Eli Lilly settlement in Zyprexa False Claims Act litigation sets record high

February 5, 2009  |  Press Releases

Eli Lilly & Co. has agreed to plead guilty of marketing Zyprexa, its antipsychotic drug, for unapproved uses and to pay the largest criminal fine on record for an individual company. The company admitted wrongdoing in promoting Zyprexa to treat elderly people with dementia. Federal and state investigations revealed that from September 1999 to March 2001, Eli Lilly improperly marketed Zyprexa to physicians for unapproved uses. Although a doctor may prescribe medication for any use, a drug manufacturer is not allowed to market its products for any use the FDA has not approved. Zyprexa has been approved to treat schizophrenia and bipolar disorder, but not to treat dementia. According to prosecutors, Eli Lilly management disregarded the law and trained the company’s sales force to promote the drug for off-label uses. Zyprexa has been linked to excessive weight gain and diabetes.

Eli Lilly’s record-setting settlement will put an end to civil investigations by the U.S. Attorney’s Office and Medicaid fraud divisions in more than 30 states. The fine is more than twice that of the previously largest False Claims settlement paid in 1999 by Roche Holding AG for conspiring to raise the price of vitamins. As part of the settlement, Eli Lilly must submit to a federal monitor’s review for five years.

The investigation into Eli Lilly’s practices began when whistleblowers among the company’s sales force filed lawsuits under the federal False Claims Act describing Eli Lilly’s scheme to boost prescription sales of Zyprexa to treat dementia. Under the Qui Tam provisions of federal and state False Claims Acts, whistleblowers are authorized to file anti-fraud lawsuits on the government’s behalf and to share in any recovery. The whistleblowers in the Eli Lilly case will receive 18 per cent of the federal portion of the settlement as well as a share of the monies recovered in the state litigation.

Eli Lilly still faces similar lawsuits in twelve states that were not part of the record settlement.

For the full story, go to Bloomberg News.

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