State of Alaska and Eli Lilly and Company Reach Agreement to Settle Zyprexa Lawsuit

March 26, 2008 /PRNewswire-FirstCall/ -- Eli Lilly and Company and the State of Alaska have agreed on the following joint statement:

Alaska Attorney General Talis J. Colberg and Eli Lilly and Company today announced a settlement of the lawsuit filed by the State of Alaska over use of Zyprexa(R) (olanzapine) by the State's Medicaid program. The trial began March 3, 2008, in Superior Court in Anchorage.
The agreement resulted from ongoing mediation ordered by trial Judge Mark Rindner before the trial began. Presiding Judge Morgan Christen renewed mediation efforts with the parties last week.
The settlement will include payment by Lilly of $15 million plus a term that will ensure that Alaska is treated as favorably as any other state that may settle with Lilly in the future over similar claims.
"I am very pleased with the efforts by Assistant Attorney General Ed Sniffen and our team of trial attorneys," Colberg said. "We believe this is a good result for the State of Alaska and the Department of Health and Social Services," he added.
"We believe this settlement is in the best interest of the company, the State, and, importantly, of the patients, families and healthcare professionals for whom Zyprexa is an important treatment option," said Robert A. Armitage, Lilly's senior vice president and general counsel.
In addition, Lilly provided the following information:
"While we had a strong defense, we agreed with the State that the best result for everyone is an amicable resolution," Armitage said. "A trial always involves significant time and resources, especially a two-phase trial like this one that posed additional legal hurdles. A settlement helps us get back to what we want to focus on as a company: developing important new medications through research and partnerships with doctors and patients.
"We appreciate all the time and energy the jury invested over more than three weeks in such a complex case," Armitage added.
The agreement involves no admission of wrongdoing on Lilly's part.
The March, 2006 lawsuit claimed the State and healthcare providers were insufficiently warned about possible side effects relating to weight gain, high blood sugar and diabetes, causing harm to the State's Medicaid recipients and increased costs to the State. The lawsuit asked that Lilly pay the State for those costs and pay civil penalties under the Alaska Unfair Trade Practices and Consumer Protection Act (UTPCPA).
Prescribed for more than 23 million people since its initial approval by the FDA in 1996, Zyprexa is regularly prescribed in the U.S. and in more than 80 other countries. One of a class of medications called "atypical antipsychotics," it is approved to treat schizophrenia and bipolar disorder.
"Our decision to resolve this case does not change the fact that Zyprexa can continue to improve the lives of patients around the world who are suffering from schizophrenia and bipolar disorder," Armitage said.