Lilly Faces Billion-Dollar Settlement

February 6, 2008
Pharmaceutical Executive
Volume 0, Issue 0

Lilly is in the midst of settlement discussions with federal prosecutors over the pharma company?s off-label marketing of the antipsychotic medication Zyprexa. If settled, Lilly could be shelling out more than $1 billion in fines.

It looks like Lilly will be paying more than a billion dollars in fines for off-label marketing of Zyprexa, according to the New York Times.

Although approved for schizophrenia, Lilly sales reps were illegally pushing Zyprexa as a treatment for dementia and depression. It is unknown how many sales reps were involved, but documents show that reps were encouraged to inform doctors that the drug could be used for older patients with forms of dementia.

The Perils of Off-Label Marketing
There has been a rash of complaints surrounding sales tactics recently. In late January, former Amgen sales reps accused the company of firing them for refusing to engage in unethical sales practices, including off-label marketing of Enbrel and gathering patient information for consumer marketing.

"There have been a series of prosecutions for off-label marketing over the course of the last decade, and part of the problem is that the laws are pretty vague so it's hard to follow what's going on," said Mark Herrmann, partner at law firm Jones Day. "Other companies have paid big amounts to settle these types of claims, and you still see the prosecutions.

"An awful lot of people will tell you that the laws are so vague that you can't figure out what you should be doing—and you can't stand the risk of prosecution, so you settle."

Whoops
In an ironic twist, theTimes broke the news of the Zyprexa settlement, but it was actually a member of Lilly's legal team that accidentally tipped the Gray Lady off to the news.

Conde Nast Portfolioreported yesterday that a lawyer at Lilly's outside firm Pepper Hamilton accidentally sent a memo with all the pertinent information regarding the settlement to Alex Berenson, a reporter at the Times, instead of the her co-counsel Bradford Berenson.