More Zyprexa Trouble for Lilly as Insurers Want Money Too
Eli Lilly still faces a ton of legal action on its Zyprexa mismarketing, despite having paid a $1.4 billion settlement recently to state prosecutors and a separate $1.2 billion to settle individual patient plaintiffs.
That leaves insurance companies, who believe they were defrauded out of money when Lilly persuaded doctors to prescribe Zyprexa for patients they should not have — so called “off-label” use. Here’s AmLaw Daily:
There’s another, more complicated suit before the U.S. Court of Appeals for the Second Circuit, this one involving insurance companies and other third-party providers who claim they overpaid for Zyprexa prescriptions written by doctors swayed by Lilly’s false marketing of the drug. (The Food and Drug Administration has approved the drug for use only by patients suffering from schizophrenia and serious bipolar disorder.) On Friday the Second Circuit announced that it would review whether that suit is valid, and drug law experts are watching very, very closely.
The issue at stake is whether insurance companies can claim even though they were not the targets of Lilly’s fraud:
The decision didn’t resolve whether a third party with money at stake (such as an insurance provider) could sue an allegedly fraudulent marketer if its complaint is based on a different group (prescribing doctors) making decisions based on the illegal marketing. In other words, can insurance companies sue Lilly even though Lilly didn’t market Zyprexa directly to them?
In theory, judges could rule that some doctors decided to prescribe Zyprexa because they thought it would work, not because they fell for some allegedly fraudulent marketing campaign.
At least one judge is sympathetic to the opposite theory, that third-parties can be defrauded.
There’s a great back story on the whistleblower at the center of this case here.
Jim Edwards, a former managing editor of Adweek, has covered drug marketing at Brandweek for four years, and is a former Knight-Bagehot fellow at Columbia University's business and journalism schools. Follow him on Twitter or send him an email.
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