AGB op.00% y M, SHERRY GAIFIS ‘CAUSE NO. 23-1031 CLERK DISTRICT COURT, HARRISON COUNTY, TEXAS. BY Toe Wisi bower ‘THE STATE OF TEXAS, § IN THE DISTRICT COURT cexrel, {UNDER SEAL] § § 5 Pla 5 ” 8 ‘71st JUDICIAL DISTRICT, § [UNDER SEAL] 5 : Defendants 5 HARRISON COUNTY, TEXAS FILED UNDER SEALFILE CAUSE NO. 2.1081 CLERK BS Court sSieteoR oe es THE STATE OF TEXAS, ivr nstacred i reed TARIK AHMED Plaintiff, ” ‘74st JUDICIAL DISTRICT PFIZER, INC., TRIS PHARMA, INC, and KETAN MEHTA, Defendants. HARRISON COUNTY, TEXAS PLAINTIFES’ FIRST AMENDED PETITION ‘The Stat of Texas, by and through the Attomey General of Texas, Ken Paxton, the Sate) and Private Person Plain Relator Tarik Ahmed (Relator) bring this law enforcement aeton pursuant the Texas Medicaid Fraud Prevention Act (IMFPA), Tex. HUM. RES. CODE Chapter 36.1 Plaintifs, the State and Relator, fle this Fist Amended Petition (Petition) and would respectflly show the Court as flows 1. DISCOVERY CONTROL PLAN 1. Discovery is intended to be conducted under Level 3 of Ree 190, Texas Roles of Civil Procedure. I PRELIMINARY STATEMENT AND NATURE OF THIS ACTION 2. This isa law enforcement action under the TMFPA to recover taxpayer dollars spent result of fraudulent conduct commited by Pfizer, Inc. (Pfizer), Tes Pharma ne (Tes), and Tris CEO Ketan Mehta (Mehta), Specifically, these Defendants knowingly distributed a "0m September 1, 2023, TEx. Hu. RE. CODE Ch. 36 was expanded to incde sate hea care programs Beyond ‘he Messi pram Intact, weve, most ths onda te predate September, 2073, and ll ‘seok only remedies wih respect othe Media program. Accordingly, Pil retro the pre-Septenber 2023 Serson of Fx Hua RES CooE Ch 36 PETITION PAGEL PLAINTIFES' FIRST AMENDpowerful pediasc atention-defiivhyperacivity disonler (ADHD) mediation, Quilvant XR (Quilvan), 0 paints thoughout Texas, despite knowing Quillivan was adulterated due (0 eficient manuctring practices. This illegal conduct caused Quillvant to bein violation of federal and sate lw, and rendered fale Pfizer's swom certification of eampliane to Texas Messi, which sraguie fr drags o be eligi for eibursernen ler he Tents Mec program. Defendants additionally mistpreseted and conccalod Quillivan’s status as an adulterated deve when providing publi testimony before Texas Medicaid dessionsmakers. AS a rest fier and Tris obtained the benefit of virally unfettered Mead reimbursements foe Quilvant on the bass of fraudulent and unlawful misepresenations and concealment, thereby Violating the TMEPA. Mm THEPARTIES AL Plaintiffs Plaintfs are the State of Texas, by and through the Attomey General of Texas, Ken Paxton, and Relator Tarik Ahmed (collectively, Plant). 4, Relator Tarik Ahmed i citizen ofthe United States and a resident of New Jersey From 2013 until approximately June 2017, Relator was employed hy Defendant Tris as Head of | Technology. During hs time at Tris, Relator also servedas the Head ofthe IT Steering Commitee, and was a member ofthe Exsoutve Commit, Quality Committe, and Commercial Commitee. ‘Throwgh his employment at Tis, Relator guined a wealth of direct and independent knowledge of the substandard manutaetung practices implemented by the Deendans B. Defendants 5, Defendant PFIZER isa comporation organized under the laws of Delaware, with ts principal office and place of business located at 1209 Orange Steet, inthe City of Wilmington, PLAINTIFPS’ FIRST AMENDED PETITION PAGE?Delaware. Pfizer marketed and distributed Quillivant in Texas. Pfizer conducts business in Texas [At the time of filing, its registered agent for service of process is CT Corporation System, 1999 Bryan St, Ste. 900, Dallas, Texas 75201 6. Defendant TRIS is corporation organized under the laws of New Jersey and has lis principal place of business in New Jersey, at 2031 U.S. Highway 130, Monmouth Junction, "New Jersey 08852. Tris manufactured Quilivant, which it marketed and distibuted in Texas. Tris ‘conducts business in Texas. At the time of filing, its registered agent for service of process is CT Corporation System, 1999 Bryan St, Ste, 900, Dallas, TX 75201 7. Defendant MEHTA isthe Founder and Chief Executive Officer of Tris. Mehta may ‘be served with process at his home address: 42 Elm Road, Princeton, New Jersey 08540, Meta has direct knowledge of and directly participated in substantially all of the fraudulent conduct alleged herein, IV. SURISDICTION AND VENUE 8. This Court has jursdition of this action pursuant to Tex. Hum. RES. Cope § 36.101. Jursdietion is further proper because the amounts sought from each Defendant exceed ‘the minimum jurisdictional mits ofthis Cour. 9. Since at least 2011, the State of Texas has licensed Defendants Pfizer and Tvs to sol and distibut their drugs throughout Texas. Ths Court has jurisdiction over these Defendants because they purposefully availed themselves ofthe benefits, privileges, and responsibilities of doing business in Texas; subjected themselves to Texas law, including the TMEPA; and then ‘committed unlawful ets, in whole oF in part, in Texas 10, This Court has personal jurisdiction over Defendant Mehta, a non-resident of “Texas, because fom 201 | tothe present, he has purposefully availed himself of the privileges and PLAINTIFFS" FIRST AMENDED PETITION PAGESbenefits of conducting business in Texas, Defendant Mehta, citer personaly or by his direction of others: 1) caused Quillvant to be masketed, sold, andor distibuted to Texas customers, including Texas Medicaid providers 2) caused Quilvan o be inched inthe Texas Medicaid formulary; and 3) applied for and obtained from the State of Tena a license for Tris o sll and isibute is drags in Texts. Defendant Mehia's purpoefulavaiment of the privileges and benefits of conducting business in Texas and commiting unlawful ats in volation ofthe TMEPA, ‘rate sufficient minimum contacts with Texas o give this Court personal jurisdiction over him. 11. Venue is proper in Harrison County, Texas and this judicial dist pursuant to Tex. HUMG RES. COO® § 36.0520), a Paint’ causes of action are based upon alleged violations ‘of the TMEPA which occurred, in part, in Harrison County 12, Mote specifically, Defendant Pizer knowingly promoted Quillvant to Medics providers in Harrison County, and knowingly distributed Quilivant to pharmacies participating in the Medicaid program in Harrison County, ultimately leading to its use by Harrison County Medicaid patients, during which time Quillivant was adulterated as a result of the conduct of Defendants Tris and Defendant Mehta V. BACKGROUND, A. ADHD and Quillivant XR 13, ADHD is a chronic and debilitating condition affecting millions of children in the United States? As a neurodevelopmental disorder, ADHD ean cause persistent problems such as sithculty sustaining attention, hyperactivity, and impulsive behavior.” ypically diagnosed in 5 American Poche Assocation, What is ADHD, alle at p/h opens {iailesichdt add (ast vised Nov. 8, 2023). > Mayo Cline Paint Care Heath Inforiaon, Aenon-dfc pracy ditrdr (ADHD) in cilben avaiable his. cin oy seasoning adage sare 20809 (st sted Nov 202 PLAINTIFFS’ FIRST AMENDED PETITION PAGESschool-aged childen, it ean cause stevggles with lw self-esteem, troubled relationships, and poor performance in schoo. 14, There is no cue for ADHD. Rather, the goal of pharmacological treatment isto manage the symptoms that would otherwise be present’ The most commonly prescribed scans used help improve the signs std syrups of ADHD are my penile sa pictamines.° These medications form the foundation of the mulibilion-dollar ADHD Pharmaceutical indus. 