NR McDANIEL ANNOUNCES RECORD SETTLEMENT WITH PHARMACEUTICAL COMPANY

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February 16, 2010

FOR IMMEDIATE RELEASE
February 16, 2010
Contact: Melissa Moody (501) 682-3632


LITTLE ROCK- Today, Attorney General Dustin McDaniel announced that the State of Arkansas has settled its lawsuit filed in 2008 against the pharmaceutical company, Eli Lilly, over its promotion of the drug Zyprexa. Arkansas will receive $18,500,000 from the settlement. It is the State's largest pharmaceutical settlement and second largest civil settlement in the State's history.

Under federal law, it is a crime for pharmaceutical manufacturers to market their drugs for uses not approved by the FDA. Zyprexa, during the relevant time, was approved by the FDA only for treatment of schizophrenia and certain types of bipolar disorder in adults. The Attorney General's complaint alleges that Eli Lilly engaged in illegal and fraudulent off-label marketing of Zyprexa by marketing it for non-FDA approved uses, such as dementia, aggression, hostility, depression and generalized sleep disorders in adults. It is further alleged that Eli Lilly improperly marketed the drug for use in children. These practices, according to the Attorney General, constituted violations of the Arkansas Medicaid Act, the Arkansas Deceptive Trade Practices Act and other state laws.

"I am pleased with today's settlement as it results in compensation for lost Medicaid funds as well as penalties against the manufacturer for its improper behavior," said McDaniel. "When drug companies seek to circumvent FDA measures meant to ensure the safety of our citizens, it endangers lives and unnecessarily increases costs. This lawsuit and settlement should send the message that such actions won't be tolerated and those responsible will be held accountable."

In addition to the monetary payment, the settlement includes terms that aim to prevent Eli Lily from future fraudulent and deceptive practices, some of which include:

• Restrictions on promotional activities, including a prohibition on off-label marketing of Zyprexa;
• Restrictions on dissemination of medical information, including a requirement that medical staff, rather than marketing staff, develop and approve medical content for medical letters and references regarding Zyprexa;
• Requirement that Eli Lilly disclose information regarding grants, including continued medical education and a prohibition on grants for use in promoting Zyprexa;
• Requirement that Eli Lilly provide the Attorney General a list of speakers and consultants who are paid more than $100 for speaking or consulting;
• Requirement that Eli Lilly provide samples of Zyprexa only to health care providers whose clinical practice is consistent with the products labeling; and,
• Requirement that Eli Lilly register clinical trials and submit results regarding Zyprexa.

Approximately $1.4 million of Arkansas's settlement will be allocated to the Arkansas Medicaid Program as reimbursement for improper payments due to the off-label marketing of Zyprexa. The Attorney General's Consumer Education and Enforcement Fund will receive $2 million to support future consumer investigations and prosecutions. Approximately $15 million will be placed into the Medicaid Program Trust Fund. The fees for Arkansas's outside counsel, Bailey Perrin Bailey of Houston, are being paid separately by Eli Lilly, for a total of $2.775 million.

In 2009, Eli Lilly settled with multiple entities over its off-label promotion of Zyprexa and agreed to pay $1.42 billion in penalties, including $362 million to 32 states and the District of Columbia, $438 million to the federal government and $615 million to end a criminal probe. Additionally, the company agreed to plead guilty to a misdemeanor violation of the Food, Drug and Cosmetic Act for promoting Zyprexa amongst elderly populations as a dementia treatment.

Please contact Melissa Moody for a copy of the consent order memorializing this settlement.


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