Eli Lilly to pay Utah $24 million in settlement

Deseret News

Firm to pay Utah $24 million in settlement
By Geoff Liesik

Pharmaceutical giant Eli Lilly and Co. has agreed to pay $24 million to settle a lawsuit filed by the Utah Attorney General’s Office.

Attorney General Mark Shurtleff sued the company after a nearly four-year investigation revealed that Lilly concealed its knowledge of significant weight gain and obesity associated with the anti-psychotic medication Zyprexa. Investigators also showed that Lilly’s sales representatives illegally promoted the drug for uses not approved by the U.S. Food and Drug Administration.

“We’re not just asking them for money. We want their bad conduct to stop,” Shurtleff said Wednesday while announcing the settlement.

“As part of the settlement agreement, there are corporate integrity responsibilities and remedial provisions that will continue to be monitored by the court to stop (Lilly’s) harmful behavior.”

Zyprexa is approved for the treatment of schizophrenia and certain types of bipolar disorder in adults. But authorities say that in 1999, Lilly’s marketing arm that focuses on doctors who treat the elderly began encouraging physicians to prescribe the drug for dementia, Alzheimer’s disease, agitation, aggression, hostility, depression and generalized sleep disorder without prior FDA approval. Lilly also trained its sales teams to avoid discussions with health-care professionals about the weight gain side effect, investigators said.

Shurtleff said his office’s investigation, conducted in conjunction with the Utah Department of Health, showed there were 1,769 Medicaid patients in Utah over the age of 65 who took Zyprexa but never had a diagnosis of either schizophrenia or bipolar disorder.

Dr. David Sundwall, executive director of the state Health Department, said when he was presented with those numbers he knew they were inflated and agreed to lend his agency’s support to the case. He said the timing of the settlement “couldn’t be better.”

“Due to our recent economic decline, we’ve had the highest increase ever in enrollment in Medicaid,” Sundwall said. “We need funds to keep up with demand.”

He added that Wednesday’s announcement shouldn’t be viewed as an indictment of drug companies.

“We do not intend to demonize the pharmaceutical industry,” Sundwall said. “As a clinician, and even as a patient, I appreciate the research and development done by pharmaceutical companies in our nation. Because of newer and better drugs we prevent disease; we treat illness and sometimes cure it; we prevent unnecessary hospitalizations and surgeries.”

Joe Steele, a private attorney who aided the state in its case, described the lawsuit as “righteous litigation.”

“They did what we accused them of doing,” he said, referring to Lilly. “Bringing the money back into the state to take care of the children who so badly need it and the people who so badly need the medical care that Medicaid provides is, I think, one of the most important things we can do.”

The settlement is the largest in Utah’s effort to hold drug companies accountable for illegal practices, according to Shurtleff.

The state is expected to receive approximately $20 million once contingency fees are paid to private attorneys who aided in the litigation. That money will be placed in the state’s general fund for allocation by the Legislature.



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CBS Evening News – May 25, 2009 – Risperdal

“Caution: Graphic Content:” For children “diagnosed” with ADD and bi-polar disorder, Risperdal is used for “treatment”. The side effects are putting them at serious risk.

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more about "Risperdal", posted with vodpod


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Documents on Seroquel show drugmaker knew of risks

Associated Press
Documents on Seroquel show drugmaker knew of risks

Internal AstraZeneca reports and e-mails written by company officials show they knew a decade ago that their psychiatric drug Seroquel caused diabetes and major weight gain, plaintiffs’ lawyers said Friday after releasing dozens of the previously sealed documents.

“They not only failed to warn about the risk of diabetes, but they marketed it as not having that risk,” said Houston attorney Ed Blizzard, one of the lead attorneys representing roughly 15,000 plaintiffs suing the British drugmaker.

The plaintiffs claim Seroquel, approved for treating schizophrenia and bipolar disorder, caused diabetes, weight gain and related health problems, from kidney failure and heart attacks to amputations and damage to the pancreas, which makes insulin.

AstraZeneca spokesman Tony Jewell said plaintiffs’ lawyers are “mischaracterizing that we knew that it caused diabetes.” He said it remains unresolved whether Seroquel causes diabetes, and that AstraZeneca PLC has shared all relevant and required data with the Food and Drug Administration, both before and after the FDA approved Seroquel as safe and effective in 1997.

“AstraZeneca believes that the Seroquel (detailed package insert) has always provided adequate and appropriate information and warnings based on available data,” Jewell said.

Blizzard claims that the company knew as early as 1997 that Seroquel caused significant weight gain – a problem linked to the surge in new cases of Type 2 diabetes – and knew by 2000 that it caused diabetes in some patients.

