Mass Tort Litigation Blog

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

Zyprexa Hearings Broadcasted

A short order by Judge Weinstein in the Zyprexa MDL on March 11, 2008, permitted cameras and recording equipment during the upcoming March 20 hearing. Here’s a brief excerpt of Judge Weinstein’s order:

Video broadcasts assist in opening the courts to the public. Since tens of thousands of individuals, organizations and governmental entities all over the United States are parties to, or affected by, the instant litigation, approval of the application is in the public interest. No reason has been suggested to depart from the policy that, in general, the public should be permitted and encouraged to observe the operation of its courts in the most convenient manner possible, so long as there is no interference with the due process, the dignity of litigants, jurors and witnesses, or with other appropriate aspects of the administration of justice.

3/11/2008 N.Y.L.J. 32, (col. 3) (MDL Case No. 04-MD-1596).
As I’ve noted in previous articles (see here and here), transparency in matters affecting the public (such as large scale pharmaceutical cases) is vital for deterrence, public education, marketplace and social accountability, and judicial legitimacy. This transparency traditionally comes through published written opinions, but it’s certainly interesting to observe the rise of these new developments. It’s not clear from the text of the order which hearing will be broadcasted. There are a few significant hearings scheduled in March. Notably, there’s a hearing on motions to dismiss and motions for summary judgment in the securities lawsuits, shareholder derivative lawsuit, and a class certification motion on the third-party payors lawsuit scheduled for March 27 and March 28 (info available at 2008 WL 619172 (E.D.N.Y.)).

ECB

FDA Says Long-Acting Form of Zyprexa Effective, But Sedating

Article in the Wall Street Journal -- Lilly Gets Support for Version Of Schizophrenia Treatment, by Jennifer Corbett Dooren.  Here's an excerpt:

A Food and Drug Administration official said that a long-acting, injectable form of Eli Lilly & Co.'s top-selling drug Zyprexa was effective at treating schizophrenia, but caused "profound sedation" in certain patients.

A memo written by Thomas P. Laughren, the FDA's psychiatry products division director, and posted on the agency's Web site, said clinical studies of the drug showed 24 out of 1,915 patients exposed to the long-acting form of Zyprexa suffered from profound sedation after receiving the injection. The FDA said the sedation typically lasted about one to three hours.

The long-acting form of Zyprexa faces a review by an FDA panel of outside medical experts tomorrow. The panel will be asked if that form of Zyprexa has been shown to be "acceptably safe" and effective for the treatment of schizophrenia. The panel's decision will amount to a recommendation about whether the FDA should approve the product. The FDA usually follows its panel's advice but isn't required to.

BGS

Reports of Lilly Reaching Settlement with Federal Prosecutors

With all of the attention Merck’s been receiving lately, it’s nice (in an abstract sense) to see some headlines about Zyprexa. The New York Times reported today that Eli Lilly is discussing the possibility of settling civil and criminal investigations by federal prosecutors, with Lilly paying more than $1 billion to federal and state governments. Here’s a bit of the New York Times piece, Lilly in Settlement Talks with U.S.:

Zyprexa has serious side effects and is approved only to treat people with schizophrenia and severe bipolar disorder. But documents from Lilly show that between 2000 and 2003, Lilly encouraged doctors to prescribe Zyprexa to people with age-related dementia, as well as people with mild bipolar disorder who had previously been diagnosed only as depressed.

Although doctors can prescribe drugs for any use once they are on the market, it is illegal for drug makers to promote their medicines any uses not formally approved by the Food and Drug Administration.

Lilly may also plead guilty to a misdemeanor criminal charge as part of the agreement, the people involved with the investigation said. But the company would be allowed to keep selling Zyprexa to Medicare and Medicaid, the government programs that are the biggest customers for the drug. Zyprexa is Lilly’s most profitable product and among the world’s best-selling medicines, with 2007 sales of $4.8 billion, about half in the United States.