15, Quilvant san extended-clease oral suspension methylphenidate indicated forthe treatment of ADHD in children. tia Schedule I Controle Dangerous Substance and isrequired by the Federal Food and Drug Administration FDA") to display a “Black Box Warning”— EDA‘s strictest Iabeling requirement-for abuse and dependence. The drug is provided to pharmacies asa powder, and pharmacists reconstitute the drug by combining the powder with ‘water and then shaking the medication by hand, Cargives are then instructed to shake the reconstituted medicine privet administering each dose. 16, Though Quilivant is approved by the FDA as acceptably safe and effective for ADHD when taken as ected itil has iss associated with normal use. Aeconting othe FDA, the most common adverse reactions include insomnia, nausea, vomiting, ane, and tachycand ‘There is also a chance for patents 10 experience severe side effets, including serious cardiovascular reations (which can cause sullen death), psychiatric averse eactons (including ‘mania), and fong-term suppression of growth. Additionally, when uillivant isnot taken atthe Sa American Prchisrie Asmcaon, Whar it ADMD, sviable at hipovew pecan orien ‘lead saci 5 (est vised Nov 8 203), “a PLAINTIFFS’ FIRST AMENDED PETITION PAGES-omoot dose, patients could experience an overdose requiring emergency medial intervention 17. Quilvant was developed and owned by Nextwave Pharmaceuticals, Ine (Neatwave), Tris held 5% ownership postion of Nextwave and ovred ntllectual propery that ‘vas par of Quillvan’s development, Nextwave submited the New Deug Application (NDA) 10 the FDA tor Quilivant Alter Pas aequted Nextwave in May 2012, Pizer contracted with Ins (Chrough its wholly owned subsidiary, Nextwavs) for Tris to manufacture Quilivant on Pfizer's behalf. Pfizer, through Nestwave, agreed to compensate Tris for meeting certain milestones, including prodict approval s wel as paying Tris 825% royalty on nt sales of Quilivant, The FDA approved Qullvant’s New Drug Application (NDA) on September 27,2012 allowing ito he prescribed within the United States B. The Federal Food, Drug, and Cosmetic Act and Current Good Manufacturing Practices 1. The FDA’s Role in Regulat Prescription Drug Quali 18, In the United States, the sale and promotion of prescription drugs is regulated by the US. Food and Drug Administration, pursuant to the authority granted by the Federal Pood, Drug, and Cosmetic Act (FDCA), 21 U.S.C. § 301 et seg. Under the FDCA, new drugs cannot be marketed inthe United States unless the sponsor ofthe drug demonstrates to the FDA “substantial ‘evidence thatthe drug will have the effet it purports or is represented to have under the eonditions| ‘of use prescribed, recommended, or suggested in the proposed labeling therea.”? The deug's sponsor must also show by substantial evidence thatthe drug is safe forthe conditions of use “prescribed, recommended, or suggested in the proposed labeling."* Approval ofthe drug by the PDA is the fi 3 step in a multi-year process consisting of clinical studies and testing. 21 USC §55(045).~Subtatlevience” ax wed in his seston i defined at 21 USC 835518), "21 US § 385K, PLAINTIFFS’ FIRST AMENDED PETITION PAGE 619, To determine whether a deus is “safe and effete,” the FDA relies on infomation provided by drug's manufacturer; it does not conduct any clinical investigations itself. Applications for FDA approval of pharmaceutical products—NDAS—must inelide “fll reports of investigations which have been made to show whether or not such drug is sfe fr use and heer or no such dru is etetve in use"? 2. EDA Regulations Prohibit the Adulteration of Prescription Drugs 20. Under the FDCA, its illegal to auerste a drug, ot inode int interstate ‘commerce any drug this adulterated." A drug becomes adulterated ifthe methods used io, ot te facilities o controls used for is manuficture.. donot conform foo ate not aperted or ‘eminstred in conformity with cument good manufacturing proctce”!! The purpose of ‘conforming to Current Good Manufacturing Practice (CGMP) iso assure that a drug “meets the requirements. a8 to safety and has the identity and strength, and meets the quality and purity hacactristis” that itis claimed to have. CGMP regulations act as a floor, establishing a minimum set of standards that must be cbserved by manufacturers to ensre that drug produets are smade according ta thir approved specifiatons."* Underscoring the importance of maintsining safety and uniformity in drug, manufacturing, cours have broadly interpreted adulteration requirements, noting tha jugs produced in violation of ... CGMP regulations are deemed to be adulterated without the [FDA] having to show that they are actually contaminated” John D, Copanos & Sons, Inc. v. Food & Drug Admin, 854 F.2d S10, S14 (D.C. Ci 1988) (citing 21 © 21 US. § 355014 21 USC. §8 3810). "21 USC. § 381002 xB), Me "U.S. Road and Dig Adminstration, Fats dhoot th Cirrent Good Mansactaring Practices (CGMP), sve t nse fa govdustphmoceia- leurs facts anen-gosd-manucuns aces: ‘mp (ae vied Nov. 2025, PLAINTIFFS’ FIRST AMENDED PETITION PAGETUSC. § 381(@)2KB). Accordingly, i is extcl for manufacturers to conform to the salty practices established under COMP. 21, ‘The FDA's CGMP regulations are st forth in 21 CFR Part 211.* These legally binding regulations require various forms of testing and implementation of related procedures to cnsure drugs mect the identity, strength, quality, and parity they purport o represent or posteas— imother words, thatthe deuas being made are exactly the same as when FDA first approved hem! ‘Under this regulatory system, a pharmaceutical company must have a “quality contol unit” with the “responsibility and authority to approve or reject all components, drug product containers, closures in-process materials, packaging materi, labeling, and drug products," as well as “the authority to review prediction records to assure that no erors have occurred or, i emors have ‘curred, that they have been filly investigate." The responsibilty for approving or rejecting drug prodvts extends to products “manufactured, processed, packed, or held under contact by another company."!” Additionally, all “production and contol records” must “be reviewed and approved by the quay control unitto determine compliance with all established, approved writen procedures befor a batch is released or distibuted."” 22, Furthermore, unexplained discrepancies or failures ofa batch or its components to meet its specifications must “be thoroughly investigated." The investigation must “extend to other batches ofthe same drug product and other drug products that may have been associated ‘with the specific failure or discrepancy,” and a “writen record of the investigation” must he made "Se Nat rn of Phare Mf. Fd & Drag Adin, 657 2487, 889 (24 Cle 1981), Seog 21 CER § 211.100. wear crng 211220, Set at cen g 211192 eee PLAINTIFFS? FIRST AMENDED PETITION PAGESand must “include the conclusions and fllowup."= 23. A drug manufacturer must also establish and follow Jriten procedures eseribing the handling of all writen and oral complaints regarding a drug produet.”® These procedures must “include provisions for review by the quality contol uni, of any complaint involving the posible failure ofa dug product to et any ofits specifications and for sch doug products, determination as to the ned for a thorough investigation The procedures must also ‘include provision for review to determine whether the complaint represents serious and smexpected adverse dag experience which srquired tobe reported othe” FDA. 24, ‘Through these CGMP regulations the FDA requits pharmaceutical manufacturers to institute standard processes for evaluating the quality of thir products and to thoroughly investigate complaints abou their products aswell as unexplained diserepancesin product quality This cal regulator system protects patients and consumers by establishing minimum standards to ensure that the finished drug products taken by patents do not deviate overtime, but rather, remain as safe, efTetive, and uniform as initially approved by the FDA. C. Texas's Role in Regulating Prescription Drugs 25, In Texas, the sale, promotion, and distribution of prescription drugs is further regulated by the Drugs and Medical Devices Group of the Texas Department of State Health Services, pursuant to the authority granted by the Texas Food, Drug, and Cosmetic Act crepcay* 26, The THDCA largely mimors the FDA. For example, the TFDCA, tke the FDCA, Seed 21 CFR S211. See Tex, HEALTH SAFETY CODE, Ch. 431, 59. PLAINTIFFS’ FIRST AMENDED PETITION PAGESprohibits the adulteration of drugs and the introduction of adulterated drugs into commerce.