Eli Lilly mulls $1 billion Zyprexa settlement

INDIANAPOLIS Eli Lilly is trying to avoid civil and criminal prosecution by discussing with federal prosecutors a settlement regarding the company’s marketing practices of the antipsychotic drug Zyprexa that could result in Lilly’s paying a fine more than $1 billion to federal and state governments, according to The New York Times.

Zyprexa is approved to treat people with schizophrenia and severe bipolar disorder. However, documents from Eli Lilly show that from 2000 to 2003 the company encouraged doctors to prescribe Zyprexa to people with age-related dementia, as well as people with mild bipolar disorder who had previously had a diagnosis of depression.

Lilly may also plead guilty to a misdemeanor criminal charge as part of the agreement, people involved with the investigation said. But the company would be allowed to keep selling Zyprexa to Medicare and Medicaid, the government programs that are the biggest customers of the drug.

The Lilly fine would be distributed among federal and state governments, which spend about $1.5 billion on Zyprexa each year through Medicare and Medicaid. The fine would be in addition to $1.2 billion that Lilly has already paid to settle 30,000 lawsuits from people who claim that Zyprexa caused them to develop diabetes or other diseases. Zyprexa can cause severe weight gain in many patients and has been linked to diabetes by the American Diabetes Association.

Federal prosecutors have been investigating Lilly for its marketing of Zyprexa since 2004, and state attorneys general have been doing so since 2005. The people involved in the investigations said the inquiries gained momentum after December 2006, when the New York Times published articles describing Lilly’s years-long efforts to play down Zyprexa’s side effects and to promote the drug for conditions other than schizophrenia and severe bipolar disorder.

Internal Lilly marketing documents and e-mail messages showed that Lilly wanted to persuade doctors to prescribe Zyprexa for patients with age-related dementia or relatively mild bipolar disorder.

In one document, an unidentified Eli Lilly marketing executive wrote that primary care doctors “do treat dementia” but leave schizophrenia and bipolar disorder to psychiatrists. As a result, sales representatives should discuss dementia with primary care doctors, according to the document, which appears to be part of a larger marketing presentation but is not marked more specifically. Later, the same document says that some primary care doctors “might prescribe outside of label.”

Zyprexa is Lilly’s best selling drug, with worldwide sales of $4.8 billion in 2007.