Blog Post

Eli Lily Company Settlement with Alaska


March 27, 2008
Topic: Pharmaceutical Liability

Eli Lily Company and the state of Alaska have agreed on a $15 million settlement over the use of the drug Zyprexa in the state's Medicaid program. It may seem like a small amount until you consider the population of the state which numbers at just 670,000 residents. It's said to be the largest such suit in the state, and it ensures that Alaska will be treated on par with other states who have cases pending against the company, all concerning the anti-schizophrenia drug, Zyprexa.

The lawsuit related to the Medicaid expenses that the state of Alaska had to pay outpatients who contracted diabetes after using the Zyprexa drug. Zyprexa, is meant to treat schizophrenic disorders and it helps calm the hallucinations and delusions that are indicative of schizophrenia and bipolar disease. It also has numerous not so desirable side effects, including weight gain, cholesterol increase and diabetes.

As it turns out the company conveniently forgot to inform Medicaid providers and other users that the drug had severe long-term side effects like diabetes. Zyprexa at the time was a blockbuster drug, with sales totaling more than $4 billion last year alone. Not only was no warning about the side effects of the drug given, but the company actually pushed its promotional campaigns to drive sales further. There were reports that Eli Lily had pushed doctors to prescribe the drug to children - the drug was not meant for anyone under the age of 18.

Damning testimony in the Alaska case came from medical experts who claimed that the company had had ample time to warn the public of Zyprexa's side effects. According to Dr. John Gueriguian, who testified at the hearing, Eli Lily "put profit over concern of the consumer." By the fall of 1998, it was apparent that Zyprexa was causing side effects like weight gain and diabetes, and this was bought to the company's notice by doctors who were prescribing these drugs. But Eli Lily chose to remain silent. Documents also showed that the company was accumulating evidence of the drug's side effects but chose not to share it with doctors.

That was not all. When Zyprexa was introduced in Japan in 2002, medical regulations in this country required Eli Lily to warn doctors of the risk of diabetes with the use of Zyprexa. In the US, however, sales representatives were asked not to proactively discuss the diabetes connection, in other words they had a "don't ask don't tell" kind of policy where the representative would admit the drug caused diabetes only if the doctor inquired about it.

It's hard to find a more glaring example, of corporate greed for profits over the safety and well being of the consumer. You have to wonder why Alaska decided to settle so easily, and why for less than the $200 million it was originally holding out for. The coming months will show whether other states will follow the same path as Alaska.

If you have suffered the adverse side effects of a drug like Zyprexa, you need the help of an experienced California personal injury lawyer. Contact an attorney at The Reeves Law Group for a free consultation.


The California personal injury attorneys at The Reeves Law Group represent victims of accidents, injuries and wrongful death throughout California from our offices in Los Angeles County, Orange County, San Diego County, Riverside County, San Bernardino County, Ventura County, Fresno County, Kern County, Sacramento County, San Fernando Valley, Long Beach, Antelope Valley, Torrance, Glendale, Bakersfield, Santa Ana, San Jose, San Francisco, Oakland, Ontario, and Victorville.