® ‘Additionally, TFDCA § 431.112 defines drug adulteration fo include the same relevant provisions asthe FDCA: a drug is adulterated if “the methods used in, or the facilities or controls used fr, its manufacture, .. do not conform to... curent good manufacturing practice to assure that such drug moet the requirements of his chapter ast afety and has the identity and trongth, and mects ‘the quality and purity characteristics, which it purports or is represented to possess. 27. Violations of the TFDCA, including violations of rules adopted under the TFDCA,” can result in @ written waming, administrative penalties, civil penalties, or criminal penaltis.** D. Texas Medicaid 1. Overview 28. The state and federal govemments fund health care for the poor and disabled ‘through public health assistance programs. Together, the State of Texas and the federal ‘government fund the Medical Assistance Program in Texas, commonly refered to as Texas Medicaid. Texas Medicaid provides vital health care coverage to Texas's most vulnerable populations. Ii lifeline ensuring that children, pregnant women, elderly adults, and disabled individu receive the mesical care they need.?? 29, The Texas Health and Human Services Commission (HHSC) administers the Texas Medicaid program and has authority to promulgate rules and other methods of administration 2 Soe TE. HL & Sane Coot $5 431.0216), 00. 2 Tex HEAL SAFETY Cove §41,111012XB}. 2 Tex HEALTH SAFETY Cobe § 41.06. See,eg, 28 Thx. ADMIN. Cane Ch. 229 2 See Tx. Hear & SAFETY CODE §§ 43.061, 41.054, 451.0585, 431.059, » Soe TEX. HIMGRES. CODE § 32.01 > Soe 1 TEX ADMD, CODE § 358.107, 1 TAX, ADMIN, CoD § 366.07; 1 TeX. ADM. CODE § 36650. PLAINTIFES’ FIRST AMENDED PETITION PAGE 10‘governing the program.** Texas Medicaid reimburses pantcipating providers for the approved pharmaceuticals they provide to Medicaid recipients. The program stives to provide safe and effective health services to beneficiaries while maximizing the efficient use of taxpayer funds ‘within the Texas Medicaid program. To that end, Texas Medicaid uses various procedures 10 monitor prescription drug benefits. 2. Texas Medicaid Tool for Managing Appropriate and Cost-Fffestive Pharmaceutical Therapy 30, The Vendor Drug Program (VDP) within HHSC overses the outpatient prescription drug potion ofthe Texas Medicaid program.” VDP is also charged with safeguarding gait eau, waste, and abuse within the program. VDP was ia operation a al times relevant tothiscae 31. Providers can obtain Medicaid reimbursement through VDP for pharmaceutical products approved for use and reimbursement under this program, and which are listed onthe VDP formulary." To have its particular pharmaceutical products listed on the VDP formulary, drug ‘company or manufacturer must file an application with VDP.9® Texas Medicaid requires information provided tit by pharmaceutical manufacturers as part of the VDP application process tobe complete truthful, and up-to-date.” VDP may return o eject an application onthe discovery ‘of false, erroneous, or incomplete information." Sfx Govr Coorg 511.021 ® Soe nre Heras Cop, $85 SW. SB, 524 (Tes 2018, See 1 TX. AD. CODE § 354.180, § 354.1891; Tex. Gov'T CODE § $31.06, Soe Tex. ADQAN. CODE § 354.1891 1 Te, ADMIN. Code § 3541831() The VDP fomulary i sls refered he Teas Dr Code Index or TDCL See 1Tex Apu, Cone § 3541991 % 1 Tex. ADMIN. Cone § 384.1920) AS alo 1 Tex, ADMIN, COO § 384.1923). 1 Tex, ADMIN.Cone§ 354192300. PLAINTIFFS’ FIRST AMENDED PETITION PAGE ML52, VDP applications rquire drug manufacturers to repo, foreach drg submited, ‘he recommended daily dosages, formulation of the deus, FDA approval eters, and copes ofthe package inserts and materials for physicians. The VDP application also requires manufacturer 0 ‘cenify that al the information provided with their application is correct and that their drug isnot Jn vlolcon of eter state or federal 33, By signing the application, manufacturers accept an ongoing duty to submit notifications of ehanges pertaining ta the information in their application no later than the date such revisions are scheduled to occur, and to submit noiications of any changes pertaining to their products status, formulation, or availabilty within fifeen days of such changes occuring Accordingly, manufacturers owe «continuing duty to Texas Medicaid to supplement information provided with their VDP application.” Moreover, a new VDP application must be submitted each time a drug fist becomes aailble in a new formulation or in diferent dosages. 34. Pharmaceutical manufacturers’ interactions with Texas Medicaid, and Texas Medicai’s review of drugs placed on its formulary do nt stop with submission ofthe initial VDP pplication. Texas Medivsd hs an ongoing obligation o manage its dug formulary through Drug Uiization Review (DUR) in secordance withthe Omnibus Budget Reconctaion At of 1990: Pursuant to that obligation, Texas Medic created the DUR program to promote optimal and cost-effective pharmaceutical therapy inthe Texas Medieaid VDP.*) 35. Specifically the DUR program exits to ensue that prescriptions are appropriate, medially necessary, and are not likely to result in adverse mesticl outcomes." the program is 2 See Tex ADMD Cane § 351192160), © HLR535 101 Congres (1989-1990: Onis Badge Reconciliation Act of 1950, HLSESS, 1015 Cons (0990), up conaes gob 01s-conress house S855; se lo 1 TEX. ADMIN. CODE § 354.1941, * Soe TEx GoW'T CODE § 531.0736; se ae TX, ADMIN. CODE § 354.1981 See TEX. GOV'T COOE § 531.0734. PLAINTIFFS? FIRS [ AMENDED PETITION PAGE IZdesigned to educate providers and to identity and reduce the fequeney of pattems of fraud, abuse, ‘overuse, or inappropriate of medically unnecessary care, 36. The DUR Board has a number of tools available to it 1 achieve these goals, including prior authorization, educational letters expressing therapeutic concemns 10 Texas Meuicaid providers, DUR setts, al clinical edit.“ 1° yecewaty, he DUR Boat initiates recommendations that certain drugs be made subject to prior authorization or to restrictions ‘concerning the types of patients (eg children, elderly persons, et.) o the types of conditions for ‘which Medicaid reimbursement is obtainable As par of this program, the DUR Board monitors and analyzes provider Level activity. 37. The DUR Boa is also tasked with developing recommendations forthe Texas Medicaid Prefered Drug List (PDL), providing another mechanism for managing Texas Medicaid's expenditures for pharmaceuticals” In making these recommendations, the DUR. Board must consider the clinical efficacy, safety, and cost-effectiveness of each drug reviewed.© HHSC then decides which drugs are placed on the PDI. based on DUR Board recommendations, the cost of competing drugs to the state, lineal considerations, writen information offered by ‘manufacturers about ther products, andthe existence ofa supplemental ebate agreement or other program benefits.” Dr that are reviewed but not selected for the PDL require prior © seid, §BLATBED, ~ see TEx. Gow'F Cove § 551.075 se alo 1 TH ADMIN. CODE § 354.) § 354.1948, 1 Soe 1 THX, ADMOW CODE § 354183100, § 35419410) “© See Tex. Gov" ove § 33.073} aso 1 TEX. ADMIN. CODE § 384. 191(0 1 Se Tx. GOV'T Cane § $31,0736(9).Frevouly, the Parmacetieal and Therapies Commitee (PT CCoomitce) mate resemendatos resring te PDL. In 2016 however, the PAT Commitee and DUR Board ‘ombine ins nee expanded, commie known a the DUR on wich now hand the onions oe ‘revue commits. 3-200 th Lep (Tex 205) ena). * Soe Tex. Gov CODE § $31.73, “© 1 Tex. ADNN.CoDE§ 38419240) PLAINTIFFS" FIRST AMENDED PETITION PAGESauthorization: 38, Incarying out its functions, the DUR Board frequent receives information fom drug manufacturers, including Defendants, concersing ther drugs! The DUR Board expect and Texas law requies—al such infomation o be complet and accurate. The DUR Board cannot effectively make recommendations to manage deg usizaton tough incl ets, the PDL, or ser interventions where material information has heen mistepresened or concealed bya drug company. 39, The Texas Medicaid program includes not jut Medicaid decision-makers suchas the VDP and DUR Board, bu also Media provides such as pharmacies and physicians that center into agroements with Texas Medicaid in order to be covered providers. The TMEPA seeks to protect against aud at all levels of the Texas Medicaid program.