Healthy Skepticism Library item: 9131

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Publication type: news

Murphy T.
Lilly shareholders sue over anti-psychotic drug Zyprexa
Canadian Press 2007 Apr 4
http://www.canada.com/topics/technology/news/gizmos/story.html?id=879871d2-ea35-4061-9d21-61623b155614&k=66922

Full text:

INDIANAPOLIS (AP) – Shareholders have become the latest plaintiffs to sue Eli Lilly and Co. over its top-selling drug, the anti-psychotic Zyprexa.

A lawsuit, filed late last month in federal court, accuses the drug maker of fraudulent conduct that led to a US$30 billion decline in the company’s market value in 2004.

The complaint cites New York Times articles from last year that stated Lilly knew of health risks tied to the drug and denied the risks repeatedly. The lawsuit also accuses Lilly of purposely marketing the drug for illegal, off-label uses.

The seeks class-action status on behalf of those who purchased Lilly securities between March 28, 2002, and Dec. 22, 2006. It notes that the price of Lilly stock grew from $43.75 per share on July 18, 2002, to nearly $77 on May 7, 2004.

Lilly spokesman Phil Belt said in an e-mail that the latest lawsuit was based on news stories using “leaked documents that were hand-picked by our adversaries to paint an inaccurate, incomplete and misleading picture of Lilly.”

Belt said the documents on which the Times articles were based “are just a tiny fraction of the more than 15 million pages of documents provided by Lilly as part of the litigation process.”

“These selected documents, as well as the associated news stories, do not accurately portray Lilly’s strategy or conduct,” he said.

A federal judge in New York ruled earlier this year that a Times reporter conspired with an Alaska-based lawyer to obtain and illegally distribute internal documents from Lilly and banned further disclosure.

Zyprexa registered $4.4 billion in sales last year as Lilly’s top-selling drug.

Lilly has faced thousands of lawsuits over the drug. In a June 2005 settlement, the company agreed to pay about $700 million to resolve more than 8,000 product-liability lawsuits involving patients.

In January, the company announced it would settle about 18,000 more lawsuits and said about 1,200 were still pending.

Insurers and several state attorneys general also have sued Lilly over Zyprexa.

Eli Lilly shares closed up 36 cents, to $54.75, in trading Tuesday on the New York Stock Exchange.