“Our position was that the public has the right to know” what the documents contain, Blizzard told reporters during a Friday afternoon teleconference.

Among the hundreds of pages released Friday were a 1997 e-mail written by Lisa Arvanitis, then the AstraZeneca project physician for Seroquel, stating, “I was really struck by how consistent the data was” from multiple patient studies showing weight gain “is more rapid initially,” but continues for at least a year.

“It doesn’t stop,” she wrote. “The other issue of what we tell the sales force is more problematic.”

Meanwhile, a memo a few months earlier from an AstraZeneca “commercial strategist,” Richard Lawrence, discusses one patient study presented at a meeting of doctors and states, “Lisa has done a great ‘smoke-and-mirrors’ job!”

The company “could put a positive spin (in terms of safety) on this cursed study,” Lawrence adds.

Plaintiffs’ lawyers say that until very recently, the company’s warnings were buried far down in the lengthy package insert, rather than being put prominently at the top of it.

Thousands of Seroquel lawsuits filed in federal courts have been consolidated under one judge in Orlando, Fla. Others are filed in state courts in New York, New Jersey and Delaware, where AstraZeneca has its U.S. headquarters.

Blizzard and his colleagues, after obtaining the documents in the course of the litigation, have been seeking since August 2007 to get them released, but AstraZeneca officials had argued they were confidential.

On Thursday, just before a hearing at which the company’s lawyers were to have to prove to a federal judge why 111 different documents should not be released, AstraZeneca agreed to release 102 of them, Blizzard said.

Some of the unsealed documents indicate a further problem for AstraZeneca’s sales representatives: Study after study showed Seroquel was not as effective as competing drugs in the same class, including Eli Lilly & Co.’s Zyprexa.

Meanwhile, AstraZeneca said Friday that the FDA has asked for additional information about the safety and effectiveness of a newer version of the drug, Seroquel XR extended release tablets. That version is proved for schizophrenia and bipolar disorder, but the company is seeking approval to market it for anxiety and major depression.


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Ruling near on privacy issues in Seroquel case

Philadelphia Inquirer
By Miriam Hill
Feb. 25, 2009

Does the world have the right to know about negative studies on AstraZeneca’s potent antipsychotic drug Seroquel?

Or whether company representatives promoted the drug for unapproved uses?


And what about details of sexual relationships between Wayne Macfadden, AstraZeneca’s former U.S. medical director for Seroquel, and two women who researched and wrote papers supporting the drug’s safety and efficacy?

A federal judge in Orlando may answer those questions as soon as tomorrow in a case stemming from personal-injury claims by 15,000 people that Seroquel triggered weight gain, diabetes, and other health problems.

Plaintiffs’ attorneys and Bloomberg News, the news organization, have sued to force London-based AstraZeneca P.L.C. to make public documents discovered in the litigation. AstraZeneca’s U.S. headquarters are in Wilmington.

“This is, first and foremost, a public-safety issue,” said Howard Nations, chairman of the Seroquel litigation group of the American Association for Justice (formerly the Association of Trial Lawyers of America).

Patients, Nations said, have the right to know about safety concerns raised in discussions between AstraZeneca and the U.S. Food and Drug Administration or in unpublished research on the drug.

Seroquel belongs to a class of drugs known as atypical antipsychotics. The drug is approved to treat bipolar disorder and schizophrenia, but doctors have been prescribing it and similar drugs for conditions including attention-deficit disorder and sleeplessness.

Seroquel is now one of AstraZeneca’s best-selling drugs, with $4.5 billion in sales last year.

AstraZeneca has asked the FDA to approve an extended-release version of the drug, Seroquel XR, to treat major depression and generalized anxiety disorder.

In December, the FDA asked for more information on that application. AstraZeneca said today that the FDA had scheduled a meeting in April to review the safety and efficacy of Seroquel XR for depression and anxiety.

Last month, the Philadelphia U.S. Attorney’s Office completed a $1.4 billion settlement with Eli Lilly & Co., the maker of Zyprexa, also an atypical antipsychotic, over allegations that the Indianapolis drug company illegally promoted Zyprexa to treat dementia in the elderly. AstraZeneca has said the U.S. attorney was looking into its marketing of Seroquel.

Lilly also paid $1.2 billion to settle several thousand personal-injury suits over allegations that Zyprexa caused weight gain and led to diabetes.

Last month, U.S. District Judge Anne Conway threw out the first two Seroquel personal-injury cases for lack of evidence.

Nations and other lawyers, along with Bloomberg, have asked Conway to unseal documents discovered in the dismissed cases.