** Providers cannot fully ‘exercise their professional judgment regarding approptite patient care for Medicaid beneficiaries ‘when drug companies misrepresent or conceal material information about a drug's status Vi. APPLICABLE TEXAS STATUTORY LAW 40, Plait e-allege and reincorporate hy reference asset font herein the allegations contained in Paragraphs I through 39 ofthis Petition. 441, A person commits an unlawful act as defined under the Texas Medicaid Fraud Prevention Aet* by, among other things: A. Knowingly making or causing to be made @ false statement or rmisrepresentation of a material fact to permit a person to receive a benefit for payment under dhe Medicaid program that is mt shorized or tha is 5 See TEX ADU, Cone § 354183200), 2 See Tex. Gov't Cone § $31,734). © Soe Tox. ADM, CODE § 352.5) § 354.1808 © See Tex. Hin, RS. CODE § 36001. Ag amended on September |, 202, the Test Medicaid Fran Prevention Act sn the “Texas Heal Care ‘rogram Fad Prevention A= nd ines st health ear prograns beyond the Medicaid roan. The substance ‘ofthe nlf ot remains unchanged PLAINTIFFS’ FIRST AMENDED PETITION PAGE IMgreater than the benefit or payment that is authorized, TEX. HUM. RES. CODE §§36.002(1). B. Knowingly concealing or failing to disclose information that permits @ person to receive a benefit or payment under the Medicaid program that is rot authorized or that is greater than the benefit or payment that is authorized, TEX. HUM. RES. CODE § 36.0022), ©. Knowingly making oF causing to be made « false statement oF misrepresenation of material fact conceming: information required to be provided by a federal or state law, rule, regulation, or provider agreement Pertaining tothe Medieaid program, TEX. HUM RES. CODE § 36,002(4)B). D. Knowingly making or causing t0 be made a claim under the Medicaid program for... product that has been adulterated, debased, mislabeled, or that is otherwise inappropriate. TEX. HUM, RES. CODE § 36.002(7\C). 42, Hereinafter, references to conduct as constituting “stator faud” mean thatthe conduct being described was done by Defendants at times when one or more of the statutory ‘provision sot forth in Paragraph 1 applied and was done in ways and through mcans tat sats all he required elements of at est one applicable statutory provi VIL. DEFENDANTS’ UNLAWFUL ACTS A. Background 43. Hoping to carve out a shar of the mulibillion dollar ADHD modicaton industry for themselves, Pfizer—a multinational pharmaceutical powethouse—invested heavily in Quilivant. Pier had big ambitions for Quilivant and sought to diferente it fom the competition as the only extended-release oral suspension methylphenidate indicated for the treatment of ADHD in children, To manufacture Quilva, ize partnered with Tris, a eaively new and growing pharmaccutcel company with fower than 200 employees atthe time of Quilivan’s approval. For Tis, properly manufacturing Qullvant at the quantities requested by Pfizer would prove tobe a significant challenge. 44. ven prior to FDA approval, Tris struggled t0 achieve consistency in PLAINTIFFS’ FIRST AMENDED PETITION PAGE IS‘manufacturing Quilivant, as reflected in Quillvant’s failure of mandatory quality control tests, Following one such early failure in August 2011, which resulted in FDA issuing « Form 483, citation, Tris promised to corect the identified deficiencies, including conducting root cause investigations of its manufacturing processes as required by federal CGMP. Inthe months and years that followed, however, Tris conecaled subsequent quality conteol (est failures by ‘manipulating the test proces itself, violation of federal and state laws and regulations. 45. At the same time, Tris and Pfizer both recognized that Texas Medicaid business ‘would be crucial for Quillvant's success. To fully exploit the economic potential of Texas “Medicaid, Defendants needed Medicaid decision-makers to add Quillivant tothe VDP Formulary and the Preferred Drug List. These steps would effectively allow Medicaid providers to prescribe Quilivanc to their Medicaid patients and would streamline the prescribing process by eliminating the need for the teating doctor to go through the burdensome process of oblaining prior authorization. Desribing Texas as a “populous state with a disproportonately high pereentage of| children covered by Medicaid,” Pfizer projected that Texas sales of Quillivant were expected to increase significantly if Quilivant was added tothe PDL 46, Pfizer successfully campaigned to have Quilvant added tothe Texas Mestcid Formulary in June 2013, including by certifying on the VDP Application that Quillvant was not in violation of state or federal law, and agreeing to update VDP of any changes in “formulation, product status price, or availabilty.” From that point forward, Quillivant was listed as being reimbursble under the Texss Medicaid program, Defendants also successfully obuained "Am FDA Form 483i sed fim management the conclusion ofan inspection when an vestiges bas ‘hurd any conion tain thiudgnent may cost ltions ofthe Foo Drug and Coste (FDAC) At Snd relied ets” US. Food & Drog Adminstration, FD Farr 483 Fequeny shed Ouetons salle ‘itn ds gulnpetis-oralinerenfereemen anna vesatos nsec tferencss i inmeK-si=skeuesins (ast vised Nov. 8,223) PLAINTIFFS? FIRS AMENDED PETITION PAGE IG“preferred” placement on the PDL for Quilivant in 2014, following an ini fled temps in 2013. 47. Quilivant’s status with Texas Medicsid became a selling point, and the Piet selesfore actively promoted Quilvant o Texas Medicaid Providers, including peitiian and ‘Pharmacists, Defendants new that Qulliven'splasement on the VDP formulary and the PDL, ‘would not only intease Quilvant's uilizaion amongst chileenenelled in Texas Medics but ‘would als increase their marketshare within the commercial insurance population in Texas by having the State's stamp of approval 48, Defendants, however would no fulfil ir obligations to Texas Medicaid. Despite ogaging in conduct that clearly violated FDCA CGMP repuaton; reguley reesving ling test results on required quality control measures: and receiving notices of deficiencies and a warning eter fom the FDA, ato point in time did Defendants provide Texas Medics ot VDP witha relevant product update, as equired by thee VDP Applicaton cetfcaton. B, Defendants Modified the Dissolution Test Method to Conceal Manufacturing Defects, ‘Violation of FDA's CGMP 49. Almost immediately after it received FDA approval-an prior to Pfizer submitting tests. Under finan the VDP application—Quillivant bepan filing routine qual pressure to produce large quantities of Quilivant after lengthy approval process, Tris tried to rapidly increase production without adequate protocols to maintain acceptable quality, leading to defects inthe manufacturing process, 50, Beginning atleast as early as October 2012, Tris quality contol personnel observed that samples of Quillivant tested under FDA-requted lissolution specifications were not _generating passing results. Dissolution testing isan important quality control tool used to measure Whether a drag was properly manufactured, by comparing a simulated release of the drug to & PLAINTIFFS’ FIRST AMENDED PETITION PAGE ITstandard set upon the drys intial approval, This intr helps to predict wheter the dr (as rnanufactared) willbe eleased as expected in a patent's bod—which is etical for ensuring proper and consistent patent dosing. Here, the Quilivant samples formed lumps during reconstitution. 