Eli Lilly to Pay 33 States $62 Million in Zyprexa Case SettlementOct 7, 2008 | Parker Waichman LLP
In its ongoing Zyprexa case, Eli Lilly just agreed to pay $62 million to 33 states to settle claims it improperly marketed Zyprexa. 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. The settlement closes an 18-month investigation led by the offices of the attorneys general of Illinois and Oregon who maintain that Lilly violated consumer protection laws by urging doctors to prescribe Zyprexa to patients who did not need the medication.
This represents the largest settlement paid by a drug company in a state consumer protection case, exceeding even the $58 million that Merck paid to settle similar accusations about Vioxx, according to the states’ lawyers. The case also points to a possibly larger, separate deal connected to a civil and criminal investigation led by federal prosecutors in Philadelphia. In that case, Lilly is expected to pay over $1 billion in fines and restitution to states and the federal government; Lilly may also plead guilty to a misdemeanor criminal charge related to off-label marketing of Zyprexa. “We know they’re working hard to get that settlement done,” said James D. Kole, the chief of the consumer fraud bureau for the Illinois office.
Both the states’ investigation and the Philadelphia case focus on Lilly’s marketing of Zyprexa for patients with dementia and milder forms of bipolar disorder, a violation of federal law. Zyprexa is a potent brain tranquilizer that calms hallucinations related to schizophrenia and bipolar mania; however, internal Lilly documents and e-mail messages indicate Lilly marketed Zyprexa off-label. Zyprexa can cause severe weight gain and an increase in blood sugar in many patients. According to the American Diabetes Association, Zyprexa is likelier to cause diabetes than most other medicines for schizophrenia and bipolar disorder.
Once the Food and Drug Administration (FDA) approves a drug for sale, doctors are free to prescribe it for whatever disease they see fit since the FDA does not regulate the practice of medicine; however, pharmaceutical companies are only legally permitted to market and advertise medicines for those uses specified on the drug’s label. It is illegal for drug companies to market medications for off-label purposes. “The company’s deceptive marketing practices were illegal and highly dangerous,” Lisa Madigan, the attorney general of Illinois, said. David Hart, senior assistant attorney general for Oregon, said, “We’re trying to send a message to the pharmaceutical industry that consumer fraud is something we’re going to investigate and prosecute.”
In July we reported on a former Lilly rep’s testimony in which the rep told a Senate committee that drug makers hire ex-cheerleaders, models, and jocks to schmooze with doctors, exaggerate drug benefits, and minimize drug risks. Shahram Ahari, who spent two years as a rep for Prozac and Zyprexa, said, "We were taught to minimize the side effects, how to use conversational ploys to minimize it or change the topic." Ahari said he received specific training on how to: Get around spending limits for important clients, use free samples to increase sales, create a quid pro quo with personal gifts and friendships, and exploit sexual tension with clients.