US drugmaker Eli Lilly pleaded guilty to violating US law in its marketing of anti-psychotic drug Zyprexa and will pay 1.42 billion dollars to settle criminal and civil allegations, officials said Thursday.
Eli Lilly said it had entered a misdemeanor plea for violation of federal law in its off-label promotion of Zyprexa between September 1999 and March 2001 and agreed to pay 615 million dollars.
The Justice Department said the criminal fine of 515 million dollars was the largest ever in a health care case, and the largest criminal fine for an individual corporation ever imposed in a US criminal prosecution of any kind. Lilly also agreed to forfeit 100 million dollars in the settlement.
Officials said so-called "off label" use of drugs was a serious legal issue.
"Off-label promotion of pharmaceutical drugs is a serious crime because it undermines the FDA's role in protecting the American public by determining that a drug is safe and effective for a particular use before it is marketed," said Gregory Katsas, assistant attorney general.
"This settlement demonstrates the Department's ongoing diligence in prosecuting cases involving violations of the Food, Drug, and Cosmetic Act, and recovering taxpayer dollars used to pay for drugs sold as a result of off-label marketing campaigns."
The company said it had admitted in its plea that it had promoted Zyprexa in elderly populations as treatment for dementia, including Alzheimer's dementia, "although Zyprexa is not approved for such uses."
The drugmaker agreed to make payments totaling 800 million dollars to settle civil investigations over the marketing of Zyprexa.
The payments are covered by a 1.415 billion dollar charge, or 1.29 dollars per share, taken in the 2008 third quarter in connection with the investigation.
Under the civil settlements, Lilly will pay 438 million dollars to the federal government and 362 million dollars to states involved in the investigation.
The company did not admit the alleged wrongdoing in the civil allegations.
The company said it would report the impact of the payments when it announces 2008 four-quarter earnings on January 29.
The settlement is subject to approval by the federal court in Philadelphia.
The investigation was launched in March 2004 by the Philadelphia US court on allegations that Lilly was marketing Zyprexa for uses that had not been authorized.
In the United States, Zyprexa is authorized for the treatment of schizophrenia, acute mixed or manic episodes of bipolar I disorder, and maintenance treatment of bipolar disorder.
Shares in Eli Lilly were down 2.05 percent at 36.70 dollars in a broad market retreat in late morning New York trade.