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Zyprexa Hole Gets Deeper
Washington, DC: On March 7, 2007,
Montana's attorney general, Mike McGrath, filed the latest Medicaid
fraud lawsuit against Eli Lilly, under the False Claims Act, for
illegally promoting the sale of the atypical antipsychotic drug Zyprexa for off-label uses and concealing its link to serious health problems.
Considered to be one of the most effective tools available to combat
Medicaid and Medicare fraud, the False Claims Act imposes treble
damages and civil penalties on companies that knowingly present false
claims for payment to government programs.
To date, drug companies are the largest source of FCA recoveries,
totaling $5.7 billion between 2001 and 2006, according to the US
Department of Justice.
When the FDA approved Zyprexa in 1996, it was approved only to treat
adults with the most serious of mental illnesses, schizophrenia and
bipolar disorder, because the drug had undergone the required testing
and was found safe and effective for those disorders.
Zyprexa was not approved for any other conditions because Lilly could
not prove to the FDA that it was safe and effective for any other
condition. However, Lilly took this powerful antipsychotic and promoted
it for so many unapproved uses that it became the company's number one
"Unapproved" or "off-label" refers to the use of a drug that has not
been approved as safe and effective and includes not only treating a
condition not listed on the label, but also treating an approved
condition for a longer duration of time, or in combination with other
drugs, or at a different dosage, or with a different patient population
such as children or the elderly.
Public health care programs pay for drugs if the drug is prescribed by
a physician as medically necessary, regardless of whether the use is
approved or off-label, but drug companies are barred from influencing
doctors to prescribe a drug for off-label use.
Under the federal and state False Claim Acts, promoting drugs for
off-label use is illegal because it causes the presentation of false
claims to public programs when doctors to write prescriptions for uses
that they otherwise would not.
In the Montana lawsuit, Mr McGrath alleges that Lilly made Zyprexa the
company's top-selling drug by marketing it for use by patients with
dementia, depression, autism and other non-approved uses.
According to the complaint, Lilly created a 280-person sales force to
promote Zyprexa to long-term care facilities to maximize its off-label
use by the elderly. It also says, "Lilly management participated,
encouraged and authorized the unlawful payment of illegal kickbacks to
physicians in order to continue generating sales of Zyprexa."
This case is unique because it seeks reimbursement on behalf of all
Montana citizens who purchased Zyprexa since it came on the market in
1996, including patients who were not on public health care programs,
because under the laws of that state, the attorney general can sue on
behalf of all consumers and request treble damages and attorneys' fees.
Lilly's fleecing of pubic health care programs through the
over-prescribing of Zyprexa demonstrates how greed breeds more greed.
First the company set up funnels for tax dollars to pay for the cost of
Zyprexa for patients in state institutions and prisons by influencing
policy makers in key positions in state governments.
Lilly then went after more tax dollars by infiltrated the nursing home
industry to influence doctors to prescribe Zyprexa off-label to elderly
citizens for symptoms of dementia who were covered by Medicare.
Next, Lilly recruited kids through corrupted foster care systems across
the country by getting doctors to prescribe Zyprexa off-label to
children as young as 2, who were covered by public programs for uses
such as mood and behavioral disorders, ADD and autism.
But by and far, the major marketing coup was Lilly's ability to
compromise a select group of state officials who controlled what are
known as drug formularies and had the power to make Zyprexa the first
line of treatment for certain conditions for all patients covered by
Medicaid and Medicare.
Once that was achieved, since most private insurance companies follow
the government's approved drug lists when paying for drugs, Lilly
killed 2 birds with one big boulder.
Through this ingenious marketing scheme, Zyprexa became the highest
drug expense to state Medicaid budgets all over the country and is now
considered to be the drug most to blame for bankrupting Medicaid
Unfortunately, a rarely-mentioned travesty caused by the
over-prescribing of this schizophrenia drug, is that an infinite number
of people, some as young as 2, have been given a life sentence of
mental illness that will disqualify them for employment in a wide
variety of fields including law enforcement, the military and the
health care industry, to name just a few. After all, employers cannot
hire crazy people to handle fire arms or mentally-disturbed healthcare
professionals to treat patients.
For 30 years, David Oaks, director of MindFreedom, an international
human rights organization, says he has been warning that the
psychiatric drug industry would target the general public. "The issue
of psychiatric drug fraud today," he says, "is about one's neighbor,
co-worker, teacher, friend and family member."
But Mr Oaks says that, as the truth leaks out, the public is becoming
more and more outraged over the drugging of our young people.
Attorney Barry Turner, a professor of Law and Ethics in the UK, is also
outraged. "That any country that calls itself civilized," he says,
"could allow the deliberate stigmatizing of perhaps millions of
children followed by giving them drugs that will damage their endocrine
systems is appalling."
"The real tragedy," he says, "will be the vast social cost of creating
a generation of outcasts, unemployable, living on welfare and
perpetuating the myth that everyone is mentally disturbed in one way or
Neurologist Dr Fred Baughman, a recognized expert on psychiatric drugs
and author of the book, "ADHD Fraud," says the pharmaceutical industry
has corrupted doctors in all fields of medicine. "It's not just
psychiatry," he says, "the whole medical profession is diagnosing
people mentally ill for profit."
Thus far, Lilly has agreed to pay about $1.2 billion to settle cases
without any public trials, and by doing so, Lilly was able to use court
orders and confidentiality clauses to prevent the litigants from
revealing information about the health risks to patients taking drug or
doctors prescribing it.
