Surprising settlement reached in Zyprexa cases

Eli Lilly announced a settlement in roughly 18,000 lawsuits related to its schizophrenia drug Zyprexa. The new agreement may cost the pharmaceutical company up to $500 million, bringing the total price tag of their Zyprexa settlements to approximately $1.2 billion. Zyprexa has been linked to an increased risk of diabetes, obesity, and high blood-sugar levels. More than a thousand cases remain pending, and various civil and criminal investigations will still proceed.

The Zyprexa (olanzapine) controversy returned to the news in December 2006 when the New York Times, citing thousands of internal Lilly documents, accused the company of questionable and possibly illegal marketing of the drug. The New York Times claimed that the drug maker intentionally downplayed Zyprexa’s risks of obesity and increased blood sugar.  The newspaper also suggested that Lilly encouraged unapproved use of Zyprexa, which is approved only for the treatment of schizophrenia and bipolar disorder.

Zyprexa has been prescribed to nearly 20 million people during the past decade, and 2005’s sales reached $4.2 billion. In June of 2005, the company settled approximately 8,000 lawsuits for nearly $700 million, or almost $90,000 per claim. The new agreement works out to less than $30,000 per claim. A warning about the risks of high blood-sugar levels was added to Zyprexa’s label in 2003, a factor that may have led to the relatively reduced settlement and that may prove to help Lilly fend off further legal action. “The change in Zyprexa’s label in September 2003, as ordered by the federal Food and Drug Administration, makes less viable, on statute of limitations grounds, such future cases,” noted supervising Judge Jack Weinstein.

Despite the agreement, the company continues to stand behind its product: “While we remain confident that these claims are without merit, we took this difficult step because we believe it is in the best interest of the company, the patients who depend on this medication, and their physicians,” said Sidney Taurel, chairman of the board and chief executive officer of Eli Lilly and Company. “We wanted to reduce significant uncertainties involved in litigating such complex cases. Our decision to resolve the claims does not change the fact that Zyprexa has and will continue to improve the lives of millions of patients around the world who are suffering from schizophrenia and bipolar disorder.”

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