DiagnosticsAttorney General Martha Coakley's Office Reaches $22 Million Medicaid Fraud Settelement From Eli Lilly
Massachusetts Attorney General Martha Coakley"s Office has reached an agreement with pharmaceutical manufacturer Eli Lilly & Co. ("Lilly"), resolving allegations that the company engaged in the improper marketing of its atypical antipsychotic drug, Zyprexa. Under the terms of the settlement, Lilly has paid $22,499,433.04 to the Massachusetts Medicaid Program, which provides funds for health care products and services to eligible low-income individuals, including people with disabilities, children and elder citizens.
The Massachusetts recovery is part of a national settlement that has returned more than $700 million to Medicaid programs nationwide and an additional $65 million to other federal health care programs. Attorney General Coakley"s office took a leading role in negotiating the agreement by serving as the lead representative and negotiator on the team responsible for protecting the interests of 36 states and the District of Columbia. The coalition of states, which included attorneys general of the states of Ohio, New York, Illinois, New Jersey, Texas and Delaware, worked in cooperation with the U.S. Attorney"s Office for the Eastern District of Pennsylvania, the U.S. Department of Justice and the Office of Inspector General of the U.S. Department of Health and Human Services. The federal government announced its settlement with Lilly on January 15, 2009.
"Our office will continue to take a leadership role, in Massachusetts and on a national level, in making sure health care corporations that engage in improper sales or marketing practices are held accountable." said Attorney General Coakley. "Particularly during times of economic distress and budget cutbacks, it is not acceptable for any company whose products or services are paid for by the Medicaid program to conduct business in an unfair or deceptive manner."
Federal and state investigators determined that Lilly promoted the sale and use of Zyprexa for unapproved uses through a marketing campaign called "Viva Zyprexa." The promotional activities undertaken by Lilly in the Viva Zyprexa campaign were designed to increase the prescribing of Zyprexa not only by psychiatrists but also by primary care physicians, and targeted such unapproved uses as the treatment of depression, anxiety, irritability, disrupted sleep, nausea and gambling addiction. As a result of these promotional activities, Lilly improperly caused physicians to prescribe Zyprexa for children and adolescents, dementia patients in long term care facilities, and in unapproved dosage amounts. The allegations that formed the basis of the joint federal-state investigation took place between September 1999 and December of 2005.
In addition to the civil settlements, Lilly has pleaded guilty to a one count misdemeanor violation of the Food, Drug and Cosmetic Act and paid federal criminal fines and forfeitures totaling $615 million. The company has also entered into a detailed and comprehensive Corporate Integrity Agreement (CIA) to be administered by the Office of Inspector General of the U.S. Department of Health and Human Services, under which its sales and marketing of Zyprexa going forward will be strictly monitored. The total monetary value to the state and federal governments of the combined criminal/civil resolution of this investigation - more than $1 billion - represents the largest recovery in a health care fraud investigation in U.S. history.
Lilly is a major pharmaceutical manufacturer incorporated in Indiana, with its principal place of business located in Indianapolis. Lilly"s Zyprexa is one of a class of drugs designated as atypical anti-psychotics. It is approved by the U.S. Food and Drug Administration for the treatment of adults suffering from schizophrenia and certain forms of bipolar disorder. This settlement is based on four whistleblower lawsuits filed in federal court in Philadelphia, all of which alleged that Lilly employed illegal off-label marketing schemes to promote sales of Zyprexa.
Off-label prescribing of pharmaceutical products by physicians is a common practice and is not unlawful, but the U.S. Food, Drug and Cosmetic Act prohibits pharmaceutical manufacturers from marketing off-label uses of their products. The settlement addresses these off-label claims only, and does not release Lilly from liability for consequential damages, including claims arising from adverse health effects suffered by Medicaid recipients or other health care consumers as a result of taking Zyprexa.
The matter was handled by Assistant Attorney General Robert Patten of Attorney General Coakley"s Medicaid Fraud Division. He was assisted by Data Analyst Anthony Megathlin, also of the Medicaid Fraud Division, and by Assistant Attorneys General from Ohio, New York, Illinois, New Jersey, Texas and Delaware and the District of Columbia.
Office of Massachusetts Attorney General Martha Coakley