According to Mr Turner, Lilly needed to bury the documents under court
orders "to staunch the hemorrhage of evidence that will cause it to pay
out possibly the largest FCA penalties in history."
His point was well evidenced in December 2006, when Lilly made a
spectacle of itself in a 2-month court battle after some of the sealed
documents surfaced in another case and were quoted by reporter Alex
Berenson in front-page articles in the New York Times.
The company immediately marched into court to get injunctions against
everyone and their brother, with orders to return the documents in an
attempt to get them back under seal. However, once the "hemorrhage"
began, there was no way to stop it, in large part thanks to the new age
of the internet.
As it turns out, Lilly had good reason to worry. With the disclosure of
those documents, the public learned that Lilly could have warned the
public about the serious health risks of Zyprexa, and countless
patients could have been saved. As early as November 2005, FDA Drug
Safety Officer Dr David Graham, estimated that Americans suffer 62,000
deaths per year due to off-label use of atypicals, in USA Today.
More recently, during a Senate hearing in February 2007, Dr Graham
focused on one sub-population of victims and said that the off-label
use of atypicals with nursing home residents kills roughly 15,000
people a year.
For instance, one of the sealed Lilly documents was written 6 years ago
by a team of doctors hired by Lilly to assess the diabetes risk
associated with Zyprexa. This document proves beyond any doubt that
Lilly was aware of the risk and that the doctors even told Lilly that,
"unless we come clean on this, it could get much more serious than we
However, these doctors could not have known that Lilly had an ace in
the hole and could rely on the court system to suppress their study if
the time ever came when people suspected that their diabetes was caused
by Zyprexa and sued Lilly.
The fact that Lilly did have that ace in the hole is probably the most
alarming revelation that came out during the battle over the release of
the Zyprexa documents, at least for people naive enough to still
believe there is an open court system in the US.
The underlying cases involved about 26,000 lawsuits, and the judge who
presided over the litigation granted Lilly a court order to permanently
seal from public view more than 11 million documents that were
disclosed in litigation.
The sealed documents substantiated every allegation made by the
plaintiffs, including that Lilly knew about Zyprexa's link to the
weight gain, high blood sugar levels and diabetes when the drug was
approved in 1996, and that Lilly had engaged in an elaborate marketing
scheme to sell Zyprexa for off-label uses.
Critics say courts should be barred from sealing documents of this kind
which show that a company is concealing the dangers of a drug and
allowing patients to be injured and killed in the name of profits.
According to Mr Turner, consumers of pharmaceutical products these days
are unprotected because, "apart from tort lawyers and a number of
pressure groups, there is currently no viable check on the industry."
"The FDA continues to fail the American people," he says, "and without
litigation and critical reporting, this problem would get even worse
than it already is."
The Zyprexa debacle proves that out-of-court settlements do nothing to
slow off-label sales because Zyprexa is still Lilly's top-selling drug.
Paying $1.2 billion to avoid pubic trials is no big deal to Lilly
because it could cover that penalty by simply forking over the $1.108
billion from Zyprexa sales in the first quarter of 2007 alone.
In the wake of the latest news about hidden studies on Zyprexa,
consumer advocates are calling on Congress to reign in the industry.
"We've seen too many cases where drug companies downplayed, hid or
'forgot' their clinical trial data that showed harmful side effects,
and patients ultimately suffered," said Bill Vaughan, senior policy
analyst for Consumers Union, publisher of Consumer Reports, in a press
"Congress has got to put a stop to this gaming of the safety system by
the drug companies, and pass real reforms now that make drug-risk
information public," he states.
"Patients and their doctors need to know the risks of a drug," Mr
Vaughn said, "and Congress has the power to stand up to the drug
companies and make that happen."
The US Senate is expected to vote this week on a prescription drug
reform bill, and advocacy groups all across the country are calling for
strong measures to eliminate the abuses of the industry in putting
unsafe products on the market and massively promoting them for
off-label use while concealing serious health risks.
According to Lilly's SEC filings, there are about 1,300 Zyprexa
personal injury claims still pending, but the filing should have
stated, "and counting", because another lawsuit was filed on April 13,
2007, in North Carolina by a woman whose father died of a toxic
overdose of Zyprexa while taking the prescribed amount, and this
complaint also lists five John Doe defendants for persons who
prescribed or administered Zyprexa to her father.?
In addition to Montana, 8 other states have sued Lilly, including
Alaska, Mississippi, New Mexico, Pennsylvania and West Virginia,
seeking reimbursement for the cost of Zyprexa purchased by Medicaid,
along with the cost of past and future medical expenses for patients
harmed by Zyprexa.
The defendants named in the Pennsylvania lawsuit also include the other
two atypical makers, AstraZeneca for Seroquel and Johnson & Johnson
For months, Mr Turner has been saying that Lilly is most worried about
the FCA fraud cases because they have the potential to cause a major
blow to Lilly's stock value which would result in a whole new round of
lawsuits filed on behalf of shareholders. Well, it appears that D-Day
has arrived, because over a period of 9 days in April 2007, four
class-action lawsuits were filed against Lilly and certain officers and
directors on behalf of shareholders.
Zyprexa Legal Help If you have or a loved on has taken Zyprexa and suffered from diabetes or hyperglycemia, please contact a [Zyprexa] lawyer who will evaluate your claim at no charge.