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January 15, 2009
AG McKenna announces new $14 million settlement with Eli Lilly

Settlement resolves allegations of improper marketing of anti-psychotic drug Zyprexa

OLYMPIA -- Attorney General Rob McKenna announced today that Washington state has joined with other states and the federal government in reaching an agreement in principle with Eli Lilly and Company to settle allegations it engaged in an off-label marketing campaign to improperly promote the anti-psychotic drug Zyprexa.

“Our team’s terrific work has produced millions of dollars for the state’s general fund and for health care for the underprivileged,” McKenna said. “Today’s settlement promotes public health by requiring that drug companies stop marketing drugs for non-FDA approved uses.”

Eli Lilly will pay the states and the federal government a total of $800 million in damages and penalties to compensate Medicaid and various federal healthcare programs for harm suffered as a result of its conduct. The state of Washington’s Medicaid program and the state’s general fund will each receive more than $3.5 million, representing compensation and damages. The state’s share of the settlement is tied to how much Zyprexa was used by state Medicaid patients. Just over $7 million of Washington state’s settlement amount will be returned to the federal government to offset its share of funds improperly distributed on behalf of state Medicaid recipients.

In addition, the US Attorney for the Eastern District of Pennsylvania filed criminal charges in US District Court charging Eli Lilly with a misdemeanor violation of the Food, Drug and Cosmetic Act. In a plea agreement filed with the court, Eli Lilly has agreed to pay a $615 million criminal fine to resolve the charge. 

Zyprexa is one of a newer generation of antipsychotic medications used to treat certain psychological disorders. Between September 1999 and December 31, 2005, Eli Lilly willfully promoted the sale and use of Zyprexa, primarily through a marketing campaign called “Viva Zyprexa,” for uses which the Food and Drug Administration had not approved. The promotional activities undertaken by Eli Lilly promoted Zyprexa not only to psychiatrists, but also to primary care physicians, for such unapproved uses as the treatment of depression, anxiety, irritability, disrupted sleep, nausea and gambling addiction. In implementing the campaign, Eli Lilly also provided payments and other things of value to health care professionals.

As a result of these promotional activities, Eli Lilly caused physicians to prescribe Zyprexa for children and adolescents, dementia patients in long-term care facilities, and in unapproved dosage amounts, all of which are uses that were not medically acceptable for reimbursement by state Medicaid programs.

As part of the settlement, Eli Lilly will enter a Corporate Integrity Agreement with the US Department of Health and Human Services, Office of the Inspector General which will closely monitor the company’s future marketing and sales practices.

A National Association of Medicaid Fraud Control Units team participated in the investigation and conducted the settlement negotiations with Eli Lilly on behalf of the settling states. Team members included representatives from Massachusetts, New York, Ohio, Delaware, New Jersey, Texas and Illinois.

Washington State Medicaid Fraud Control Unit (MFCU) Director Dawn Cortez coordinated the settlement for the State of Washington. Terry Tate, investigator with the MFCU provided data analysis and production.

“It’s a credit to our team of state Assistant Attorneys General, investigators, and auditors that we were able to reach such a substantial settlement,” McKenna said.

McKenna and 33 other attorneys general reached a consumer protection settlement with Eli Lilly and Company concerning Zyprexa marketing in October 2008.



Janelle Guthrie, AGO Communications Director, (360) 586-0725


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