Lilly Settles Zyprexa Suit in W.V. for $22.5 Million

Eli Lilly & Co. is breaking out the corporate checkbook again to settle legal claims that it illegally marketed its blockbuster antipsychotic drug Zyprexa.

The Indianapolis-based drug company has agreed to pay $22.5 million to resolve West Virginia’s lawsuit accusing Lilly of failing to warn users of the risks of high blood sugar and diabetes in marketing Zyprexa. The company allegedly pushed the drug for unapproved uses, such as a sleep aide for patients in nursing homes, which resulted in improper claims being submitted to government health-insurance programs.

The settlement reportedly was reached in July and approved by U.S. District Judge Jack Weinstein in Brooklyn, N.Y., but the amount was only made public this week in unsealed court documents. The deal means West Virginia will be paid $15.75 million, with $14.75 million going to fund behavioral health care and the remaining $1 million will go to consumer protection. The balance of $6.75 million will be paid to outside attorneys who represented the state in the suit, officials said.

In agreeing to pay the settlement sum, Lilly did not admit wrongdoing in the marketing of Zyprexa.

Top-Seller Causing Legal Problems

Zyprexa is Lilly’s top-selling drug, with an estimated $2.3 billion in sales in the first three months of this year alone, but it has been dogged by controversy for years. Earlier this year, Lilly agreed to pay $1.42 billion to settle a lawsuit over Zyprexa’s marketing brought by 30 states.

Also, in 2008, the company agreed to pay at least $2.6 billion to settle lawsuits and government investigations into its marketing of Zyprexa. The cases accused of Lilly of failing to warn about the diabetes risks in users of the drug and for promoting “off-label uses” that had not been approved by the Food and Drug Administration.

Lilly reportedly is in discussions to settle similar suits brought by attorneys general in 11 other states, including Arkansas, Connecticut, Idaho, Louisiana, Mississippi, Minnesota, Montana, New Mexico, Pennsylvania, South Carolina and Utah. A coordinated settlement for a single lump sum may be reached to resolve those pending cases. So … more big-money settlements may be in the works.

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