[Corp. Watch] Drugmaker "put thousands at risk", uses profits gained to buy legal impunity

[Corporation Watch]

Eli Lilly Settles Zyprexa Lawsuit for $1.42 Billion

(Associated Press, January 17) -- Eli Lilly & Co. said it has pleaded  
guilty to a charge that it illegally marketed the anti-psychotic drug  
Zyprexa for an unapproved use, and will pay $1.42 billion to settle  
civil suits and end the criminal investigation.

	The Indianapolis-based company said it will pay $800 million to  
settle civil suits, including $438 million to the federal government  
and $362 million to states.

	It will pay $615 million to resolve the criminal probe, and plead  
guilty to a misdemeanor violation of the Food, Drug, and Cosmetic Act  
for promoting Zyprexa as a dementia treatment.

	The company did not acknowledge any wrongdoing in the civil cases.

	The misdemeanor plea resolves charges related to Lilly's marketing of  
Zyprexa between September 1999 and March 2001. Lilly marketed the drug  
for the treatment of dementia, including Alzheimer's-related dementia,  
even though the drug is not approved for that use.

	Zyprexa is approved to treat schizophrenia and bipolar disorder.  
Doctors are allowed to prescribe it for other uses, but Lilly is not  
allowed to market the drug for any other illnesses, because it lacks  
Food and Drug Administration approval.

	The case began in 2004 and was led by the U.S. attorney for the  
Eastern District of Pennsylvania and the Office of Consumer Litigation  
of the Department of Justice.

	Laurie Magid, U.S. Attorney for the Eastern District of Pennsylvania,  
said they hoped cases like this put an end to a pharmaceutical  
practice known as "off-label" marketing.

	"The company made hundreds of millions of dollars by trying to  
convince healthcare providers that Zyprexa was safe for unapproved  
uses," Magid said, noting that they hold the drugmaker "responsible  
for putting thousands and thousands of patients at risk."

	She added that off-label marketing circumvents "the very process put  
in place to protect the public."

	Lilly also said it agreed to resolve civil investigations brought by  
the Medicaid fraud-control units of the states involved in the  
settlement. The states were looking into rebate agreements between  
Lilly and pharmacy benefits managers related to Zyprexa and other drugs.

	A company spokesman said about 30 states are involved.

	Zyprexa was approved in 1996 and has been Lilly's top seller for  
years. It brought in $3.5 billion in revenue through the first three  
quarters of 2008, or roughly $1.5 billion more than the company's  
second-best seller, the anti-depressant Cymbalta.

	But the company has spent roughly $1.2 billion to resolve 32,000  
claims related to Zyprexa product liability, and about 125 cases are  
still pending.

	A group of insurance companies, unions, and others are suing Lilly  
for billions of dollars, saying it broke marketing laws and  
overcharged for the drug.

	In October 2008, Lilly said it expected to pay the additional $1.42  
billion to end the investigations. It set aside that amount, or $1.29  
per share, in the third quarter, which resulted in the company's first  
quarterly loss in three years.

	Earlier the same month, Lilly agreed to pay $62 million to 32 states  
and the District of Columbia to resolve accusations it marketed  
Zyprexa for pediatric care, for use in high doses, and for dementia.