South Carolina Attorney General Reaches $45M Deal with Lilly

Mon, 10/26/2009 - 4:54am
MEG KINNARD Associated Press Writer COLUMBIA, S.C. (AP) — South Carolina's attorney general said Friday the state has reached a $45 million settlement with drug maker Eli Lilly & Co. over the company's marketing of an anti-psychotic drug, an agreement the drug maker said was its largest with a single state over Zyprexa. "This is a victory for South Carolina's taxpayers who were forced to bear the financial costs of Eli Lilly's unlawful conduct," Henry McMaster said. "Our case was sound. The evidence we presented was overwhelming. And I am pleased to say justice has been served." In 2007, McMaster filed a lawsuit against Lilly, arguing that the Indiana-based drug maker had improperly marketed Zyprexa for off-label uses. The Food and Drug Administration has approved it to treat schizophrenia and certain types of bipolar disorder. McMaster claimed the company also pushed doctors to prescribe the drug for other ailments including dementia and attention-deficit disorder without warning of possible side effects like heart problems, weight gain and diabetes. In his lawsuit, McMaster argued that the drug maker should reimburse South Carolina's Medicaid and state health plan for the tens of millions of dollars it had spent to treat those side effects for nearly 64,000 patients from 1996 to 2007, as well as money the state spent to buy the prescriptions. McMaster says the settlement is second in South Carolina history only to the 1998 agreement by tobacco companies to pay 46 states, including South Carolina, more than $200 billion over several decades. Instead of waiting years for payments expected to total $3.2 billion, state lawmakers in 2001 borrowed against the settlement to raise more than $900 million. Attorneys general in 44 other states have sued Lilly over Zyprexa, but the $45 million agreement is the largest a single state has reached with the drug maker, company spokeswoman Marni Lemons said. "We're glad to put the issue behind us and think it's in the best interests of not only Lilly but of patients, care givers, health care professionals and those who continue to rely on Zyprexa, which is a life-saving medication," she said. The next-highest single-state Zyprexa settlement was with Connecticut, for $30 million, Lemons said. In its third-quarter earnings statement released Wednesday, the company said it was in "advanced discussions" with the six remaining states with which it has open Zyprexa cases. In January, Lilly pleaded guilty to illegally marketing Zyprexa, agreeing to pay a combined $1.42 billion to settle civil suits with several states and end a criminal investigation. Lilly also pleaded guilty to a misdemeanor Food, Drug and Cosmetic Act violation for promoting the drug as a dementia treatment. Zyprexa, approved in 1996, is Lilly's top seller, bringing in $1.2 billion in the third quarter, 3 percent more than it did the same quarter last year. But a year ago, Lilly lost $465.6 million, or 43 cents per share, after setting aside almost $1.5 billion to settle the off-label marketing investigations. As part of the settlement agreement, Eli Lilly is required to refrain from making misleading claims regarding Zyprexa and require medical — and not marketing — staff to approve references to the drug.

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