Lawsuits Allege Lilly Knew of Drug Dilution

Eli Lilly & Co. faces at least five lawsuits alleging it knew a Kansas City, Mo., pharmacist was diluting cancer drugs and failed to contact authorities immediately.

The lawsuits stem from the arrest of pharmacist Robert R. Courtney, who is accused of diluting Lilly’s Gemzar and Bristol-Myers Squibb Co.’s Taxol and pocketing the difference.

Lilly drug salesman Darryl Ashley became suspicious in early 2000 and reported his concern to company officials, according to the suits filed in state court in Kansas City. Lilly conducted an internal investigation and determined Courtney was diluting drugs, yet decided to remain silent, the lawsuits allege.

Attorney Michael Ketchmark said he filed the lawsuits on behalf of two women with ovarian cancer and the families of other cancer patients.

“Any claim that Lilly was aware of this alleged dilution and acted inappropriately is untrue and absolutely ridiculous,” Lilly said. “To the contrary, Lilly helped uncover this alleged criminal activity.”

Courtney is facing federal charges and a civil lawsuit filed by the government.

Shares of Indianapolis-based Lilly fell $1.42 to $82.25 on the New York Stock Exchange.