Eli Lilly and Co., one of the nation's largest pharmaceutical manufacturers, pleaded guilty today to criminal charges of failing to notify the government of numerous deaths and injuries overseas among users of Oraflex, an arthritis drug briefly sold in this country.
Under a plea-bargain agreement, Lilly entered guilty pleas to 25 misdemeanor counts, and U.S. District Court Judge S. Hugh Dillin imposed the maximum penalty, a $25,000 fine.
Dr. W. Ian H. Shedden, a former Lilly senior research executive and vice president, pleaded no contest to 15 misdemeanor counts, and was fined $15,000.
Lilly and Shedden each was charged with 10 counts of failing to report to the FDA information that Lilly received in 1981 and 1982 on the safety of Oraflex. That period covers the U.S. pre-marketing phase, when the drug was in legally experimental status, and the time after the FDA approved it for the domestic market. In addition, Lilly was accused in 15 counts and Shedden in five of introducing Oraflex into interstate commerce with labeling that failed to reveal important facts about its safety.
Judge Dillin said there was no doubt that the defendant had violated Food and Drug Administration regulations, but said he was satisfied that the violations were "totally inadvertent."
Defense lawyers and Shedden himself told the court that they had acted "in good faith" and without intent to violate the law. A showing of intent is required to prove felony, but not misdemeanor violations.
In a letter to shareholders dated today, Lilly Chairman Richard D. Wood said: "The [Justice] Department has made no charge that Lilly . . . intentionally violated the law in its handling of the Oraflex matter."
The reporting regulation requires a manufacturer to report within 15 days any unexpected side effects associated with a drug.
In a statement of facts given to the court by Vicki G. Golden, of the Justice Department's Office of Consumer Litigation, the government said that Lilly "was kept regularly informed by telex and telephone of overseas adverse reactions. . . . " The statement said, for example, that Shedden and two other Lilly physicians in Indianapolis received a British government report in January 1982 that listed 26 serious liver disorders, including two fatal ones, and 23 other fatalities. This was about three months before the FDA approved Oraflex for sale in this country.
Lilly began to sell the arthritis drug as Opren in the United Kingdom in October 1980. The FDA approved Oraflex for U.S. sale on April 19, 1982. Lilly put it on the market a month later with a $12 million media campaign, including two press conferences and distribution of 6,100 press kits that the FDA later found to be "false and misleading." Over the next 14 weeks, U.S. Oraflex revenue totaled $14 million.
Meanwhile, after Oraflex was approved by the FDA, deaths and injury -- mainly liver and/or kidney damage and jaundice in the elderly, began to be reported in British medical journals. In Washington, the nonprofit Public Citizen Health Research Group, founded by Ralph Nader, petitioned the Department of Health and Human Services to ban Oraflex.
By August 1982, the reported death toll was 62 in the United Kingdom, among an estimated 750,000 Oraflex users, and 11 in the United States, among about 250,000 users. The toll eventually reached 96 in the United Kingdom. At least 26 U.S. patients died from liver or kidney failure after Oraflex went on sale. The Justice Department statement said more than 200 other patients suffered non-fatal liver and kidney failure.
On Aug. 4, 1982, Britain banned the drug and, within hours, Lilly withdrew it worldwide.
In June 1983, Dr. Shedden testified in a civil lawsuit that he had known of 29 overseas deaths before the FDA released Oraflex. But, he said, he saw "no necessity" to report the deaths because none of them "was unexpected in relation to this class of chemical agent."
Lilly did not tell the FDA of most of the overseas deaths until several weeks after the withdrawal of Oraflex in August 1982.
Shedden, 54, a British citizen, resigned from Lilly in mid-1983 to become research director of the Glaxo Group, Britain's largest drug company.
Lilly Chairman Wood said in December 1983 that the company had had "inadequate" systems in place "to ensure that all reports of adverse reactions received abroad prior to U.S. approvals are forwarded to Indianapolis and submitted to FDA."
Both Lilly and the FDA, which is revising its regulations, have said it was an industry practice not to report serious and even alarming adverse reactions to a drug sold overseas while in an experimental stage here.