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Eli Lilly to Pay Over $1 Billion In Zyprexa Claims

Jan 15, 2009 | Parker Waichman LLP, LLP Eli Lilly and Company is planning on paying over $1 billion to close out some criminal and civil investigations related to how it marketed Zyprexa, said Reuters.  To settle the claims, Zyprexa will about $1.42 billion to settle claims over the marketing of its antipsychotic drug; Lilly has agreed to plead guilty to one misdemeanor violation of the Food, Drug, and Cosmetic Act, reported Reuters.  Zyprexa has been linked to serious side effects including diabetes, hyperglycemia, and other blood sugar disorders.  

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, which also reported that Lilly said the misdemeanor plea settles claims of its off-label promotion of Zyprexa between September of 1999 and March of 2001.  Also, Lilly entered into a so-called corporate integrity agreement with the Office of the Inspector General of the U.S.  Department of Health and Human Services (HHS).  "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.  According to Reuters, that new study raises questions about claims that atypical antipsychotics are safer than older generation antipsychotics.

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.  Late last year, Lilly agreed to pay $62 million to 32 states and Washington, D.C. to settle claims or improper marketing of the drug.  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.

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.

The Associated Press reported last year that Zyprexa brought Lilly over $4.7 billion in revenue the prior year; however, Lilly has spent over $1.1 billion since 2005 to settle product liability claims concerning 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.

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