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Eli Lilly’s history of deception and fraud in marketing the psychiatric drug Zyprexa is apparently making it more difficult for them to find insurance for product liability.

Nobody Buys Lilly’s Innocence Routine About Zyprexa

Date Published:

Feb 05, 2007 03:00 AM

Author: Evelyn Pringle

Source: OpEdNews

Eli Lilly is having trouble obtaining and retaining insurance coverage for Zyprexa litigation because apparently insurance companies are no longer willing to buy its wide eyed innocence routine when it comes to the company’s fraudulent off-label marketing schemes.

In filings with the SEC, Lilly admits that it is having problems and that the company may end up having to pay its own Zyprexa costs, but blames it on the insurance industry stating: “We have experienced difficulties in obtaining product liability insurance due to a very restrictive insurance market and therefore will be largely self-insured for future product liability losses.”

As for the insurance that Lilly does have to cover past and future Zyprexa lawsuits, the filing reports that carriers have raised defenses to their liability and are seeking to rescind the policies, and Lilly further warns that, “there is no assurance that we will be able to fully collect from our insurance carriers on past claims.”

Some internal Lilly documents recently leaked to the press, that Lilly somehow managed to have sealed with a court order, reveal that Lilly hid the side effects of Zyprexa identified in its own clinical trials a decade ago and engaged in wide-ranging off-label marketing schemes to make a drug approved by the FDA only to treat adults with schizophrenia and bipoloar disorder into its top selling product bringing in a reported $30 billion thus far.

In light of these insurance problems, Lilly could be likened to a dog chasing its tail. While on one hand, it is being sued for illegally marketing Zyprexa off-label, if it stops the illegal conduct profits will plummet and it won’t have the money to pay the litigation costs.

However, Lilly has apparently decided to take the low road, because to date, settling with 26,500 Zyprexa cases out of court by paying out over $1.2 billion has done nothing to lower the off-label sales figures for Zyprexa. In fact, in 2006, sales of the drug increased 12%, according to SEC filings.

In 2003, the FDA ordered warning labels on all atypicals, of an increased risk of high blood sugar and diabetes and said blood sugar surges in some patients were associated with life-threatening medical conditions or death. In 2005, the FDA added the strongest warning available, a black box, stating that the drugs increased the risk of death in elderly patients with dementia. The warnings did nothing to slow off-label prescribing of Zyprexa.

It is still being freely prescribed for uses never approved or intended. On April 25, 2006, Bloomberg News reported that in 2005, nearly 7 children out of one thousand were taking an antipsychotic, and among senior citizens 65 and older, antipsychotic use was 21 per 1000. Per patient antipsychotic costs for children 19 and under have increased 196%, or nearly triple 2001’s total, according to Bloomberg.

An assessment by Christoph Correll, Child and Adolescent Psychiatric Clinics of North America, January 2006, in USA Today, shows Zyprexa to be the worst of the atypicals for children and lists side effects of diabetes and weight gain with Zyprexa as “severe.”

Zyprexa is not approve for any on-label indication for children but even if it was, schizophrenia is extremely rare in children at about 1 in 40,000 under the age of 18, according to the National Institute of Mental Health, and psychiatrists do not even agree on what criteria should be used to diagnose children with bipolar disorder.

Yet the rate of children treated with atypicals “is growing dramatically faster than the rate for adults,” Robert Epstein, chief medical officer for Medco Health Solutions, pharmacy benefit managers, told USA Today.

Medco did an analysis of outpatient prescriptions for USA Today and found that, in a sampling of about 2.5 million of its 55 million insured members, the rate of children 19 and under with at least one atypical jumped 80% from 2001 to 2005. And that number only represents privately insured kids, and not those in foster care or covered by Medicaid.

In what outraged critics called an unethical and dangerous experiment conducted by Lilly on children, on May 1, 2006, the New York Times, reported that “psychiatric researchers have been experimenting with a bold and controversial treatment strategy: they are prescribing drugs to young people at risk for schizophrenia who have not yet developed the full-blown disorder.”

The study, co-funded by Eli Lilly and the National Institute of Mental Health, and published in the May 2006, American Journal of Psychiatry, involved 60 patients, mostly adolescents, who supposedly scored high on a scale that assessed the risk for psychosis.

The scale rated the severity of over a dozen symptoms including categories such as grandiosity, suspiciousness, and bizarre thoughts. The researchers claimed that from 20% to 45% of the people who scored high would go on to develop full-blown psychosis, in which the symptoms would become extreme.

