Utah snags $24M in drug settlement
A four-year investigation into a pharmaceutical giant's alleged off-label marketing of an anti-psychotic drug has earned a $24 million settlement for Utah.
"This isn't just about money," Utah Attorney General Mark Shurtleff said Wednesday. "The victims were those who could least afford health care."
The Food and Drug Administration had approved Zyprexa's use for treating schizophrenia and bipolar disorders. But, Utah investigators say, Eli Lilly's sales force had been encouraging, since 1999, doctors to prescribe the drug for dementia, Alzheimer's, agitation, aggression, hostility, depression and generalized sleep disorders.
"The thing that was remarkable was how vigorously it was promoted and how much we spent in our Utah Medicaid program" -- the state's Zyprexa tab totaled $11 million since 2007, said David Sundwall, executive director of Utah's Department of Health.
"There aren't that many psychotic people in Utah," Sundwall said, noting there was clear documentation of the drug's overuse and misuse.
Shurtleff said, besides the settlement money, the state "wanted [Eli Lilly's] bad conduct to stop."
The company, founded in Indianapolis in 1876 and now marketing its products in 143 countries, denies any wrongdoing, said spokeswoman Marni Lemons.
"We have always lived by the highest standards in promoting our drugs," Lemons said. "We reached the point where it was time to put these issues behind us."
The company -- which also makes the well-known Cialis, Cymbalta and Prozac -- has battled Zyprexa litigation since 2003. Last year, a 32-state lawsuit ended in a $62 million settlement. Utah was one of 13 states that chose to file separately.
Zyprexa's side effects include significant weight gain and obesity -- part of a metabolic syndrome, Sundwall said, that can lead to diabetes, hypertension and stroke.
According to Utah's investigation, 1,769 Utah Medicaid patients over age 65 took Zyprexa without the proper diagnosis.
In 2005, the firm of Garretson & Steele was selected to handle this case through an informal bid process. Attorney Joseph Steele has ties to Siegfried & Jensen, a personal-injury law firm that gives frequently and generously to Shurtleff's campaign coffers.
Steele praised Shurtleff for his courage, saying that he and lawyer Mitch Jensen spoke with several other state attorneys general about the volatile litigation.
"What you find is a great deal of political pressure to end litigation without payment of the appropriate level of compensation," Steele said. "There were very few who had the courage to stand up to the pharmaceutical industry."
The settlement money comes at an opportune time for Utah. In January, state lawmakers will grapple with a potential $850 million shortfall.
"There are plenty of opportunities and critical needs for this money," House Speaker David Clark, R-Santa Clara, said as he accepted a faux $24 million check from Shurtleff.
Sundwall hopes state lawmakers will remember Utah's most vulnerable residents when they allocate the money.
"The timing couldn't be better because of the stress we're under in Medicaid," he said.
» Last fall, Eli Lilly settled consumer-protection claims with 32 states for $62 million
» Eli Lilly also settled with Alaska in 2008 for $15 million.
» In January, the company settled with the federal government for $1.42 billion in criminal and civil fines and Medicaid restitution in more than 30 states.
» Since the first of the year, Eli Lilly settled with Connecticut for $25.1 million, Idaho for $13 million, South Carolina for $45 million, West Virginia for $22.5 million, and most recently, Utah for $24 million.
Source: Eli Lilly
» $3.6 million for outside attorney fees.
» $475,067 for costs incurred by outside counsel.
» About $20 million for the state.
Source: 3rd District Court documents