The Zyprexa Chronicles: More State Lawsuits In The Offing?

I bumped into an interesting legal article yesterday. It was mostly interesting because it's now becoming obvious that Eli Lilly may be looking at many more lawsuits by states over the company's behavior regarding Zyprexa. The news just keeps getting bad for Lilly because the plaintiffs keep lining up. It's all becoming very reminiscent of the mid-1990s when the states collectively sued Big Tobacco and brought to an end many decades of bullshit spin by tobacco companies.

Here's a rundown of where matters sit today:

"Seven states have filed Medicaid cost recovery suits against Eli Lilly over the way it promoted Zyprexa, including Louisiana, Mississippi, West Virginia and, most recently, Pennsylvania. Others are gearing up to do the same. Alaska is expected to be the first to go to trial, in an Anchorage court next year."

OK, 50 minus 7 equals 43. Yeah, if all those folks got together, you could end up with one big old Master Tobacco Settlement thingamajig, or one heck of a court trial. To get a feel for the allegations, here's a summary of the suit filed by the State of Montana last month. I have no idea what the chance is of a bunch of states going after Lilly en masse, but here's what one outside lawyer handling cases for some states told Law.com:

"Fletch Trammell of Houston plaintiffs firm Bailey Perrin Bailey said four of his state clients are preparing to sue drug manufacturers for Medicaid fraud. He declined to name them. Trammell already represents Louisiana, which sued Eli Lilly over Zyprexa in 2004, and Mississippi, which filed suit last summer. Pennsylvania sued three drug makers in February, including Eli Lilly and AstraZeneca Inc.

"The fundamental allegation in Trammell's cases, he said, is that the manufacturers had promoted drugs for uses other than the illnesses for which they had been approved. 'We plead these cases entirely on violation of state law,' Trammell said.

"'Legislatures take Medicaid and government fraud very seriously and there are very serious and stiff penalties,' he added. 'The damages in these cases -- particularly in the anti-psychotic drug cases -- tend to be very large because they have been, and continue to be, very widely used drugs.'"

Lilly spokeswoman Marni "I Don't Answer Bloggers' Inquiries" Lemons told Law.com that Lilly intends to "vigorously defend these cases."

I'm thinking they'll vigorously settle--and sooner rather than later as it'll limit their exposure and word has it that the company can no longer get legal liability insurance for Zyprexa--so give 'em hell Fletch. But leave them enough money to cover the Cymbalta they'll need for Public Relations Dysphoria Disorder.

In a related AP story on the investor suit against Lilly that I noted yesterday, another Lilly official spun matters thus:

"Lilly spokesman Phil Belt told The Associated Press in an e-mail that the latest lawsuit was based on news stories using 'leaked documents that were hand-picked by our adversaries to paint an inaccurate, incomplete and misleading picture of Lilly.'

Belt said the documents on which the Times articles were based 'are just a tiny fraction of the more than 15 million pages of documents provided by Lilly as part of the litigation process.'

"'These selected documents, as well as the associated news stories, do not accurately portray Lilly's strategy or conduct,' he said."

If Lilly has any documents to disprove the facts contained in those documents, which are also hosted on this site, then I'd really like to see them. I'll host them on my site! But I've been making that offer for months and have gotten no response.

Anyhow, the New York Times' Alex Berenson sure caused Lilly a butt load of trouble back in December. A judge deemed his reporting on the leaked documents "reprehensible." I call it good journalism and I say Lilly's claims sound like ashes settling in the dustbin of history. Since then, Lilly has settled another $500 million in one class action lawsuit (bringing their total to $1.2 billion), become the subject of a Congressional investigation and had more states sue. As far as I know, Berenson's reporting has garnered no journalism awards, which is an oversight.

Speaking of history, it will prove that judge very wrong and maybe even a little reprehensible and that the two people who leaked out the documents were very right. And righteous, even.

BTW, the last I've heard is that Lilly's lawyers have yet to file a request for sanctions against the leakers, David Egilman and Jim Gottstein. Maybe they will, but it's been seven weeks since the judge ruled against the pair, both of whom are appealing the judge's ruling in a federal court of appeals, and I am beginning to think that Lilly would prefer to forego the inevitable press onslaught that filing against the two would bring.

Why would the two get press attention? Because journalism is often predicated on the willingness of insiders in government, law, business and so on to listen to their conscience and, where appropriate, fink out their employers. Think Pentagon Papers, for example. Our democracy works pretty well as a result. So when big companies or governments go after reporters' sources in court and then try to get civil penalties levied against them, then the press has this habit of covering these matters because we take a very dim view of people monkeying with people who tell the truth. And have the documents to back it up.