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A donation from Empower Pharmacy\u2019s CEO to the Baylor College of Medicine paid the office rent for a prominent Houston urologist who prescribed Empower\u2019s drugs to his patients. The arrangement raises concerns among experts of a possible conflict of interest and points to looser laws regulating compounders.<\/p>\n
Illustration by Lauren Iba\u00f1ez<\/p>\n
A prominent Houston urologist used money donated by Empower Pharmacy\u2019s CEO to pay rent for his medical practice, raising concerns among experts about a conflict of interest, according to a Houston Chronicle investigation.<\/p>\n
Dr. Larry Lipshultz used the money \u2014 which was sent to his employer, Baylor College of Medicine, as a gift \u2014 while also referring his patients to the pharmacy<\/a>, according to interviews and public statements Lipshultz has made.\u00a0<\/p>\n \u201cThere’s a whole slew of ethical concerns related to this,\u201d said Dr. Reshma Ramachandran, a primary care physician and health services researcher at Yale School of Medicine. \u201cIf 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.\u201d\u00a0<\/p>\n Article continues below this ad<\/p>\n This story is part of the series \u201cA Dose of Disruption: How America\u2019s desire for GLP-1s and testosterone fueled the growth of Empower Pharmacy and roiled the drug industry.\u201d<\/p>\n Read more<\/a><\/p>\n 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<\/a> that physicians who accept gifts from pharmaceutical companies tend to prescribe more drugs to patients, including pricier brand-name drugs.\u00a0<\/p>\n 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\u2019re donated through a medical school, said Genevieve Kanter, a professor at the University of Southern California Price School of Public Policy. That\u2019s what happened in Lipshultz\u2019s case.\u00a0<\/p>\n 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.\u00a0<\/p>\n Article continues below this ad<\/p>\n PART 1: Testosterone transformed a Houston man\u2019s life. Now he\u2019s building a pharmacy empire<\/a><\/p>\n While compounding pharmacies have to abide by basic quality standards, the drugs they make are not tested in humans for safety and effectiveness.<\/p>\n \u201cI have concerns about undue influence from these sorts of gifts, whether from compounding pharmacies or from pharmaceutical companies,\u201d\u00a0 Kanter said. \u201cBut, of course, there are greater potential health risks from compounded drugs, which are not standardized and have not undergone evaluation of safety and efficacy.\u201d\u00a0<\/p>\n \n\u2018Not quid pro quo\u2019\u00a0\n<\/p>\n 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\u2019s CEO and founder Shaun Noorian, who was Lipshultz\u2019s former patient and, at one point, a potential business partner.\u00a0<\/p>\n Article continues below this ad<\/p>\n 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 \u2014 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\u2019Quinn Medical Tower in the Texas Medical Center.<\/p>\n In an email, Lipshultz said that while Baylor normally paid the rent for the O\u2019Quinn space, the university had been experiencing temporary \u201ccash flow issues\u201d and, as a result, the rent payments would have come out of his personal research fund.<\/p>\n \u201cIn order to avoid this, Shaun\u00a0Noorian made a contribution to Baylor that was used to pay for the rent for one or two months\u201d until he could move his practice to another location, Lipshultz\u00a0said.\u00a0<\/p>\n REPEAT PROBLEMS: FDA finds repeat quality failures at Houston\u2019s Empower Pharmacy in latest inspection, records show<\/a><\/p>\n He also said other pharmaceutical companies have made donations to support his work.\u00a0<\/p>\n Article continues below this ad<\/p>\n \u201cMr. Noorian\u2019s relationship with our department was absolutely no different than other relationships we have with other charitable organizations and\/or charitable pharmaceutical companies,\u201d he said. \u201c…These gifts in support are not quid pro quo or \u2018tit for tat\u2019 gifts. They are merely gifts to show appreciation of what we do and in support of our academic roles.\u201d\u00a0<\/p>\n Lipshultz added that he writes prescriptions to other compounding pharmacies.\u00a0<\/p>\n \u201cIt just happened that Mr. Noorian was more sensitive to the needs of our department than were some of the others,\u201d he said.<\/p>\n 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.\u00a0<\/p>\n Baylor\u2019s policy says the college will not accept any gifts that create a \u201creal or apparent conflict of interest\u201d 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.\u00a0<\/p>\n Article continues below this ad<\/p>\n The statement also says: \u201cPhysicians cannot accept payment\/gifts for referrals.\u201d\u00a0<\/p>\n LILLY’S SUIT: Eli Lilly targets Houston-based Empower Pharmacy over copycat diabetes, weight loss drugs<\/a><\/p>\n 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.\u00a0<\/p>\n Empower specializes in making drugs commonly prescribed by urologists, including testosterone, erectile dysfunction medication and fertility drugs.\u00a0<\/p>\n There does not have to be an explicit \u201cquid pro quo\u201d \u2014 in which one party expects a specific favor or benefit in exchange for something \u2014 to establish a conflict, he said.\u00a0<\/p>\n \u201cSmart people don’t make explicit quid pro quos, because those get you in trouble,\u201d he said.\u00a0<\/p>\n 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.