Drug giant Eli Lilly is expected to agree as soon as today to pay $1.4-billion to settle criminal and civil charges that it illegally marketed its blockbuster antipsychotic drug Zyprexa for unauthorized use in patients particularly vulnerable to its risky side effects.
The amount of the settlement is a record for so-called corporate whistle-blower cases, which are federal lawsuits prompted by tips from company employees or former employees.
Last year, the St. Petersburg Times published several investigative stories highlighting the aggressive promotion of Zyprexa amid growing concerns about dangerous side effects, particularly for children and elderly people with dementia.
Zyprexa is not federally approved for use by children and the elderly.
In one marketing effort, the company urged geriatricians to use Zyprexa to sedate unruly nursing home patients so as to reduce "nursing time and effort," according to court documents. Like other antipsychotics, the drug increases risk of sudden death, heart failure and infections like pneumonia in elderly patients with dementia-related psychosis.
The company also pressed pediatricians and family practice doctors to treat disruptive children with Zyprexa, court documents show, even though the medicine has a tendency to cause severe weight gain and metabolic disorders in children. Over the last decade, Zyprexa's use in children has soared.
The case is being prosecuted by the United States Attorney's Office for the Eastern District of Pennsylvania. Patricia Hartman, a spokeswoman for the office, declined to comment.
Angela Sekson, a Lilly spokeswoman, said she could not comment on the status of the Zyprexa negotiations. Last fall, the company, anticipating a settlement, had set aside $1.4-billion for that purpose.
Lilly executives for years insisted the company's Zyprexa marketing efforts were legal and appropriate. When asked whether she could repeat those assurances, Ms. Sekson said, "It would be inappropriate for me to comment further right now."
Without a settlement, Lilly risks being barred from participating in the federal Medicaid and Medicare programs, a huge part of its business.
In the United States, most of Zyprexa's sales are paid for by government programs because so many of those taking Zyprexa are indigent or disabled. Zyprexa had sales of $4.8-billion in 2007, making it the biggest seller by far for Lilly, whose revenue that year was $18.6-billion. Depending on dosage, the drug can cost as much as $25 for a daily pill.