Zyprexa Maker Pays $25 Million to Settle Improper-Marketing Suit

Eli Lilly & Co. will pay $25.1 million to settle a lawsuit alleging the state of Connecticut needlessly paid millions of dollars in Medicaid benefits and other funding to cover the cost of Zyprexa prescriptions written for federally unapproved uses.

The settlement ends an 18-month legal battle over Connecticut Attorney General Richard Blumenthal's claim that the drugmaker used a "massive illegal marketing campaign" to sell the popular antipsychotic drug for unsanctioned uses by children, teens and the elderly.

In 2008 Blumenthal sued Lilly in the U.S. District Court for the Eastern District of New York, seeking to recover an estimated $190 million in state funds spent on "improper" Zyprexa prescriptions to treat anxiety, depression and attention deficit disorder in children.

According to the suit, Lilly promoted the drug for such unapproved purposes through payments to physicians to tout its "off-label" usage at pharmaceutical conferences. The company also allegedly provided drug samples to health care providers whose practices were unrelated to Zyprexa's approved uses.

Connecticut sought damages under federal racketeering laws and the state's Unfair Trade Practices Act.

Blumenthal charged that even though Lilly had Food and Drug Administration approval to market Zyprexa for the treatment of schizophrenia and bipolar mania, it peddled the drug for use by children and adolescents without warning that it could result in severe weight gain, diabetes and cardiovascular problems.

Under the settlement, the company agreed to halt the off-label promotion of Zyprexa and to provide Connecticut with an ongoing list of all health care professionals to whom it has paid more than $100 to serve as promotional speakers or product consultants.

The deal also requires Lilly to stop providing "continuing medical education" grants as part of its Zyprexa promotion efforts. Further, the company can provide product samples only to health care professionals "whose clinical practice is consistent with the product's current labeling."

Such providers include family practitioners, general practitioners, emergency medicine providers and psychiatrists.

Under the settlement, Lilly's actions will be monitored for six years.

In reaching the settlement, the company neither admitted nor denied any wrongdoing.

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The state was represented by Blumenthal, Assistant Attorneys General Robert Teitelman and Thomas Saadi, and Chief State Attorney Kevin Kane in Hartford.Lilly is represented by Nina Gussack and George Lehner of Pepper Hamilton in Philadelphia and deputy general counsel Michael J. Harrington in Indianapolis.