Eli Lilly Agrees to Pay an Additional $62 Million to Settle Zyprexa Lawsuits by 32 States
Eli Lilly has previously settled over 30,000 Zyprexa lawsuits brought by individuals who suffered diabetes, pancreatitis and other injuries as a side effect of this drug. This week they agreed to pay an additional $62 million to 32 states and the District of Columbia over claims that they improperly marketed the drug off-label, and this is not likely to end their legal troubles.
Zyprexa (olanzapine) was approved in 1996 for treatment of schizophrenia and bipolar disorder. More than 26 million people worldwide have used the drug, and many of the prescriptions have been off-label, for unapproved indications such as dementia and mild forms of bipolar disorder.
Eli Lilly & Co. has been accused of heavily promoting the drug for non-approved uses, which has helped them build the drug into a blockbuster that generates over $4.8 billion in annual sales. They have also minimized the potential side effects of Zyprexa, which could lead to severe weight gain, diabetes and other adverse health consequences.
In response to lawsuits filed by users who suffered from Zyprexa side effects, Eli Lilly has already paid about $1.2 billion in settlements. They also paid $15 million to the state of Alaska as part of a Zyprexa settlement for prescription reimbursements, rather than allowing the jury to decide the case after three weeks of trial.
Even after this latest settlement with 32 states and Washington, D.C., it will not end the legal actions Eli Lilly faces over the drug.
Civil and criminal investigations are still being pursed by federal prosecutors in Philadelphia related to Eli Lilly’s off-label marketing of the drug. The New York Times reports that Eli Lilly is expected to pay over $1 billion in fines and restitution to resolve the federal investigations and the company may also have to plead guilty to criminal charges related to their marketing.
Last month a federal judge certified a Zyprexa class action lawsuit for insurance companies, labor unions, pension funds and other third party payors who covered Zyprexa prescriptions between June 20, 2001 and June 20, 2005. The lawsuit alleges that Eli Lilly committed fraud by selling the drug at high prices, while exaggerating the benefits and understating the side effects.
The current settlement, announced on October 7, 2008, is the largest paid by a drug company in a state consumer protection case, which claimed Eli Lilly had violated consumer protection laws by aggressively promoting the drug to doctors for non-approved purposes in order to boost its profits.
