Judge wants 'global settlement' of remaining AG Zyprexa suits

John O'Brien Sep. 2, 2009, 5:23pm


NEW YORK (Legal Newsline) - U.S. District Judge Jack Weinstein recently continued his push to have all state actions filed against Eli Lilly & Co. over its prescription antipsychotic Zyprexa settled.

Weinstein encouraged a coordinated effort between states with actions in state courts and states with suits pending in federal courts in an Aug. 17 memorandum. Last year, Weinstein told the federal court parties to take 30 days off to hammer out settlements.

West Virginia recently settled its case with Lilly for $22.5 million, with more than $6 million going to private firms hired by state Attorney General Darrell McGraw to pursue the suit.

"A global settlement of all cases, including those pending in state courts, is desirable," Weinstein wrote.

"This is particularly true since uniform portions of settlements already approved contain restrictions on practices in the sale of pharmaceutical products that should be uniform throughout the nation."

Weinstein sent the memo to the state court judges presiding over the cases of Arkansas, Pennsylvania, South Carolina and Utah.

"Efforts are being made to settle the cases brought by the attorneys general now pending before this court and, this court is informed, in state courts," he wrote.

"It would be useful to settle all attorney general claims as part of a coordinated effort since the issues in each are much the same and settlement terms should be relatively uniform through the country."

Though no settlements are on record in the federal cases of four states, it would appear they are not far from happening. Weinstein wrote that he is presiding only over the cases of Louisiana, Mississippi and Idaho.

He is also presiding over the cases of Connecticut, Minnesota, New Mexico and Montana.

"We've yet to settle the case," said Kevin O'Brien of the Montana Attorney General's Office.

Weinstein ordered Special Settlement Master Michael Rozen to retain a copy of the West Virginia settlement to coordinate future settlements with state attorneys general.

The states argued Eli Lilly promoted off-label uses for Zyprexa and also claimed the drug's side effects (weight gain-related issues like diabetes and hypertension) put a strain on their Medicaid programs.

Eli Lilly has already settled consumer protection claims with 33 other states for $62 million, and also agreed to pay $1.4 billion to settle federal civil and criminal claims stemming from the alleged off-label marketing.

The payment also benefited the Medicaid programs of more than 30 states that collectively received approximately $362 million.

In October, Weinstein told the parties to take 30 days off from the case to try to work out a settlement.

"While most states have settled their cases against Lilly for a few million dollars each, the states with cases now pending in this court -- Connecticut, Louisiana, Mississippi, Montana, New Mexico and West Virginia -- are seeking, on essentially the same theories and evidence, many billions of dollars in damages in fines," Weinstein wrote.

Eli Lilly has also paid $1.2 billion to settle more than 30,000 individual lawsuits.

Weinstein has requested those representing Mississippi's Jim Hood, Idaho's Lawrence Wasden and Louisiana's Buddy Caldwell be present Sept. 21 for arguments on three motions.

Lilly has filed for summary judgment in the Louisiana case, and pre-summary judgment conference will be held in the Mississippi and Idaho cases. Firms representing Mississippi and Louisiana have donated to the campaigns of the attorneys general in those states.

Bailey Perrin Bailey, representing Mississippi, gave Hood $75,000.

From Legal Newsline: Reach John O'Brien by e-mail at jobrienwv@gmail.com.

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