Eli Lilly Settles More Zyprexa Lawsuits

INDIANAPOLIS, Jan. 4 -- Drugmaker Eli Lilly said Thursday that it will settle about 18,000 additional lawsuits alleging it did not adequately warn patients that its anti-psychotic medication Zyprexa carries a heightened risk of diabetes.

Lilly did not disclose the amount of the settlement but said in a statement that it would take a fourth-quarter settlement charge that's not expected to exceed $500 million.

In a June 2005 settlement, the Indianapolis company agreed to pay about $700 million to resolve more than 8,000 similar lawsuits involving Zyprexa, its top-selling drug.

Lilly spokeswoman Tarra Ryker said the new settlement covered more plaintiffs for less money because the 18,000 cases were less viable due to a 2003 Zyprexa labeling change, which addressed the drug's possible diabetes risk.

She said the company plans to go to trial, beginning in April, to defend itself against the 1,200 remaining claims, which she said are not being settled for "various reasons." Lilly declined to elaborate on the specific reasons.

Sales of Zyprexa, which is used to treat schizophrenia and bipolar disorder, accounted for 28 percent of Lilly's $3.86 billion in revenue in the most recent quarter.

Lilly has recently been the subject of New York Times articles that allege the drugmaker played down safety data on Zyprexa. Lilly contends the Times' stories relied on illegally obtained internal documents leaked by a plaintiff lawyer and used selected memos out of context.

Independent pharmaceuticals analyst Hemant Shah of HKS said the new settlement would help Lilly end negative publicity about the drug and allow Zyprexa to recover some of the market share it has lost in the past few years.

"They needed to get this drug off front pages -- get the negative press out of the way -- and one way you do that is settle so you don't have bad news coming out one case at a time," he said.

Most of the lawsuits claimed that before September 2003, the information on Zyprexa labels regarding the risk of hyperglycemia and diabetes was not adequately displayed. Hyperglycemia is a condition in which the blood has elevated sugar levels, typical in diabetics.

Lilly also faces lawsuits filed by the attorneys general of Alaska, Louisiana, Mississippi, New Mexico and West Virginia alleging that it marketed Zyprexa for unapproved uses or hid the risks of weight gain and diabetes, said company spokeswoman Carole Witsken Puls.