Lilly would neither confirm nor deny the settlement talks.

"We have been and are continuing to cooperate in state and federal investigations related to Zyprexa, including providing a broad range of documents and information," Lilly said in a statement Wednesday afternoon. "As part of that cooperation we regularly have discussions with the government. However, we have no intention of sharing those discussions with the news media and it would be speculative and irresponsible for anyone to do so."

Lilly also said that it had always followed state and federal laws when promoting Zyprexa.

The Lilly fine would be distributed among federal and state governments, which spend about $1.5 billion on Zyprexa each year through Medicare and Medicaid.

The fine would be in addition to $1.2 billion that Lilly has already paid to settle 30,000 lawsuits from people who claim that Zyprexa caused them to suffer diabetes or other diseases. Zyprexa can cause severe weight gain in many patients and has been linked to diabetes by the American Diabetes Association.

Stay tuned.

ECB

Blog Roundup

Drug and Device Law Blog has posts on Tort Reform Works in Texas; Notes from the Scientific Underground; Preemption Scorecards; The Vanishing Trial; and Riegel Survives.

Food Law Prof Blog has posts on Cargill meat recall based on e.coli; Bush signs FDA Amendments Act of 2007; More on the Recall Process; CRS Report on Recall Authority; Roberts on Role of Regulation in Minimizing; Thinking About Recalls; and  Yet another meat recall -- this one enough for one picnic.

Point of Law has posts on Refik Kozic v. Merck; Absurd RI lead abatement plan developed; 
"Defendants See a Case of Diagnosing for Dollars"; and Zyprexa protective order enforcement VI: Egilman settlement.

Torts Prof Blog has posts on Topps Meat Recall: Let the Filing Begin; 9/11 Opt-Outers Settle; Lead Everywhere; Stent Safety and Patents;  USSC Denies Cert In Engle (Tobacco) Case; FDA Warns Against Use of Cold Meds by Toddlers; and Sebok's Part II on NJ Supreme Court's Vioxx Ruling.

BGS

Blog Roundup

Drug and Device Law Blog has an interesting post on causation in failure-to-warn cases, and another post elaborating after reader comment.

TortsProf Blog flags another story on Zyprexa from Alex Berenson of the New York Times.

Products Liability Prof Blog posts a link to a story on a meager punitive verdict in a Ford rollover case, delivered after Ford noted its layoffs and losses.

Civil Procedure Prof Blog has a post on the 2007 U.S. Chamber of Commerce rankings of states for tort law climate.

Point of Law has a post celebrating a California opinion questioning the oursourcing of government lawsuits to plaintiffs lawyers.

BGS

Congressional Panel Examines Off-Label Use of Drugs and Medical Devices

Article in the Wall Street Journal -- Congressional Panel to Study Off-Label Use of Stents, Drugs, by Keith J. Winstein.  Here's an excerpt:

A congressional committee is looking into the "off label" use of drugs and heart stents, examining the widespread practice in which doctors prescribe medical products to patients outside the boundaries approved by the Food and Drug Administration.

Boston Scientific Corp. and Johnson & Johnson's Cordis unit, the only makers of drug-coated stents sold in the U.S., were asked to submit marketing materials and clinical data to the House Committee on Oversight and Government Reform on Wednesday. About 60% of drug-coated stents, which prop open clogged arteries, are used off-label. For example, manufacturers haven't rigorously tested their stents in patients who have had heart attacks, but stents are commonly given to such patients. Doctors are allowed to prescribe stents to off-label patients, but manufacturers can't encourage off-label use.

The committee's chairman, California Democrat Henry Waxman, also asked for marketing materials from three drug companies that have come under scrutiny over whether they promoted their products for unapproved uses: Eli Lilly & Co., whose antipsychotic drug Zyprexa had $4.36 billion in sales last year and was the company's best seller; AstraZeneca PLC, which makes another depression drug, Seroquel; and Cephalon Inc., whose marketing of painkillers has been under investigation by the Connecticut attorney general.

