Eli Lilly and Company Resolves Investigation Involving Numerous States

Wednesday, October 8, 2008 General News
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INDIANAPOLIS, Ind., Oct. 7 Eli Lilly and Company(NYSE: LLY) today announced that it has resolved a multi-state investigationinvolving 32 states and the District of Columbia (DC) related to the sales,marketing and promotion of its antipsychotic medication Zyprexa(R)(olanzapine).

"We believe all of the parties involved share an interest in putting thisdispute behind us," said Robert A. Armitage, Lilly's senior vice president andgeneral counsel. "From our standpoint, it's certainly in the best interests ofthe company and the patients, care-givers and healthcare professionals whocontinue to rely on this life-saving medication," he said, adding that Zyprexaremains available to patients and on formularies for Medicaid programs in all50 states and DC.

The Agreement

While there is no finding that Lilly has violated any provision of thestate laws under which the investigations were conducted, the company will pay$62 million to be divided among the settling states. This payment will resultin a charge in the third quarter of $.04 per share. In addition, Lilly willundertake certain commitments regarding Zyprexa for a period of six yearsfollowing the agreement via consent decrees filed in the various states.These commitments relate to the company's promotional practices, disseminationof medical information, funding of continuing medical education (CME) andgrants related to Zyprexa, and continued disclosure of Zyprexa clinical trialsand their results. Lilly would also agree to provide signatory attorneysgeneral with information related to compensation made to healthcareprofessionals who have received more than $100 annually from the company forpromotional speaking or consulting regarding Zyprexa in the U.S.

"Lilly's policies and practices already mirror most of the provisionsincluded in the proposed consent decrees. This resolution reflects ourcommitment to continually build on a foundation of compliance, accuracy andtransparency," said Armitage.

Lilly's Commitment to Compliance

Lilly has implemented and continues to review and enhance a broadly basedcompliance program that includes comprehensive compliance-related activitiesdesigned to ensure that its marketing and promotional practices comply withpromotional laws and regulations. Lilly's compliance program includes theelements of compliance guidelines issued by the Department of Health and HumanServices, Office of Inspector General, for the pharmaceutical industry. Thecompany has a vice president and chief compliance officer, who reportsdirectly to Lilly's Chairman and its Board of Directors; corporate compliancecommittee; a code of conduct; policies and procedures specific to promotionand marketing; extensive training; auditing, monitoring and reportingprograms, including a compliance hotline; and disciplinary and correctiveaction processes.

Participating States

The 32 states participating in the agreement are Alabama, Arizona,California, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Maine,Maryland, Massachusetts, Michigan, Missouri, Nebraska, Nevada, New Jersey, NewYork, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania,Rhode Island, South Dakota, Tennessee, Texas, Vermont, Washington andWisconsin, as well as the District of Columbia. The company previouslydisclosed these state investigations, which were brought under those states'various consumer protection laws, in May 2007, in a quarterly filing with theU.S. Securities and Exchange Commission.

Eleven other states (Louisiana, Mississippi, Montana, New Mexico,Pennsylvania, South Carolina, Utah, West Virginia, Connecticut, Arkansas andIdaho) have filed lawsuits over Zyprexa and are not covered by this agreement.In March, Lilly entered into a $15 million settlement with the State ofAlaska, which concluded an ongoing trial involving various issues surroundingZyprexa. In addition, since 2005, Lilly has settled approximately 31,000individual product liability lawsuits alleging that certain adverse events areassociated with Zyprexa.

Since its initial approval by the FDA in 1996, Zyprexa has been prescribedfor more than an estimated 26 million patients around the world, and isregularly used in the U.S. and in more than 80 other countries.

Zyprexa Background

Zyprexa is indicated in the United States for the short- and long-termtreatment of schizophrenia, acute mixed or manic episodes of bipolar Idisorder, and maintenance treatment of bipolar disorder. Since Zyprexa wasintroduced in 1996, it has been prescribed more than 26 million times byphysicians around the world. Zyprexa is not approved for patients under 18years of age.

Zyprexa is not approved for the treatment of patients with dementia-related psychosis. Elderly patients with dementia-related psychosis treatedwith atypical antipsychotic drugs are at an increased risk of death comparedwith those patients taking a placebo. In addition, compared to elderlypatients with dementia-related psychosis taking a placebo, there was asignificantly higher incidence of cerebrovascular adverse events in elderlypatients with dementia-related psychosis treated with Zyprexa.

Hyperglycemia, in some cases extreme and associated with ketoacidosis orhyperosmolar coma or death, has been reported in patients treated withatypical antipsychotics, including Zyprexa.

While relative risk estimates are inconsistent, the association betweenatypical antipsychotics and increases in glucose levels appears to fall on acontinuum and olanzapine appears to have a greater association than some otheratypical antipsychotics. Physicians should consider the risks and benefitswhen prescribing olanzapine to patients with an established diagnosis ofdiabetes mellitus, or who have borderline increased blood glucose levels.Patients taking olanzapine should be monitored regularly for worsening ofglucose control. Persons with risk factors for diabetes who are starting onatypical antipsychotics should undergo baseline and periodic fasting bloodglucose testing. Patients who develop symptoms of hyperglycemia duringtreatment should undergo fasting blood glucose testing.

Undesirable alterations in lipids have been observed with olanzapine use.Clinical monitoring, including baseline and follow-up lipid evaluations inpatients using olanzapine, is advised. Significant, and sometimes very high,elevations in triglyceride levels have been observed with olanzapine use.

Potential consequences of weight gain should be considered prior tostarting olanzapine. Patients receiving olanzapine should receive regularmonitoring of weight.

As with all antipsychotic medications, a rare and potentially fatalcondition knows as Neuroleptic Malignant Syndrome NMS has been reported withZyprexa. If signs and symptoms appear, immediate discontinuation isrecommended. Clinical manifestations of NMS are hyperpyrexia, musclerigidity, altered mental status and evidence of autonomic instability(irregular pulse or blood pressure, tachycardia, diaphoresis and cardiacdysrhythmia). Additional signs may include elevated creatinine phosphokinase,myoglobinuria (rhabdomyolysis), and acute renal failure.

Also, as with all antipsychotic treatments, prescribing should beconsistent with the need to minimize Tardive Dyskinesia (TD). The risk ofdeveloping TD and the likelihood that it will become irreversible are believedto increase as the duration of treatment and the total cumulative dose ofantipsychotic increase. The syndrome may remit, partially or completely, ifantipsychotic treatment is withdrawn.

Other potentially serious adverse events include low blood pressure,seizures, elevated prolactin levels, elevated liver enzymes, cognitive andmotor impairment, body temperature elevation, and trouble swallowing.

The most common treatment-emergent adverse event associated with Zyprexain placebo-controlled, short-term schizophrenia and bipolar mania trials wassomnolence. Other common events were dizziness, weight gain, personalitydisorder (COSTART term for nonagressive objectionable behavior), constipation,akathisia, postural hypotension, dry mouth, asthenia, dyspepsia, increasedappetite and tremor.

Full prescribing information, including a boxed warning, is available atwww.zyprexa.com.

About Lilly

Lilly, a leading innovation-driven corporation, is developing a growingportfolio of first-in-class and best-in-class pharmaceutical products byapplying the latest research from its own worldwide laboratories and fromcollaborations with eminent scientific organizations. Headquartered inIndianapolis, Ind., Lilly provides answers - through medicines and information- for some of the world's most urgent medical needs. Additional informationabout Lilly is available at www.lilly.com .


SOURCE Eli Lilly and Company

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