A donation from Empower Pharmacy’s CEO to the Baylor College of Medicine paid the office rent for a prominent Houston urologist who prescribed Empower’s drugs to his patients. The arrangement raises concerns among experts of a possible conflict of interest and points to looser laws regulating compounders.
Illustration by Lauren Ibañez
A prominent Houston urologist used money donated by Empower Pharmacy’s CEO to pay rent for his medical practice, raising concerns among experts about a conflict of interest, according to a Houston Chronicle investigation.
Dr. Larry Lipshultz used the money — which was sent to his employer, Baylor College of Medicine, as a gift — while also referring his patients to the pharmacy, according to interviews and public statements Lipshultz has made.
“There’s a whole slew of ethical concerns related to this,” said Dr. Reshma Ramachandran, a primary care physician and health services researcher at Yale School of Medicine. “If you really believe in these products, then as a clinician, you should just prescribe them without having a financial relationship that will obscure your motivations around prescribing.”
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This story is part of the series “A Dose of Disruption: How America’s desire for GLP-1s and testosterone fueled the growth of Empower Pharmacy and roiled the drug industry.”
Lawmakers have long scrutinized conflicts of interest in medicine and created laws that require pharmaceutical companies to disclose payments or gifts to physicians. Research shows that physicians who accept gifts from pharmaceutical companies tend to prescribe more drugs to patients, including pricier brand-name drugs.
But loopholes exist in transparency laws, experts say. For example, pharmaceutical companies are not required to disclose payments that may benefit a physician when they’re donated through a medical school, said Genevieve Kanter, a professor at the University of Southern California Price School of Public Policy. That’s what happened in Lipshultz’s case.
And those loopholes extend to compounding pharmacies, which make drugs that millions of Americans consume but are not subject to the same requirements for drug quality as pharmaceutical companies.
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While compounding pharmacies have to abide by basic quality standards, the drugs they make are not tested in humans for safety and effectiveness.
“I have concerns about undue influence from these sorts of gifts, whether from compounding pharmacies or from pharmaceutical companies,” Kanter said. “But, of course, there are greater potential health risks from compounded drugs, which are not standardized and have not undergone evaluation of safety and efficacy.”
‘Not quid pro quo’
Lipshultz, 84, is a widely respected and accomplished urologist who has worked in Houston for more than three decades. He has had a long-running relationship with Empower’s CEO and founder Shaun Noorian, who was Lipshultz’s former patient and, at one point, a potential business partner.
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In response to questions from the Chronicle, Lipshultz said the gift did not come with the expectation that he would refer patients to the pharmacy — and that it was not for personal gain. Noorian gave the money as an official gift to the medical school, and Lipshultz said he used it to make rent payments for a space in the O’Quinn Medical Tower in the Texas Medical Center.
In an email, Lipshultz said that while Baylor normally paid the rent for the O’Quinn space, the university had been experiencing temporary “cash flow issues” and, as a result, the rent payments would have come out of his personal research fund.
“In order to avoid this, Shaun Noorian made a contribution to Baylor that was used to pay for the rent for one or two months” until he could move his practice to another location, Lipshultz said.
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He also said other pharmaceutical companies have made donations to support his work.
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“Mr. Noorian’s relationship with our department was absolutely no different than other relationships we have with other charitable organizations and/or charitable pharmaceutical companies,” he said. “…These gifts in support are not quid pro quo or ‘tit for tat’ gifts. They are merely gifts to show appreciation of what we do and in support of our academic roles.”
Lipshultz added that he writes prescriptions to other compounding pharmacies.
“It just happened that Mr. Noorian was more sensitive to the needs of our department than were some of the others,” he said.
The amount of money Noorian has donated to Baylor College of Medicine is not clear. In a separate statement, the school said it does not release information on gifts unless the donor approves the release of the information.
Baylor’s policy says the college will not accept any gifts that create a “real or apparent conflict of interest” or come with an expectation that the donor will benefit. The gifts also must not compromise the mission and independence of the college, according to the statement.