They want to unseal correspondence and other documents stemming from AstraZeneca’s initial application for FDA approval of Seroquel.

They are also asking that Conway make public so-called call notes from Seroquel representatives that may reveal whether AstraZeneca sales pitches focused on prescribing the drug for uses not approved by the FDA. If that happened, it would be illegal. Plaintiffs’ attorneys and Bloomberg have also requested that correspondence between Macfadden and people who researched or wrote about Seroquel be made public.

AstraZeneca spokesman Tony Jewell said the hearing tomorrow is about the confidentiality of 111 documents, and of those documents, AstraZeneca is arguing that only 65 documents should remain confidential. The company also is worried that documents released in litigation may cause undue concern among patients.

“AstraZeneca believes the best way for physicians and patients to understand benefits and risks of medicines is through communications from the FDA, not in discovery as part of litigation or through the media,” Jewell said.

The company also said that while it did not condone Macfadden’s behavior, details of his relationships are irrelevant. He no longer works for AstraZeneca and could not be reached for comment.

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Seroquel suit in Arkansas to proceed

Arkansas Democrat-Gazette (Little Rock)

State drug suit gains court go-ahead McDaniel contends manufacturer’s misinformation proved costly

The state’s lawsuit against drug manufacturer AstraZeneca will move forward after a judge ruled Thursday against the company’s motion to dismiss the case.

In its complaint filed by Arkansas Attorney General Dustin McDaniel last May, the state claims AstraZeneca gave Arkansas doctors false information that encouraged them to prescribe an antipsychotic drug to children and the elderly for uses beyond its federal approval and thus harmed patients and cost taxpayers millions of dollars.

It’s one of three major drug companies the state is suing with claims they illegally marketed the antipsychotic drugs Zyprexa, Risperdal and Seroquel to be paid for by state Medicaid and employee health-insurance programs.

Pulaski County Circuit Judge Chris Piazza’s ruling Thursday came after a two-hour hearing during which attorneys for AstraZeneca said Seroquel is a “good drug” that’s been successfully used to treat serious mental illnesses for more than a decade.

It was first approved by the U.S. Food and Drug Administration in September 1997 for treatment of such psychotic illnesses as schizophrenia and bipolar disorder.

Arkansas Medicaid continues to cover Seroquel, and a state committee that reviews medications for the program hasn’t recommended restricting prescribing of the drug, argued J. Gordon Cooney Jr., of the law firm Morgan, Lewis & Bockius LLP of Pittsburgh.

Cooney, who’s representing AstraZeneca in at least four other Seroquel cases around the country, said the attorney general’s lawsuit second-guesses the physicians who prescribed Seroquel to patients.

He said the state’s lawsuit fails to give any specific cases in which it claims company representatives gave false information to Arkansas doctors or Medicaid officials. Furthermore, it doesn’t name any patients who suffered harmful side effects from the drug, he said.

“We have no idea what we’re defending, how many claims there are or what the complaints may be,” Cooney said.

The state’s “broad and general allegations of fraud” make the case difficult to argue and would create an “amorphous mess” that would only confuse jurors if it went to trial, he said.

But Fletch Trammell, with Bailey Perrin Bailey LLP of Houston, the private firm hired by the state for the case, argued that the law doesn’t require the state to present specific cases. The complaint against Astra-Zeneca is one of “systemic fraud,” he said.

Trammell said AstraZeneca failed to warn physicians and patients that Seroquel had the potential to cause such conditions as diabetes and stroke even though the company knew of the risks. Knowing the potential harmful side effects would’ve affected how doctors prescribed the medication, and the state has the right to try to recoup its costs, he said.

“Had they not lied to doctors, those doctors wouldn’t have submitted those claims … We allege that every single Seroquel prescription was tainted by fraud,” Trammell said.

In his ruling immediately after attorneys’ arguments, Piazza said the case needed to continue.

“This may be an amorphous mess, but I think it needs to go to the next level,” he said.

Justin Allen, Arkansas’ chief deputy attorney general, said he expects that at least a year will pass before the Seroquel case goes to trial. The state is suing London-based AstraZeneca PLC and four of its related companies in the United States and abroad.

The state’s lawsuits against Titusville, N.J.-based Janssen Pharmaceutica of Johnson & Johnson Inc. and Eli Lilly & Co. of Indianapolis are ongoing.


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Seroquel maker wants to seal info from you, “for” you

St. Petersburg Times
Seroquel maker wants to seal info from you, “for” you
By Kris Hundley
In Print: Sunday, February 15, 2009

AstraZeneca, maker of the blockbuster anti­psychotic Seroquel, is battling to keep information about the drug out of the public’s view … for the public’s own good.

