Eli Lilly as early as Thursday is expected to agree to enter into a $1.4 billion agreement with the U.S. Department of Justice to settle criminal and civil charges that it illegally marketed its schizophrenia drug Zyprexa, Dow Jones reports (Grace, Dow Jones, 1/15). The suit was filed on behalf of all 50 states by the U.S. attorney's office for the Eastern District of Pennsylvania. In the lawsuit, the plaintiffs allege that Lilly marketed Zyprexa for unauthorized use in patients, particularly children and elderly adults, who are especially vulnerable to the drug's potential side effects and for whom the drug is not approved, according to the New York Times (Harris/Berenson, New York Times, 1/15).

In October 2008, Lilly set aside $1.42 billion to settle the charges (Kaiser Daily Health Policy Report, 10/22/08). Earlier that month, the company 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 (Kaiser Daily Health Policy Report, 10/7/08).

The illegal marketing practices included urging geriatricians to use Zyprexa to sedate unruly nursing home patients and pressing physicians to treat disruptive children with Zyprexa (New York Times, 1/15). Under the agreement, Lilly will pay $615 million to settle a criminal investigation and nearly $800 million to settle civil investigations, $438 million of which will go to the federal government and $362 million of which will be available for settlements with states (Dow Jones, 1/15).

A judge is expected to approve the settlement Thursday (New York Times, 1/15). According to the Times, it is unclear whether Lilly will acknowledge wrongdoing as part of the settlement. Although the settlement is intended to settle all pending government claims, it remains unclear whether all states have agreed to the terms, according to the Times.

The Times reports that without a settlement, Lilly risks being prohibited from participating in Medicare and Medicaid. However, "such bans are almost unheard of for big drugmakers because their products are considered so essential," according to the Times. The Times reports that the settlement likely will not affect physicians' use of Zyprexa because they are not barred from prescribing it for off-label uses (New York Times, 1/15).

Record Settlement
If approved, the settlement would be a record in a false-claims case, according to Patrick Burns of Taxpayers Against Fraud in Washington, D.C. He said, "The settlement is a game-changer because it breaks the $1 billion barrier," adding, "Smaller settlements weren't getting the job done" (Bloomberg/Boston Globe, 1/15).

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