Lilly settles Zyprexa suit for $1.42 billion

Eli Lilly & Co. taught its sales force a catchy slogan to peddle the antipsychotic drug Zyprexa for treating the elderly.

Company salespeople told care providers that 5 milligrams of Zyprexa at 5 p.m. -- or “5 at 5” -- would help dementia patients sleep.

One problem: Regulators never approved selling the drug for dementia, and federal prosecutors say this type of marketing led to a record $1.42-billion settlement with Lilly announced Thursday.

The Indianapolis company agreed to plead guilty to a misdemeanor charge of introducing misbranded drugs into interstate commerce and pay $615 million to resolve the criminal case.

It also agreed to pay roughly $800 million to resolve a civil case. The company said in a statement it admitted no wrongdoing in that case.

Zyprexa is Lilly’s top-selling product, raking in more than $4 billion a year. The Food and Drug Administration has approved marketing it to treat schizophrenia and bipolar disorder.

But court documents show Lilly sales representatives also pushed it to treat generalized sleep disorder, aggression, Alzheimer’s-related dementia and depression, among other unapproved uses, from 1999 through 2003. Doctors can prescribe drugs for unapproved uses, but companies aren’t allowed to market drugs for those uses.

“The company made hundreds of millions of dollars by trying to convince healthcare providers that Zyprexa was safe for unapproved uses,” said Laurie Magid, acting U.S. attorney for the Eastern District of Pennsylvania.

In 1999, Lilly started pushing the drug in nursing homes and assisted-living facilities. Sales reps said the weight gain caused by Zyprexa was actually a “therapeutic benefit,” according to papers filed in the criminal case.

The drug maker also marketed Zyprexa to primary-care doctors, even though the company knew there were virtually no approved uses for the drug in that market, the documents state. It trained salespeople to focus on symptoms rather than Zyprexa’s approved uses.

At one point, Lilly had thousands of salespeople involved in marketing the drug for unapproved uses, Magid said.

In 2006, the FDA approved a severe, “black box” warning tying Zyprexa to increased risk of death in elderly patients, mainly from heart problems and infections.

Magid said Lilly was responsible for “putting thousands and thousands of patients at risk.”

“Off-label marketing circumvents the very process put in place to protect the public,” she said.

Lilly Chief Executive John C. Lechleiter said in a statement that the company “deeply regrets the past actions covered by the misdemeanor plea.”

On the civil side, Lilly will pay $438 million to settle allegations that it caused invalid claims to be submitted to government programs like Medicaid and the Federal Employees Health Benefits Program.

The company will also pay $361.8 million to state Medicaid programs.

Lilly shares rose 8 cents to $37.55.