41, Asnoted nthe October 2012 Devin Repon, the “probable ewe” othe waco speciation esut was “elated to sample reconsintion hydration,” which refers to the process by which the drag—manutactred by Tris a a powder—is properly mixed with water prior ether to-eing dispensed toa patient or teste in Tiss lb 52. Rather than seeking to understand why the sample formed tumps during reconstitution, es “ea ined its analysts to shake the wateldug mixture longer, as wel as to conduct the test only when “foaming is absent from the suspension.” Put simply, Tis meager “retaining” was insufficient to prevent farther out-ofspecificaton solution et resus 53, Juste month ater in November 2012, Quilivant failed dissolution testing due to 1 dissolution a the 0.S-hour time point. In otber wor, inadequate amounts of Quillvant were dissolved half an hour after testing began. Once again, Tris blamed the method of mixing the sample instead of conducting & proper manuteuring investigation ‘54. InFebmuary 2013, Tis issued a Notice of Investigation for Quilivant slated to out cofspeifcation dissolution test results that far exceeded the reference standard at every tested timepont Shortly thereafter, Tvs Quality Conta isuod another Notice of Investigation in March 2015, where the analyst noted thatthe sample's dissolution test esults were Below the minimum standard, This stark contrat in outofspecfication est results should have resulted in Tris investigating and revamping its manufacturing process (and thereby incurring substantial costs) to = US. Pharmscopea, Disolion and Or Aeleme Tews, avalble at ipedivwasp oraismal. mosses a vised Nov 8.2023). PLAINTIFPS’ FIRST AMENDED PETITION PAGE 18rectify Quilvan’s inconsistency as finished product However, that agin did not occu. 5S, Rather than thoroughly investigating the root cause of Quilivant’s fares as roquird by federal CGMP regulations, Tris—under the dret orders of CEO Mehta-halted issouion testing unde the existing test method (Method 5) and focused on erating a new tet ser il defective pala wuld cet FDA witeia. This Quality Contel staff inpleaneuted ‘the problematic new tes (Method 6) on or about July 26,2013. Alarmingly the new test method was not representative of real-world usage by patents, and worse, went against dhe pharma reconstitution instetions ontained inthe FDA-approved label for Qulivant.? 56, Method 5, the dissolution testing method approved by the FDA, required that dissolution testing samples be “well shaken.” This aligned withthe instructions on Quilivat's FDA.appeoved label, which instructed pharmacists and caregivers o shake Quillivant fr at least 10 second during reconstitution and again pro o administration ofa dose. 57. However, under Method 6, ater sbaking the sample o reconstitute it (al that was required under Method 5), slab personnel were instructed to lt he samples for 30 minutes: sonicte ic for tee minutes; and then nx it gently with spatula or glass rod for an addtional minute. Each ofthese new sep differed from the steps contained in Quilivant’s label, which ‘meant that Tiss solution testing procedure was no fonger measuring dissolution sit would be experienced by patients aking Quilvan 58. A sonicator, or ultrasoni bath, works by using sound waves outside the range of 2 X's ake” or package nai the died information sheet tht i provided with every prsrpon drs product Icons fommaton that FDA has approved a being neces foes palin sly take he dug fe {indicated condon This Information includes rope dosing, waning ud precastons, and usage insets "Forfa dl pts Ui Site Pharma USP) Ch, aa Fthodstaze 6 monosagh 25 feb 2011 pif (st vied Nov. 8,202). Se oso FDA Gulance for Ins, ‘alable at hp i,poMownhss ns ldanrsizm 7020 pi Cast vised Nov. 8.2023). PLAINTIFFS’ FIRST AMENDED PETITION PAGE 19‘human hearin to create millions of microscopic bubbles ina solution that then implode, releasing ‘enormous amounts of energy.*? That energy can then be used to dissolve and homogenize liquids. ‘Tris lab personnel were instructed to sonicate Quillivnt wsing a particular ultrasonic bath model for three minutes “st maximum power.” Per the specifications sheet forthe specified model, itis cone of “the most teluelogicaly advanced uluascnie baths evailebe,” and maximum power ‘equates to 40 kilohertz, or 40,000 pulses per second. The machine retails for well over $1,000. In sharp contrast, Quilivant’s label instucted pharmacists to shake the medication botle “with ‘vigorous back and forth motion fora eas 10 seconds to prepare suspension." Similarly, the label instructed caregivers to “vigorously shake botle Fr atleast 10 seconds” prior administering dose of the medication. Thus, sonication plays no part in normal patient or pharmacy usage of Quilivane. 59, Under FDA regulations, “a supplement must be submitted” to the FDA “for any ‘change inthe drug substance, drug produet, production process, quality controls, equipment, oF facilities that has a moderate potential to have an adverse effect onthe identity, strength, quality, ‘or poteney ofthe drug” atleast 30 days before distribution of drugs made using the changes. © This note is referred to as “CBE-30." Changes requiring a 30-day prior notice include “Relaxation of an acceptance criterion or deletion of testo comply with an official compendium (USP) that is consistent with FDA statutory or regulatory requirements." In implementing Method 6, Defendants failed to notify FDA by submitting a CBE-30 prior to its use, in violation of FDA regulations, © See hpsduw neon con/docunensiauonstionmnsa-ransoic-powersgo-r-S106)0 0 ast visted Now 82003), ou 21 CRS 314706). 921 CFR S314 70632. PLAINTIFFS? FIRST AMENDED PETITION PAGE2060. Even Tris Quality Control personnel realized the absurdity of substituting an expensive machine for 10 seconds of shaking by hand, In response to an internal report purporting to justify the new sonication step, Tris's Senior VP of Quality observed that based on the data he reviewed, there was “absolutely no reason to sonicate” Quillivant samples. Another Quality CConteol employee noted tha “Wwe might be pushing it” to edd the sonication step, given that it demonstrably increased the dissolution rate during testing, 61. The Senior VP of Quality continued to voice his objections in a later email directly ‘to CEO Mehta, where he plainly stated that sonication of samples was “not seientifieally sound” «due to the impact on the sample results, and that “we can’t just keep ignoring these [quality] issues.” Nevertheless, Tris, under orders from its CEO Mehta, moved forward 3 sonication as pat of Method 6, This would not be the Ist method change, as Tris was unable to produce uilivant that consistently met acceptance criteria even under revised Method 6 2, Intemaly at Tes, employees of the Quality Assurance division understood the sonication step to be affecting Quilivant est results. While investigating a customer complaint in October 2013, one analyst questioned whether the curently employed Method 6 (inluding sonication) should be used, since “the inital results with [Method 5] are on the higher side of the speciicaton;* and noted that testing with sonication could result in 5.8% increase inthe dissolution rte, which would exceed the upper imi. 63, Through its Contract Operations Quality Assurance Department (COQA), Pfizer vas responsible for oversight uf Tris manufetuin including COMP compliance. Pizer also had 1 multidiseiplinary team, known as the Audit Quality Response Team (AQRT), tasked with investigating quality contol failures 64. As early as October 2012, Pfizer was aware that Quilivant was having difficulty PLAINTIFFS’ FIRST AMENDED PETITION PAGEmeeting its FDA-mandated testing specifications. Pfizer understood that Tris was seeking to change the test method to ineade sonication atleast as early a8 June 19,2013. ize didnot object to Tris's devsion to change the test method, but rather, sought to understand wht it would enti for fier in tems of regulatory filings to FDA. 65, nan cma in March 2014 fer several ot of Quilivant fled dissolution esting Lnder the new est Method 6 by exeeeding the upper limit of the specification, one Pfizer External Supply employee noted to another Pizer employee that sonication “id the trick to adess low isso results and then some,” showing that Pfizer understood the real reason for sonication was to influence dissolution test results (66. Piizer's Senior Director of COQA noted that test Method 6 didnot align with the test method approved by FDA, stating “I read this as they are out of compliance with our [FDA] filing” Unfortunately, this realization didnot prompt Pfizer COQN to demand that Tris perform 1 root cause investigation into Quilivan’sdisolutin testing eilues, no did it wigge Pie's own AQRT to investigate the problem. 