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The statement also says: “Physicians cannot accept payment/gifts for referrals.”
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Yet multiple experts who reviewed the donation say the payment could qualify as a conflict that should be disclosed to patients. In this case, the financial connection has the potential to affect prescribing decisions, said Eric Campbell, research director of the Center for Bioethics and Humanities at the University of Colorado Anschutz.
Empower specializes in making drugs commonly prescribed by urologists, including testosterone, erectile dysfunction medication and fertility drugs.
There does not have to be an explicit “quid pro quo” — in which one party expects a specific favor or benefit in exchange for something — to establish a conflict, he said.
“Smart people don’t make explicit quid pro quos, because those get you in trouble,” he said.
In a statement, an Empower spokesperson said it is standard practice in the healthcare industry to make donations to academic research centers. The spokesperson referred specific questions about the donation to Baylor.
“As a private company, we do not publicly disclose specific amounts of individual donations,” the spokesperson said. “We also do not direct nor control how Baylor — or any other institution — allocates donated funds.”
The details of the transaction fall into a gray area when it comes to disclosure requirements, multiple experts said. It’s common for grateful patients to make donations to universities to support a doctor’s work, and universities often don’t require physicians to disclose such payments. But this patient owned a business that profited from the physician’s referrals.
“It’s certainly a unique case,” Campbell said.
A history of disclosed conflicts
Lipshultz was the first research scholar at the American Urological Association, which describes him as an early pioneer in male infertility research who helped transform the field’s understanding of testosterone therapy and specialized surgical techniques.
A specialist in male reproductive medicine and urological microsurgery, Lipshultz has trained more than 40 urology fellows who are currently practicing in the U.S., according to his website.
Lipshultz, among other prominent urologists, has advocated for more flexible standards for diagnosing patients with low testosterone. In an expert panel convened in December by the U.S. Food and Drug Administration, Lipshultz said treatment should account for a patient’s symptoms — not just their testosterone level.
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“All too often, patients are just treated based on the number,” he said.
In research studies, Lipshultz has disclosed numerous financial conflicts with pharmaceutical and medical device companies related to his field. He is listed as an investor in Augmenta, a company that makes penile implants. He served as a consultant for Abbvie, which makes a topical gel form of testosterone therapy, and Lipocine, a biopharmaceutical company that also makes oral versions of the hormone drug.
According to the disclosures, he has held formal positions, including advisory and speaking roles, for a number of other pharmaceutical companies, such as Eli Lilly, Pfizer, Endo Pharmaceuticals and Auxilium Pharmaceuticals.
There are no public disclosures of a formal role with Empower, though his relationship with Noorian goes back to before 2009, when Noorian first opened the pharmacy.
Then an oil field engineer in his 20s, Noorian discovered he had very low testosterone levels when he sought medical care for an on-the-job injury, Noorian said in a podcast interview. The doctor referred him to Lipshultz, who prescribed hormone drugs made by a compounding pharmacy, Noorian said. The drugs would be cheaper than the commercial versions.
“When Dr. Lipshultz decided to send me to a compounding pharmacy, he knew that I would have to be on these medications for the rest of my life,” Noorian said on the “Dr. Gabrielle Lyon Show.” Commercial drug prices increase annually at a higher rate than compounded drugs, he said. “He knew that the only way to make sure his patients would be compliant with this chronic therapy is by using a compounding pharmacy.”
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In an October phone interview with the Chronicle, Lipshultz said he didn’t remember his initial encounter with Noorian as a patient. But after Noorian opened the pharmacy, Lipshultz said he began referring his patients there.
“I’m not tooting my own horn, but I was really busy,” Lipshultz said. “I just sent all my business to Shaun because he was doing such a good job, and my patients were appreciating the ease that they could get these medications.”
Noorian’s company grew to become one of the largest compounders in the country, serving patients in all 50 states.
