On Friday, a federal judge certified a Zyprexa class action lawsuit for a group of “third party payors” who allege that Eli Lilly committed fraud by selling their anti-psychotic drug at high prices, while exaggerating its benefits and understating the Zyprexa side effects.
Zyprexa was introduced by Eli Lilly in 1996 as a miracle drug for treatment of schizophrenia and bipolar disorder. It quickly became one of the pharmaceutical company’s best sellers, with annual sales of $4.8 billion by 2007.
The class action involves insurance companies, labor unions, pension funds and other companies who made payment toward Zyprexa prescription costs for users. Eli Lilly has already paid about $1.2 billion to settle thousands of Zyprexa lawsuits from individual users who suffered severe weight gain and diabetes from the medication.
Eli Lilly also faced criminal investigations for their marketing practices, which encouraged sales representatives to promote Zyprexa off-label for uses that were not approved by the FDA.
U.S. District Judge Jack B. Weinstein, from the Eastern District of New York, only certified the class action for a narrow group of claims involving the Racketeer Influenced and Corrupt Organization Act, and not claims those under state laws. The class certification also only includes payments or reimbursements for Zyprexa prescriptions administered between June 20, 2001 and June 20, 2005, although the plaintiffs had sought reimbursement for claims relating to Zyprexa as early as 1996.
The Judge’s order also unsealed hundreds of confidential documents produced by Eli Lilly as part of the Zyprexa litigation filed by users. Although Eli Lilly sought to keep the public from learning about the contents of the documents, Judge Weinstein indicated that the public’s right to be informed about contents of these documents outweighed Lilly’s interest in confidentiality.
“Public access is now advisable because this litigation involves issues of great public interest, the health of hundreds of thousands of people, fundamental questions about our system of approval and monitoring of pharmaceutical products, and the funding for many health and insurance benefit plans,” wrote Judge Weinstein in a 295 page decision.