67. Instead, Tvs hegan working up a justification to update the est method once again, In response to seving the preliminary dissolution repor, Tvs’ Senior VP of Quality remarked, “right now it looks like when the products slow we sonicate and when i's fst we don’t sonicate wwe need to take a serious Scenic approach to solving this issue." Despite this rtcsm, Tris continued forward wi ance again altering the test metho, 68. In ster em in April 2014, Par Entel Supply employee characterized the situation involving Quillivant’s out-ofspecification dissolution results as “prety serious” The fier employee further explained tht Phizer COQA had expected Tis to “present data to quay ‘the impact of [a] sonication step inthe dissolution method,” but that Tris untimely provided “a PLAINTIFFS’ FIRST AMENDED PETITION PAGE 22statement but no dat." He went on to conclude that, as result, Pfizer could nt continue to release Quillvant using the new test method until Tris could justify its use 69. Roughly a month later, Pfizer's Senior Director of COQA admitted: “I agree [the method] doesn’t represent patient usage and am surprised it was [internally] approved..." Despite Pfien's levine anc el shepticioan sega the validity of sonication, Piao fated to ‘ensure Tes thoroughly investigated the rot cause of Quilivant’s quality issues and eile to alert “Texas Medicaid to those ongoing problems 70. Rather than conducting a proper manufacturing investigation, Pfizer and Tris concocted a convenient narative to explain avay the problem, Ina May 2014 Field Acton Report (PAR), fiers Senior Director Team Lead for COQA claimed the root cause of Quilivant's istolution testing issues was “conimed tobe laboratory err associated with lack of laity within the analytical method.” More specially, they claimed that an analyst erroneously sonicated Quilvant samples during ate stage ofthe testing proces, Yeausing an inerese inthe rate of solution” observed at that ime point inthe testing proces. 71. This response to FDA was misleading for two reasons. First, contrary Defendants’ assertion, Method 6 as implemented plainly isiucted analysts to sonicate Quillvan samples prior to testing, so there was no method ambiguity. Second, by stating thatthe analyst, sonicated “in err” Defendants concealed the fet that Quilvant samples were beng sonicated in order to manipolate dissolution test ess to falsely pass quality contol. 72, AMersubmiting the FAR 1 FDA, Tis worked revises assouton test method fiom Method 6 to Method 7. During the development of Method 7, Pier asked Tif about shipping Quilivant despite the failure to pass dissolution testing, Tris personnel responded tht, ® Under th est nti approved by FDA—Method sonication ie never ppropit PLAINTIFES’ FIRST AMENDED PETITION PAGE23although they prefered to not doso, they were “trying to esp up with Pfizer's demand’ and the ‘ecsion was upto Pfizee. However, Tis cautioned that the shipment in question would not have a Cenifiat of Analysis showing Quilivant met its PDA coquired specifications 73, At that point, Pfize’s Ditector and Team Lead for COQA replied that with no te test and ny Cestiicate of Analysis, Pizes Ui “wot lave any support for any [Quilivaat] in distribution,” and thatthe product woud either need to be tested and receased or recalled Despite this grim assessment, the discussion didnot prompt Pfizer to press Tis for a thorough investigation of the underlying cause of the dissolution testing failures that necessitated the ‘creation of anew test method. I also did not trigger an investigation by Pfizer's AQRT. 74, The new method went nt effect in June 2014. Under the Method 7 test, samples used for release esting wer sonicated, while samples reconstituted and held for stability testing were not sonicated, 75, A-month ater Pizer expressed alarm about wheter there was any support for Quilivan’s continued distribution, Pizer simply accepted that Trs's implementation of the updated test method (Method 7) solved the problem. Minutes from a July 2014 Joint Steering ‘Commitee meeting betwoon Tis and Pizer noted that “dein updating the dissolution method «tested in a supply isk," but conveniently explained that, withthe new methods approval, ‘the Quilivant supply situation as “no longer sn ise.” 76. Importantly, neither Tris nor Pfizer had thoroughly westigated the actual root ‘cause of the quality control raitures that prompted the method change inthe ist place, Both companies knew the continued use of sonication in Method 7 was inconsistent wth the test method “on le withthe FDA; was inconsistent with patient use; wasnt supported by the appropriate datas and had an impact onthe dissolution test results. But Defendants chose to move forward with is PLAINT FIRST AMENDED PETITION PAGEMse to avoid potential supply disropton. 77. Atthe same time Pfizer and Tris were working to bypass rather than salve known quality issues with Quilvan, Pfizer was petitioning the Texas Medicaid PAT Commitee for uilivant’sadtion tothe Prefered Drug List, The PAT Commitee relies on deug manufactures to prove teh sd empl norton st third prt i ver eay oat it duties of ecommending prefered drugs bated on thir lficaciousnes, clinical significance, cost, cffectiveness and safety. At no point did Pfizer or Tris inform PAT Committe decision-makers that there were ongoing and unresolved quality issves with Qullivant. 78. Having kept this crucial information ftom the P&T Commitee, Pfizer and Tes succeeded in their eons to have Quilivant added tothe Texas Mees Prefered Drug Liston July 17, 2014, This removed the need for prior authorizations for Quillvant prescriptions, ‘woadening the deus's marke appeal and increasing the likelihood that chien on Texas Medicaid ‘would be prescribed Quilivant. Unfortunately for those children, Quilvant also continued 19 generate outof-specitiaton dissolution test rests due to the unresolved manufacturing issues luring this time. 79, tm October 2014, Tis again altered the test method, switching to Method 8. But just 4 few months later, Quilivant produced more outo-specification results sing the new method. 80, Even more outof specification dissolution testing results were observed in 2015 sand 2016, despite testing curing under evsed Methods 8 and 9. Inthe Deviation Report for ‘one ofthe 2010 files, Ins Senior Compliance Specialist concluded tha “he root ease oF the subject deviation was related to method,” thus continuing Tiss tend of blaming the tet method ther than finding the underlying cause forts product's variability. & Vendor Drug Program, Prfred Drug, avlble at yoo endo com fomularieeredds (st ished Now. 023) PLAINTIFFS? FIRST AMENDED PETITION PAGE 2581. Following this Repor, Tris changed the dissolution test method to Method 10. But edt inrease rather than adjusting the test method to etter resemble real-world usage, Tris the extent to which Quilivant samples were manipulated prior to dissolution testing by adding a ‘est perio of sx hous afer sonication This extra step was not inched in the only dissolution texting method propery reportedto the FDA (Method 5) nd was not eetive ofthe pint usage described inthe drg's label. No matching sitchour wating period wat added to Quilivant’s instrstions for pharmacists ad caregivers, 82, Tes observed additonal out-ofspesficaton dissolutions results for Quilivant in December 2016 However, this time the failure occured ight hous fie reconstitution —a fist for Quilvant In response, Pier notified the FDA through another Field Action Report Following additional negotiations with FDA, Pfizer agreed to commit to internally narrowis Quillvan’s dissolution test spectiations, which upset Tris personnel and caused Tris CBO Mehta to personally complain to Phizr. 