Lipshultz said compounded drugs are often cheaper and easier to access for his patients. Empower sells its testosterone for cash prices, allowing patients to bypass insurance company restrictions. To get coverage, patients need two testosterone tests the same day, with both tests showing low levels, Lipshultz said.
“I can’t do that with a busy practice,” he said, adding, “It became much more expedient (to prescribe compounded drugs), and given the low cost of testosterone to prescribe through the compounding pharmacies, then my patient could get it basically the next day and didn’t have to wait until their insurance was verified.”
A close relationship
By 2017, Lipshultz had become more closely intertwined with Empower executives.
That year, Lipshultz discussed plans with Noorian and Empower’s chief sales officer, Jasen Bruce, to open a testosterone clinic in Houston’s River Oaks neighborhood, with Lipshultz serving as medical director, according to drafts of business plans obtained by the Chronicle. The plans were among the documents that surfaced during a long-running lawsuit involving the clinic.
Defy International, a company operated by Noorian and Bruce, would manage the “Lipshultz Clinic,” according to the business plan, which predicted a “strong cash-generating business because it will earn recurring fees from patients who continually feel better and willingly purchase treatments month after month.” Bruce suggested licensing Lipshultz’s treatment protocols to “optimize revenue through royalties” and “memorialize Dr. Lipshultz’s legacy,” on an email thread among Lipshultz, Noorian and Bruce.
But plans for the clinic ultimately fell through — after Defy International paid about $800,000 to build out the space — because of a dispute with the landlord of the property, according to court records.
Defy sued the landlord, and Lipshultz was deposed in that case. In one brief exchange with the defendant’s attorney, Lipshultz acknowledged that a gift from Noorian temporarily helped him cover rent payments for his office until it could be moved to a different location in the Texas Medical Center.
Lipshultz was not questioned further about his relationship with Noorian during the deposition. The case went on for years until a 2025 court order enforcing a settlement agreement, according to court records.
Lipshultz and Empower have collaborated in other ways.
The physician co-authored at least two studies using drugs made by Empower Pharmacy, both of which reported benefits associated with the medicine. Neither study listed any outside funding sources. One of the studies did list Lipshultz’s roles as a consultant and speaker for various pharmaceutical companies.
Lipshultz also wrote a letter of support for Empower to receive state grant money in 2018, a copy of which was obtained by the Chronicle, though the pharmacy backed away from its application.
The physician’s relationship with Noorian eventually came under scrutiny, after he allegedly attended a dinner at a ritzy Houston restaurant with Empower executives and other Baylor urologists, according to a federal lawsuit.
Allegations of ‘kickbacks’
In January 2019, a former Empower Pharmacy sales director named Adam Gremillion arrived at Doris Metropolitan, a high-end steakhouse near River Oaks. He had been invited to attend a meeting with Bruce, Noorian, Lipshultz and other Baylor urologists, according to a federal lawsuit Gremillion later filed against Empower.
The group met at the bar while they waited for their table, and Gremillion was asked to pick up the $109 bar tab with his Empower credit card, he said in the lawsuit.
Later, Lipshultz brought up an anonymous donor who he said had been helping a colleague pay for a physician assistant, according to the lawsuit.
Noorian revealed that he was the anonymous donor, the lawsuit said.
That Noorian would pay for his colleague’s physician assistant aggravated Lipshultz, according to the lawsuit, because the two doctors had “a little professional competition.”
Noorian explained that a physician assistant would help the physician write more prescriptions, but Baylor would not pay for one, according to the suit. Noorian made the donations to Baylor anonymously and ensured they would be used to pay for the physician assistant, the lawsuit said.
Noorian then offered to pay for a physician assistant for Lipshultz, Gremillion alleged in the suit.
In the lawsuit, Gremillion said he learned that Empower had provided Lipshultz and his colleague with office equipment to encourage them to send business to the pharmacy. The lawsuit described dinners and the donations to Baylor as “kickbacks” that violated the federal anti-kickback statute.
