Eli Lilly to Pay $1.4 Billion for Illegal Drug Marketing Ohio’s share to be $32.1 million

http://www.ag.state.oh.us/press/09/pr090115.asp
January 15, 2009

(COLUMBUS, Ohio) – In what is believed to be the largest-ever health care fraud settlement, Eli Lilly and Company will pay more than $1.4 billion to settle allegations of illegal drug marketing involving the anti-psychotic drug, Zyprexa. Ohio Attorney General Richard Cordray announced today that Ohio played a lead role in the negotiations, joining with several other states and the federal government to reach the agreement in principle with Eli Lilly.

“Eli Lilly engaged in an off-label marketing campaign that improperly promoted the use of Zyprexa,” said Attorney General Cordray. “They were promoting the drug for uses that were specifically not approved by the Food and Drug Administration.”

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. In addition, the United States Attorney for the Eastern District of Pennsylvania has charged 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.

The total state and federal recovery for the State of Ohio will be $32.1 million. That amount includes $19 million to reimburse the federal share of Medicaid. The remaining $13.1 million will be returned to the State of Ohio. Cordray specifically cited the work of his predecessors, Jim Petro, Marc Dann, and Nancy Rogers, who pressed the case forward and helped achieve this resolution.

Zyprexa is one of a newer generation of antipsychotic medications (called atypical antipsychotics) used to treat certain psychological disorders. Between September 1999 and December 31, 2005, Eli Lilly promoted the sale and use of Zyprexa, primarily through a marketing campaign called “Viva Zyprexa,” for certain uses which the Food and Drug Administration had not approved. The campaign 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 physicians and other health care professionals. As a result of the promotion, physicians prescribed Zyprexa for children and adolescents, for dementia patients in long term care facilities, and in unapproved dosage amounts. Those are all uses that were not medically accepted indications for which state Medicaid programs would approve reimbursement.

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

This settlement is based on four qui tam cases that were filed or consolidated in the United States District Court for the Eastern District of Pennsylvania by various relators - private parties that filed actions under state and federal false claims statutes.

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. Joining the team members from the Ohio Attorney General’s office were representatives from Massachusetts, New York, Delaware, New Jersey, Texas, and Illinois.

From John Curry, January 15, 2009