Zyprexa Lawsuits ContinueJan 29, 2009 | Parker Waichman LLP
Following Zyprexa maker Eli Lilly & Company’s $2.6 billion in payouts to settle claims of illegal sales practices, Lilly still faces lawsuits that will likely cost it an additional $2 billion, reported Bloomberg.
The prior $2.6 billion covered state and federal claims of illegal sales practices, which caused the company to take a per share hit of $1.29; $1.2 billion settled 31,000 patient lawsuits, reported Bloomberg. The Street reported that in a statement, Lilly said that while it agreed to settle the dispute, it disagrees with the allegations and does not admit to the civil allegations.
The Indianapolis Business Journal noted that Lilly’s guilty plea of improper marketing practices involving Zyprexa is its second such plea in about three years. It made a similar plea in December 2005 over how it marketed its osteoporosis drug Evista in 1998 as a treatment for breast cancer and agreed to pay $615 million.
Not included in these figures are suits filed by 12 states as well as a class-action suit filed by pension funds, insurance companies and, labor unions in which nearly $7 billion is sought, said Bloomberg; two state trials are scheduled for 2009. Spokesman for Taxpayers Against Fraud Patrick Burns estimates that settling the state suits could cost Lilly $2 billion, more if the cases reach trial, “The total nut on this could be four or five billion…. Their cheapest way of clearing the decks is to settle,” Burns told Bloomberg. The 12 states claim Lilly withheld information about Zyprexa’s side effects and promoted sales for unapproved purposes and are seeking damages and fines over deceptive practices and false claims and reimbursement for prescription costs and costs to Medicaid programs for patients injured by Zyprexa, reported Bloomberg.
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 was being marketed for use in milder cases of bi-polar disorder and for dementia and has been linked to serious side effects including diabetes, hyperglycemia, and other blood sugar disorders. 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. Lilly admitted guilt in a misdemeanor violation of the Food, Drug and Cosmetic Act for its improper marketing of Zyprexa to elderly patients with dementia, reported Forbes.
Lilly recently entered into a corporate integrity agreement with the Office of Inspector General of the U.S. Department of Health and Human Services (HHS) which requires Lilly to both maintain its compliance program and follow a mandated set corporate integrity obligations for five years, Forbes reported last week.
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.