Published: 01-16-09
Joint state-federal agreement resolves Medicaid fraud charges against Eli Lilly
AUSTIN – Texas Attorney General Greg Abbott today resolved an enforcement action against Eli Lilly & Co. that will recover more than $30 million in Medicaid funds for the state of Texas in a state/federal government share.
Under today’s agreement the Indiana-based company has agreed to pay $800 million to Texas the federal government and other states for unlawfully marketing its antipsychotic prescription drug Zyprexa. To resolve the related criminal charges the company also pled guilty to a misdemeanor violation of the federal Food Drug and Cosmetic Act and agreed to pay a $615 million criminal fine. Altogether Lilly will pay $1.4 billion to resolve the combined state and federal enforcement actions.
“State and federal law prohibits pharmaceutical manufacturers from marketing their products for uses that have not been approved by the federal government” Attorney General Abbott said. “Today’s settlement concludes a lengthy investigation into an illegal effort to market a powerful anti-psychotic drug for unapproved purposes. This agreement protects patients by preventing the defendant from conducting these unlawful marketing campaigns and it serves the taxpayers who were stuck paying the bill when Medicaid patients were prescribed Zyprexa for unapproved uses.”
A multi-state jurisdictional investigation into Eli Lilly uncovered the defendant’s deliberate effort to illegally market Zyprexa for use by certain Medicaid-eligible patients including children and elderly dementia sufferers.
In 2000 Eli Lilly launched its “Viva Zyprexa” marketing campaign that deceptively suggested that the drug was appropriate for children and elderly depression and anxiety sufferers. However Zyprexa had only been approved by the U.S. Food and Drug Administration (FDA) for adult schizophrenia and bipolar disorder. Because of the unlawful marketing campaign Medicaid paid for Zyprexa prescriptions that would not have otherwise been requested by physicians.
In addition the defendant either downplayed or omitted information about Zyprexa’s often serious side effects such as weight gain and diabetes. According to investigators Eli Lilly urged doctors to use Zyprexa to treat behavioral or mood disorders and symptoms such as irritability and disrupted sleep. While physicians may prescribe drugs for “off-label” uses – or uses not approved by the FDA – state and federal law prohibit drug manufacturers from marketing drugs to providers for off-label purposes.
Under the settlement Eli Lilly will enter into a corporate integrity agreement with the U.S. Department of Health and Human Services’ Office of Inspector General which will monitor the defendant’s future marketing and sales practices.
A National Association of Medicaid Fraud Control Units team conducted the investigation and settlement negotiations with Eli Lilly on behalf of multiple states. Team members included representatives from Texas Massachusetts New York Ohio Delaware New Jersey and Illinois.
Today’s announcement by the Attorney General reflects a continuing crackdown on waste fraud and abuse in the Medicaid system. In 2006 alone the Texas Medicaid program cost more than $17 billion. To save taxpayer dollars Attorney General Abbott has dramatically expanded both the Civil Medicaid Fraud Section and the Medicaid Fraud Control Unit. Since Attorney General Abbott took office the civil and criminal Medicaid fraud sections have recovered more than $300 million.
To obtain more information about the Attorney General’s efforts to fight Medicaid fraud access the agency’s Web site at www.texasattorneygeneral.gov
