in their specifics, (including whether referrals for certain types of payers may implicate the statute), the AstraZeneca settlement demonstrates how state-level kickback statutes can be implicated by activities that would similarly implicate the federal AKS. 

In the AstraZeneca settlement, Texas alleged that the manufacturer generated over one million tainted Medicaid prescription claims through three related schemes involving improper sales and marketing activities, including two expense-relief activities.

1. Providing free nurse support services. AstraZeneca allegedly provided prescribers with free nursing support — worth an estimated $60,000 annually — to improve practice efficiency, provide disease care training and patient education, and answer patient questions on call. This support allegedly relieved prescribers of costs they otherwise would have incurred to employ staff or other nurses, making it a central example of the expense-relief theory.

2. Providing free reimbursement support services. AstraZeneca also allegedly provided free benefits verification, coverage determination, prior-authorization, coding, and appeals support, eliminating significant administrative time and expense that prescribers and their staff otherwise would have borne. Representatives also allegedly sometimes misrepresented themselves as the patient’s “appointed representative” or as calling from the provider’s office, going beyond ordinary forms and general guidance. While some types of reimbursement support are permitted, providing prior-authorization services and a certain level of appeal support would likely cross into impermissible territory, as would a manufacturer representative holding themselves out as being from the provider’s office. 

Related White Coat Marketing: Deploying Nurses as Undercover Sales Agents

AstraZeneca allegedly paid third-party staffing companies to deploy nurses posing as “nurse educators” who recommended AstraZeneca drugs to prescribers and patients under the guise of disease education. The nurses allegedly used their positions of public trust to obtain access and influence prescribing in ways traditional sales representatives could not achieve (i.e., by putting on their “white coats”). 

A Broader Pattern of Enforcement against Expense Relief and White Coat Marketing

The AstraZeneca settlement fits a broader enforcement pattern over the past decade involving patient support services that may provide expense relief, and related white coat marketing. Much of this enforcement has taken place at the state level. In August 2025, the Texas Attorney General sued Eli Lilly, alleging that the company offered nursing services as kickbacks in exchange for prescribers writing prescriptions for its GLP-1 medications, Mounjaro and Zepbound, which are used to treat diabetes and for weight loss. Eli Lilly allegedly devised a “Free Nurse Program,” offering health care providers “the time, service and expertise of nursing staff and other individuals who were trained to offer patient support to help manage these [p]roviders’ patients and engage directly with patients to ensure that they were looked after – without burdening the prescribing [p]roviders.” The plaintiffs allege that Eli Lilly used this program to induce health care providers to prescribe the company’s drug products.

In 2020, AbbVie paid $24 million to settle a California Department of Insurance fraud lawsuit alleging that it deployed registered nurses as “Ambassadors” to develop relationships with physicians and patients, handle insurance authorizations, appeal coverage denials, and guide patients to AbbVie-favorable insurance plans. The “Ambassadors” also allegedly performed a sales role for the company, raising white coat marketing concerns. AbbVie separately faced litigation in Illinois and an investor lawsuit in Delaware based on its “Ambassadors” program.

Navigating the Grey Area

Whether an arrangement constitutes expense relief under the AKS is highly fact specific. The analysis begins with whether the manufacturer’s support eliminates a cost or administrative burden the prescriber would otherwise bear and whether the support is tied directly or indirectly to federal health care program business (or, for state law claims, a payer covered by the applicable state statute). A manufacturer may provide certain types of general information useful to a prescriber when prescribing a specific drug, including template prior authorization letters, information or guidelines regarding specific payer appeal requirements, and general billing and coding information about the product. The line into impermissible expense relief may be crossed, however, if the manufacturer or its agent completes forms or other documentation on the provider’s behalf or — as alleged in the AstraZeneca case — calls the payer while holding itself out as the patient’s “appointed representative” or as calling from the provider’s office. 

Similarly, white coat marketing is a related but legally unsettled, fact-intensive issue. The OIG has distinguished passive promotional activities, particularly where the promoter is not involved in health care delivery, from activities by individuals in positions of public trust who are involved in patient care. Compensation paid by manufacturers to health care professionals (including physicians, nurses, and others in a position of trust by virtue of their relationship with a patient) for activities that can be tied to the manufacturer’s sales and marketing is, according to OIG, particularly concerning. 

Practical Compliance Takeaways

When implementing patient support programs, manufacturers can take the following steps:

• Limit reimbursement support activities. Providing templates, general guidance, or benefits verification may be permitted. Completing prior-authorization or appeals forms on a provider’s behalf, conducting advocacy for the provider, or misrepresenting one’s identity when contacting payers increases the manufacturer’s risk of providing impermissible expense relief. Manufacturers can adequately train personnel involved in patient support services on permissible and impermissible activities, including strictly prohibiting them from representing themselves to a payer as the patient’s appointed representative or as calling from a provider’s office.

• Distinguish education from sales. Confirm that nurses or health care professionals deployed under “educator” or “patient support” titles are not functioning as sales agents or replacing staff prescribers would otherwise employ. Red flags include sales training at manufacturer headquarters, compensation tied to prescription metrics, use of CRM or sales-tracking tools, and sales call targets.

• Ensure compensation transparency. Review all arrangements in which health care professionals engage in promotional activities on a manufacturer’s behalf. Disclose compensation clearly and contemporaneously so the engagement’s paid nature is apparent to prescribers and patients.

• Scrutinize “peer-to-peer” and access arrangements. Evaluate whether seemingly independent health care professionals are used primarily to gain access to prescribers who would otherwise decline to meet with sales representatives. If access, rather than genuine educational exchange, is the principal purpose, restructure immediately.

The AstraZeneca settlement underscores that free patient support services can create significant risk under the AKS and equivalent state laws when such programs relieve expenses prescribers would otherwise bear and are tied to prescriptions for the manufacturer’s products. Although much of the enforcement in this area has occurred at the state level, the dollar amounts at stake can be substantial. White coat marketing — disguising sales as education — presents a related risk. More broadly, manufacturers can proactively audit their nurse support, reimbursement assistance, and other patient support programs, including how any educational engagement is structured and disclosed, to mitigate state and federal enforcement exposure.