Texas Attorney General Ken Paxton is suing drug manufacturers Pfizer and Tris Pharma for misrepresenting a drug to treat attention-deficit/hyperactivity disorder (ADHD) they claimed complied with Food and Drug Administration regulations, that was adulterated.
Tris was under contract with Pfizer to manufacture the ADHD drug Quillivant XR for children enrolled in Medicaid. The Texas AG’s lawsuit accuses the two companies of defrauding the Texas Medicaid program by distributing adulterated drugs to children in Texas.
The suit also claims the companies violated the Texas Medicaid Fraud Prevention Act (TMFPA) now known as the Texas Health Program Fraud Prevention Act (THFPA).
Paxton states on his website that Pfizer distributed Quillivant to children on Medicaid knowing the drug failed quality control tests due to flawed manufacturing practices. Paxton also alleges Tris altered the drug’s testing method for years in violation of federal and state laws to ensure Quillivant passed regulatory hurdles and continued to be sold.
“I am horrified by the dishonesty we uncovered in this investigation,” Paxton said in his news release.
‘Companies Cheat’
The case raises big questions on who is watching the hen house, says John Dale Dunn, M.D., J.D., a physician and policy advisor to The Heartland Institute, which publishes Health Care News.
“I think the AG’s lawsuit is a good one,” said Dunn. “I think he’s right because pharmaceutical companies cheat and one of the reasons they get away with cheating is because of regulatory capture. The people who are supposed to be regulating them, many of whom have a conflict of interest with them, because they are getting money indirectly or directly from the companies.
Dunn puts a new spin on an accepted truth.
“Have you ever heard of ‘Hanlon’s Razor?’ asked Dunn. “Hanlon said, ‘Well, you know, a lot of times people do something bad because they’re stupid.’ This is Dunn’s Razor: When somebody does something that’s bad, don’t be stupid, sometimes it’s because they’re evil; or sometimes their apparent ignorance is because of the fact that they’re paid off.”
‘Legal and Financial Peril’
The Texas case is intriguing, says Quentin Brogdon, a personal injury trial attorney at Crain Brogdon, LLP, in Dallas, Texas.
“If the Texas Attorney General’s allegations are true, it shows a longstanding pattern of bad behavior that is exactly the kind of behavior the TMFPA was enacted to address,” said Brogdon. “It’s also important because it may begin a process by which other Attorneys General jump into the fray, and collectively, multiple states and the federal government could create real legal and financial peril for Pfizer.”
‘A Fairly Stout Statue’
Paxton’s case appears to be modeled on the federal qui tam law that was instituted during the Civil War to address war profiteering and war fraud, says Brogdon. The federal law punishes fraud committed by knowingly making or causing a false statement to be made: knowingly concealing or failing to disclose a false statement, and knowingly applying for or receiving a benefit or payment in violation of the law. The federal law incentivizes whistleblowers to come forward.
“If found guilty, you are subject to not just the amount that you wrongfully billed the government for court costs, potentially attorney fees, witness fees, deposition fees, and interest, and additional penalties, including, but not limited to two times the amount of the payment of the value of the benefit,” said Brogdon.
“The trier of fact, or the jury can consider certain enumerated factors in determining the amount of that penalty, including whether you previously violated the statute, the seriousness of the act, the health and safety of the public to the extent to which they were jeopardized, your bad faith, and then the amount necessary to deter future unlawful acts. So, it is a fairly stout statute aimed to deter fraud, deemed to empower whistleblowers to come forward, and even to prosecute the case if the state AG does not elect to step in,” said Brogdon.
‘Very Real Jeopardy’
Pfizer and Tris Pharma face allegations they manipulated quality control testing to fraudulently obtain passing results from tests. At issue is whether Quillivant, an extended-release drug, failed to dissolve as it was intended, which would impact the drug’s ability to control ADHD symptoms, says Brogdon.
In 2017, the FDA warned Tris, which supplied Quillivant to Pfizer Manufacturing Labs, says Brogdon.
“Paxton’s case is alleging, that these manufacturing labs knowingly were rendering the product not consistent in its quality control testing,” said Brogdon. “And if those things are true, then these actions fall squarely under the Texas act, and these companies then face the very real jeopardy of the penalties under the act.”
Expects a Settlement
Pfizer was subpoenaed in 2022 by federal prosecutors in the Southern District of New York for its relationship with Tris, says Brogdon.
“Since it’s in the Southern District of New York, it’s possibly related to security issues and potential security fraud,” said Brogdon. “But if you as a company know of information that could potentially impact the value of your shares and you don’t make that public or you conceal it, then you may have violated federal securities laws and regulations.”
Brogdon says he doubts the case will go to trial.
“I would imagine that Pfizer would try and work out some sort of civil penalty settlement involving repayment of money to the State of Texas,” said Brogdon. “That’s how this would get resolved—it would never actually, in all probability, go to any trial or adjudicatory proceeding.”
Kenneth Artz (KApublishing@gmx.com) writes from Tyler, Texas.
Internet info:
The State of Texas, ex rel. [UNDER SEAL] v. [UNDER SEAL] Defendants, Cause No. 23-1031, U.S. District Court, 71st Judicial District, Harrison County, Texas