Eli Lilly's Zyprexa Woes not Finished Yet

Washington, DCEli Lilly, makers of Zyprexa, may finally be feeling some of the sting of recent lawsuits. Late last month Eli Lilly announced that its fourth-quarter earnings had dropped, likely due to recent settlements of lawsuits related to Zyprexa.

According to a report in the New York Times, Eli Lilly made $132 million in its fourth quarter; during the same period a year before the company made $701 million.

Earlier in January, 2007, Lilly settled a lawsuit for $495 million that covered 18,000 Zyprexa users. The plaintiffs claimed that they developed diabetes or other diseases after taking Zyprexa. In 2005 Lilly settled around 8,000 claims for $700 million. So far around $1.2 billion has been spent to settle claims by around 28,500 people who said they were injured by Zyprexa. Additionally, Lilly has settled 2,500 individual suits but the value of those settlements has not been made public.

However, the company still has around 1,200 claims against it that have not yet been settled, as well as four state-government lawsuits seeking damages and lawsuits from insurance carriers. Plaintiffs suing Lilly claim the company knew about the severity of weight gain but down-played the risks to doctors. They also claim that Lilly marketed Zyprexa for patients who were not diagnosed with schizophrenia or bipolar disorder.

Zyprexa (olanzapine) is used to reduce psychotic hallucinations and delusions. However, use of Zyprexa has also been linked to severe weight gain and increases in blood sugar and cholesterol levels. Some reports put the weight gain at over 65 pounds for 16 percent of people who took Zyprexa.

Zyprexa was approved by the U.S. Food and Drug Administration in 1996 for the treatment of schizophrenia and bipolar disorder. According to U.S. law, drug companies are not allowed to market their drugs for off-label uses. The states of Alaska and West Virginia sued Lilly in February, 2006, for improperly marketing Zyprexa for unapproved uses which cost those states millions of dollars when patients on health plans developed diseases from taking Zyprexa. Louisiana filed its own suit in September, 2004.

Meanwhile, Mississippi filed a lawsuit in July claiming that Lilly knowingly misrepresented the risks associated with taking Zyprexa while at the same time marketing the drugs to treat disorders that it was not approved for.

Finally, a lawsuit by insurance carriers was filed in New York in 2005 claiming Lilly violated racketeering laws in its marketing of Zyprexa. The lawsuit argues that Lilly paid doctors, consultants and medical marketing companies to promote Zyprexa for unapproved uses. The suit, which is seeking class action status, is requesting Lilly pay triple damages for all costs related to Zyprexa.