Georgia settles with drug company for $6M
Other states seek more with lawsuits over potential side effects of Zyprexa
By BILL RANKIN
The Atlanta Journal-Constitution
Wednesday, April 29, 2009
Georgia has decided to enter into a multimillion-dollar settlement with Eli Lilly and Co. over the pharmaceutical giant’s off-label promotion of the anti-psychotic drug Zyprexa.
The state will get more than $6 million from the deal. Even so, lawyers familiar with the case wonder if Georgia is missing out on a much larger payday.
A dozen other states have decided not to settle. They have filed their own lawsuits seeking massive damage awards. The suits seek, in part, reimbursement for Medicaid payments for unwarranted Zyprexa prescriptions.
The suits contend Lilly misled patients and their physicians about Zyprexa’s potential side effects — diabetes, hyperglycemia and excessive weight gain. Lilly has denied wrongdoing in these civil cases.
Georgia has joined 30 other states in taking the settlement, a Lilly spokeswoman said.
Mark Zamora, an Atlanta lawyer who represents clients with Zyprexa claims, said Georgia should take on Lilly in court.
“At the end of the day, Georgia citizens would be better served by taking their chances with 12 fair jurors,” he said. “You have to hold the company accountable here, and there’s already admitted criminal wrongdoing.”
State Attorney General Thurbert Baker believes it is a good deal for state taxpayers.
The attorney general’s office looked at the anticipated Medicaid losses and calculated the payout would be about double what Georgia’s claims would have been, said Russ Willard, a Baker spokesman. The entire settlement for Georgia is more than $15 million, with $9 million reimbursing the federal share of state Medicaid claims, he said.
“Given the issues raised as well as the parameters of the settlement, Attorney General Baker thought this was a beneficial settlement for the taxpayers of Georgia,” Willard said.
Zyprexa has Food and Drug Administration approval for the treatment of schizophrenia and bipolar disorder. Yet lawsuits contend that Lilly’s marketing campaign targeted patients with dementia, even though the company lacked FDA approval to do so. The drug was Lilly’s best seller for years, bringing in billions of dollars.
In January, Lilly pleaded guilty to illegally marketing Zyprexa. It agreed to pay $1.42 billion to resolve lawsuits and end the criminal investigation.
This included $800 million to settle civil cases, with $438 million going to the federal government and $362 million to states. Lilly did not admit wrongdoing in the civil litigation.
There is always risk when a lawsuit is filed, said Edward Sherman, a Tulane University law professor and expert in civil litigation. Lilly could prevail and, if the state wins, the case could take years to play out, he said.
Also, states pursuing such demanding cases must hire trial lawyers who work for contingency fees. This can have political repercussions, he said.
But states taking on Lilly in court could win big verdicts or get larger settlements, Sherman said. “There’s the potential for a good deal more money than what’s being offered now.”
Alaska took such an approach.
In March 2008, three weeks into trial, the state and Lilly agreed on a $15 million settlement. Although Alaska had sought far more, the settlement was sizable given the state’s population of 670,000. Georgia has about 9.5 million residents.
Fletch Trammell, a Houston lawyer whose firm represents several states in the Zyprexa litigation, said the risk to bringing suit is diminished because Lilly entered a guilty plea.
“States participating in this settlement instead of litigating their claims,” he said, “are sending the message to Lilly and companies like them, ‘You can steal all the money you can for as long as you can, as long as at the end of the day, you’re willing to settle with us for pennies on the dollar.’ “