Criminal Prosecutions of Eli Lilly and Company

July 15, 2012

In 2006, Eli Lilly and Company agreed to plead guilty and to pay $36 million in connection with its illegal promotion of its pharmaceutical drug Evista. In addition to the criminal plea, Lilly agreed to settle civil Food, Drug, and Cosmetic Act liabilities by entering into a consent decree of permanent injunction and paying the United States $24 million in equitable disgorgement.Evista is approved by the FDA for the prevention and treatment of osteoporosis in postmenopausal women. The Government alleged that the first year’s sales of Evista in the U.S. were disappointing compared to Lilly’s original forecast; the company reduced the forecast of Evista’s first year’s sales in the U.S. from $401 million to $120 million. In order to expand sales of the drug, it was alleged, Lilly sought to broaden the market for Evista by promoting it for off-label uses, such as for the prevention and reduction in risk of breast cancer, and the reduction in the risk of cardiovascular disease. Lilly promoted Evista as effective for reducing the risk of breast cancer, even after Lilly’s proposed labeling for this use was specifically rejected by the FDA.

In 2009, Lilly entered an approximately $1.4 billion global criminal, civil,and administrative settlement to resolve allegations that it illegally marketed its antipsychotic drug Zyprexa. Under the civil settlement agreement, Lilly agreed to pay the Federal Government $438.2 million and participating States up to $361.8 million to resolve False Claims Act (FCA) allegations that it marketed Zyprexa for certain unapproved uses and caused false claims for payment to be submitted to Federal health care programs, such as Medicaid, from September 1999 to the end of2005. Lilly will alsopay a criminal fine of$5l5.0 million and forfeit assets of$IOO.O million. In its plea agreement, Lilly admitted that from September 1999 to March 31, 200 I it promoted Zyprexa for unapproved uses in elderly populations as treatment for dementia, including Alzheimer’s dementia. Lilly also entered a 5-year CIA which provides for increased accountability by Lilly’s board of directors and management in the form of an annual resolution by a board committee and annual certifications from managers about compliance..

Source: HHS Health Care Fraud and Abuse Control Program, Annual Reporst for FY 2006 and 2009

This article was posted on July 15, 2012.