In the first year of what was scheduled to be a 2-year trial, five of the 31 patients on the drug developed full-blown psychosis, compared to 11 of the 29 who were on placebos. However, by the end of the first year, more than two-thirds of the patients had quit, making it impossible to interpret any differences between the 2 groups.

The only definite finding of the study was that patients taking the drug gained an average of 20 pounds, once again documenting a side effect that has been known for 15 years.

Experts say the rapid weight gain is the most worrisome side effect of Zyprexa because obesity leads to so many other serious health problems like diabetes, hypertension and heart disease.

Public health programs are throwing good money after bad paying for Zyprexa. A recent study published in the October 12, 2006, New England Journal of Medicine, funded by the National Institute of Mental Health, found atypical use with Alzheimer patients was no more effective than a placebo for most patients and put them at risk of serious side effects including confusion, sleepiness and Parkinson like symptoms.

According to the report, about a third of the roughly 2.5 million Medicare beneficiaries in nursing homes have taken atypicals, and their use accounts for an estimated $2 billion in annual sales, much of it paid by Medicare and Medicaid.

All that said, Lilly cannot claim to be unaware of the continued off-label sale of Zyprexa in the US, because it buys the detailed prescribing records for every doctor in the country and provides them to sales representatives so they can better direct the company’s promotion efforts.

Lilly knows exactly which doctors are prescribing Zyprexa, in what dose, and how often, on any given day of the year and that places Lilly in the best position to contact doctors to tell them to halt the off-label prescribing but that obviously has not happened.

Allowing Lilly to keep documents that were produced in litigation hidden even after the cases were settled has done nothing to curb the off-labeling prescribing of Zyprexa either.

And, the fact that a judge would even entertain Lilly’s demands to place the recently released documents back under seal has resulted in outrage voiced by health care professionals all over the US. The pubic health crisis created by Lilly’s off-label sale of Zyprexa for 10 years without warning about the health risks is no small matter.

On November 16, 2005, USA Today interviewed FDA scientist, Dr David Graham, the man famous for blowing the whistle on the mishandling of the Vioxx disaster, who estimates that there are 62,000 deaths each year from the off-label use of atypical drugs.

The allegations made by the plaintiffs in the underlying litigation are all verified in the leaked documents. For instance, the California law firm, Hersh and Hersh, represented plaintiffs in the first settlement, who alleged that Lilly “fraudulently withheld relevant information from potential users of Zyprexa.”

The lawsuits also alleged a failure to warn doctors and patients that Zyprexa carried potentially lethal risks from weight gain and diabetes, and one of the leaked documents dated 6 years ago, written by a panel of diabetes doctors hired by Lilly to assess the diabetes risk, warned Lilly back then that “unless we come clean on this, it could get much more serious than we might anticipate.”

According to Leonard Roy Frank, in “Zyprexa: A Prescription for Diabetes, Disease and Early Death,” in the August 2005, edition of Street Spirit, if Lilly had issued the warnings, “there undoubtedly would have been fewer cases of diabetes and fewer deaths from taking Zyprexa.”

“But truthfulness is not one of Eli Lilly’s strong suits when profits are at stake,” Mr Franks says.

“Telling the truth,” he points out, “would undoubtedly have cut into sales for its blockbuster drug (the fifth best-selling prescription drug in the world), which, in 2004, produced revenues of $4.4 billion, almost a third of the company’s total revenues and more than a third of its profits.”

This is not the first time that the judge’s Zyprexa protective order has been criticized. In 2005, the Swedish Academy of Pharmaceutical Sciences journal ran an article titled, “Lilly is hiding negative information about Zyprexa,” featuring an interview with Dr Curt Furberg, Professor of Public Health Sciences, at Wake Forest University.

Dr Furberg said that he had seen secret documents on Zyprexa in his capacity as an expert witness and stated that the most hazardous effects of Zyprexa were hidden from prescribing physicians and the public.

The hidden Zyprexa evidence is said to be worse than that revealed on Vioxx and Dr Furber’s interview provides good insight into why Lilly would early on agree to pay a $690 million settlement to the first round of Zyprexa plaintiffs, which allowed the company to keep the damaging evidence buried.

According to Lilly, the company has produced approximately 11 million documents and the court has, without any stated reasons, allowed Lilly to designate all 11 million as confidential pursuant to Case Management Order 3, an August 9, 2004, protective order.

Attorneys involved in the case say Lilly was even permitted to designate reports and articles about Zyprexa that appeared in the media as confidential.

In mid-December 2006, Alaskan attorney, Jim Gottstein, obtained some of the sealed documents by issuing a subpoena for Dr David Egilman, another expert witness who evaluated the Zyprexa documents for a law firm in the underlying litigation, to appear for a deposition.

