Lilly Settles Suit With South Carolina Over Zyprexa

Eli Lilly & Co. agreed to settle a lawsuit brought by South Carolina claiming the company improperly marketed its antipsychotic Zyprexa, averting a trial in which the state planned to seek $6 billion.   South Carolina sought reimbursement for the costs of Zyprexa prescriptions and alleged Zyprexa-related illnesses. The state claimed Lilly pushed doctors to prescribe the medication and withheld information about Zyprexa’s side effects such as weight gain.

Zyprexa, Lilly’s best-selling drug, has been the subject of federal and state investigations into marketing practices, including “off-label” marketing.  Lilly, the largest maker of psychiatric drugs, resolved a marketing investigation in January with the U.S. Justice Department, promising to pay $1.42 billion, including about $362 million to more than 30 states.

Pharmaceuticals and other drugs are highly regulated by numerous federal and state laws and regulations. Before any drug can be approved for use in the United States, it must first be approved by the Food and Drug Administration (“FDA”). The FDA determines precisely which medical conditions a drug may be used to treat. This determination is known as the drug’s “label” or “indication.” The label or indication is critical to pharmaceutical companies because federal law restricts pharmaceutical companies to marketing or promoting drugs only for the uses or indications approved by the FDA. Physicians, by contrast, generally may prescribe drugs to treat numerous medical conditions even if the drug has not been approved by the FDA to treat those conditions. This practice is known as “off-label” use of a drug because it goes beyond those uses specifically approved by the FDA.

One common scheme by pharmaceutical manufacturers has been to market or promote their drugs to physicians for an off-label or unapproved use. Although physicians may prescribe a drug for an off-label use, pharmaceutical companies violate federal law, including the False Claims Act, when they market, promote or encourage physicians to use their drugs in an off-label or non-FDA approved manner. Pharmaceutical companies that have engaged in illegal off-label marketing or promotion of their drugs have paid the Government hundreds of millions of dollars as a result of Federal False Claims Act cases, often times brought by pharmaceutical sales representatives, sales managers, compliance officers, other pharmaceutical company employees, physicians, nurses and/or employees of hospitals or physician practices.

The case is State of South Carolina v. Eli Lilly & Co., 2007-CP-42-1855, Common Pleas Court of South Carolina, Seventh Judicial Circuit (Spartanburg).  For more information:

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