BGS

Weinstein on Zyprexa Document Leak

Judge Jack Weinstein yesterday faulted the attorney, expert, and reporter involved in disseminating confidential documents that were covered by a protective order in the Zyprexa multidistrict litigation.  Here's a link to the court's order, and an excerpt from the story in today's New York Law Journal:

A federal judge Tuesday rebuked an attorney, an expert witness and a reporter for The New York Times for violating a protective order in a mass-tort action concerning the health risks of Zyprexa, an anti-psychotic drug manufactured by Eli Lilly.

Eastern District of New York Judge Jack B. Weinstein, said the men -- Alaska attorney James Gottstein; Dr. David Egilman, an expert hired by plaintiffs; and Alex Berenson, of the Times -- had "conspired to obtain and publish documents in knowing violation of a court order not to do so, and that they executed the conspiracy using other people as their agents in crime."

The documents in question were among millions of internal e-mails and files given to attorneys representing 30,000 plaintiffs who sued Eli Lilly over Zyprexa, a schizophrenia drug that patients alleged caused obesity and diabetes. Most of the suits involving Zyprexa have been settled for a total of $750 million, according to reports.

The documents were covered by a protective order, and Weinstein said all three men knew about the order.

The judge alleged, based on testimony from Gottstein, that Berenson and Egilman had devised a way to circumvent the order: Have Gottstein subpoena Egilman for a case in Alaska, and then send the documents to Berenson for an exclusive story.

Berenson relied on the documents for several articles he wrote in December alleging that Lilly played down data that found Zyprexa increased the risk of obesity and diabetes in patients.

Although the court called Berenson's conduct "reprehensible," it imposed its injunction against further dissemination only on Gottstein and Egilman.

HME

Zyprexa Reporter Declines Invitation

Yesterday, New York Times reporter Alex Berenson declined Judge Jack Weinstein's invitation to testify concerning the acquisition and disclosure of sealed documents in the Zyprexa litigation.  Torts Prof has a copy of the letter from the Times respectfully declining the invitation with an invocation of First Amendment principles and freedom of the press, and Point of Law comments.

HME

Zyprexa Documents: Judge Invites NYT Reporter to Appear

The fallout from the disclosure of Zyprexa documents continues and just gets more interesting.  Torts Prof has the story of Judge Jack Weinstein's "invitation" yesterday to New York Times reporter Alex Berenson, asking him to voluntarily appear on February 7 to explain how he obtained the sealed documents.  According to Judge Weinstein's order, a copy of which may be found on Torts Prof, "This invitation is intended to permit Alex Berenson to confront testimony received at a hearing in this court on January 16-17, 2007 implicating him in a conspiracy to obtain and publish confidential documents sealed by this court."  The order includes relevant excerpts from the hearing transcript referencing Alex Berenson, James Gottstein, and David Egilman, and instructs Lilly to "serve a copy of this invitation" on Berenson.

HME

Zyprexa Hearing Transcript

Torts Prof has highlights from the hearing on the disclosure of the Zyprexa documents.

HME

Tracing the Release of Eli Lilly Zyprexa Documents

An article in the New York Times -- Documents Borne by Winds of Free Speech, by Tom Zeller, Jr. -- details the release of the controversial Eli Lilly Zyprexa documents.  (On the controversial documents, see our prior posts on December 16, December 18, December 19, and December 21; and see this post with links to Eli Lilly's responses.)  Here's an excerpt from the article:

It all began with Dr. David Egilman of Massachusetts, who was a consulting witness in ongoing litigation against Lilly. Dr. Egilman had in his possession a trove of internal Lilly documents — not all of them flattering to the company — sealed by the court as part of that litigation.

Comes James B. Gottstein, a lawyer from Alaska, who was pursuing unrelated litigation for mentally ill patients in his state. He somehow got wind (and precisely how is the subject of separate legal jujitsu) that Dr. Egilman had some interesting documents.

