Wednesday, March 26, 2008

Lilly Settles with the State of Alaska over Zyprexa Claims

Rather than proceed with trial, Eli Lilly has entered into a $15 million settlement with the State of Alaska in the State’s Medicaid lawsuit over Zyprexa. The State’s suit involved claims that it had to pay for treatment of Zyprexa-related health problems such as diabetes and weight gain. The Wall Street Journal reports some remarks by the Alaska judge:

Anchorage Superior Court Judge Mark Rindner said on the bench, without jurors present, that without lawsuits like the one the state of Alaska brought, claims that drugs cause health problems "might well go unaddressed."

Judge Rindner was reacting to an assertion by Lilly lawyer George Lehner that drug regulation is up to the federal Food and Drug Administration, not any state. He argued that Alaska's Unfair Trade Practices and Consumer Protection Act shouldn't apply to drugs.

But Judge Rindner said evidence presented by the state had established that the FDA "isn't capable of policing this matter."

The Wall Street Journal’s Health Blog adds:

The settlement means the end of an Anchorage jury trial that people were watching as a bellwether, to get a read on how Lilly might fare in negotiations with other states and with the feds, which have leveled similar allegations.

The outcome looks pretty good for the company. Before the jury trial started, the WSJ reported that Lilly floated a settlement offer of about $2 million, while Alaska was looking for something closer to $200 million.

ECB

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