Pharma giant Pfizer (NYSE:PFE) and its supplier Tris Pharma have been slapped with a lawsuit by Texas Attorney General Ken Paxton for allegedly providing low-quality ADHD (attention deficit hyperactivity disorder) drug to kids enrolled in the state’s Medicaid program.
Pfizer Sued by Texas Attorney General
The Texas Attorney General accused Pfizer, Tris Pharma, and Tris CEO Ketan Mehta of deliberately providing powerful ADHD medication, Quillivant XR, to children despite knowing that the drug was adulterated due to deficient manufacturing practices.
The lawsuit also alleges that Pfizer and Tris manipulated Quillivant XR’s quality-control tests to show passing results for tests required under federal law between 2012 and 2018. Several properly conducted tests, in fact, showed that the drug did not dissolve properly, an indication that it would not be released in the body as expected.
Overall, Paxton slammed Pfizer and Tris for deliberately concealing and failing to disclose the issues related to the ADHD drug to receive the benefits under Texas Medicaid, “defrauding the state and endangering children.” Texas is seeking over $1 million in damages, fines, and the return of all Medicaid funds.
It is worth noting that earlier this year, Paxton launched an investigation into Pfizer, Moderna (NASDAQ:MRNA), and Johnson & Johnson (NYSE:JNJ), alleging that they overstated the effectiveness of their COVID-19 vaccines.
Is Pfizer a Buy, Hold, or Sell?
Wall Street is cautiously optimistic about Pfizer amid macro pressures and fading COVID-19 vaccine tailwinds. The Moderate Buy consensus rating on Pfizer is based on five Buys and nine Holds. The average price target of $39 implies 30% upside potential.