Mr. Gottstein sends Dr. Egilman a subpoena for copies. Hell begins breaking loose.

In a letter dated Dec. 6, Dr. Egilman informed Lilly’s lawyers, as was required by the order sealing the documents, that he had been subpoenaed. Lilly’s lawyers expressed their deep displeasure in a Dec. 14 letter to Mr. Gottstein, and politely told him to back off. In a response a day later, Mr. Gottstein informed them, among other things, that it was too late, and that some of the material had already been produced.

It seems Mr. Gottstein was also apparently in a sharing mood, which is how hundreds of pages ended up with a Times reporter, Alex Berenson — and about a dozen or so other individuals and organizations.

This is also how copies of the documents ended up on various Web servers — and when that happened, things changed. While surely painful for Lilly, the online proliferation began flirting with some bedrock principles of free speech and press, as well as some practical realities that looked a fair bit like toothpaste out of its tube.

Nonetheless, last month, United States District Judge Jack B. Weinstein ordered Mr. Gottstein to provide a list of recipients to whom he had distributed the contraband pages, and to collect each copy back.

The New York Times article also quotes William Childs, editor of the TortsProf Blog, which is affiliated with this blog through the Law Professor Blogs Network:

On his TortsProf blog (snipurl.com/Torts), William G. Childs, an assistant professor at Western New England School of Law in Springfield, Mass., put it this way in a headline: “Judge Tries to Unring Bell Hanging Around Neck of Horse Already Out of Barn Being Carried on Ship That Has Sailed.”

A similar problem occurred in the tobacco litigation in late 1990s, when, if I recollect correctly, the judge in the Minnesota Attorney General case ruled that whole categories of types of documents were not privileged, based on a review by the special master of only a sample of the documents in each category.  Disagreeing with the judge's approach to examining privilege (there is much to disagree with in such a privilege-review-by-sample approach),the tobacco defendants then continued to keep trying to claim privilege on the other documents across the country.  Ultimately, I believe Congress subpoenaed the documents and put them on the internet, and plaintiffs argued against defendants' privilege assertions by saying the cat was out of the bag (add that to William Childs' animal metaphors).  While at some point documents may become newsworthy and unable to be recovered (especially in the internet age), any such inappropriate and contested release of documents to the public should not be deemed to affect how courts treat the documents for litigation and trial purposes, e.g., finding implied waiver of privilege.

BGS

Zyprexa links

Torts Prof has updated links to information on the Zyprexa documents brouhaha (disclosure of documents by expert David Egilman and dissemination by Alaska plaintiffs' lawyer James Gottstein).

HME

Zyprexa Settlements: Round Two

Eli Lilly announced today that it is settling 18,000 Zyprexa claims.  In 2005, the company settled about 8000 claims in a mass settlement in the MDL before Judge Jack Weinstein.  Here's an excerpt from a Bloomberg report by Joe Schneider and Margaret Cronin Fisk -- Eli Lilly Settles Zyprexa Suits With 18,000 Patients:

Eli Lilly & Co. settled 18,000 claims by patients who sued over diabetes and other side effects of the top-selling antipsychotic drug Zyprexa, an accord that will reduce fourth-quarter profit by as much as $500 million.

The agreements don't resolve 1,200 patient claims or four state-government lawsuits seeking hundreds of millions of dollars in damages. The accords follow a June 2005 settlement of 8,000 U.S. claims that cost Lilly $700 million to resolve -- about $87,500 per patient. Payments for the new settlements, a confidential amount, will be ``substantially less'' than the 2005 figure, Indianapolis-based Lilly said.

Lilly's announcement notes that the company reached the settlement with fourteen plaintiffs' firms or groups of firms, and that "the exact number of claimants covered by this settlement cannot be determined, but is estimated to be more than 18,000, representing the vast majority of existing Zyprexa product liability litigation."

