Judge Urges Lilly To Settle Zyprexa Lawsuits - estimated up to $7.7
billion

These Zyprexa lawsuits describe how Lilly uses NAMI (National Alliance
on Mental Illness) as a front group to market Zyprexa.

You can find that evidence at the bottom of this webpage:
http://www.psychsearch.net/lawsuits.html

Letters to the editor: http://www2.indystar.com/help/letters.html

Indianapolis Star

Judge: Case against Lilly may go to trial

By John Russell

Eli Lilly and Co., which already has paid more than $1 billion to
settle legal claims over the side effects of its top-selling drug,
Zyprexa, now faces another protracted legal battle over whether it
improperly marketed and overcharged for the antipsychotic and should
pay billions more to insurers.

The stage was set Thursday when U.S. District Judge Jack Weinstein
issued a draft order saying the case against Lilly is strong enough to
warrant a trial and noting that the company may have excessively
encouraged questionable uses of the drug. In his 291-page draft, he
urged Lilly to negotiate a worldwide settlement with plaintiffs, who
are seeking up to $7.7 billion in reimbursements.
Zyprexa "antipsychotic" pills ItÂ’s the latest twist in a lengthy legal
saga, filled with complex medical issues and implications for the
national health-care system, including how drug makers market and
charge for medicines, and how doctors prescribe them.

The case also continues to cast uncertainty over Lilly, the largest
private employer in Indianapolis. The company already has paid more
than $1 billion to settle personal injury claims by patients who said
the company hid ZyprexaÂ’s side effects, including weight gain and
increased blood sugar. The company still faces criminal and civil
investigations by federal and state officials.

In this case, a group of insurance companies and labor unions claimed
that Lilly hid information and spread misinformation about the
effectiveness and safety of Zyprexa, hiding its risks. They also
claimed Lilly promoted and marketed the drug for off-label uses, such
as depression, dementia and panic. Zyprexa is approved only for
schizophrenia and bipolar disorder.

The insurers and labor unions sued Lilly, claiming the company
violated the Racketeer Influenced and Corrupt Organizations Act (RICO)
through mail fraud.

“There is sufficient evidence of fraud under RICO to go to a jury,”
the judge wrote in a draft order filed Thursday in federal court in
Brooklyn, N.Y.

He added: “There is evidence that off-label use of Zyprexa was
excessive and may have been encouraged by Lilly.”

WeinsteinÂ’s writings are not a final order but a draft that all
parties can respond to. A hearing is set for July 17 in New York for
responses. Still, the judgeÂ’s comments send a strong signal about his
thinking in the case.

For years, Lilly has denied it downplayed or hid the drugÂ’s side
effects or promoted it for off-label uses. Company officials repeated
that position Thursday.

“There was undoubtedly off-label use of all drugs in this area.
Doctors can use drugs for whatever they want to,” said Michael
Harrington, Lilly’s general counsel. “But we deny we promoted the drug
improperly for off-label uses.”

He said Lilly would appeal if the judge enters the draft opinion as a
final order.

The judge ruled that the payers could sue as a class. He denied
class-action status for individual patients.

A date for a jury trial has not been set. The judge indicated he hoped
the two sides could reach a settlement, avoiding a long trial. “A
global settlement for the overpricing claims and any other claims is
desirable,” Weinstein wrote. “Legal disputes of this nature should be
resolved as quickly and comprehensively as possible so that
government, the medical profession, and drug manufacturers can get on
with their main job, protecting the peopleÂ’s health effectively at the
cheapest practicable cost.”

The plaintiffs claim that LillyÂ’s actions resulted in them being
overcharged for Zyprexa by as much as $7.7 billion. They say the price
of Zyprexa was artificially inflated by the companyÂ’s false claims
that the product was significantly more effective than previous
generations of antipsychotic drugs.

On Thursday, Lilly slapped down any notion it would settle for that
amount. “The numbers that have been thrown around by the plaintiff’s
lawyers are calculated to be inflammatory and get people’s attention,”
Harrington said.

He said Lilly has yet to present its case in court and said the
company “still has a whole series of substantive motions we would file
to have the case dismissed.”

He said the plaintiffs have continued to approve the use of the drug
and pay for it for their members. That shows, he said, that they
recognize Zyprexa “as a really important drug for the people they
insure.”

On that point, the judge reached a similar conclusion in his draft,
noting that the plaintiffs continue to pay or reimburse for Zyprexa
prescriptions for their members. But he added: “Nevertheless, the
utility of Zyprexa does not trump plaintiffsÂ’ legal claims for fraud
and overpricing.”

The judge limited the damages to four years before the lawsuit was
filed, or the period from June 20, 2001, to June 20, 2005.
It remains unclear whether the judgeÂ’s draft ruling will hurt the
company financially or scare investors. Word of the ruling did not hit
the news wires until near the end of an abbreviated day of trading on
Wall Street, before a long holiday weekend. Any impact on the
companyÂ’s stock price wonÂ’t be felt until Monday.

Shares of Lilly climbed about 2 percent Thursday, closing at $46.98,
up 89 cents. Still, that remains near an 11-year low for the company,
which has been bedeviled by setbacks in its drug pipeline. In the past
year or so, several of LillyÂ’s late-stage drugs have been shelved,
including an inhaled insulin and a drug for treating eye diseases. Two
weeks ago, the companyÂ’s most critical experimental drug, a blood
thinner called prasugrel, was delayed for three months at the FDAÂ’s
request for further review.

“From an investor point of view, this ongoing problem with Zyprexa is
going to make people nervous until there’s a resolution,” said Les
Funtleyder, an analyst at Miller Tabak & Co. in New York. “The thing
is, we donÂ’t know when there will ever be resolution. It just keeps
going on and on.”

Zyprexa has been approved in more than 80 countries and has been
prescribed to more than 23 million people since it hit the market in
1996. The drug rang up sales of $4.7.billion last year, accounting for
about 27.percent of LillyÂ’s total revenues, down from a high of 33
percent in 2002.

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