Gremillion declined to comment on the case when reached by phone. Multiple other physicians who were named in the lawsuit did not respond to requests for comment.
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An Empower spokesperson said, “We have no record of this meeting or the statements attributed to it.” Lipshultz said he did not remember the dinner meeting in 2019. When asked about the allegations of anonymous donations, he said, “these are institutional gifts — not individual gifts.”
“Neither I nor any of my associates have ever received any direct payment from Shaun Noorian or Empower Pharmacy,” he said. “We are literally all only paid for the clinical work that we do and do not keep any funds that are donated to the institution for personal use.”
The criminal kickback statute prohibits any form of payments to encourage or reward patient referrals. The statute, however, applies only to items or services covered by federal healthcare programs like Medicare or Medicaid. Empower says on its website that it does not accept insurance plans.
The statute includes several exceptions. Drug manufacturers can legally compensate physicians for performing services, like acting as a consultant or a public speaker, if the physician is paid fair market wages and performs the work, said Martin Merritt, a healthcare lawyer in Texas. Paying for a physician’s meals also may not qualify as a kickback if the payment wasn’t intended to solicit business for the company, he said.
In Texas, a broader state law prohibits any form of payment intended to solicit patients, even if federal insurance programs were not involved. The penalty for violating it is a misdemeanor, and the law is poorly defined, said Merritt, adding that prosecutors rarely pursue those charges.
“It’s not a well-worn path, because the payoff is so little,” he said.
Gremillion voluntarily dismissed the lawsuit in 2023 after federal prosecutors declined to pursue the case. Texas Attorney General Ken Paxton also signed off on the dismissal, records show.
“That case was resolved without any findings against anyone, including Empower,” an Empower spokesperson said.
Medical ethics experts say any payment from the drug industry to a physician can create the appearance of a conflict of interest, regardless of the circumstance. A gift from a drug company to a university could create “the perception of a laundered kickback payment,” said Campbell. “That is the perception that I think people grab onto.”
A unique case
The pharmaceutical and medical device industries commonly pay doctors for consultant work and speaking gigs. It’s not unusual for them to cover smaller expenses, such as meals. But patients can find information about those payments in the government-run Open Payments database, where the companies are required to disclose them.
Lipshultz earned a combined total of $29,284 from such companies in 2020 and 2021, primarily from a $9,000 consulting fee paid by Gilead Sciences Inc. and $12,000 worth of honoraria paid by Antares Pharma, according to the database.
His total payments during those two years were well above the average amount for a physician, the data shows. However, from 2022 through 2024, the last year for which data is available, the reported payments to Lipshultz dropped dramatically. He was paid a total of $3,430 over those years — well below average, records show.
While gifts to universities are not disclosed in the system, academic medical centers like Baylor have internal policies to manage conflicts of interest related to gifts, experts said. For example, if a company donated money to a university for research, the university may not allow a physician with a conflict to serve as the lead investigator on a project funded by that gift, said Kanter.
The case of Noorian and Lipshultz, however, is complicated by the fact that the donor is an individual and former patient, Campbell said.
“It just so happens this grateful patient owned a compounding pharmacy,” he said.
“It’s just in that nether world,” he said. “I’ve been doing research and having discussions on conflicts of interest for the last 25 years of my life. … I’ve never encountered a case like this.”
For some experts, the recent growth of the compounding industry only magnifies the concern around financial connections between compounding pharmacies and physicians.
The relationship “further raises the question of whether it was in the patient’s best interest” to be prescribed compounded drugs, said Dr. Caleb Alexander, an epidemiologist at Johns Hopkins Bloomberg School of Public Health, who has studied prescription drug utilization and safety.
“It smells funny,” Alexander said. “Whether or not it’s illegal, it leaves a bad taste in someone’s mouth.”
Find the full series, “A Dose of Disruption,” here.