Once again a mega million dollar drug company is on the line. A trial lawyer in Alaska says that the manufacturer of Eli Lilly’s Zyprexa, a drug that treats schizophrenia and causes diabetes, knew that Zyprexa caused diabetes while the Zyprexa clinical trials were happening in 1996 but failed to disclose that fact.
The Zyprexa lawsuit is asked Lilly to pay for the medical expenses of Medicaid patients who patients who have contracted diabetes or other diseases after taking Zyprexa. The company claims to have done nothing wrong. Alaska’s Medicaid program continues to pay for the drug zyprexa.
The trial is divided into two parts. First the jury will determine if Lilly is liable for concealing Zyprexa’s diabetes causing risks. If the jury finds Lily liable, a second jury will determine if Zyprexa caused the illnesses and how much the company must pay in restitution.
Zyprexa is among the world’s top-selling medicines, with sales of $4.8 billion in 2007. About 23 million people have taken the drug since it was introduced. Lilly has already spent about $1.2 billion to settle about 30,000 claims from people who say that Zyprexa caused them to develop diabetes or other diseases.
Eli Lilly also faces suits from many states that want to be reimbursed for the cost of providing medical care to Medicaid patients who took Zyprexa. Most schizophrenia patients are unemployed and receive medical coverage through Medicaid. In all, states and the federal government spent about $1.5 billion on Zyprexa last year.
Lilly and Pennsylvania prosecutors are discussing an overall settlement of the state and federal investigations and lawsuits that would require Lilly to pay $1 to $2 billion in fines and restitution to federal and state governments.
The negotiations in Pennsylvania increase the importance of the Alaska trial. If Lilly wins, its hand will be strengthened in the settlement talks. If Alaska wins, other states and federal prosecutors are likely to demand even more money.