By AVERY JOHNSON
Eli Lilly & Co. is set to square off next week in the first trial over its schizophrenia drug Zyprexa, defending a civil suit by the state of Alaska that will be closely watched by state and federal prosecutors investigating the drug company.
The trial’s outcome — or even evidence introduced along the way — could influence fragile settlement talks under way with the U.S. Attorney for the Eastern District of Pennsylvania and state attorneys general. An unfavorable verdict for Lilly might also embolden other states to file suit.
Plaintiffs and prosecutors have alleged for years that the Indianapolis drug maker failed to adequately warn that its powerful antipsychotic drug could lead to inordinate weight gain and diabetes. Lilly, which has sold about $35 billion of Zyprexa since its 1996 launch, has set aside $1.2 billion to settle with about 31,000 private claimants. But an additional 1,200 private suits are pending, and the company hasn’t been able to strike a deal with public-sector plaintiffs.
Alaska accuses the company of failing to warn patients of Zyprexa’s side effects, and of making deceptive claims in marketing the drug. Its 2006 complaint, filed by the state’s attorney general, also alleges that Lilly improperly marketed Zyprexa “off-label” to the state’s Medicaid recipients, costing Alaska more than it should have to reimburse patients. The state’s Medicaid program spent about $40 million on Zyprexa in the past five years, about a third of it for off-label uses…