Lilly Whistleblowers Lead To $1.4 Billion Record Zyprexa Settlement

Eli Lilly will have to pay the federal government more than $1.4 billion to settle an off-label marketing scheme for its prescription drug, Zyprexa.

The settlement is the largest amount paid by a single defendant in the history of the U.S. Department of Justice.

InjuryBoard member attorney Stephen Sheller of Sheller, P.C., filed the first complaint in February 2003. The allegations originated from six former Lilly drug marketing representatives who became whistleblowers.

Lilly perpetrated fraud on the public, says Sheller, while the whistleblowers complained within the company about Lilly’s improper marketing practices. All six were eventually fired or forced to resign.

One sales representative, who is also a pharmacist, also contacted the company hotline regarding the unethical sales practices but got no response.

“They reported what they felt was very wrong and tried to do it first within the company boundaries, but no one was interested in hearing that,” says Jamie Sheller of Sheller P.C.

Zyprexa is approved by the Food and Drug Administration (FDA) to treat schizophrenia and a specific type of bipolar disorder.

In order to boost sales, Lilly marketed Zyprexa for numerous off-label uses targeting doctors at nursing homes and assisted-care facilities to convince them to use Zyprexa for behavioral symptoms such as Alzheimer’s disease, depression and dementia, agitation, aggression, hostility, mood and sleep disorders, according to the complaint.

Reps also encouraged doctors to prescribe for off-label use in children with behavioral problems. Side effects include heart failure and pneumonia in the elderly, and weight gain and diabetes in children.

As early as November 1996, the FDA sent Lilly a letter informing the company it found that Zyprexa’s promotional materials and activities were false and misleading and in violation of the Federal Food, Drug, and Cosmetic Act.

In 2000, Eli Lilly expanded the aggressive marketing campaign with a “Viva Zyprexa” campaign with a goal of making Zyprexa an, “everyday agent in primary care.”

• Marketing tactics included off-label lectures and audio conferences for physicians with Lilly sales representatives who posed as persons in the audience with questions about Zyprexa’s expanded use
  
  
• Lilly produced a video called “The Myth of Diabetes” to minimize the connection between Zyprexa and weight gain and diabetes
  
  
• In the summer of 2003, Lilly management ordered the destruction of sales literature with misleading information, core sales aids, and flip charts
  
  
• Lilly promoted the oral version of Zyprexa, called Zydis, and claimed it did not have the same weight-gain effects as Zyprexa
  
  
• Lilly’s sales force informed doctors that 5 milligrams of Zyprexa at 5 p.m., referred to by the sales slogan, “5 at 5” would help elderly patients with behavioral issues and dementia sleep at night

Zyprexa is Lillys top-selling drug with sales of nearly $40 billion since its approval in 1996.

In accompanying statement, Eli Lilly of Indianapolis says it agreed to plead guilty to one misdemeanor violation of the Food, Drug, and Cosmetic Act, even though the company disagrees with and does not admit to the civil allegations of promoting the drug for off-label use.

"We deeply regret the past actions covered by the misdemeanor plea," said John C. Lechleiter, Ph.D., chairman, president and chief executive officer of Lilly. "At Lilly we take seriously our responsibilities to abide by all the laws governing our business practices, and we realize that we have a tremendous responsibility to the patients and healthcare professionals we serve. Every day and with every interaction we strive to operate in a responsible and compliant manner. Doing the right thing is non-negotiable at Lilly, and I remain personally committed to all of us at Lilly maintaining the highest standards of conduct."

Under the agreement, Lilly will pay $800 million in civil fines and over $600 million in criminal penalties. And Lilly has entered into a corporate integrity agreement with the Department of Health and Human Services Office of Inspector General.

The False Claims Act allows private individual to sue companies that knowingly defraud national or state governments.

The six whistleblowers will share in approximately 18 percent of the federal and qualifying states recoveries; though Sheller adds what they did was difficult both personally and professionally.

“I’m hoping whistleblowers will become heroes to emulate rather than becoming pariahs,” she says. #