83, Tris moditod the dissolution test method to Method 11 in May 2017. Method 11 sil included a sonication step. This test method remained in place unit leas January 2018 84. During this time, Defendant fled to propely conduct investigations into the oot «uses ofthe various dissolution flues, electing instead to continue mosiying the dissolution test tel Both Defendants’ changes inthe dissolution testing procedure—at the insistence of CEO Mehta as well as Defendants flue to investigate the out-of specificaton tes results constitute congong volntons of FDA regulitons, causing Qullivan tobe adukerte In volo of sate and federal aw, inclaing the TFDCA and FDCA. C. Defendants Failed to Determine the Root Cause of Particle Size Testing Failures in ‘Violation of FDA CGMP. 85. Not only was Quilivant routinely filing dissolution testing, but it was also PLAINTIFFS’ FIRST AMENDED PETITION PAGE 26regularly filing particle size testing. By way of background, Quilvan’s extended-release technology used a speci coating to contol the release of Quillvan’s setive pharmaceutical ingredint—methylphenidate "© To manage the release of the active ingredient, Tis plied varius thicknesses of the time-elease coating to Quillvant's ative ingredient panicles: the {hicks the coming, de longs thes for the niyphenidate to be leased 16, Particle size testing was an important tool ta meat the ratio of how big the patcles of coated methylphenidate present ina sample were, which would dirty impact how rapidly the drug would be absorbed within the body. Critizally, the FDA required Qullivant to pass patil size esting in addition to dissolution testing. 87. At least as carly as June 2014, Quilivant sated generating out-of specification panicle siz testing ress. Quilivant continued to fail parse size tests throughout 2014 and 2015, In an email dated November 12,2014, Tvis's Senior VP of Quality bluntly stated: foe those that were unaware, this is now the &* [methylphenidate] pate size failure in $ months. 1am ssoltely “pointing the finger at all oF us for doing less than accepable jb investigating his issue and finding a re root cause.” 88. Quilivant’s particle size is a direct fonction of the manufacturing process, snd repeatedly filing to mest pail size speifcaions was another symptom of Trs's awed manufacturing process for Quilvant $9. Butina familiar move, Tris coninsed “doing a les than sccepabe jab by filing ‘to investigate me oot cause or the manufturng problem. stead, THs had the create lea 0 remove pace size testing altogether 9, In communications with Pfizer, Tes alleged that batches were filing in-process ‘Tris Phanma, Li Technolgy avalble a por ssa oni 8,203). PLAINTIFES’ FIRST AMENDED PETITION PAGE 27particle size testing but meeting their final dissolution specifications, and that che “inappropriate test” could “potentially impact (Tris’s} ability to supply” Quillivant to Pfizer. During this «discussion, Tris did not inform Pfizer that Tris continued to use the unapproved dissolution test that improperly manipulated the test samples, thereby making teaser for Quilvant to pas. 91, Tre needed Pfizer's support to sek FDA approval forthe removal of particle sie testing, and they complained that Pfizer's regulatory group was moving slowly, Pfizer's ‘Commeril Lead for Quilivant epied that, while they were “als extremely concemed about the upcoming out of stock situation” for Quilvant, here were concems that particle size “was sill ‘ou of specification and no rot cause [had] been found.” They further eutioned that here were “significant implications to. Quilivant if his snot aly vetted.” 92. Onthe same day Pizer shared ther concerns with Tes, they aso ceculated intemal ‘emails outing the spprchension about removing particle size testing. Pfizer's Director of Business Development forthe QXR Franchise noted that Pfizer's intemal analysis contradicted “Tris's positon, explaining that Pfizer personnel were “concemed that sufficient data curently [aid] not exist o eliminate or widen te in-process specification” for particle size testing, 93, A Pfizer memo attached to an email chain by thei Senior Director of Chemistry, ‘Manufacturing, and Controls acknowledged that “{ijtrinsically, panicle size influences [bioavailability] due to diferences in surface area,” and that, because dissolution testing was “not able to adequately demonstrate clinical performance... dissolution testing alone” could not be relied on to justify removal of paticle size testing, He further cautioned, “we ate not being transparent with the [FDA] as... we are deleting this specification for eause. This an issue from 4 {CJGMP perspective.” He concluded that sufficient data did not exist to eliminate or widen the specifications for particle size testing, and tha ational testing would be needed to support Tris's PLAINTIFFS’ FIRST AMENDED PETITION, PAGE 28proposed course of action. 94. A month later, affer Tris continued insistence on removing particle size testing based soley on the alleged sufficiency of dissolution testing, Pfizer capitulated. They agreed to suppor the change request othe FDA, in large part du to Trs’s agreement to submit the change 1. price approval supplement (PAS) to Qullivnt’s NDA thet would include information about Quilivan’s ou-of-specitiation particle size testing results. 95, But tension sill existed regarding how fo handle the request. Pfizer personnel ‘wanted to bringin an external consultant o facilitate the process, but Tris CEO Mehta was anxious {to move forward and thought the consultant added “unnecessary time and convolution.” 196. In response to pushback from Tris, Pfizer's General Manager for US Brands discussed the problem intemally with her colleagues. In an email dated December 2, 2015, she provided the fllowing summary ofthe situation: Regulatory believes that they need tobe certain that [Tis") manufacturing process is fully in contol before requesting this ofthe EDA. We have gotten several lack ‘of effect comments from patients that have been reported tothe EDA a well as we have had a consistency issue with the particle size which has caused a high percentage of batches the disearded as they didn’t meet spec. [Fis is why Tei ‘wants to eliminate the additional standards testing. While these events are not necessarily connected, regulatory must have confidence that they ae not. Ts was not able to establish a root cause for the manufacturing issues and as a hard-o- make product, the departure of their key manufacturing person seems to have ‘coincided with thee issues. Since Tris has nat been amenable toa iizer review of the data the compromise was to bring in an extemaneutal party to enable ti ‘confidence level tobe reached before requesting something of the FDA.* 97. Despite Pfizer's misgivings, Tris and Pfizer ultimately moved forward with submission ofthe PAS to FDA, requesting removal of particle size testing on February 17, 2016, Unsurprisingly, the FDA rejected the request. The ageney's Complete Response Letter “nphasis aed PLAINTIFFS’ FIRST AMENDED PETITION PAGEsummarized Piers argument as follows: “You claim tha isolation is a provise quality contol tool and a more relevant and appropriate test forthe assessment ofthe product performance end ‘evaluation of batch to batch reproducibility compared tothe paces size testing." The FDA critiqued this claim, noting that Quilivan’s dissolution testing end acceptance criteria—as understood by TDA—were insufficient to sepa patise si leting. Inputaly, while uillvan was sil regularly fling the dissolution tests even under Tis’ increasingly modified and unapproved dissolution methods, Pfizer was making grandiose claims about the alleged reliability and sufficiency of dissolution testing 98. As approved by the FDA, Quilivant ad to mest certain particle size standards Tris recorded numerous out-fspeciicaton results forthe mandated particle size tet fom 2014 to at eas 2016, while fling to propery conduct investigations into the rot eases ofthe patcle size failures, Defendant’ flue to investigate the out-of-peifction test results constitutes an “ongoing violton of FDA regulations, causing Quillivant tobe adulterated in violation of state and {federal law, including the TFDCA and FDCA. D. Defendants Failed_to_Properly Investigate Numerous Complaints Regarding illvant and Lack of Effet, in Violation of FDA's CGMP. 99. Given the numerous quality contol sus plaguing Qullivan between 2013 and 2018, itis unsurprising that a significant numberof consumers took the extaordinary sep of officially complaining that Qulivant was filing to works expected, As cacy as September 2013, Defendants began receiving consumer complaints that Qullivat had “lack of effect.” 