Lilly To Pay Conn. $25M Over Zyprexa Marketing

By Erin Marie Daly

Law360, New York (September 29, 2009) -- Eli Lilly & Co. is set to fork over $25.1 million to settle a lawsuit brought by the Connecticut Attorney General's Office for allegedly marketing its antipsychotic Zyprexa for unapproved uses and concealing the drug's serious side effects for more than a decade.

The settlement, announced Tuesday by Connecticut Attorney General Richard Blumenthal, marks the third such deal the pharmaceutical giant has brokered with states in recent months.

Lilly reached the deal without admitting any wrongdoing, according to a consent decree filed Tuesday in the U.S. District Court for the Eastern District of New York

Blumenthal was one of several attorneys general to take legal action against Lilly over what they claimed was a massive illegal marketing campaign to promote Zyprexa for unapproved off-label uses, including for the treatment of children.

Lilly corrupted physicians, pharmacies and administrators at nursing homes and youth detention centers as part of that campaign, Blumenthal alleged.

The settlement — which is meant to recover money Connecticut improperly spent on Zyprexa as a result of Lilly's alleged illegal marketing — requires stronger standards for marketing and transparency to prevent Lilly from rewarding physicians and others for their prescribing practices, according to Blumenthal.

“This illicit multibillion-dollar drug marketing scheme corrupted health care at the expense of taxpayers, senior citizens, children and others who suffered serious side effects from Zyprexa,” he said. “Lilly was aided and abetted by so-called independent physicians paid handsomely to promote Zyprexa for unapproved off-label uses — ghost writing articles, downplaying dangers, and pitching the product.”

Blumenthal said that propelled by profits, Lilly promoted Zyprexa “recklessly” and “regardless of danger” or U.S. Food and Drug Administration rules.

Lilly, he said, illegally marketed Zyprexa for unapproved uses in children to treat depression and attention deficit disorder, as well as other uses not approved by the FDA.

“The result was catastrophic, causing severe weight gain, diabetes and cardiovascular problems in patients,” Blumenthal said.

Countless consumers continue to suffer needless physical and financial damage from unapproved promotion and prescribing of Zyprexa, he added.

“This meritless marketing misled countless physicians into accepting peer recommendations and prescribing Zyprexa for unapproved and unsafe uses,” Blumenthal said. “More than the money, this settlement stops future harm, preventing practices that may deceive doctors and deprive patients of the right to make informed medical decisions.”

Marni Lemons, a spokesperson for Lilly, said the company wanted to focus on moving forward.

"Putting this issue behind us is not only in the best interests of the Lilly, but also in the interest of patients, care-givers and healthcare professionals while helping us get back to what we want to focus on as a company: developing important new medications through research and partnerships with doctors and patients," she said.

Indianapolis-based Lilly has already agreed to pay $22.5 million to settle similar charges brought by the West Virginia Attorney General's Office, as well as $15 million to the state of Alaska.

A total of 13 states have sued Lilly over Zyprexa.

Troubles with Zyprexa — one of the biggest-selling drugs in the world — date back to March 2004, when the U.S. Attorney's Office for the Eastern District of Pennsylvania told Lilly it was investigating the company's marketing and promotional practices for the drugs Zyprexa and Prozac.

Since then, over 30,000 individual product liability lawsuits have come in, alleging that Zyprexa caused deleterious side effects such as excessive weight gain, hyperglycemia and diabetes, and that the company misled patients about the likelihood of those side effects.

Claims have also been filed against Lilly alleging that it unlawfully encouraged off-label uses of Zyprexa.

About 8,000 plaintiffs agreed to participate in a $700 million settlement in November 2005, and another 18,000 agreed in January 2007 to share approximately $495 million. Other settlements have also been reached.

In January, Lilly agreed to pay about $1.4 billion to settle claims brought by 30 states.

Lilly is represented by Pepper Hamilton LLP.

Connecticut is represented by Hagens Berman Sobol Shapiro LLP.

The case is State of Connecticut v. Eli Lilly & Co., case number 2:08-cv-00955, in the U.S. District Court for the Eastern District of New York.

The MDL is In re: Zyprexa Products Liability Litigation, case number 04-md-01596, in the U.S. District Court for the Eastern District of New York.