As soon as he received the documents, Mr Gottstein set out to publicize the information by immediately providing copies to journalists and authors including Dr Peter Breggin, Dr Grace Jackson, Dr David Cohen, Dr Stefan Kruszewski, Judy Chamberlin, Vera Sherav, Robert Whitaker, and Alex Berenson at the New York Times.

When articles began appearing in the Times, Lilly obtained an injunction that required Mr Gottstein to return the documents and identify everyone they were disclosed to.

After Lilly received the names, on December 29, 2006, the court issued a second temporary injunction to prohibit the dissemination of the documents by Terrie Gottstein, Jerry Winchester, Will Hall, Bruce Whittington, and Laura Ziegler.

The injunction also barred the disclosure of the information about Zyprexa by many of the most well-known experts on psychiatric drugs in the US, who are also journalists and authors, to include Dr Peter Breggin, Dr Grace Jackson, Dr David Cohen, Dr Stefan Kruszewski, Judy Chamberlin, Vera Sherav, and Robert Whitaker.

At Lilly’s request, in early January, 2007, more names were added to the injunction including two websites belonging to the consumer protection and patient advocacy organization, the Alliance for Human Research Protection (AHRP), at and, and the web site of the international patient advocacy organization, MindFreedom, at, and Eric Whalen and his web site at

The name of New York Times reporter, Alex Berenson, the only journalist who actually quoted from the documents in the press was not included in any injunction. Lilly in fact never asked for an injunction against the Times, and Judge Jack Weinstein announced in one hearing that he was not going to issue an injunction against the Times.

However, for the others journalist, the litigation process has dragged out at snail’s pace and Lilly has been successful in getting the court to bar them from discussing or writing about the public health risk created by the continued off-label prescribing of Zyprexa.

Attorney, Alan Milstein, representing Ms Sharav, the AHRP, and Dr Cohen, has filed a motion asking the judge to unseal the documents in question from the original protective order on the grounds that they should not have been designated confidential to begin with.

At a January 17, 2007, hearing Mr Milstein told Judge Weinstein that the documents are critically important to saving human lives, to prevent human suffering and “this Court should in no way assist Lilly in keeping them from the public.”

The above statement by Mr Milstein is not an exaggeration. According to recently updated estimates by Allen Jones, a former Medicaid fraud investigator, in considering the $10 billion a year spent on atypicals in the US, the death rate would be close to one patient per $162,000 spent on Zyprexa, or nearly six deaths for every million.

Lilly is now seeking civil and criminal contempt charges against Mr Gottstein and Dr Egilman for their part in warning the public, which Mr Gottstein admits will hopefully have a negative impact on the sale of Zyprexa for unapproved uses.

Dr Egilman has recently notified Lilly that he will not be attending what could be seen as his own funeral in refusing to testify against himself at a deposition based on his right against self-incrimination under the Fifth Amendment of the US Constitution.

Several of the authors and journalists restrained by the injunction have obtained private attorneys to file briefs arguing against their inclusion based on rights guaranteed by the First Amendment and some have testified in person or by phone at court hearings.

Attorney, Fred von Lohmann, of the Electronic Frontier Foundation, filed a brief to object to the injunction on behalf of John Doe, referred to as a citizen-journalist who contributes to the Wiki web site and states: “The information that Doe desires to publish on the Wiki (including links to sites where the Lilly Documents can be obtained) plainly relate to a matter of overriding public concern.”

Lilly apparently believes that showing that there has not been widespread viewing of the documents is important. However, after Lilly told the judge that they were not available on the internet and that a grassroots campaign to disseminate them had “fallen flat,” Mr von Lohmann filed a brief saying Lilly “appears to have been incorrect,” and supplied the court with affidavits by two persons who said they easily found and downloaded the files on the internet, and in one instance it only took 19 minutes.

Ted Chabasinski, the attorney for Robert Whitaker, Judi Chamberlin, and David Oaks, the Director of Mindfreedom, is calling for criminal charges against Lilly executives for illegally marketing Zyprexa for unapproved uses, with full knowledge that thousands of patients were being injured and killed. In his latest brief filed on Feb 1, 2007, Mr Chabasinski says the documents that Lilly claims should be kept secret show this:

“Certain executives of defendant corporation, motivated by greed, deliberately engaged in a course of action that they knew would cause, and did cause, the injury and death of thousands of people.

“Because of defendant executives’ depraved disregard for human life, thousands upon thousands of innocent people were left with their bodies bloated, their health ruined, and their lives severely shortened or rapidly ended.”

