By Jonathan Stempel
(Reuters) -Pfizer and supplier Tris Pharma reached a $41.5 million settlement with Texas to resolve a lawsuit claiming they defrauded the state's Medicaid program over alleged quality control lapses in a medicine to treat attention deficit hyperactivity disorder in children.
Texas Attorney General Ken Paxton said on Wednesday the settlement resolves a November 2023 lawsuit accusing the companies of manipulating testing for Quillivant XR between 2012 and 2018, to ensure it would comply with federal law and remain eligible for sale.
Paxton said properly done tests often showed the liquid medicine failed to dissolve in the body and was therefore ineffective. He said the defendants' actions violated the Texas Health Care Program Fraud Prevention Act.
"Under my watch, Big Pharma will not escape justice for lying about the effectiveness of its drugs," Paxton said in a statement.
Pfizer denied wrongdoing in agreeing to settle. In a statement, the New York-based drugmaker added that its review of Paxton's claims did not find any impact on the safety of the product for patients.
Tris did not immediately respond to a request for comment. Paxton's office did not immediately respond to a similar request.
The lawsuit stemmed from a whistleblower complaint by Tarik Ahmed, who was Tris' technology chief from 2013 to 2017.
Quillivant was developed by NextWave Pharmaceuticals, which Pfizer bought in 2012. Tris manufactured Quillivant for Pfizer until 2018, when it bought the medicine.
Paxton is running for the U.S. Senate in 2026 and is expected to face incumbent Senator John Cornyn in the Republican primary.
(Reporting by Jonathan Stempel in New York; Editing by Richard Chang)
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