Zyprexa Hole Gets Deeper

May 1, 2007

By Evelyn Pringle

Washington, DC: On March 7, 2007, Montana's attorney general, Mike McGrath, filed the latest Medicaid fraud lawsuit against Eli Lilly, under the False Claims Act, for illegally promoting the sale of the atypical antipsychotic drug Zyprexa for off-label uses and concealing its link to serious health problems.

Considered to be one of the most effective tools available to combat Medicaid and Medicare fraud, the False Claims Act imposes treble damages and civil penalties on companies that knowingly present false claims for payment to government programs.

To date, drug companies are the largest source of FCA recoveries, totaling $5.7 billion between 2001 and 2006, according to the US Department of Justice.

When the FDA approved Zyprexa in 1996, it was approved only to treat adults with the most serious of mental illnesses, schizophrenia and bipolar disorder, because the drug had undergone the required testing and was found safe and effective for those disorders.

Zyprexa was not approved for any other conditions because Lilly could not prove to the FDA that it was safe and effective for any other condition. However, Lilly took this powerful antipsychotic and promoted it for so many unapproved uses that it became the company's number one best-selling product.

"Unapproved" or "off-label" refers to the use of a drug that has not been approved as safe and effective and includes not only treating a condition not listed on the label, but also treating an approved condition for a longer duration of time, or in combination with other drugs, or at a different dosage, or with a different patient population such as children or the elderly.

Public health care programs pay for drugs if the drug is prescribed by a physician as medically necessary, regardless of whether the use is approved or off-label, but drug companies are barred from influencing doctors to prescribe a drug for off-label use.

Under the federal and state False Claim Acts, promoting drugs for off-label use is illegal because it causes the presentation of false claims to public programs when doctors to write prescriptions for uses that they otherwise would not.

In the Montana lawsuit, Mr McGrath alleges that Lilly made Zyprexa the company's top-selling drug by marketing it for use by patients with dementia, depression, autism and other non-approved uses.

According to the complaint, Lilly created a 280-person sales force to promote Zyprexa to long-term care facilities to maximize its off-label use by the elderly. It also says, "Lilly management participated, encouraged and authorized the unlawful payment of illegal kickbacks to physicians in order to continue generating sales of Zyprexa."

This case is unique because it seeks reimbursement on behalf of all Montana citizens who purchased Zyprexa since it came on the market in 1996, including patients who were not on public health care programs, because under the laws of that state, the attorney general can sue on behalf of all consumers and request treble damages and attorneys' fees.

Lilly's fleecing of pubic health care programs through the over-prescribing of Zyprexa demonstrates how greed breeds more greed. First the company set up funnels for tax dollars to pay for the cost of Zyprexa for patients in state institutions and prisons by influencing policy makers in key positions in state governments.

Lilly then went after more tax dollars by infiltrated the nursing home industry to influence doctors to prescribe Zyprexa off-label to elderly citizens for symptoms of dementia who were covered by Medicare.

Next, Lilly recruited kids through corrupted foster care systems across the country by getting doctors to prescribe Zyprexa off-label to children as young as 2, who were covered by public programs for uses such as mood and behavioral disorders, ADD and autism.

But by and far, the major marketing coup was Lilly's ability to compromise a select group of state officials who controlled what are known as drug formularies and had the power to make Zyprexa the first line of treatment for certain conditions for all patients covered by Medicaid and Medicare.

Once that was achieved, since most private insurance companies follow the government's approved drug lists when paying for drugs, Lilly killed 2 birds with one big boulder.

Through this ingenious marketing scheme, Zyprexa became the highest drug expense to state Medicaid budgets all over the country and is now considered to be the drug most to blame for bankrupting Medicaid programs.

Unfortunately, a rarely-mentioned travesty caused by the over-prescribing of this schizophrenia drug, is that an infinite number of people, some as young as 2, have been given a life sentence of mental illness that will disqualify them for employment in a wide variety of fields including law enforcement, the military and the health care industry, to name just a few. After all, employers cannot hire crazy people to handle fire arms or mentally-disturbed healthcare professionals to treat patients.

For 30 years, David Oaks, director of MindFreedom, an international human rights organization, says he has been warning that the psychiatric drug industry would target the general public. "The issue of psychiatric drug fraud today," he says, "is about one's neighbor, co-worker, teacher, friend and family member."

But Mr Oaks says that, as the truth leaks out, the public is becoming more and more outraged over the drugging of our young people.

Attorney Barry Turner, a professor of Law and Ethics in the UK, is also outraged. "That any country that calls itself civilized," he says, "could allow the deliberate stigmatizing of perhaps millions of children followed by giving them drugs that will damage their endocrine systems is appalling."

"The real tragedy," he says, "will be the vast social cost of creating a generation of outcasts, unemployable, living on welfare and perpetuating the myth that everyone is mentally disturbed in one way or another."

Neurologist Dr Fred Baughman, a recognized expert on psychiatric drugs and author of the book, "ADHD Fraud," says the pharmaceutical industry has corrupted doctors in all fields of medicine. "It's not just psychiatry," he says, "the whole medical profession is diagnosing people mentally ill for profit."

Thus far, Lilly has agreed to pay about $1.2 billion to settle cases without any public trials, and by doing so, Lilly was able to use court orders and confidentiality clauses to prevent the litigants from revealing information about the health risks to patients taking drug or doctors prescribing it.

