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Eli Lily Pays $700 Million To States in Zyprexa Settlement

Payment will fund state Medicaid programs in exchange for dropped charges

May 19, 2009

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Drug giant Eli Lily has agreed to pay state Medicaid programs a total of $700 million. The agreement settles changes Lily engaged in the improper marketing of its atypical antipsychotic drug, Zyprexa.

The coalition of states, which included attorneys general of the states of Massachusetts, Ohio, New York, Illinois, New Jersey, Texas and Delaware, worked in cooperation with the U.S. Attorney's Office for the Eastern District of Pennsylvania, the U.S. Department of Justice and the Office of Inspector General of the U.S. Department of Health and Human Services. The federal government announced its settlement with Lilly on January 15, 2009.

"Our office will continue to take a leadership role, in Massachusetts and on a national level, in making sure health care corporations that engage in improper sales or marketing practices are held accountable." said Massachusetts Attorney General Coakley. "Particularly during times of economic distress and budget cutbacks, it is not acceptable for any company whose products or services are paid for by the Medicaid program to conduct business in an unfair or deceptive manner."

Federal and state investigators determined that Lilly promoted the sale and use of Zyprexa for unapproved uses through a marketing campaign called "Viva Zyprexa." The promotional activities undertaken by Lilly in the Viva Zyprexa campaign were designed to increase the prescribing of Zyprexa not only by psychiatrists but also by primary care physicians, and targeted such unapproved uses as the treatment of depression, anxiety, irritability, disrupted sleep, nausea and gambling addiction.

As a result of these promotional activities, Lilly improperly caused physicians to prescribe Zyprexa for children and adolescents, dementia patients in long term care facilities, and in unapproved dosage amounts. The allegations that formed the basis of the joint federal-state investigation took place between September 1999 and December of 2005.

In addition to the civil settlements, Lilly has pleaded guilty to a one count misdemeanor violation of the Food, Drug and Cosmetic Act and paid federal criminal fines and forfeitures totaling $615 million.

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