S.C. the largest in last round of Zyprexa settlements so far

John O'Brien Oct. 26, 2009, 4:59pm


COLUMBIA, S.C. (Legal Newsline) - South Carolina Attorney General Henry McMaster announced Friday that his settlement with Eli Lilly & Co. over its prescription antipsychotic Zyprexa is worth $45 million.

Outside counsel hired by McMaster will receive more than $6.5 million for their work on the case, while McMaster's office is receiving $647,000. The remaining $37.8 million will go to the state Medicaid program, the South Carolina Employee Insurance Program and consumer protection causes.

Contributions made by the counsel representing South Carolina to McMaster became an issue in September, before McMaster, who is running for governor, announced that he was returning them.

John White of Harrison White Smith & Coggins and John Simmons of Simmons Law Firm both had donated to McMaster's campaigns. White gave $2,000 to McMaster in 2008, and Simmons gave McMaster $7,000 ($3,500 in 2006 and 2008).

Other members of Harrison White who gave to McMaster include: Danny Smith ($2,000 in 2007 and $2,000 in 2008); Ben Harrison ($2,000 in 2007); and Donald Coggins ($3,500 in 2006).

The firm itself gave McMaster $3,500 in both 2006 and 2008.

Houston-based plaintiffs firm Bailey Perrin Bailey also represented the State.

"This is a victory for South Carolina's taxpayers who were forced to bear the financial costs of Eli Lilly's unlawful conduct," McMaster said. "Our case was sound. The evidence we presented was overwhelming. And I am pleased to say justice has been served."

Twelve states did not settle their claims against Eli Lilly in a 33-state, $62 million settlement. Connecticut settled for $25.1 million, and West Virginia settled for more than $22 million, with $6.75 going to outside counsel hired by state Attorney General Darrell McGraw. Idaho settled its case for $13 million, with more than $2.5 million going to outside attorneys.

Eli Lilly has paid $1.4 billion to settle federal civil and criminal claims stemming from alleged off-label marketing.

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

The holdout states alleged harm to their Medicaid programs because Zyprexa caused weight gain-related side effects like diabetes and hypertension.

Most of those states have reached settlements, but they have not been made final.

Only Mississippi has not reached a settlement from a group of states that had claims in federal court. The others are West Virginia, Connecticut, Minnesota, Montana, New Mexico, Louisiana and Utah.

South Carolina's case was litigated in state court. Utah, Pennsylvania and Arkansas have cases remaining in state courts.

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

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