Pharma suit has familiar ring for Utah AG

John O'Brien May 14, 2010, 2:22pm


SALT LAKE CITY (Legal Newsline) - Six months after a $24 million settlement with pharmaceutical maker Eli Lilly & Co., the state of Utah is headed back to court with the same argument and the same attorneys.

The only thing that's changed is the defendants.

Utah Attorney General Mark Shurtleff filed a lawsuit May 3 against Janssen Pharmaceutica and AstraZeneca, both of which made an antipsychotic drug that was allegedly marketed for off-label uses.

That, plus alleged side effects associated with weight gain, is the essence of the lawsuit against Eli Lilly over its antipsychotic Zyprexa.

"It's basically the same sort of theories," Assistant Attorney General Bob Morton told Legal Newsline Thursday.

Thirty-two states and the District of Columbia participated in a $62 million settlement with Eli Lilly, but 12 states held out and decided to file their own suits. More than 30 states also received funds from a $1.4 billion settling of federal civil and criminal claims.

Ten of the 12 that held out of the $62 million settlement have since settled their lawsuits for a total of more than $218 million. South Carolina brokered the largest agreement, at $45 million.

AstraZeneca similarly settled federal claims on April 27. That agreement is worth $520 million.

"It's the same sort of idea -- you either participate in the global settlement and take what's given to you, or you opt out and go at it alone," Morton said. "That's what we're doing with regard to this suit. We feel we can get a better recovery, as we did in the Zyprexa case."

Morton added that global settlements often have a different model to calculate damages than a state might use.

"In the global settlements, you're looking at pill costs -- 'You engaged in off-label marketing, we purchased this number of pills, this is what you owe us,'" he said.

"Ours is not only for pill costs but consequential damages. That obviously bumps the damages up significantly."

The states involved in the federal Zyprexa settlement received approximately $362 million to split. The AstraZeneca settlement provides up to $218.1 million for states.

AstraZeneca said it was smarter to settle the claims and did not admit any wrongdoing.

"It is in the best interest of AstraZeneca to resolve these matters and to move forward with our business of discovering and developing important, life-changing medicines while avoiding the delay, uncertainty and expense of protracted litigation," Glenn Engelmann, the company's general counsel, said in a statement.

Morton said he doesn't expect a quick resolution to any state's lawsuit against AstraZeneca, noting that pharmaceutical companies usually mount a strong defense.

Part of Utah's litigation team is the Salt Lake City firm Steele & Biggs, which worked on the Zyprexa case.

The firm is a part of Siegfried & Jensen, which has donated to Shurtleff's campaign over the years.

The firm has donated $58,000 to Shurtleff and hired his daughter to work as a paralegal on Zyprexa and Vioxx cases. Shurtleff's daughter only worked for the firm for less than a year, quitting to give birth and spend time with her child.

Morton said the firm brings "a wealth of experience" to the suit.

"Joe Steele was actively involved with the litigation team up in Alaska for the Zyprexa case and got us a very good result on our Zyprexa case," he added.

"It is kind of a unique piece of litigation, and prior experience with it is very, very helpful."

Joining Steele & Biggs in filing the complaint was Barroway Topaz Kessler Meltzer & Check of Pennsylvania; Nix, Patterson & Roach of Texas; and Rossbach Hart of Montana.

Rossbach Hart represented Montana in Zyprexa litigation, and the Barroway firm represented Ohio pension funds in litigation against Bank of America.

From Legal Newsline: Reach John O'Brien by e-mail at

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