Judge urges Eli Lilly to settle Zyprexa lawsuit

A federal judge in New York is urging Eli Lilly and Co. to settle a multibillion-dollar lawsuit filed by insurance companies, unions and others who claim the pharmaceutical giant overpriced its top-selling drug Zyprexa and exaggerated its usefulness.

In a 290-page discussion draft, U.S. District Judge Jack Weinstein said he was prepared to grant class-action status for the lawsuit brought by Mid-West National Life Insurance Co. of Tennessee and others. He set a hearing on the proposed order for July 31.

Weinstein made it clear he believed there was enough evidence for the case to proceed to trial, and urged a settlement. Weinstein's draft cites two experts' estimates of damages, one of $4.9 billion and the other ranging from $3.9 billion to nearly $7.7 billion.

"A global settlement for the overpricing claims and any other claims is desirable," he wrote. "Legal disputes of this nature should be resolved as quickly and comprehensively as possible so that government, the medical profession, and drug manufacturers can get on with their main job - protecting the people's health effectively at the cheapest practicable cost."

The claims center on alleged overpricing and allegations that Indianapolis-based Lilly marketed the anti-psychotic drug for unapproved off-label uses.

"There is evidence that off-label use of Zyprexa was excessive and may have been encouraged by Lilly," Weinstein wrote in the draft filed Wednesday.

Lilly spokeswoman Tarra Ryker on Thursday denied that Lilly pushed Zyprexa for uses other than prescribed.

"Lilly does not promote off-label, ... but doctors do prescribe all kinds of medications off label," she said.

The plaintiffs claim Lilly violated the Racketeer Influenced and Corrupt Organizations Act through mail fraud, and Weinstein said there was enough evidence to take the claims to trial at which jurors would determine the excess pricing. The plaintiffs also claim Lilly disavowed secondary effects of the drug, including diabetes and weight gain.

"At this point there's no evidence that any plaintiffs have been harmed by the drug," Ryker said.

Ryker said Lilly attorneys still were reviewing details of the lengthy draft. She emphasized that the document was not a final ruling. "I think the main thing is that this is not an order, this is a discussion draft."

In March, Lilly and the state of Alaska announced a $15 million settlement in a lawsuit over the use of Zyprexa in the state's Medicaid program. Several other states have also sued the drugmaker.

Zyprexa brought in $4.8 billion in sales last year, accounting for 25 percent of the company's total sales. But Lilly also has faced layers of litigation over the drug. Besides the state cases, the company has spent more than $1 billion to settle product liability claims from patients over Zyprexa, and about 1,200 cases were still pending earlier this year.