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Eli Lilly Admits Zyprexa Wrongdoing

Jan 23, 2009 | Parker Waichman LLP

Eli Lilly finally admitted some wrongdoing in how it marketed Zyprexa.  Lilly also agreed to pay over $1.4 billion in settlements, but did not officially admit its guilt in the civil investigation, reported Forbes.  Zyprexa has been linked to serious side effects including diabetes, hyperglycemia, and other blood sugar disorders.

Zyprexa is a potent brain tranquilizer that calms hallucinations related to schizophrenia and bipolar mania; however, internal Lilly documents and email messages found that Lilly marketed Zyprexa off-label.  Zyprexa is only approved for the treatment of schizophrenia and bipolar disorder and was being marketed for use in milder cases of bi-polar disorder and for dementia.

Late last year, Lilly agreed to pay $62 million to 32 states and Washington, D.C. to settle claims of improper marketing of the drug.  And, in addition to states, insurers, pension funds, and unions have been among those groups legally seeking compensation from Lilly and accusing it of concealing Zyprexa's tendency to cause weight gain and diabetes and of marketing the drug for off-label uses.

It is widely accepted and understood that doctors can use their best judgment in prescribing practices and can prescribe U.S. Food and Drug Administration (FDA)-approved drugs for approved and nonapproved purposes.  What is illegal is a drug maker’s marketing of an approved drug for an unapproved use.  This is what happened with Zyprexa and Lilly, which admitted guilt in a misdemeanor violation of the Food, Drug and Cosmetic Act for its improper marketing of the drug to elderly patients with dementia, reported Forbes.  The illegal marketing occurred from September 1999 to March 2001.

Of the $1.4 billion Lilly agreed to pay in settlements, Lilly will pay $615 million to settle the criminal and about $800 million to settle the civil investigations, which were initiated by the State Medicaid Fraud Control Units of the states, said Reuters in an earlier piece.  Of the $800.0 million, $438 million will go to the federal government, with the remainder to be used in state settlements, explained Forbes.  Also, said Forbes, Lilly entered into a corporate integrity agreement with the Office of Inspector General of the U.S. Department of Health and Human Services (HHS).  This agreement, explained Forbes, requires Lilly to both maintain its compliance program and follow a mandated set corporate integrity obligations for five years.  Specifically, the plea states that Lilly promoted Zyprexa in elderly populations as treatment for dementia, including Alzheimer's dementia, although Zyprexa is not approved for such uses," Lilly said, according to Reuters.

In 2005, Lilly entered into an agreement in principle to settle about 8,000, or 75 percent, of the claims against the company related to Zyprexa, which involved claimants who asserted they developed diabetes-related conditions from their use of the antipsychotic.  Also, atypical antipsychotic drugs, such as Zyprexa, were found to double the risk of heart failure and death, according to a study published in The New England Journal of Medicine.  Said Reuters, that new study raised questions about claims that atypical antipsychotics are safer than older generation antipsychotics.

NewsBlaze has pointed out that many victim claimants remain unpaid in the largest so-called pharma-fraud-whistleblower case in United States history.


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