Eli Lilly Settles Zyprexa Litigation for $1.42 Billion

After settling over 30,000 Zyprexa lawsuits filed by users who alleged that Eli Lilly & Co. failed to adequately warn about side effects of Zyprexa which could increase the risk of diabetes and other injuries, the drug maker has agreed to pay $1.42 billion to resolve the government Zyprexa litigation, which included criminal investigation into their illegal marketing and promotion of the atypical antipsychotic for uses that were not approved by the FDA or established as safe and effective by the drug maker.

Zyprexa (olanzapine) is an atypical antipsychotic medication which was approved in 1996 for treatment of bipolar disorder and schizophrenia. The drug has been used by more than 26 million people worldwide and has generated sales of $4.8 billion a year, in part based on wide spread off-label use for treatment of mild forms of bipolar disorder, dementia and for those under 18 years old.

On January 15, 2009, Eli Lilly & Co. confirmed that they will pay $1.42 billion to resolve issues pending with the Office of Consumer Litigation of the Department of Justice and the United States Attorney for the Eastern District of Pennsylvania (EDPA) regarding a government investigation into the company’s alleged off-label marketing and promotion of Zyprexa.

Lilly will plead guilty to one misdemeanor charge under the Food, Drug, and Cosmetic Act, pay $615 million to settle the criminal investigation and will not be indicted.

The drug maker has also agreed to pay nearly $800 million to settle the civil investigation, including $438 million to the federal government and about $362 million that will be paid to settle civil charges brought by the State Medicaid Fraud Control Units of states that have been working with the EDPA in the probe.

The misdemeanor plea is related to Lilly’s off-label promotion of Zyprexa from September 1999 through March 2001. The plea states that Lilly promoted Zyprexa for treatment for dementia, including Alzheimer’s dementia in elderly patients, for which it is not approved.

The Zyprexa lawyers at Saiontz & Kirk, P.A. have previously represented individuals who have settled lawsuits against Eli Lilly which alleged that the company failed to adequately warn about potential diabetes side effects associated with their drug.

This most recent Zyprexa settlement does not involve payments to consumers, but resolves criminal fines and payments to federal and state governments for the fraudulent activities of the drug maker.