Zyprexa — Possible Settlement of Criminal and Civil Claims

Eli Lilly Co. is expected to pay $1.4 billion to settle the government’s criminal and civil claims against the company in connection with its marketing of Zyprexa, according to this article in the New York Times, which notes the record-breaking size of the deal:

Eli Lilly, the drug company, is expected to agree as soon as Thursday to pay $1.4 billion to settle criminal and civil charges that it illegally marketed its blockbuster antipsychotic drug Zyprexa for unauthorized use in patients particularly vulnerable to its risky side effects.  The amount of the settlement is a record sum for so-called corporate whistle-blower cases, which are federal lawsuits prompted by tips from company employees or former employees.

Zyprexa is approved for schizophrenia and bipolar disorder.  Lilly is charged with pushing doctors to prescribe the drug for unruly children and nursing home patients, despite the increased risks attendant to use of the drug by the young and the elderly.  The Times article points out that a $1.4 billion fine, while substantial, may represent as little as one year’s worth of off-label-use Zyprexa revenues, as Zyprexa has generated over $39 billion in revenues since 1996.

According to the article, more information may come out Thursday:

The government’s case will remain sealed until at least Thursday, when a judge is expected to approve the settlement. People involved in the negotiations say that prosecutors pressed for a resolution in the waning days of the Bush administration to avoid having to get another set of approvals from new bosses at the Justice Department in Washington.

While the settlement is intended to resolve all pending government claims, it is unclear whether all states, which are parties to the case through the federal-state Medicaid program, have agreed to terms.

HME