The Zyprexa Chronicles: $2 Billion May Hinge On Alaska Case

The stakes could hardly be any higher for Eli Lilly as it defends itself against the State of Alaska's allegations that the company failed to warn doctors and patients about problems with its drug Zyprexa. According to Bloomberg, losing in Alaska could have huge implications for other outstanding lawsuits against the company and stalled negotiations with the feds and about 25 states. A loss in Alaska could set the stage for another $2 billion or so in payouts to states and the feds.

"A defeat would weaken Indianapolis-based Lilly's position in nine other states' suits and separate consumer-protection investigations in about 30 states. The company resolved about 31,000 patients' claims for $1.2 billion. Total exposure in the rest may reach $2 billion, said David Stallard, a lawyer for Utah, which sued last year. That's equivalent to $1.83 a share.

"'We'll feel like we have a stronger hand if Lilly loses,' Stallard, 55, said from Salt Lake City. 'Even if Lilly was willing to pay $1 billion, it isn't enough to satisfy all the parties at the table.'"

Earlier reports indicated that Lilly was seeking to settle claims with the feds and some of the states for about $1 billion.

No news yet from Anchorage on how the trial has gone the last two days.

BTW, I'll mostly be offline today. Traffic is slow due to spring break/Easter break and I'm catching up on some other things.