Zyprexa class action lawsuits settled

Readers will recall that Eli Lilly was facing class action lawsuits related to Zyprexa, an "atypical antipsychotic drugs" prescribed for the treatment of certain disorders, including schizophrenia and acute mixed and manic episodes of bipolar I disorder. Since its introduction, the drug has been taken by as many as 17 million people worldwide.

Eli Lilly has now announced that it has entered into an agreement in principle with plaintiffs' attorneys involved in Zyprexa liability litigation to settle a majority of the claims against Lilly relating to the medication. According to the agreement, Lilly will establish a fund not to exceed $690 million for plaintiffs who agree to settle their claims. The settlement fund will be overseen and distributed by claims administrators appointed by the plaintiffs' steering committee. At this time, the exact number of claimants covered by this settlement is unknown, but is estimated to be 8,000, comprising approximately 75 percent of claims identified to Lilly.

There are other hundreds of class action lawsuits related to drugs and recalls in process in the United States courts. Most notable are the Vioxx class action lawsuits against Merck and Bextra and Celebrex class action lawsuits against Pfizer. In recent days, Pfizer is also facing Viagra lawsuits.

Like most drug companies, Eli Lilly refused to settle the cases initially despite strong words from consumer rights groups. Even while settling the claims, the company is adamant that it has done nothing wrong. In a statement, Eli Lilly reiterated that, "Our decision to resolve these claims does not change the fact that Zyprexa has and will continue to improve the lives of millions of patients around the world who are suffering from schizophrenia and bipolar  disorder."

When finalized, the settlement will resolve the majority of Zyprexa claims pending in the United States. This includes federal and state lawsuits that have been brought against Lilly, the filed nationwide class action lawsuits (none of which had been certified by a judge), and the majority of approximately 5,000 claims that were the subject of "tolling agreements" that extended the deadline for potential claimants to file a lawsuit, as well as other potential claims against Lilly. The agreement will also result in the dismissal of claims against physicians and other health care professionals named as co-defendants in any cases covered by this settlement.

Most of the lawsuits claimed that before September 2003, the information in the medication label, which listed the risk of hyperglycemia and diabetes as an infrequent adverse event since 1996, was not adequately displayed. In September 2003, the FDA required label changes for all atypical antipsychotics to warn against this risk. The US FDA refused to recall Zyprexa when requested by consumer rights groups.

The agreement involves claimants who asserted that they developed diabetes-related conditions from their use of Zyprexa. Claimants who are not covered by the final settlement are those represented by attorneys who are not participating in the agreement in principle. Lilly is prepared to continue its vigorous defense of Zyprexa in the remaining cases. Lilly will also take a $700 million pre-tax charge in the second quarter of 2005 to cover this settlement, as well as other product liability claims not covered by the settlement.

Recommended article: Prozac recall