The series of non-class aggregate settlements distinguishes the Zyprexa litigation from cases in which parties have negotiated settlements on a class action basis.  This blog has noted previously Judge Weinstein's treatment of the earlier Zyprexa MDL settlement as a "quasi-class action."

To me, one of the most interesting aspects of the Zyprexa litigation is Lilly's decision to settle claims wholesale without a history of verdicts, in sharp contrast to Merck's strategy in the Vioxx litigation.  Zyprexa, an antipsychotic drug, differs from Vioxx in that it remains on the market.  Therefore, the potential cost to Lilly of adverse trial publicity includes not only its effect on the course of the litigation, but also its effect on patients and physicians.  Zyprexa offers a powerful example of the significance of non-litigation factors on a mass tort defendant's settlement strategy.

HME

Eli Lilly Responses to NYT Articles on Zyprexa Misconduct

Point of Law notes that Eli Lilly has responded to the New York Times articles discussing Zyprexa misconduct.  Here are links to Eli Lilly's response to the 12/17 NYT article, Eli Lilly's response to the 12/18 NYT article, and Eli Lilly's response to the 12/21 NYT article.

BGS

More Questions Based on Eli Lilly Zyprexa Documents

Another investigative article in the New York Times about Eli Lilly's conduct with Zyprexa -- Disparity Emerges in Lilly Data on Schizophrenia Drug, by Alex Berenson:

For at least a year, Eli Lilly provided information to doctors about the blood-sugar risks of its drug Zyprexa that did not match data that the company circulated internally when it first reviewed its clinical trial results, according to company documents.

The original results showed that patients on Zyprexa, Lilly’s pill for schizophrenia, were 3.5 times as likely to experience high blood sugar levels as those taking a placebo, according to a February 2000 memo sent to top Lilly scientists. The memo is one of hundreds of internal Lilly documents provided to The New York Times by a lawyer in Alaska who represents mentally ill patients.

But the results that Lilly eventually provided to doctors until at least late 2001 were very different. Those results indicated that patients taking Zyprexa were only slightly more likely to suffer high blood sugar as those taking a placebo, or an inactive pill.

Another Lilly report, from November 1999, shows that Lilly found after examining 70 clinical trials that 16 percent of patients taking Zyprexa for a year gained more than 66 pounds.

The company did not publicly disclose that figure, instead focusing on data from a smaller group of clinical trials that showed about 30 percent of patients gained 22 pounds.

BGS

NYT on Eli Lilly and Zyprexa

Editorial in the New York Times -- Playing Down the Risks of a Drug.  Here's an excerpt:

It was bad enough when studies showed that the newest and most heavily promoted drugs for treating schizophrenia weren’t worth their high cost. Now the disturbing tale of their excessive use has taken a tawdry turn with revelations that Eli Lilly, a pharmaceutical giant, has consistently played down the risks of its best-selling antipsychotic drug, Zyprexa, and has promoted it for unapproved uses.

The details were spelled out in The Times this week by Alex Berenson, who drew on hundreds of internal Lilly documents that have surfaced in legal proceedings. Although Lilly says the documents present an inaccurate picture, they offer persuasive evidence that the company engaged in questionable behavior to prop up its best-selling drug, which creates almost 30 percent of Lilly’s revenue.

BGS

Eli Lilly Allegedly Marketed Zyprexa for Unapproved Uses

Another interesting, detailed, and troubling article in the New York Times about Eli Lilly and Zyprexa -- Drug Files Show Maker Promoted Unapproved Use, by Alex Berenson:

Eli Lilly encouraged primary care physicians to use Zyprexa, a powerful drug for schizophrenia and bipolar disorder, in patients who did not have either condition, according to internal Lilly marketing materials.

The marketing documents, given to The New York Times by a lawyer representing mentally ill patients, detail a multiyear promotional campaign that Lilly began in Orlando, Fla., in late 2000. In the campaign, called Viva Zyprexa, Lilly told its sales representatives to suggest that doctors prescribe Zyprexa to older patients with symptoms of dementia.

