Lilly Fraudulently Marketed Zyprexa, Montana Claims (Update5)
By Margaret Cronin Fisk
March 12 (Bloomberg) -- Eli Lilly & Co. was sued by the
state of Montana over claims the company fraudulently marketed
its antipsychotic drug Zyprexa for unapproved uses and owes the
state for prescription costs and harm to patients.
Lilly allegedly gave kickbacks to doctors and improperly
promoted the drug to nursing homes as a sedative, Montana
Attorney General Mike McGrath said in a complaint filed March 7
in state court in Helena. He claimed Lilly, the world's biggest
maker of psychiatric drugs, bought off a ``disgruntled'' sales
director to keep him from disclosing its marketing practices.
The drugmaker ``instructed its representatives to minimize
and misrepresent the dangers of Zyprexa, affirmatively and
consciously placing company profits above the public safety,''
according to the complaint. ``This failure to warn was designed
and intended to maximize company profits.''
Zyprexa has been linked to excessive weight gain and
increased diabetes risk. The lawsuit is the seventh state claim
against Indianapolis-based Lilly over Zyprexa marketing, and the
second this year. Pennsylvania sued Lilly and two other makers of
similar drugs Feb. 26 on behalf of its Medicaid programs. Both
states seek unspecified reimbursement for money paid on
prescriptions and any harm caused by Zyprexa.
Lilly also faces federal probes into the drug's marketing.
Lilly spokeswoman Marni Lemons said the company plans to fight
the Montana suit and that it promotes its medications ``only for
approved uses,'' according to an e-mailed statement.
Lilly's off-label marketing has enabled Zyprexa, approved
only for use for schizophrenia and bipolar disorder, to become
the company's top-selling drug, Montana alleged in its complaint.
Lilly promoted Zyprexa for use by patients suffering from
dementia, depression and autism, among other non-approved uses,
according to the court filing.
Under federal law, doctors can prescribe medications for
uses that aren't approved by the U.S. Food and Drug
Administration, although pharmaceutical companies are barred from
marketing their drugs for such ``off-label'' uses.
Lilly created a 280-person sales force ``to promote Zyprexa
exclusively for off-label uses, specifically for long term care
facilities to maximize off-label use of Zyprexa sales'' for the
elderly, Montana said in its complaint.
Johnson & Johnson, AstraZeneca
``Lilly management participated, encouraged and authorized
the unlawful payment of illegal kickbacks to physicians in order
to continue generating sales of Zyprexa,'' the state claimed.
In addition to Zyprexa, AstraZeneca Plc's Seroquel and
Johnson & Johnson's Risperdal, all members of a class of
medications called atypical antipsychotics, have been linked to
weight gain and diabetes. In September 2003, the FDA required the
three companies to place warnings on the drugs' labels.
The three drugs, approved for schizophrenia and bipolar
disorder, are among the top-selling medications in the world.
Lilly's global sales of Zyprexa were $4.36 billion in 2006,
Risperdal sales were $4.18 billion and Seroquel's worldwide sales
in 2006 were $3.4 billion.
As many as half of the prescriptions for the three drugs are
for off-label use, which has helped propel sales, according to
market research data. U.S. Representative Henry Waxman, a
California Democrat and chairman of the House Oversight and
Government Reform Committee, last week asked the drugmakers to
provide information on marketing practices for their
Lilly settled about 28,500 claims brought by users of
Zyprexa for a total of as much as $1.2 billion. About 1,300
individual claims remain pending, the company said in a
regulatory filing last month.
The drugmaker also has been sued by Louisiana, West
Virginia, Alaska, New Mexico and Mississippi, all seeking
reimbursement of money spent on the drug by their Medicaid
programs, as well as the costs of past and future medical care
for any injuries caused by Zyprexa use. The Alaska suit against
Lilly is set for trial in March 2008.
Most states didn't specify a dollar amount. West Virginia
said it's seeking reimbursement of more than $70 million it paid
Lilly for Zyprexa. Any damages could be tripled under state law,
according to the suit.
Louisiana also has sued New Brunswick, New Jersey-based
Johnson & Johnson over Risperdal and Pennsylvania has sued both
companies as well as London-based AstraZeneca last month.
The Montana suit also seeks reimbursement for patients who
weren't on public assistance, said attorney Mike Miller, who
represents the state. Under Montana law, the state attorney
general can sue on behalf of all consumers, the lawyer said.
``We are looking for all funds spent by Montana or its
citizens on Zyprexa since its launch in 1996, treble damages and
attorneys' fees,'' Miller said.
Lilly rose 21 cents to $52.80 at 4 p.m. in New York Stock
Exchange composite trading.
Last week Lilly said it had sold $2.5 billion of bonds to
repay debt used in its acquisition of drugmaker Icos Corp., in
its biggest bond sale ever.
Lilly's notes are rated Aa3 by Moody's Investors Service and
AA by Standard & Poor's, both investment grade.
The lawsuit is Montana v. Eli Lilly & Co., No. ADV-2007-188,
1st Judicial District Court, Lewis & Clark County, Montana.
To contact the reporter on this story:
Margaret Cronin Fisk in Southfield, Michigan,
at email@example.com .
Last Updated: March 12, 2007 16:13 EDT