Mr Chabasinski is advising members of the public to contact state attorneys general to direct their attention to the Times articles and the existence of the secret Zyprexa files and a list of current state attorneys general is posted on the Mindfreedom web site.

Ms Sharav testified at a January 17, hearing that the public needs to be warned “because vulnerable people such as children and the elderly and disabled people are being targeted to take drugs that are doing them more harm than there is any evidence of benefit.”

She freely expressed her views about Lilly which prompted Lilly’s legal team to ask that her comments be stricken from the record but the request was denied. When asked what the secret documents showed with respect to the practices of Lilly, she stated:

“In my opinion, this is about the worst that I have seen. It borders on indifference to human life. Eli Lilly knew that Zyprexa causes hypoglycemia, diabetes, cardiovascular damage and they set about both to market it unlawfully for off label uses to primary care physicians and they even set about to teach these physicians who were not used to prescribing these kind of drugs to, they taught them to interpret adverse effects from their drug Prozac and the other antidepressants which induce mania.

“They taught them that if a patient presented with mania after having been on antidepressants, that that was an indication for prescribing Zyprexa for bipolar which is manic depression. That is absolutely outrageous and that is one of the reasons that I felt that this should involve the Attorney General.”

“The sales of a drug that was approved for very limited indications, for schizophrenia and for bipolar,” Mr Sharav stated. “Each one of these is about one to 2 percent of the population,” she pointed out.

“But the reason the drug became a four and a half billion dollar seller in the United States,” she testified, “is because they encouraged the prescription for children, for the elderly, for all sorts of reasons.”

She said her organization had disseminated a video on U-Tube in which a “former Zyprexa salesman tells exactly what they were taught and how they were taught to defuse doctors’s concerns who saw their patients as he put it blow up.”

Ms Sharav testified that she asked Mr Gottstein for 2 copies of the documents because she wanted to deliver one to the New York State Attorney General.

Attorney, Richard Meadows, who represented some of the plaintiffs in cases settled out of court was called to testify and attorneys were able to establish that the information contained in the leaked documents is basically nothing new.

He admitted that the two central allegations in the underlying lawsuits was that Zyprexa was marketed off-label and that when Lilly sought FDA approval of the drug that Lilly had information that showed that there were dangers in regard to the drug.

Near the end of the hearing, Attorney Milstein argued that the foundation for the injunction was that the Lilly documents were trade secrets and “yet in all of the papers they filed, all they do is say, without any kind of support, that they are trade secrets.”

He objected to the blanket court order for 11 million documents. “You heard the testimony of the plaintiffs’ attorney,” he told the judge, “who said to his knowledge, that virtually every document produced by Lilly in this case is marked confidential.”

In one of the latest development in this bizarre legal battle, Judge Weinstein has issued a court order with the word “Invitation” asking Mr Berenson to appear in court, apparently to guarantee him a front row seat at his own hanging, by giving testimony on whether he participated in what the judge called a “conspiracy” with Dr Egilman and Mr Gottstein to violate the order that sealed the secret documents to begin with.

On the other side of the coin, if the documents remain sealed, Mr Franks warns that users of the drug, doctors, and the public are still almost totally in the dark about the clinical trials and what he calls, “Zyprexa’s shameful history.”

He says Zyprexa was approved based on the results of a six-week clinical trial that involved 2,500 subjects, and two-thirds of them did not even successfully complete it. “Among those who stuck it out,” he reports, “22 percent of the Zyprexa subjects suffered a “serious” adverse effect, compared to 18 percent in the group taking Haldol.”

Besides severe weight gain, Mr Franks says, other adverse effects included shaking, spasms, sedation, diabetic complications, rapid heartbeat, restlessness, constipation, seizures, liver problems, white blood cell disorders, and decreased blood pressure.

There were a total of 20 deaths, including 12 suicides, in the Zyprexa group. Information documenting these deaths was obtained from FDA files using the Freedom of Information Act, by one of the currently muzzled journalists, Robert Whitaker, who wrote that one in every 145 subjects who entered the trials for Zyprexa, and the other atypicals, died in his best selling book, “Mad in America: Bad Science, Bad Medicine, and the Enduring Mistreatment of the Mentally Ill.”

According to Mr Frank, Lilly has another perverse reason for pushing Zyprexa. “It’s a cruel irony,” he says, “that while the company is filling its coffers by selling a drug that can cause diabetes, four of its top-selling drugs are treatments for diabetes.”

“Eli Lilly gets the customer coming and going,” he states.

by Evelyn Pringle

Author’s Bio: Evelyn Pringle is a columnist for OpEd News and investigative journalist focused on exposing corruption in government and corporate America.