A Lilly executive said that she could not comment on specific documents but that the company had never promoted Zyprexa for off-label uses and that it always showed the marketing materials used by its sales representatives to the Food and Drug Administration, as required by law.

BGS

Documents Allegedly Show Eli Lilly Downplayed Zyprexa Risks

Interesting and detailed article in the New York Times -- Eli Lilly Said to Play Down Risk of Top Pill, by Alex Berenson, pertaining to documents that allegedly show manipulation of Zyprexa information by Eli Lilly sales agents.  Here's an excerpt:

The drug maker Eli Lilly has engaged in a decade-long effort to play down the health risks of Zyprexa, its best-selling medication for schizophrenia, according to hundreds of internal Lilly documents and e-mail messages among top company managers.

The documents, given to The Times by a lawyer representing mentally ill patients, show that Lilly executives kept important information from doctors about Zyprexa’s links to obesity and its tendency to raise blood sugar — both known risk factors for diabetes.

Lilly’s own published data, which it told its sales representatives to play down in conversations with doctors, has shown that 30 percent of patients taking Zyprexa gain 22 pounds or more after a year on the drug, and some patients have reported gaining 100 pounds or more. But Lilly was concerned that Zyprexa’s sales would be hurt if the company was more forthright about the fact that the drug might cause unmanageable weight gain or diabetes, according to the documents, which cover the period 1995 to 2004.

Zyprexa has become by far Lilly’s best-selling product, with sales of $4.2 billion last year, when about two million people worldwide took the drug.

BGS

Zyprexa Settlement Approved

Article from Sept. 28 by Jeff Swiatek of The Indianapolis Star -- $700M Zyprexa Deal OK'd by Judge:

A federal judge has given his blessing to Eli Lilly and Co.'s complex $700 million settlement with Zyprexa patients, who should see the money soon after lawyers and Medicare and Medicaid take their cuts.

...

The order by Judge Jack B. Weinstein, of federal court in Brooklyn, N.Y., posted on the court's Web site Tuesday, is one of the last steps in carrying out the private settlement by Lilly to deal with thousands of lawsuits and potential lawsuits against it over its antipsychotic Zyprexa.

Patients alleged the schizophrenia drug, Lilly's best-selling product, caused diabetes-related symptoms, including weight gain and high blood-sugar levels.

Payments will range from $5,000 lump-sum awards to more than $100,000 per person.

Notably, the Zyprexa deal is a mass aggregate settlement of about 8000 individual claims in the MDL, rather than a class action settlement.  Although it's not a class action and therefore not governed by the judicial approval requirement of Rule 23(e), Judge Weinstein took the unusual step of reviewing the settlement, and also capped attorneys' fees.  Another interesting aspect of the deal, according to the Indianapolis Star article, is that it includes a reimbursement plan for Medicare's and Medicaid's share of the settlement funds.

HME

NJ Mass Tort Designation for Risperdal, Seroquel, and Zyprexa

Last month, New Jersey centralized its state court litigation over the anti-psychotic drugs Risperdal, Seroquel, and Zyprexa.  Here's the Notice to the Bar and the accompanying announcement:

On September 11, 2006, the Supreme Court designated all litigation, pending and future, statewide involving the drugs, Risperdal, Seroquel and Zyprexa as mass tort and assigned it for centralized, coordinated handling to the Hon. Bryan D. Garruto in the Middlesex vicinage. This litigation involves claims filed largely against the manufacturers of these pharmaceuticals for alleged damages and injuries arising from their use.

The state supreme court designated litigation over the three drugs as a single mass tort "for coordinated and centralized management purposes."  By contrast, in the federal courts, the Judicial Panel on Multidistrict Litigation designated separate MDL's for Zyprexa (E.D.N.Y.) and Seroquel (M.D. Fla.).

HME