Eli Lilly on Tuesday said it will set aside $1.42 billion to settle federal charges of improperly marketing its schizophrenia drug Zyprexa, the Wall Street Journal reports. The firm said it is in "advanced discussions" on an agreement with the U.S. attorney's office in Philadelphia that would settle the case and eliminate the possibility of criminal charges against the company (Rockoff, Wall Street Journal, 10/22).

The U.S. attorney's office in 2004 began investigating allegations that Lilly marketed the drug to unapproved patients and that it downplayed the side effects, including weight gain and an increased risk of diabetes. The Medicaid fraud control agencies of more than 30 states have cooperated in the federal investigation (Reuters/New York Times, 10/22).

Lilly earlier this month agreed to pay $62 million to 33 states to settle allegations that the company marketed Zyprexa for unapproved uses in violation of state consumer protection laws. According to the allegations, internal documents and e-mails indicate that Lilly marketed Zyprexa, which FDA has approved as a treatment for schizophrenia and mania associated with bipolar disorder in adults, as a treatment for dementia and milder forms of bipolar disorder (Kaiser Daily Health Policy Report, 10/7). States alleged that that the misuse of Zyprexa forced their Medicaid programs to spend large amounts of money treating such adverse effects. Eleven states that have filed suits against Lilly are not participating in the federal investigation (Reuters/New York Times, 10/22).

Previously, Lilly reached agreements to pay a total of $1.2 billion to about 31,000 individual plaintiffs (Wall Street Journal, 10/22).

Reprinted with kind permission from kaisernetwork. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at kaisernetwork/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork, a free service of The Henry J. Kaiser Family Foundation.

© 2008 Advisory Board Company and Kaiser Family Foundation.  All rights reserved.

View drug information on Zyprexa.