Later this month in Orlando, lawyers for the drugmaker will argue that unsealing company documents, including unpublished clinical trial data and letters from the FDA, could harm “a vulnerable patient population.”

“This (disclosure) could jeopardize public safety by causing confusion and alarm in patients, who may then discontinue their medication without seeking the guidance of a medical professional,” lawyers for the drugmaker said in a recent filing in federal court.

Seroquel is approved only for schizophrenia and bipolar disorder, but its use for everything from depression to insomnia to ADHD in kids is so widespread that the drug has been prescribed for more than 22 million patients. Its $4.5 billion in sales last year put it among the top-selling drugs in the world.

In light of Seroquel’s popularity, the argument that hiding information protects patients has public health advocates nearly swinging from the rafters.

“They don’t want anybody to know about the side effects of their drug, and they’re keeping secret the results of studies from patients, their doctors and the FDA,” said Dr. David Egilman, clinical associate professor at Brown University’s Department of Community Health.

“Saying they’re protecting the patient is a self-serving, fraudulent argument.”

• • •

Though Egilman is merely an observer of the Seroquel proceedings, he knows the power of sealed documents in drug liability cases. He played a key role when similar lawsuits were lodged against another mega-selling antipsychotic, Eli Lilly’s drug Zyprexa. As in the Seroquel cases, thousands upon thousands of patients claimed Zyprexa caused weight gain and diabetes.

Hired as an expert witness for the plaintiffs in Zyprexa cases, Egilman was given access to reams of internal Lilly documents that had been sealed by the court. The documents showed that the drugmaker had ignored evidence of diabetes among patients while pushing Zyprexa’s off-label use for anxiety and dementia.

Egilman defied the judge’s orders and helped leak thousands of damaging Lilly documents to the New York Times. Egilman ended up paying a $100,000 fine to Lilly for releasing the sealed documents.

The leaked documents, meanwhile, helped the U.S. Department of Justice build a criminal case against Lilly. The company pleaded guilty to marketing Zyprexa illegally and last month paid a record $1.4 billion fine. Though a landmark amount, Lilly’s fine amounts to about 3.5 percent of the $39 billion in revenues Zyprexa has posted since the FDA approved it 1996.

• • •

Seroquel’s parent, Astra­Zeneca, has a similarly valuable franchise to protect. The anti­psychotic accounted for 14 percent of AstraZeneca’s sales of $31.6 billion last year. Avoiding negative publicity — one of the reasons the company wants to seal documents in the Orlando cases — is critical as it seeks to maximize sales before Seroquel loses patent protection in about three years.

The skirmish over document disclosure in Orlando is part of a hornet’s nest of litigation against AstraZeneca, a British company with U.S. headquarters in Wilmington, Del. More than 15,000 patients have filed over 9,000 personal injury lawsuits. About 40 percent of these claims have been consolidated for pretrial motions in U.S. District Court for the Middle District of Florida.

Plaintiffs say the company knew as early as 2000 that Seroquel caused diabetes, weight gain and other health problems, but failed to adequately warn patients and doctors.

Dr. William C. Wirshing, a California psychiatrist, has lectured doctors on AstraZeneca’s behalf and has prescribed Seroquel to as many as 5,000 patients. Though he has been a paid consultant for the drugmaker, in a pretrial deposition he left no question about the links he sees between the drug, weight gain and diabetes.

“You literally just got to watch them get bigger … it was riveting to me,” said Wirshing who estimated that several hundred of his patients developed diabetes.

AstraZeneca denies the allegations and has spent more than $500 million defending itself against Seroquel claims. Key to the company’s strategy has been its insistence that millions of pages of documents produced in discovery should remain under seal, out of the public eye.

To Egilman, such blanket agreements in drug liability cases are outrageous. “Confidentiality agreements that prohibit disclosure of important information that may impact public health to state and federal authorities should be illegal,” he said. “The court should at least send all discovery in drug cases to the FDA and DOJ (Department of Justice) for review if they intend to seal them.”

The upcoming hearing is expected to focus on specific items that the plaintiffs’ lawyers say have no legal right to secrecy. Among them: unpublished results of several drug studies, sales reps’ notes on Seroquel’s marketing strategies and letters from the FDA.

The drugmaker also hopes to keep under seal information about sexual relationships that Dr. Wayne MacFadden, AstraZeneca’s former U.S. medical director for Seroquel, had with an independent researcher as well as with a woman who wrote papers supporting the drug’s safety and efficacy. Correspondence shows that MacFadden, who was also director of clinical research for neuroscience drugs, “promised sexual favors in exchange for intelligence on AstraZeneca’s competitors.”

