Eli Lilly Pleads Guilty of Failure to Disclose Oraflex-Linked Deaths

Times Staff Writer

Eli Lilly & Co. pleaded guilty Wednesday to federal charges that it failed to tell the government about deaths and toxic reactions associated with its arthritis drug Oraflex, subsequently linked to dozens of fatalities in the United States.

The company, which also was charged with failure to label the drug with information describing its potential side effects, was fined $25,000.

Dr. William Ian Shedden, former vice president and chief medical officer of Lilly Research Laboratories, pleaded no contest to separate criminal charges and was fined $15,000.


Under an agreement worked out in advance with the U.S. attorney’s office in Indianapolis, where Lilly is based, federal prosecutors filed 25 misdemeanor charges against the company and 15 against Shedden, and both defendants immediately entered their pleas. U.S. District Judge S. Hugh Dillin fined the company and Shedden $1,000 for each count.

Oraflex, approved by the Food and Drug Administration (FDA) for use in this country in May, 1982, was originally hailed as more effective and having fewer side effects than aspirin, the most common arthritis medication.

49 Deaths in U.S.

It was removed from the market by Lilly after three months after questions about its safety were raised by Ralph Nader’s Health Research Group.

The government charged that Lilly, which marketed Oraflex overseas before it was approved for use in the United States, “received reports from affiliates in the United Kingdom and elsewhere of adverse reactions associated with the use of the drug . . . but the company and Shedden failed to make required reports of this information to the FDA.”

These findings included four cases of liver failure, one case of acute kidney failure, one case of kidney and liver failure and three cases of jaundice, the Justice Department said.

According to the FDA, the drug has been associated with 49 deaths in the United States and several hundred deaths abroad. There have been nearly 1,000 reports of adverse reactions to the drug in this country, Health Research Group officials said.


Lilly Chairman Richard D. Wood said in a statement Wednesday that “Eli Lilly & Co. continues to believe that it acted responsibly in its handling of Oraflex.”

He added: “No information was received by our medical component from foreign commercial experience prior to approval that supported a different scientific conclusion concerning liver-kidney reactions.

“We could argue with the department forever on this 3-year-old matter, but we feel it is important to get this matter behind us.”

No Intent Charged

Edgar Davis, Lilly’s vice president for corporate affairs, said:

“What is important is what the government did not charge us with. They did not charge us with withholding information to expedite the approval of Oraflex. They charged us with not reporting 10 cases--but there was no charge of intention. There was no willful, intentional or knowing violation.”

Dr. Sidney Wolfe, director of the Health Research Group, criticized the outcome, saying that “the criminal convicted of tax fraud and the murderer who kills one person both go to jail, but Eli Lilly executives . . . get slapped with fines and will not go to jail.”

However, John Tinder, the U.S. attorney in Indianapolis, called the results “the best we could do in light of the evidence.”


Tinder said the government’s investigation “was not a murder investigation or a wrongful-death investigation--it was an investigation of whether FDA violations had occurred.”

$6-Million Award

Less than 100 civil actions have been filed against Lilly, a company spokesman said.

In November, 1983, a jury returned a $6-million award for punitive damages against Lilly in the death in Alabama of an 81-year-old woman who had taken the drug.

The verdict was, at the time, the largest product-liability award ever made for a wrongful death involving medicine. While an appeal was pending, the company negotiated a secret settlement that later was approved.

In another case, a Virginia man last year received an undisclosed amount of money in a settlement involving the death of his daughter.