Eli Lilly in Shareholder Cross Hairs

While Eli Lilly’s Zyprexa troubles with the federal government may be coming to an end, the company faces new legal problems with a recent lawsuit filed by two of its company’s shareholders.

It was reported last week that the company is in advanced settlement talks with federal investigators following last year’s federal grand jury subpoena for documents related to its marketing for Zyprexa (olanzapine). The U.S. attorney for the Eastern District of Pennsylvania, who began a civil investigation into Zyprexa’s marketing in 2004, issued the subpoena.

Although the company will not confirm or deny reports of settlement talks, it acknowledged it faces a lawsuit from two shareholders who allege it used illegal marketing practices for Zyprexa, an atypical antipsychotic, and ignored the drug’s risks.
 
The Jan. 17 lawsuit notes the company has paid $1.2 billion since September 2005 to settle claims that Zyprexa caused or contributed to diabetes or high blood-glucose levels.

Lilly “inadequately tested for and warned about potentially harmful side effects of the drug,” and many of the claims allege the company improperly promoted the drug, the shareholder suit says, adding that hundreds of similar claims remain unsettled, along with class actions in the U.S. and Canada.