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Eli Lilly Agrees to $1.4 Billion Settlement in Zyprexa Probes

Eli Lilly and Co. has announced that it will pay approximately $1.4 billion to settle criminal and civil investigations into the marketing of its antipsychotic drug Zyprexa and has agreed to plead guilty to a federal misdemeanor.

Lilly will pay $615 million to settle the criminal investigation and approximately $800 million to settle the civil probes initiated by State Medicaid units.

The misdemeanor charges in which Lilly agreed to plead guilty stemmed from the advertisement of Zyprexa as a treatment for ailments that it was not approved between September 1999 and March 2001, a practice known as off-label promotion.

"Specifically, the plea states that Lilly promoted Zyprexa in elderly populations as treatment for dementia, including Alzheimer's dementia, although Zyprexa is not approved for such uses," Lilly said in a statement.

In the third quarter of 2008, Lilly anticipated the settlement booking $1.48 billion in charges related to the investigations.

Zyprexa is one the Lilly’s biggest selling drugs and had $4.8 billion in sales in 2007.  This drug is commonly used as atypical antipsychotics to treat schizophrenia.  However, Zyprexa also appears to carry side effects, such as weight gain, which can lead to diabetes.

"Eli Lilly had an army of 2,000 sales representatives engaged in nothing but off-label marketing," said Laurie Magid, the Acting U.S. Attorney in Philadelphia in an interview.

Nursing homes and assisted living facilities were targeted by one Lilly sales force, despite the fact that schizophrenia is rare among the elderly.  During the visits to the nursing homes, Lilly sales reps promoted weight gain from Zyprexa as a health-promoting benefit, instead of a troublesome side effect.

In 2011, Zyprexa is supposed to lose patent protection.  U.S. regulators have delayed their final decision regarding the approval of a long-acting form of the drug.

Lilly has also agreed to enter into a corporate integrity agreement with the Office of Inspector General of the U.S. Department of Health and Human Services.

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