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Great question, although I am sorry to hear your brother has been struggling so much. But to answer your question directly, psychotherapy can absolutely help. Here is why: Your brother may (probably will, actually) weave the therapist into his paranoid delusion initially... that is a natural outcropping of his disorder. But, the therapist can eventually enter the delusion and work on your brother's perceptions from within his frame of reference... in other words, the therapist can validate and support parts of the delusionary fabric, thereby gaining the confidence of your brother. From that position, s/he will best be able to maneuver the delusions until they are less toxic.
I will also say that the medication should (if it has not been already) checked out by the prescribing physician. The dosage may have been upped, but may still need to be tweaked to maximize its effectiveness. As time goes by and the new dosage has time to work, the delusions may also lessen in intensity. Best of luck to you- If you are satisfied with the response, please hit "Accept." That is the only way I can receive credit for my answer. Thanks-