Firm to pay Utah $24 million in settlement
Nov. 11, 2009
By Geoff Liesik
Pharmaceutical giant Eli Lilly and Co. has agreed to pay $24 million to settle a lawsuit filed by the Utah Attorney General's Office.
Attorney General Mark Shurtleff sued the company after a nearly four-year investigation revealed that Lilly concealed its knowledge of significant weight gain and obesity associated with the anti-psychotic medication Zyprexa. Investigators also showed that Lilly's sales representatives illegally promoted the drug for uses not approved by the U.S. Food and Drug Administration.
"We're not just asking them for money. We want their bad conduct to stop," Shurtleff said Wednesday while announcing the settlement.
"As part of the settlement agreement, there are corporate integrity responsibilities and remedial provisions that will continue to be monitored by the court to stop (Lilly's) harmful behavior."
Zyprexa is approved for the treatment of schizophrenia and certain types of bipolar disorder in adults. But authorities say that in 1999, Lilly's marketing arm that focuses on doctors who treat the elderly began encouraging physicians to prescribe the drug for dementia, Alzheimer's disease, agitation, aggression, hostility, depression and generalized sleep disorder without prior FDA approval. Lilly also trained its sales teams to avoid discussions with health-care professionals about the weight gain side effect, investigators said.
Shurtleff said his office's investigation, conducted in conjunction with the Utah Department of Health, showed there were 1,769 Medicaid patients in Utah over the age of 65 who took Zyprexa but never had a diagnosis of either schizophrenia or bipolar disorder.
Dr. David Sundwall, executive director of the state Health Department, said when he was presented with those numbers he knew they were inflated and agreed to lend his agency's support to the case. He said the timing of the settlement "couldn't be better."
"Due to our recent economic decline, we've had the highest increase ever in enrollment in Medicaid," Sundwall said. "We need funds to keep up with demand."
He added that Wednesday's announcement shouldn't be viewed as an indictment of drug companies.
"We do not intend to demonize the pharmaceutical industry," Sundwall said. "As a clinician, and even as a patient, I appreciate the research and development done by pharmaceutical companies in our nation. Because of newer and better drugs we prevent disease; we treat illness and sometimes cure it; we prevent unnecessary hospitalizations and surgeries."
Joe Steele, a private attorney who aided the state in its case, described the lawsuit as "righteous litigation."
"They did what we accused them of doing," he said, referring to Lilly. "Bringing the money back into the state to take care of the children who so badly need it and the people who so badly need the medical care that Medicaid provides is, I think, one of the most important things we can do."
The settlement is the largest in Utah's effort to hold drug companies accountable for illegal practices, according to Shurtleff.
The state is expected to receive approximately $20 million once contingency fees are paid to private attorneys who aided in the litigation. That money will be placed in the state's general fund for allocation by the Legislature.