The plaintiffs say the affairs “can create bias which can affect the integrity of the science.”

Lawyers for the drugmaker counter that the affairs are not relevant to the lawsuits. Other disputed documents, they say, contain trade secrets, could taint the jury pool and could “harm public health.”

AstraZeneca’s lawyers say the information to be discussed at the hearing scheduled Feb. 26 is so sensitive that the court should be closed to the public. “The potential harm of dissemination of documents at this stage in the litigation far outweighs the public’s right of access, particularly when trials in these cases are on the near horizon,” company lawyers said in a filing Feb. 6. “The whole picture will be presented to the public at once.”

The judge has not ruled on the request.

There’s a good chance that many of these cases will never come to trial, and the underlying documents will never become public. In a victory for Astra­Zeneca, the judge dismissed the first two cases in late January, saying plaintiffs had not sufficiently established that their health problems were caused by Seroquel. Up to nine trials are slated for 2009.

In the Zyprexa litigation, Lilly paid $1.2 billion to settle injury claims involving 31,000 patients. Damaging company documents were never released by the court, though they were available on the Internet after Egilman leaked them and excerpts appeared in the New York Times.

Egilman is well aware of the big money in liability lawsuits, having made $2.3 million as an expert witness in Vioxx cases. He contends that patients’ lawyers are motivated by maximizing their share of any settlement, which can be 30 percent or more. He says attorneys should be required to get their client’s approval before agreeing to seal documents.

“The client may be more interested in making sure that health information gets to their doctor than money,” he said. “They have a real interest and it’s called their health.”

Gary Farmer, a Fort Lauderdale lawyer who represents more than 100 Seroquel patients, said Egilman has a point.

“If we can get the documents to win the case and get compensation, you have to ask yourself, ‘Is it necessary to make that information public?’ ” he said.

Whether the mountains of Seroquel material now sealed in Orlando’s federal court ever see the light of day may depend on the progress of related cases. Four states — Pennsylvania, Montana, Arkansas and South Carolina — are suing Astra­Zeneca for off-label marketing of Seroquel.

The company said it is aware that the U.S. Attorney’s Office in Philadelphia is investigating Seroquel’s marketing practices, most likely based on whistle blower complaints.

Regulators also seem to be taking note. In December, the FDA sent AstraZeneca a warning letter after learning a sales rep had pitched Seroquel to a doctor as a treatment for depression. Though doctors can prescribe a drug for any use, it is illegal for pharmaceutical companies to promote such uses.

The FDA also reportedly sent AstraZeneca two letters in late December, telling the company to strengthen Seroquel’s warnings about diabetes. The drugmaker declined to comment, saying its communications with the FDA are confidential. The letters remain sealed in Orlando’s federal court.

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Marketing a Phony “Miracle” Drug – Zyprexa

Rolling Stone
Marketing a Phony “Miracle” Drug
By Ben Wallace-Wells


Zyprexa was created to treat schizophrenia, but it wound up being used on depressed moms and misbehaving kids. How one of the nation’s biggest pharmaceutical companies turned a flawed, dangerous pill into a multi-billion-dollar bonanza — and who paid the price.

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Whistle-blower’s perspective on Lilly case

Philadelphia Inquirer
Whistle-blower’s perspective on Lilly case
By Miriam Hill

Robert Rudolph knew he was about to end his lucrative career at Eli Lilly & Co., but he had to say something.


Why, he asked management, was the Indianapolis pharmaceutical company marketing its antipsychotic drug Zyprexa to elderly people when the drug was not approved for that group?

Why had the company violated privacy rules by culling patient lists at doctors’ offices?

Why was the company counting drug samples as sales, which would boost the stock price?

He went on for about 10 minutes during a sales meeting in 2002. The other 25 Lilly sales representatives stared at him, stunned.

“I’d just been wrestling with this stuff for so long,” he said in a telephone interview today. “I was put in a position of breaking the law, in my view, or quitting.”

Rudolph and eight other whistle-blowers brought their allegations to federal prosecutors. That led Lilly to agree Thursday to a record $1.4 billion fine to settle charges of marketing Zyprexa illegally.

Zyprexa had been approved by the Food and Drug Administration for schizophrenia and bipolar disorder – but in 2001, the company began promoting it for other uses, such as treating anxiety, agitation and confusion in the elderly.

Drug companies are permitted to market drugs only for approved uses, though doctors may prescribe as they see fit. Lilly did an end run around the process by telling doctors Zyprexa could ease agitation, anxiety, and other everyday symptoms, according to the Philadelphia U.S. Attorney’s Office, which brought the case.

