Lilly settles Ark. suit brought by Bailey firm
LITTLE ROCK, Ark. (Legal Newsline) - Arkansas will receive $18.5 million as a result the settlement of a lawsuit filed against pharmaceutical company Eli Lilly.
The $18.5 million settlement is the largest pharmaceutical settlement and second-largest civil settlement in Arkansas state history. It is the same size as a recent Lilly settlement with Mississippi, which -- like Arkansas -- was represented by Houston firm Bailey Perrin Bailey.
Arkansas was one of 12 states that did not participate in a previous 33-state, $62 million settlement. The suits allege Lilly marketed Zyprexa for off-label purposes and that the drug caused weight gain-related side effects like diabetes and hypertension.
"When drug companies seek to circumvent FDA measures meant to ensure the safety of our citizens, it endangers lives and unnecessarily increases costs," Arkansas Attorney General Dustin McDaniel said Tuesday.
The other holdout states that have settled are:
-Connecticut settled for $25.1 million;
-West Virginia settled for more than $22 million ($6.75 went to outside counsel hired by state Attorney General Darrell McGraw);
-Idaho settled its case for $13 million ($2.5 went to outside counsel hired by state Attorney General Lawrence Wasden);
-New Mexico settled its case for $15.5 million ($5.4 million went to outside counsel hired by former state Attorney General Patricia Madrid);
-Mississippi settled its case for $18.5 million ($3.7 million went to outside counsel hired by state Attorney General Jim Hood);
-Utah settled for $24 million (more than $4 million went to outside counsel hired by state Attorney General Mark Shurtleff); and
-South Carolina settled for $45 million (more than $6.5 million went to outside counsel hired by state Attorney General Henry McMaster).
Eli Lilly has also 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.
Cases brought Pennsylvania, Louisiana, Montana and Minnesota are still pending. Pennsylvania's was brought by Gov. Ed Rendell, not state Attorney General Tom Corbett.
Rendell hired BPB, which donated $75,000 to his campaign fund and offered $16,000 in air travel, for the case. The firm also donated $75,000 to Hood and $70,000 to the Arkansas Democratic Party in 2006.
U.S. District Judge Jack Weinstein had rejected the firm's statistical analysis it said showed the drug harmed the state's Medicaid program. He granted Lilly summary judgment on all but one of Mississippi's claims.
He also wrote that a ruling in favor of Mississippi could have been dangerous.
"If allowed to proceed in their entirety, the State's claims could result in serious harm or bankruptcy for this defendant and the pharmaceutical industry generally," he wrote.
"For the legal system to be used for this slash-and-burn style of litigation would arguably constitute an abuse of the legal process. Constitutional, statutory and common law rights of those injured to seek relief from the courts must be recognized. But courts cannot be used as an engine of an industry's destruction."
From Legal Newsline: Reach John O'Brien by e-mail at email@example.com.