Eli Lilly to pay $15 million in first of many cases

Anchorage Daily News
State settles lawsuit over lack of warnings on dangerous drug -
Eli Lilly to pay $15 million in first of many cases
March 27, 2008 By LISA DEMER

AL GRILLO / The Associated Press

Nina Gussack, left, and George Lehner, center, attorneys for Eli Lilly and Co., talk with Tommy Fibich, attorney for the State of Alaska, during a break March 26, 2008, after a settlement was reached in the state's lawsuit over the use of Zyprexa in its Medicaid program.

Just days before its case would have gone to a jury, the state settled a lawsuit against Eli Lilly over the drug Zyprexa for $15 million in a deal that disappointed lawyers fighting in court for the state but was still a “good result,” according to Attorney General Talis Colberg.
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A team of Outside lawyers in court every day for the state didn’t want to settle. One of them, Scott Allen of Houston, Texas, didn’t show up Wednesday for the announcement.

“I got the sense they were disappointed and I don’t blame them,” said Ed Sniffen, a senior assistant attorney general who supervised the case for the state.
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Jurors, some of whom filled legal pads with notes during the trial, seemed surprised when Rindner told them they would not be asked for a verdict. Afterward, they talked about their views of the case with lawyers and the judge, sharing what they thought for the first time.

Three of the 12 jurors were leaning toward Lilly and the rest were for the state, but the Lilly-leaning group probably would have gone the state’s way after talking it out, said juror No. 1, Dennis Jump, who counted himself in the minority.

“I guess in the end, Lilly … pushed a line and they probably at points pushed it too far,” Jump said. He thought the benefits of Zyprexa for conditions like schizophrenia outweighed the risks, but not for depression, a market that Lilly hoped to reach.

Zyprexa was approved by the federal Food and Drug Administration in 1996 for treatment of schizophrenia and later for bi-polar disorder.

Rindner ruled before the trial to exclude a state claim that Lilly improperly promoted the drug for other conditions, but state lawyers still got in some evidence about off-label use though they didn’t call it that. Jurors heard testimony about a 2001 guide for Lilly sales representatives that pitched Zyprexa as treatment for depression and mood changes.

Jennifer Mitchell, another juror, said she was disappointed she didn’t get to hear all of Lilly’s evidence “but that said, the State of Alaska had a really strong case.”

Internal Lilly e-mail presented by the state in which one executive urged the company to come clean especially struck her, she said. While Lilly may not have known at the start about Zyprexa’s serious health risks, once the drug had been on the market a couple of years, the company had enough reports about “adverse reactions” to put a clear warning on its label, she said.

“A definite cover-up,” is how another juror, Misty Steed, described Lilly’s tactics. Lilly was trying to minimize the risks and it tortured the data from studies, she said.

The jurors all knew they were sitting on an important case.

“I was concerned about what this is doing not only to Alaska, but also the nation,” Steed said.

“The jurors got it,” said Tommy Fibich, a Houston lawyer on the state team. “There were some people on there that absolutely blew me away with the breadth of the knowledge of some of the subtleties and nuances of our evidence.”

More here- http://tmap.wordpress.com/2008/03/27/state-settles-lawsuit-over-lack-of-warnings-on-dangerous-drug-eli-lilly-to-pay-15-million-in-first-of-many-cases/

New York Times
Alaska Suit Against Lilly Is Settled
March 27, 2008
By ALEX BERENSON

The prospect of a pending Supreme Court case that could sweep away many lawsuits against drug companies loomed over Alaska’s decision to settle the state’s suit against Eli Lilly over the schizophrenia drug Zyprexa, lawyers for Lilly and the state said Wednesday.

Alaska had sued to recoup medical bills it said were generated by Medicaid patients who developed diabetes while taking Zyprexa. But on Wednesday it agreed to settle for $15 million — a fraction of the hundreds of millions of dollars in damages that Ed Sniffen, Alaska’s senior assistant attorney general, had said the state was seeking when the trial opened three weeks ago.

On Wednesday, though, Mr. Sniffen said he was satisfied with the deal, in which Lilly did not admit wrongdoing.

“It’s a good settlement,” Mr. Sniffen said. “Probably not a great settlement, but I think it’s a good settlement.”

Good, at least, in light of that looming Supreme Court case. Mr. Sniffen noted that in October 2008, the Supreme Court is expected to hear Wyeth v. Levine, in which the drug maker Wyeth argues that federal laws bar, or “pre-empt,” most state court lawsuits filed by patients who say they were injured by drugs they have taken.

Based on last month’s 8-to-1 Supreme Court ruling in favor of pre-emption in a similar case about medical devices, the court is assumed to be leaning in favor of the drug industry in the Wyeth case. And so plaintiffs’ lawyers and state attorneys general are worried that they could have many of their pending claims dismissed when the court decides Wyeth.

Even cases that have already reached trial could be vulnerable, since drug makers almost always appeal jury verdicts against them, extending cases for months, if not years.

“We had this issue with the Supreme Court deciding pre-emption this fall that could have completely unwound any victory we might have had,” Mr. Sniffen said. Nina Gussack, a lawyer for Pepper Hamilton, which represented Lilly, agreed that pre-emption concerns had played a major role in the settlement.

“The state took a very strong and hard look at their case, and recognized that even if they were successful, they had a substantial chance of losing their case on pre-emption grounds,” Ms. Gussack said.

Given the fact that Alaska has fewer than 700,000 residents, and only 6,300 Medicaid patients taking Zyprexa, the $15 million payment is larger than it first seems.

More here- http://tmap.wordpress.com/2008/03/27/alaska-suit-against-lilly-is-settled/