In a statement today, Lilly insisted its employees always adhered to strict ethics. “Doing things the right way at Lilly is more important than securing a prescription,” the statement said.

Rudolph and several other whistle-blowers found their way to prosecutors through their attorneys, Steve Sheller of Sheller P.C. and Michael Mustokoff of Duane Morris L.L.P., both of Philadelphia, and Gary Farmer of Florida.

Lilly’s Zyprexa marketing material included pictures of composite patients such as Martha, a confused and agitated widow.

“If you looked at it, you would say this was an Alzheimer’s dementia patient,” Rudolph said in the interview from his home in Oregon.

Other tactics bothered him, too. Company employees were allowed into doctors’ offices on weekends to collect names of patients taking certain drugs in hopes of switching them to Lilly products.

“We’re not selling soap. We’re selling chemicals that can be dangerous if they’re not used in the right way,” he said.

That was especially true of Zyprexa, which caused weight gain. And diabetes is a risk of the drug.

Rudolph, who was a pharmacist before joining Lilly in 1976, chose the company because of its sterling reputation.

But gradually, as financial markets boomed and stock options became a bigger part of executive pay, Lilly’s culture began to change, Rudolph said.

Instead of the pharmacists it had traditionally hired, Lilly started bringing in recent college graduates who had no medical background and were easy to train to parrot the company line. Instead of a profit-sharing program that all employees participated in – “even the guy who swept the floor,” Rudolph said – compensation shifted to rewards-based on sales.

“This new way of compensation kind of opened the door for a lot of unscrupulous practices, I felt,” Rudolph said.

He warned management of his concerns. Their response: “You’re not a team player.”

He began talking to other sales representatives about the issue, including Hector Rosado, another whistle-blower in the case.

As he pondered what to do, Rudolph’s son, then 15, provided a moment of clarity:

“He came up to me and said, ‘Dad, what’s wrong is wrong.’ I had taught my kids that. It was wrong, and I wanted to make it right.”

So he raised his hand at the Lilly district sales meeting in Sacramento, Calif., in January 2002.

The stress of the job had thrown him into a depression. Managers made it clear they wanted him to leave, so six months after he made his stand at the meeting, he retired from his $115,000-a-year job.

He and the eight other whistle-blowers will split $78 million to $100 million of the settlement. Rudolph, 60, says the settlement against Lilly will only go so far in changing business practices. He wants jail time for wrongdoing by companies and executives.

Zyprexa sales were about $39 billion since FDA approval in 1996. Lilly did plead to a single misdemeanor of misbranding of a drug.

“You have to remember, with Zyprexa,” he said, “people lost their lives.”

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Lilly Reaches Zyprexa Settlement

Wall Street Journal
Lilly Reaches Zyprexa Settlement

Eli Lilly & Co. agreed to pay $1.42 billion in a long-awaited settlement with federal prosecutors regarding allegations of improperly marketing its blockbuster antipsychotic drug Zyprexa.

A resolution has been expected since October, when the Indianapolis drug maker announced it was in “advanced discussions” and had set aside the settlement’s amount, a record sum in a corporate whistleblower case, for an eventual settlement in the case.

The company said Thursday it will pay $615 million to settle a criminal investigation and nearly $800 million — $438 million to the federal government and $362 million available for settlements with states — to resolve civil investigations related to Zyprexa.

As part of the settlement with the Justice Department, Lilly agreed to plead guilty to one misdemeanor violation of the Food, Drug and Cosmetic Act related to the off-label promotion of Zyprexa between 1999 and 2001. The guilty plea says Lilly promoted the drug in elderly people as treatment for dementia, including Alzheimer’s, although the drug isn’t approved for such use.

The company said it disagrees with and doesn’t admit to the allegations, but would settle the dispute. General Counsel Robert A. Armitage noted in October the probe “has been ongoing for five years and we now have a heightened sense of responsibility to all our stakeholders to intensify efforts to resolve these issues.”

Lilly will also face a period of increased regulation as part of the settlement — it has entered a corporate integrity agreement with the Health and Human Services Department. The agreement requires the company to maintain its compliance program and undertake a set of obligations related to integrity over five years. The deal also provides for a third-party review of the company’s policies…

Insurers, pension funds and unions have been among those seeking compensation from Lilly, accusing it of concealing Zyprexa’s tendency to cause weight gain and diabetes and of marketing the drug for unapproved uses

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U.S. Department of Justice
United States Attorney
Eastern District of Pennsylvania
615 Chestnut Street
Suite 1250
Philadelphia, Pennsylvania 19106-4476
(215) 861-8200

For Immediate Release January 15, 2009
Criminal Penalty is Largest Individual Corporate Criminal Fine

PHILADELPHIA – United States Attorney General Michael B. Mukasey and Acting United States Attorney Laurie Magid today announced the filing of a criminal information against, and a civil settlement with, pharmaceutical company Eli Lilly and Company, headquartered in Indianapolis, Indiana, for the off-label marketing of the anti-psychotic drug Zyprexa. The monetary settlement, totaling $1.415 billion, is the largest amount paid by a single defendant in the history of the United States Department of Justice (“DOJ”).

