Lilly Reaches Zyprexa Settlement

Wall Street Journal
Lilly Reaches Zyprexa Settlement
By KERRY E. GRACE

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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