100. In December 2014, the FDA issued a Postmarket Drug and Biologic Safety Evaluations report identifying lack of effect for Quilivant as @ “new potential issue" the ageney ‘As of 206, Tis ad notified the oo cause of parle ie fires towph they had aken steps that they himed reduced he egueney of sch ares, PLAINTIFFS? FIRST AMENDED PETITION PAGE30\was monitoring. The FDA sent another notice regarding lack of effect complaints to Pfizer in April 2015, identifying it as a “potential safety issue.” Prize forwarded the notice to Tes, along with questions about Trs's procedures for monitoring and investigating product complaints nce sent Pfizer @ memo 101. On May 21, 2015, This's Senior Manager of Comp sidessing the steps Tis had taken to investigate lack of effect complaints concesning Quillivat ‘Among other things, the memo assured Pfizer that Tris had tested relevant samples for dissolution an the samples had met release speifcations. The memo conelide there “were no disrepancies noted inthe manufacturing or packaging processcs that would have resulted inthe report of lack of effet.” 102, But what the memo failed to acknowledge i that in May 2015, Tris was using dissolution test Method 8, which included sonieation and was not approved by the FDA. By using this unapproved test method, Tris was unable to properly investigate whether the previously released product actully met the FDA's finished product specifications. 103, Even when faced with an influx of actual patient complaints about the drug lacking fect, Tis could not say whether the drug as manufactured was consistent with the drug as approved, because Tris had changed one ofthe primary methods to verify that fact. Tvs continued {o use unapproved quality contol testing methods despite FDA's wamings regarding patients lack ‘of effet complains, 108, Pfizer was far from blameless in its handling of Quilivant product complaints. Ja July 2015, the FDA asked Pazer for specie information related 19 Quilvan’s lak of effect ‘complaints, The FDA's Information Request was eventually shared with Teis's Chef Medial Officer, who emailed Tris CEO Mehta to express her concems about Pfizer's handling of the situation, Pizer wanted to argue thatthe lack of effet complaints largely occurred during the PLAINTIFFS’ FIRST AMENDED PETITION PAGE SLtitration phase and were caused by doctors lng to adjust the medication to a flly optimized dose, But according to Tris the majority of complaints contained no dosage information, with only 21% ofthe complaints arising during the iil tieation period. Trs's Chief Medial Officer ‘worried that “a soliton [was] being proposed [by Pfizer] before the problem (vas) well understood” 10, Even Pfizer personel resognized weaknesses inthe postion that dose tation was to ame for the uptick in produet complaints, as the VP of Safety Surveillance and Risk Management acknowledged, “inthe absence of conclusive data it seems we at lft with some “nypathesiaing.” Nevertheless, when Pfizer submitted its response to the FDA's Information ‘Request, its report concluded that “the oot cause {was} most likely associated with the titration phase ofthe dosing regimen.” Pfizer additionally placed some blame on the patients and their caregivers, suggesting that they were not properly shaking the product prior to use. 106. While Pfizer's response to the Information Request was sufiient to lose that particular inquiry, FDA continued to have concems regarding Quillivant's efficacy. For instance, inan October 2016 email dtiling Tvs's discussion with FDA on Quillivant’s particle size testing ‘requirement, Tris noted tht FDA appeared to have the lack of effect topic on their ming, and that [PDA linked i to potential safety issues, 107, Internally, Tris and Pfizer continued to conceal the true scope of lack of effect complaints, and continued to improperly investigate the complains by using their unapproved Lisooution test methods. In early 2017, after Tris oblaine ouveFspecitieation ssulution West results for Quilivant, Pfizer compiled a graph summarizing all reported lack of effect complaints {for Quillvant, According to this graph, complaints in 2017 had again spiked to some ofthe highest ‘This chim was pariully dsngenous given that Pier knew Te was soictingQuilivat tpl rar soon eng, Soviet mies he dug farmoeeTecvely than shaking pet he abe! insrucions PLAINTIFES’ FIRST AMENDED PETITION PAGE 32reported levels 108, Defendants understood the link between the Quilivant's quality conto failures and the lack of effect complaints, Yet at no point did Defendants wam Texas Medicaid providers, ‘or decision-makers that Quilivant had known manufacturing issues afecting its efficacy. Defendants they deprived the Mead program of the racial infomation itrelies onto ensure the safety and quality of care provided to Moisi beneficiaries. As a result, thousands of Texas children roceved an adulterated Schedule Il Controlled Dangerous Substance 109, Defendants’ inability to properly compare the consistency ofthe Quillvant batches referenced inthe ack of effet sims mean hat Defendants were unble to properly investigate the complaints a quired by FDA CGMP regulations, Accordingly, Defendants’ actions caused = CDA Issues Notices of Violations to Tris and Pfizer ivan tobe adulterated in violation of state and federal lw, including the TFDCA and FDCA. 110, By 2017, Quillvan’s persistent quality issues triggered an FDA. inspection of “Tex's manufactaring faite, beaining in February and extending into March 2017. Dung that time, Pfizer recalled multiple lt of Qullivant de to dissolution testing failures 111. After the inspection, the FDA issued a Form 483 Inspctional Observations fining, in selevant par, hat: 1) the “quality conto unit ake the responsiblity and authority to eject all components and drug products"; 2) “Outof‘Specification (QOS) results were obtined for isolation testing for” multiple lot of Quillvants 3) the “responsibilities and procedures applicable ro se quality conto unk were] notin wring ad fly followed 4 he “accuracy, sensitivity, specificity] and reproducibility of test methods [had] not been established and documented and 5) “e} tablished test procedures an laboratory contol mechanisms [were] nat followed and documented a the time of performance.” PLAINTIFFS’ FIRST AMENDED PETITION PAGE33112, Pfize’s Director of Business Development forthe QXR Franchise citclatd the FDA 483 Inspetional Observations to others in Piize senior leadership positions, nating that the report revealed “seve systemic isuos at Tris.” Aer describing the FDA's findings, he summarized “In essen, I blieve FDA is saying that Tis Quality System [is broken” Despite this dir ancniment, when Tes recommended that Picr placa lls of Quilivant on hold uti the issues aise by the EDA could be fully investigated, Prize pushed Testo coninve supplying the marketplace with Quilvant 13, Theeventsof early 2017 finally prompted Phizerto internally examine the workings ofits COQA team. In July 2017 emi, Piers Senior Director of Regulaory Alsesadmited that Pfizer had not fllowed “the normal change contro! process” for making changes to Quilivan’s dissolution testing method. He blamed this fling onthe progression af izes working clationship with Tris, as wel as Tris’s postion regeding the proprietary natu of information concerning Qullivant. He further admited Pizet’s COQA team had “dropped the bull” when, afer requesting that ational testing be performed regarding the introduction of sonication, “nothing materialized.” 114, In October 2017, the FDA sent Tris Drug Master File (DME) Deficiency Letter critiquing Tvis's repeated revisions to Quilivan’s dissolution testing method, The agency ‘explained that te introduction of sonication in Method 6 and its conned use in subsequent test ‘methods was unacceptable, The agency likewise found unacceptable the si-howr sample rest ‘esi induce in Method 10, As a rel, the FDA. concluded that che only appropriate issolution testing method for Quillivant was Method 5. The EDA instructed ris to update Quillivan’s DME scordingly. 1S. Merely a month after receiving such harsh feedback fom the FDA on Quilivan, PLAINTIFFS’ FIRST AMENDED PETITION PAGES