Eli Lilly Getting Nailed for Drug Scandal

January 10, 2007 1 By Tad Reeves

This, from RedHerring.com:

The weekend was not kind to Eli Lilly, one of the largest pharmaceutical companies in the United States.


the fact the Lilly recently announced new terms to its deal to acquire
Icos, a move that is largely viewed as a boon to the company, a New York Times scoop about the anti-psychotic Zyprexa dragged the drug-maker through the mud Sunday.


According to the Times,
Lilly has allegedly been downplaying the health risks of Zyprexa, an
atypical antipsychotic used to treat schizophrenia and bipolar
disorder, and which also happens to be Lilly’s best-selling medication,
pulling in a reported $4.2 billion in sales in 2005.


Shares of the drugmaker fell more than 2 percent to $53.23 from $51.94 Monday.


Documents given to the Times by
James Gottstein, an attorney for mentally ill patients, show that Lilly
executives tried to hide information from physicians about Zyprexa’s
tendency to cause substantial weight gain and high blood pressure. The
data show that 30 percent of patients taking Zyprexa for more than a
year gain 22 pounds or more, the Times reports, which can be a factor in causing type-2 diabetes.

The Times also
says that Lilly encouraged doctors to prescribe Zyprexa for elderly
patients with dementia, an indication for which the drug is not FDA
approved, according to “internal Lilly marketing materials.”


The documents acquired by the Times
allegedly show that Lilly began a marketing campaign in 2000
encouraging physicians to prescribe Zyprexa for the unapproved
indication—and as a result, sales of the drug doubled from $1.5 billion
in 1999 to $3 billion in 2002.


Beating a Dead Horse?

the revelations of the weekend may sting, the knowledge that atypical
antipsychotics like Zyprexa may cause weight gain and increased blood
sugar is well established. In 2003, the FDA issued an extra warning
label for anti-psychotics that addressed the risks of hyperglycemia
among patients, and issued another warning about the risks of death
among elderly patients with dementia who took the drugs.


Eli Lilly has settled more than 10,000 “injury” claims from patients
taking Zyprexa, with 9,700 more pending. In statement released by the
company in response to the Times allegations, it the
company said that “from the day Lilly was [FDA approved], the labeling
provided to physicians identified the clinically-significant weight
gain that was observed in more than half of all patients treated
long-term with Zyprexa.”


The company also says that the documents acquired by the Times are
“a tiny fraction” of the more than 11 million pages that were provided
as a part of the lawsuits against the company, and that leaking them is


view among analysts is that the Zyprexa news will not hurt the company
much. “Given the prior publicity on this issue and the change in FDA
product labeling…we would not expect significant new claims due to this
attention,” Goldman Sachs analyst James Kelly wrote in a research note.

James contends that prescriptions for Zyprexa have already been on the
decline since the FDA warning about antipsychotics and weight gain that
was issued in 2003. Now, the drug is mainly taken by those with severe
schizophrenic and bipolar symptoms, and typically is not used as a
first-line solution. “Our research and the NY Times
article note that the drug is valued for its potency, which is
important in second-line use, and Zyprexa has a potency advantage in a
large comparative trial,” he writes.

As for Lilly, the company insists that it does not promote the off-label prescription of its drugs.

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