Justice Dept. Defends Handling of Lilly Case

The government accepted a plea bargain by Eli Lilly & Co. to charges of failing to disclose the harmful effects of Oraflex because of the risk of losing the case in a trial, the Justice Department’s No. 2 official says.

In a wide-ranging defense of the department’s handling of the Lilly case, Deputy Atty. Gen. D. Lowell Jensen said a courtroom loss “would signal we are unable to punish this type of conduct. It would thus provide a green light for the very activity sought to be discouraged.”

Jensen explained the prosecution strategy in a five-page letter to Sen. Strom Thurmond (R-S.C.), chairman of the Judiciary Committee, which is weighing whether to approve President Reagan’s nomination of Richard K. Willard as an assistant attorney general.

Sen. Howard Metzenbaum (D-Ohio), a member of the Judiciary Committee, has asked for a delay in the panel’s consideration of Willard’s nomination to head the department’s civil division.

Metzenbaum said last week that “the responsibility for the final decision in this matter (the Lilly case) belongs to Mr. Willard,” who heads the civil division as an acting assistant attorney general.

Questions Ability

“The evidence available at this time causes me to seriously question his ability to deal forcefully with corporate negligence and white-collar criminals,” Metzenbaum said in a letter to Thurmond.

Jensen’s letter to Thurmond, dated Sept. 9, was made available Wednesday by Metzenbaum’s staff.

Eli Lilly, headquartered in Indianapolis, pleaded guilty in federal court there Aug. 21 to federal charges of mislabeling and not reporting the side effects of the anti-arthritis drug Oraflex, which Metzenbaum said had caused 26 deaths in this country and “many more overseas.”

The drug was removed from the market in 1983.

In addition to the company pleading, Dr. W. I. Shedden, a former vice president of Lilly Research Laboratories, entered a plea of no contest to 15 counts of a separate criminal information.

U.S. District Judge S. Hugh Dillin fined the company $25,000, including $1,000 on each of 25 counts, and fined Shedden $15,000, which included $1,000 on each of 15 counts.

It was not immediately clear Wednesday whether Jensen’s letter was aimed at removing any obstacles to Willard’s confirmation by the Senate.

But in the letter, he said that, since Congress amended the Food, Drug and Cosmetic Act in 1962 to require drug manufacturers to notify the government of harmful side effects of their products, “no administration had prosecuted a pharmaceutical company for failure to report adverse reactions associated with its drug product.”

Jensen Made Decision

Jensen, who formerly headed the department’s criminal division, said the final decision on allowing the firm to plead guilty was made by him. He denied recent published reports that said department attorneys had been overruled in their push to prosecute several Lilly officials.

“The ultimate decision concerning the charges filed in the Lilly case was reached after searching and exhaustive analysis within the Department of Justice,” Jensen said. “Everyone agreed that the evidence clearly established that the individual ultimately charged bore the most responsible relationship to the violations, was the Lilly executive most personally involved in the events that constituted the offenses and should properly have been charged.”

Jensen denied that the government had been too lenient with the Lilly company.