Eli Lilly is having trouble obtaining and retaining insurance coverage for Zyprexa litigation because apparently insurance companies are no longer willing to buy its wide eyed innocence routine when it comes to the company's fraudulent off-label marketing schemes.
In filings with the SEC, Lilly admits that it is having problems and that the company may end up having to pay its own Zyprexa costs, but blames it on the insurance industry stating: "We have experienced difficulties in obtaining product liability insurance due to a very restrictive insurance market and therefore will be largely self-insured for future product liability losses."
As for the insurance that Lilly does have to cover past and future Zyprexa lawsuits, the filing reports that carriers have raised defenses to their liability and are seeking to rescind the policies, and Lilly further warns that, "there is no assurance that we will be able to fully collect from our insurance carriers on past claims."
Some internal Lilly documents recently leaked to the press, that Lilly somehow managed to have sealed with a court order, reveal that Lilly hid the side effects of Zyprexa identified in its own clinical trials a decade ago and engaged in wide-ranging off-label marketing schemes to make a drug approved by the FDA only to treat adults with schizophrenia and bipoloar disorder into its top selling product bringing in a reported $30 billion thus far.
In light of these insurance problems, Lilly could be likened to a dog chasing its tail. While on one hand, it is being sued for illegally marketing Zyprexa off-label, if it stops the illegal conduct profits will plummet and it won't have the money to pay the litigation costs.
However, Lilly has apparently decided to take the low road, because to date, settling with 26,500 Zyprexa cases out of court by paying out over $1.2 billion has done nothing to lower the off-label sales figures for Zyprexa. In fact, in 2006, sales of the drug increased 12%, according to SEC filings.
In 2003, the FDA ordered warning labels on all atypicals, of an increased risk of high blood sugar and diabetes and said blood sugar surges in some patients were associated with life-threatening medical conditions or death. In 2005, the FDA added the strongest warning available, a black box, stating that the drugs increased the risk of death in elderly patients with dementia. The warnings did nothing to slow off-label prescribing of Zyprexa.
It is still being freely prescribed for uses never approved or intended. On April 25, 2006, Bloomberg News reported that in 2005, nearly 7 children out of one thousand were taking an antipsychotic, and among senior citizens 65 and older, antipsychotic use was 21 per 1000. Per patient antipsychotic costs for children 19 and under have increased 196%, or nearly triple 2001's total, according to Bloomberg.
An assessment by Christoph Correll, Child and Adolescent Psychiatric Clinics of North America, January 2006, in USA Today, shows Zyprexa to be the worst of the atypicals for children and lists side effects of diabetes and weight gain with Zyprexa as "severe."
Zyprexa is not approve for any on-label indication for children but even if it was, schizophrenia is extremely rare in children at about 1 in 40,000 under the age of 18, according to the National Institute of Mental Health, and psychiatrists do not even agree on what criteria should be used to diagnose children with bipolar disorder.
Yet the rate of children treated with atypicals "is growing dramatically faster than the rate for adults," Robert Epstein, chief medical officer for Medco Health Solutions, pharmacy benefit managers, told USA Today.
Medco did an analysis of outpatient prescriptions for USA Today and found that, in a sampling of about 2.5 million of its 55 million insured members, the rate of children 19 and under with at least one atypical jumped 80% from 2001 to 2005. And that number only represents privately insured kids, and not those in foster care or covered by Medicaid.
In what outraged critics called an unethical and dangerous experiment conducted by Lilly on children, on May 1, 2006, the New York Times, reported that "psychiatric researchers have been experimenting with a bold and controversial treatment strategy: they are prescribing drugs to young people at risk for schizophrenia who have not yet developed the full-blown disorder."
The study, co-funded by Eli Lilly and the National Institute of Mental Health, and published in the May 2006, American Journal of Psychiatry, involved 60 patients, mostly adolescents, who supposedly scored high on a scale that assessed the risk for psychosis.
The scale rated the severity of over a dozen symptoms including categories such as grandiosity, suspiciousness, and bizarre thoughts. The researchers claimed that from 20% to 45% of the people who scored high would go on to develop full-blown psychosis, in which the symptoms would become extreme.
In the first year of what was scheduled to be a 2-year trial, five of the 31 patients on the drug developed full-blown psychosis, compared to 11 of the 29 who were on placebos. However, by the end of the first year, more than two-thirds of the patients had quit, making it impossible to interpret any differences between the 2 groups.
A big hurdle with the Zyprexa issue is Lilly's credibility over their continuous PR on how they are going to pay out $1.2 billion in damages.As long as they keep up this rhetoric and don't actually pay the issue won't go away.
Think about the need to 'put their money where their mouth is'.
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Daniel Haszard
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Danny Haszard (1 articles, 0 quicklinks, 0 diaries, 50 comments)
on Monday, February 5, 2007 at 11:34:19 AM
