Drug Company to Pay 22.5 Million to Settle Zyprexa Suit - August 27, 2009

Eli Lilly & Co. has agreed to pay $22.5 million to settle a lawsuit brought by the State of West Virginia on claims that the drug company improperly marketed its drug Zyprexa.

Drug Maker Eli Lilly has admitted no wrongdoing under the settlement agreement.

Zyprexa, Eli Lilly's best selling drug, is an antipsychotic that has been approved for treatment of schizophrenia and bipolar disorders. The drug has generated 2.3 billion dollars in sales for the first half of 2009. Lilly has agreed in recent years to pay at least 2.6 billion dollars to settle a number of personal injury lawsuits and governmental investigations that allege that the company has been promoting the drug for unapproved or off label uses. While doctors can prescribe medicines for any use, drug makers can not promote or market a medicine for any use other than those approved by the U.S. Food and Drug Administration.

Lilly is involved in a number of lawsuits from the states of Arkansas, Connecticut, Idaho, Louisiana, Mississippi, Minnesota, Montana, New Mexico, Pennsylvania, South Carolina and Utah seeking damages and fines for violations of laws against deceptive practices and false claims. The lawsuits have resulted from the allegations that the drug maker improperly warned about the side effects of the drug, which have been linked to excessive weight gain, high blood sugar and diabetes in patients. Additionally, it is alleged that Lilly encouraged the sale of the drug for unapproved purposes, such as helping nursing-home patients fall asleep, which authorities have claimed caused improper reimbursement claims to be submitted to government health-insurance programs. It is also claimed that Eli Lilly encouraged sales for the unapproved treatment of dementia and depression.

U.S. District Judge Jack Weinstein is overseeing all federal court lawsuits over the drug. He has encouraged the states to settle their marketing claims against Lilly involving Zyprexa. Weinstein stated in an August 17 decision: "A global settlement of all cases, including those pending in state courts is desirable."

The West Virginia case is part of In re: Zyprexa Products Liability Litigation, 04-MD-1596, U.S. District Court, Eastern District of New York (Brooklyn).