\u00a0<\/p>\n \u201cAs a private company, we do not publicly disclose specific amounts of individual donations,\u201d the spokesperson said. \u201cWe also do not direct nor control how Baylor \u2014 or any other institution \u2014 allocates donated funds.\u201d<\/p>\n The details of the transaction fall into a gray area when it comes to disclosure requirements, multiple experts said. It\u2019s common for grateful patients to make donations to universities to support a doctor\u2019s work, and universities often don\u2019t require physicians to disclose such payments. But this patient owned a business that profited from the physician\u2019s referrals.\u00a0<\/p>\n \u201cIt\u2019s certainly a unique case,\u201d Campbell said.\u00a0<\/p>\n A history of disclosed conflicts<\/p>\n 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\u2019s understanding of testosterone therapy and specialized surgical techniques.<\/p>\n 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.\u00a0<\/p>\n 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\u00a0Administration, Lipshultz said treatment should account for a patient\u2019s symptoms \u2014 not just their testosterone level.<\/p>\n EXPLORE THE DATA: Testosterone use in Texas is skyrocketing, and more than 40% comes from compound pharmacies<\/a><\/p>\n \u201cAll too often, patients are just treated based on the number,\u201d he said.<\/p>\n 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.<\/p>\n According to the disclosures,<\/a> 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.<\/p>\n 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.<\/p>\n 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.\u00a0\u00a0<\/p>\n \u201cWhen 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,\u201d Noorian said on the “Dr. Gabrielle Lyon Show.” Commercial drug prices increase annually at a higher rate than compounded drugs, he said. \u201cHe knew that the only way to make sure his patients would be compliant with this chronic therapy is by using a compounding pharmacy.\u201d<\/p>\n EMPOWER’S CEO: Houston compounding pharmacy\u2019s recipe for success<\/a><\/p>\n In an October phone interview with the Chronicle, Lipshultz said he didn\u2019t remember his initial encounter with Noorian as a patient. But after Noorian opened the pharmacy, Lipshultz said he began referring his patients there.<\/p>\n \u201cI\u2019m not tooting my own horn, but I was really busy,\u201d Lipshultz said. \u201cI 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.\u201d<\/p>\n Noorian\u2019s company grew to become one of the largest compounders in the country, serving patients in all 50 states.\u00a0<\/p>\n 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.\u00a0<\/p>\n \u201cI can\u2019t do that with a busy practice,\u201d he said, adding, \u201cIt 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.\u201d\u00a0<\/p>\n A close relationship<\/p>\n By 2017, Lipshultz had become more closely intertwined with Empower executives.<\/p>\n That year, Lipshultz discussed plans with Noorian and Empower\u2019s chief sales officer, Jasen Bruce, to open a testosterone clinic in Houston\u2019s 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.\u00a0<\/p>\n Defy International, a company operated by Noorian and Bruce, would manage the \u201cLipshultz Clinic,\u201d according to the business plan, which predicted a \u201cstrong cash-generating business because it will earn recurring fees from patients who continually feel better and willingly purchase treatments month after month.\u201d Bruce suggested licensing Lipshultz\u2019s treatment protocols to \u201coptimize revenue through royalties\u201d and \u201cmemorialize Dr. Lipshultz\u2019s legacy,\u201d on an email thread among\u00a0Lipshultz, Noorian and Bruce.\u00a0<\/p>\n But plans for the clinic ultimately fell through \u2014 after Defy International paid about $800,000 to build out the space \u2014 because of a dispute with the landlord of the property, according to court records.<\/p>\n Defy sued the landlord, and Lipshultz was deposed in that case. In one brief exchange with the defendant\u2019s 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.<\/p>\n 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.<\/p>\n Lipshultz and Empower have collaborated in other ways.<\/p>\n The physician\u00a0co-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\u2019s roles as a consultant and speaker for various pharmaceutical companies.\u00a0<\/p>\n 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.\u00a0\u00a0<\/p>\n The physician\u2019s 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.\u00a0\u00a0<\/p>\n Allegations of \u2018kickbacks\u2019<\/p>\n 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.\u00a0<\/p>\n 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.<\/p>\n Later, Lipshultz brought up an anonymous donor who he said had been helping a colleague pay for a physician assistant, according to the lawsuit.\u00a0<\/p>\n Noorian revealed that he was the anonymous donor, the lawsuit said.\u00a0<\/p>\n That Noorian would pay for his colleague\u2019s physician assistant aggravated Lipshultz, according to the lawsuit, because the two doctors had \u201ca little professional competition.\u201d\u00a0<\/p>\n 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.<\/p>\n Noorian then offered to pay for a physician assistant for Lipshultz, Gremillion alleged in the suit.<\/p>\n 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 \u201ckickbacks\u201d that violated the federal anti-kickback statute.<\/p>\n 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.\u00a0<\/p>\n![\"\"\/](\"https:\/\/files.sfchronicle.com\/static-assets\/compression-bot\/1781586000_adoseofdisruption.png\")
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