Lilly Settles With 18,000
Over Zyprexa
New York Times
http://www.nytimes.com/2007/01/05/business/05drug.html?_r=2&oref=slogin&oref=slogin
January 5, 2007
Lilly Settles With 18,000 Over Zyprexa
By ALEX BERENSON
Eli Lilly agreed yesterday to pay up to $500 million to settle 18,000 lawsuits
from people who claimed they had developed diabetes or other diseases after
taking Zyprexa, Lilly’s drug for schizophrenia and bipolar disorder.
Including earlier settlements over Zyprexa, Lilly has now agreed to pay at least
$1.2 billion to 28,500 people who said they were injured by the drug. At least
1,200 suits are still pending, the company said. About 20 million people
worldwide have taken Zyprexa since its introduction in 1996.
The settlement covers cases filed in state and federal courts by law firms or
groups of firms for 18,000 clients, Lilly said. The federal suits have been
overseen in Brooklyn by Judge Jack B. Weinstein of the Eastern District of New
York.
The settlement will not affect continuing civil or criminal investigations of
Zyprexa by state attorneys general and federal prosecutors.
Both Lilly and lawyers for plaintiffs said they were pleased with the agreement.
With global sales of roughly $4.2 billion last year, Zyprexa is Lilly’s
largest-selling drug and a major contributor to the company’s profits. Lilly
shares were relatively flat after the settlement announcement. They rose 11
cents yesterday, to $52.36.
Zyprexa is the brand name for olanzapine, a potent chemical that binds to
receptors in the brain to reduce psychotic hallucinations and delusions.
Clinical trials show that in many patients, Zyprexa also causes severe weight
gain and increases in cholesterol and blood sugar.
Documents provided to The New York Times last month by a lawyer who represents
mentally ill patients show that Lilly played down the risks of Zyprexa to
doctors as the drug’s sales soared after its introduction in 1996. The internal
documents show that in Lilly’s clinical trials, 16 percent of people taking
Zyprexa gained more than 66 pounds after a year on the drug, a far higher figure
than the company disclosed to doctors.
The documents also show that Lilly marketed the drug as appropriate for patients
who did not meet accepted diagnoses of schizophrenia or bipolar disorder,
Zyprexa’s only approved uses. By law, drug makers may promote their drugs only
for diseases for which the Food and Drug Administration has found the medicines
to be safe and effective, though doctors may prescribe drugs in any way they see
fit.
In response to questions about the information in the documents, Lilly has
denied any wrongdoing and said it provided all relevant information to doctors
and the F.D.A. Lilly has also said it did not promote Zyprexa for conditions
other than schizophrenia or bipolar disorder.
In 2004, a panel of the American Diabetes Association found that Zyprexa caused
diabetes more than other widely used antipsychotic drugs, in part because it
tends to cause much more weight gain. But the F.D.A. has never made a similar
finding. Instead, the F.D.A. added a warning in 2003 to the label of Zyprexa and
other new antipsychotic drugs about their tendency to cause high blood sugar.
In 2005, a $700 million agreement covered 8,000 patients, and the company has
made 2,500 individual settlements whose total value has not been disclosed,
Lilly said. The 2005 settlement valued claims at about $90,000 a plaintiff,
while yesterday’s agreement values claims at about $27,000 a plaintiff, at most.
The lower value for the new claims comes in part because of the F.D.A. label
change, which has allowed Lilly to say that it adequately warned doctors of the
risks of Zyprexa after 2003. The label change may also help to protect Lilly
from future lawsuits, analysts and lawyers say.
In its statement, Lilly said the settlement did not change its view that Zyprexa
is a safe and effective treatment for mental illness.
“We wanted to reduce significant uncertainties involved in litigating such
complex cases,” Sidney Taurel, Lilly’s chief executive, said in the statement.
Richard Meadow, one of the lead lawyers for the plaintiffs, said the deal was
fair to both sides. “Prolonging this litigation further is in no one’s best
interest,” he said.
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