Joining Mukasey and Magid in today’s announcement were Assistant Attorney General Gregory Katsas, who is in charge of DOJ’s Civil Division; Director of DOJ’s Office of Consumer Litigation, Eugene Thirolf; Special Agent-in-Charge of the Defense Criminal Investigative Service Ed Bradley; Special Agent-in-Charge of the Food and Drug Administration, Office of Criminal Investigations Kim Rice; and Special Agent-in-Charge Patrick Doyle of the Office of Inspector General of the Department of Health and Human Services.

The Criminal Charge
The information charges Eli Lilly with the misdemeanor of introducing misbranded drugs into interstate commerce between September 1999 and November 2003. The Food and Drug Administration (“FDA”) had approved Zyprexa for use by adults for treatment of schizophrenia and certain types of bipolar disorder. Eli Lilly has admitted that it illegally marketed Zyprexa for uses never approved by the FDA. Among other things, the government alleges that these uses included treatment of elderly patients for such things as sleep disorders and dementia.

According to the information, Eli Lilly targeted its illegal marketing of Zyprexa to two types of doctors: those who treat the elderly in nursing homes and assisted living facilities, and primary care physicians. In September 1999, Eli Lilly began encouraging doctors to prescribe the drug for the treatment of dementia, Alzheimer’s, agitation, aggression, hostility, depression, and 2 generalized sleep disorder. Zyprexa was not approved for use for any of these disorders, which, unlike schizophrenia, are prevalent in the elderly population. Nevertheless, Eli Lilly’s long-term care sales force promoted the use of Zyprexa in elderly populations for these symptoms. Because one of Zyprexa’s side effects is sedation, Eli Lilly directed its long-term care sales force to tell doctors that Zyprexa would help patients with sleep problems, behavioral issues, and dementia.

They claimed this side effect was a therapeutic benefit, not an adverse event, with the sales slogan “5 at 5,” that five milligrams of Zyprexa at 5 p.m. would help their patients sleep. Then in 2000, Eli Lilly expanded its illegal marketing to primary care physicians with its primary care sales force in the “Viva Zyprexa” campaign, adding even more sales representatives. The goal of the campaign was to make Zyprexa an “everyday agent in primary care” even though the company recognized that schizophrenia and bipolar disorder were not viewed as conditions typically treated by primary care physicians. Lilly instructed the sales force to recommend Zyprexa for all adult patients with behavioral symptoms like agitation, aggression, hostility, mood and sleep disturbances, and depression.

The information alleges that Eli Lilly’s illegal off-label marketing campaign raised safety issues and posed potential risk to patients. Eli Lilly knew that significant weight gain and obesity were adverse side effects of Zyprexa and that weight gain and obesity were factors in causing hyperglycemia and diabetes. Yet despite written caution from the FDA, Eli Lilly continued to promote these adverse events as therapeutic benefits of Zyprexa use, particularly in the elderly.

Eli Lilly’s management created marketing materials promoting Zyprexa for off-label uses, trained its sales force to disregard the law, and directed its sales personnel to promote Zyprexa for off-label uses. Anticipating the possibility of resistance from primary care physicians to prescribing Zyprexa, defendant Eli Lilly specifically trained its sales representatives on how to respond to doctors’ concerns about off-label uses of Zyprexa, and how to continue to promote Zyprexa for off-label conditions. Eli Lilly retained medical professionals to speak to doctors during peer-to-peer sessions about off-label uses of Zyprexa. When promoting Zyprexa to health care providers, Lilly emphasized that the weight gain side effect of the drug was a therapeutic benefit for patients who had trouble maintaining their weight.

“When pharmaceutical companies interfere with the FDA’s mission to insure that drugs are safe and effective, they undermine the doctor-patient relationship and put the health and safety of patients at risk,” said Magid. “People have a legal right to know that pharmaceutical companies are marketing their drugs only for uses approved by the FDA and that their doctors’ judgment has not been affected by misinformation from a pharmaceutical company trying to boost revenues.”

