Healthy Skepticism Library item: 10748

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Publication type: news

Fisk MC, Hurtado P.
Lilly Must Face Suit Over Zyprexa Drug, Judge Rules
Bloomberg News 2007 Jun 28
http://www.bloomberg.com/apps/news?pid=20601202&sid=aYoxLZi68u2w&refer=healthcare

Full text:

Eli Lilly & Co., the world’s largest maker of psychiatric medicines, lost a bid to dismiss a suit accusing it of violating racketeering laws in marketing its antipsychotic drug Zyprexa.

Private health insurers sued Lilly, seeking damages for all costs related to Zyprexa, including prescription payments and illnesses caused by the drug. U.S. District Judge Jack Weinstein in Brooklyn, New York, today denied Indianapolis-based Lilly’s motion to throw out the suit.

Such lawsuits give protection against ``under-regulated potentially dangerous activity by a market where caveat emptor largely rules,’‘ Weinstein wrote in his ruling. ``Arguably, suits such as the present one do more good than harm.’‘

Zyprexa has been linked to weight gain and an increased risk of diabetes. Lilly paid about $1.2 billion in the past two years to settle more than 29,000 personal injury claims over the drug. At least eight states have sued the company seeking reimbursement for Medicaid costs.

``We continue to stand behind Zyprexa and its efficacy and will aggressively defend it in court,’‘ Lilly spokeswoman Marni Lemons said in a phone interview today. The private insurers continue to ``allow unrestricted access to Zyprexa’‘ for patients, she said.

Weinstein wrote that many doctors continue to prescribe the drug after revelations about its risks, Lemons noted. ``We think he recognizes the benefit of Zyprexa,’‘ she said.

Insurers `Very Pleased’

The insurers are ``very pleased’‘ with the decision, said their attorney, Thomas Sobol. ``The judge has given us a vision of the role of the courts in detecting fraud in the marketing of pharmaceuticals,’‘ he said.

Zyprexa was approved in 1996 by the U.S. Food and Drug Administration to treat two mental health conditions: schizophrenia and bipolar disorder. Reports about diabetes associated with the drug surfaced a few years later.

In September 2003, the FDA required Lilly and other companies selling similar antipsychotic drugs to place warnings on labels.

The private health insurers sued in 2005, claiming Lilly violated racketeering laws by bankrolling nonprofit groups and paying doctors, consultants and medical marketing companies to promote Zyprexa as a treatment for illnesses for which it wasn’t approved and to downplay its side effects. The suit asks that any damages award be tripled because of the alleged racketeering violations.

Union Health Plan

The lawsuit, initially filed by the health plan of the United Food & Commercial Workers’ Philadelphia local, seeks to represent all private insurers in a class action. Two suits filed later by other insurers were combined with the union’s claim.

The insurers claim Lilly’s actions caused them to pay high prices for Zyprexa for patients who would have been better served by less-expensive medications. Individuals who made co- payments for Zyprexa also would be covered by the lawsuit.

The judge denied the insurers’ request for a partial judgment against Lilly without a trial. The insurers asked Weinstein to decide that Zyprexa isn’t superior to other antipsychotic drugs and that their damages are at least $3.7 billion.

``It is not clear that plaintiffs can prove any damages,’‘ Weinstein said, leaving those claims to be resolved at a jury trial.

Weinstein’s decision follows a June 22 hearing in which Lilly argued that the lawsuit should be dismissed on summary judgment without a trial.

Medicine Worked

The insurers ``are asking for a refund for a medicine that has worked, is working, and will work for patients in the future,’‘ Lilly attorney Anthony Vale said at the hearing.

``We don’t know of any case that has sanctioned an insurance company or payer getting money back based on an allegation that doctors were misled unless they have evidence that the medicine was ineffective,’‘ Vale said.

Lilly is accused in the personal-injury suits of failing to properly warn of Zyprexa’s side effects when prescribed for approved uses. In some cases, the company is also accused of improperly marketing the drug for so-called off-label uses in violation of FDA regulations.

About 500 personal-injury cases remain in Weinstein’s court. He said last week he will begin trying some of them on Oct. 15.

Lilly shares fell 14 cents to $56.18 in New York Stock Exchange composite trading.

The lead private-insurer lawsuit is UFCW Local 1776 and Participating Employers Health and Welfare Fund v. Eli Lilly & Co. The suits are combined in federal court with personal-injury and state claims as In Re Zyprexa Products Liability Litigation, 04-MD-1596, U.S. District Court, Eastern District of New York (Brooklyn).

To contact the reporter on this story: Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net ; Patricia Hurtado in Brooklyn federal court at pathurtado@Bloomberg.net .