According to Mr Turner, Lilly needed to bury the documents under court orders "to staunch the hemorrhage of evidence that will cause it to pay out possibly the largest FCA penalties in history."

His point was well evidenced in December 2006, when Lilly made a spectacle of itself in a 2-month court battle after some of the sealed documents surfaced in another case and were quoted by reporter Alex Berenson in front-page articles in the New York Times.

The company immediately marched into court to get injunctions against everyone and their brother, with orders to return the documents in an attempt to get them back under seal. However, once the "hemorrhage" began, there was no way to stop it, in large part thanks to the new age of the internet.

As it turns out, Lilly had good reason to worry. With the disclosure of those documents, the public learned that Lilly could have warned the public about the serious health risks of Zyprexa, and countless patients could have been saved. As early as November 2005, FDA Drug Safety Officer Dr David Graham, estimated that Americans suffer 62,000 deaths per year due to off-label use of atypicals, in USA Today.

More recently, during a Senate hearing in February 2007, Dr Graham focused on one sub-population of victims and said that the off-label use of atypicals with nursing home residents kills roughly 15,000 people a year.

For instance, one of the sealed Lilly documents was written 6 years ago by a team of doctors hired by Lilly to assess the diabetes risk associated with Zyprexa. This document proves beyond any doubt that Lilly was aware of the risk and that the doctors even told Lilly that, "unless we come clean on this, it could get much more serious than we might anticipate."

However, these doctors could not have known that Lilly had an ace in the hole and could rely on the court system to suppress their study if the time ever came when people suspected that their diabetes was caused by Zyprexa and sued Lilly.

The fact that Lilly did have that ace in the hole is probably the most alarming revelation that came out during the battle over the release of the Zyprexa documents, at least for people naive enough to still believe there is an open court system in the US.

The underlying cases involved about 26,000 lawsuits, and the judge who presided over the litigation granted Lilly a court order to permanently seal from public view more than 11 million documents that were disclosed in litigation.

The sealed documents substantiated every allegation made by the plaintiffs, including that Lilly knew about Zyprexa's link to the weight gain, high blood sugar levels and diabetes when the drug was approved in 1996, and that Lilly had engaged in an elaborate marketing scheme to sell Zyprexa for off-label uses.

Critics say courts should be barred from sealing documents of this kind which show that a company is concealing the dangers of a drug and allowing patients to be injured and killed in the name of profits.

According to Mr Turner, consumers of pharmaceutical products these days are unprotected because, "apart from tort lawyers and a number of pressure groups, there is currently no viable check on the industry."

"The FDA continues to fail the American people," he says, "and without litigation and critical reporting, this problem would get even worse than it already is."

The Zyprexa debacle proves that out-of-court settlements do nothing to slow off-label sales because Zyprexa is still Lilly's top-selling drug. Paying $1.2 billion to avoid pubic trials is no big deal to Lilly because it could cover that penalty by simply forking over the $1.108 billion from Zyprexa sales in the first quarter of 2007 alone.

In the wake of the latest news about hidden studies on Zyprexa, consumer advocates are calling on Congress to reign in the industry. "We've seen too many cases where drug companies downplayed, hid or 'forgot' their clinical trial data that showed harmful side effects, and patients ultimately suffered," said Bill Vaughan, senior policy analyst for Consumers Union, publisher of Consumer Reports, in a press release.

"Congress has got to put a stop to this gaming of the safety system by the drug companies, and pass real reforms now that make drug-risk information public," he states.

"Patients and their doctors need to know the risks of a drug," Mr Vaughn said, "and Congress has the power to stand up to the drug companies and make that happen."

The US Senate is expected to vote this week on a prescription drug reform bill, and advocacy groups all across the country are calling for strong measures to eliminate the abuses of the industry in putting unsafe products on the market and massively promoting them for off-label use while concealing serious health risks.

According to Lilly's SEC filings, there are about 1,300 Zyprexa personal injury claims still pending, but the filing should have stated, "and counting", because another lawsuit was filed on April 13, 2007, in North Carolina by a woman whose father died of a toxic overdose of Zyprexa while taking the prescribed amount, and this complaint also lists five John Doe defendants for persons who prescribed or administered Zyprexa to her father.?

In addition to Montana, 8 other states have sued Lilly, including Alaska, Mississippi, New Mexico, Pennsylvania and West Virginia, seeking reimbursement for the cost of Zyprexa purchased by Medicaid, along with the cost of past and future medical expenses for patients harmed by Zyprexa.

The defendants named in the Pennsylvania lawsuit also include the other two atypical makers, AstraZeneca for Seroquel and Johnson & Johnson for Risperdal.

For months, Mr Turner has been saying that Lilly is most worried about the FCA fraud cases because they have the potential to cause a major blow to Lilly's stock value which would result in a whole new round of lawsuits filed on behalf of shareholders. Well, it appears that D-Day has arrived, because over a period of 9 days in April 2007, four class-action lawsuits were filed against Lilly and certain officers and directors on behalf of shareholders.

Zyprexa Legal Help
If you have or a loved on has taken Zyprexa and suffered from diabetes or hyperglycemia, please contact a [Zyprexa] lawyer who will evaluate your claim at no charge.