In a plea agreement with the United States, Eli Lilly will pay a total of $615 million, including a $515 million fine and $100 million in forfeiture. “Off-label promotion of pharmaceutical drugs is a serious crime because it undermines the FDA’s role in protecting the American public by determining a drug is safe and effective for a particular use before it is marketed,” said Gregory G. Katsas, Assistant Attorney General for the 3 Civil Division. “This settlement demonstrates the Department’s ongoing diligence in prosecuting cases involving violations of the Food, Drug, and Cosmetic Act, and recovery of taxpayer dollars used to pay for drugs sold as a result of off-label marketing campaigns.”

The Civil Settlement
In a separate civil settlement agreement, Eli Lilly agreed to pay the United States approximately $438,171,543.58 to settle allegations that it caused invalid claims for payment for Zyprexa to be submitted to various government programs such as Medicaid, TRICARE, and the Federal Employees Health Benefits Program and caused purchases of Zyprexa by the Department of Veterans Affairs, the Bureau of Prisons, the Department of Defense, the Defense Logistics Agency, the Department of Labor, and Public Health Service entities for unapproved off-label uses. Also, Eli Lilly agreed to pay various state Medicaid programs more than $361,828,456.42 to settle similar claims.

“Today’s announcement of the filing of a criminal charge and the unprecedented terms of this settlement demonstrate the government’s increasing efforts aimed at pharmaceutical companies that choose to put profits ahead of the public’s health,” said Special Agent-in-Charge Kim Rice, of FDA’s Office of Criminal Investigations. “The FDA will continue to devote resources to criminal investigations targeting pharmaceutical companies that disregard the safeguards of the drug approval process and recklessly promote drugs for uses for which they have not been proven to be safe and effective.”

“The illegal scheme used by Eli Lilly significantly impacted the integrity of the Department of Defense’s healthcare system,” said Special Agent-in-Charge of the Defense Criminal Investigative Service Ed Bradley. “This illegal activity increases patients’ costs, threatens their safety and negatively affects the delivery of healthcare services to the more than nine million military members, retirees and their families who rely on this system. Today’s charges and settlement demonstrate the ongoing commitment of the Defense Criminal Investigative Service and its partners in law enforcement to investigate and prosecute those that abuse the government’s healthcare programs at the expense of the taxpayers and patients.”

“Today’s disclosures should send a clear message to those doing business with the Government that they will be held accountable for their decisions and actions that have an adverse impact on health care programs, such as Medicare and Medicaid,” said Special Agent-in-Charge Patrick Doyle, HHS, Office of Inspector General, Office of Investigations. “Our office is committed to pursuing those companies and individuals who choose to put profits ahead of the law.”

The civil settlement also resolves four whistle-blower lawsuits filed in federal court here: United States of America ex rel. Robert Rudolph v. Eli Lilly and Company, Civil Action No. 03-943; United States of America ex rel. Joseph Faltaous v. Eli Lilly and Company, Civil Action No. 05-1471; United States of America ex rel. Steven Woodward v. Eli Lilly and Company, Civil Action No. 06-5526; and United States of America ex rel. Jaydeen Vincente v. Eli Lilly and Company, Civil Action No. 07-1791. Those cases were filed by former sales representatives who identified Eli Lilly’s off-label marketing practices. To encourage individuals to come forward and identify companies and individuals that defraud the government, federal law permits whistle blowers to share in the recovery for such fraud. In this case, the whistle blowers will share in 18%, or $78,870,877, of the federal share of the (civil) settlement.

The HHS Office of Inspector General and Eli Lilly entered into an agreement that requires Eli Lilly to cease off-label marketing and to put certain programs in place to prevent the illegal conduct from recurring. This agreement, called a Corporate Integrity Agreement, requires Eli Lilly to send doctors letters advising them of this resolution and give them a way to report questionable conduct of sales representatives, list payments to doctors on its website, and assure that its board of directors and top management regularly certify that the company obeys the law and has an effective compliance program.

This case was investigated by the Defense Criminal Investigative Service, the FDA’s Office of Criminal Investigations, and the Department of Health and Human Services Office of the Inspector General. The case is being prosecuted by Assistant United States Attorneys Catherine L. Votaw, Marilyn May, Joseph Trautwein, and Denise S. Wolf, and DOJ Office of Consumer Litigation Trial Attorneys Jeffrey Steger and Ross Goldstein.

Assistance was provided by representatives of FDA’s Office of Chief Counsel and the National Association of Medicaid Fraud Control Units.

The Corporate Integrity Agreement was negotiated by the Office of Inspector General of the Department of Health and Human Services. Eli Lilly’s guilty plea and sentence are not final until accepted by the United States District Court.

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