Stephen Sheller, a Philadelphia-based plaintiffs lawyer, was on the phone with Nina Gussack of Pepper Hamilton on Wednesday at 2 p.m. hammering out the final details of a record-making settlement against Eli Lilly & Co. for its fraudulent marketing of the antipsychotic drug Zyprexa.
The two lawyers were discussing claims brought by six whistle-blowers, all former Eli employees, against the company for wrongful termination, Sheller says.
Those six employees will split more than $100 million as part of a settlement the company and attorneys on the matter announced today. It’s the largest false claims settlement in U.S. history, Sheller says.
That answers one question that was hanging out there yesterday after reports of an imminent settlement surfaced. Today, we got two more answers. First, Eli Lilly will in fact admit wrongdoing; the company has agreed to plead guilty to a misdemeanor criminal charge of illegally promoting Zyprexa and pay a $615 million fine. They will also pay $800 million in civil penalties to end civil investigations of Medicaid and Medicare fraud conducted by the federal government and 30 states, Bloomberg says. (The six whistle-blowers get 18 percent of that $800 million).
Lilly has now paid about $2.5 billion to settle various state, federal, and individual plaintiffs lawsuits related to off-label marketing of Zyprexa and the drug’s side effects. Still, that’s a fraction of the nearly $40 billion the drug has brought in since its approval in 1996, the New York Times says.
But the settlement leaves the door open for hundreds of claims against Lilly to proceed, Sheller says. A dozen states, including Pennsylvania, Connecticut, and West Virginia, will continue to pursue suits against Lilly for the fraudulent marketing of Zyprexa, and about 140 individual plaintiffs have pending suits that are not a part of today’s settlement.
Federal prosecutors claimed Lilly promoted Zyprexa for use with unapproved symptoms, including dementia and minor bipolar disorder. (The drug is meant for schizophrenia and serious bipolar symptoms). Doctors have leeway to prescribe drugs for so-called off-label use, but drug companies are not allowed to promote it for such use.