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Zyprexa Medicaid Gravy Train Derailed

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Evelyn Pringle
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He felt "funny" one Sunday morning, she recalls, "but his symptoms weren't psychiatric and, to my sorrow," she says, "I didn't take him to the ER."

"By Tuesday, he had fallen into a coma," Ellen said.

Rob never came out of the coma. He died of profound hyperglycemia four days later on October 5, 2002.

Ellen was devastated. "He didn't deserve to be killed by a drug carrying a lethal bomb that we knew nothing about," she said. "He didn't deserve to become another Eli Lilly statistic."

"And we, his family," she added, "don't deserve to carry the pain that never goes away."

According to Ellen, "Lilly continues to deny any of these ill effects because they don't want their market share disturbed."

"After the settlement in June," she says, "they continued to deny of the ill effects of Zyprexa, and only mentioned diabetes, not hyperglycemia or death."

Although Zyprexa costs a small fortune, a 12-month study by researchers at Yale, published in the November 26, 2003, Journal of the American Medical Association, followed 309 schizophrenic patients at VA hospitals nationwide and found no statistically significant advantages in patients treated with Zyprexa over the older generic Haldol, on measures of compliance, symptoms, overall quality of life, or reduced hospitalizations.

The only difference was the cost. In 2003, Zyprexa cost $3,000 to $9,000 more per patient than Haldol. In fiscal year 2003, the VA spent more than $106 million on Zyprexa.

However, public reports of the drug's adverse effects are finally taking their toll, especially in the US. In the third quarter of 2005, Zyprexa sales fell 10% to $504 million. The previous year, Zyprexa was the top-selling atypical with sales of $4.4 billion.

And for 2006, the decline in sales is likely to be even worse because Lilly now faces a major reduction in the company's most lucrative customer base: the Medicaid population, served by the federal and state funded programs that provides prescription drug coverage to the poor, disabled and people in the custody of state hospitals and prison systems.

In every state, Zyprexa represents a big line-item expense to Medicaid at a time when most states are facing a budget crisis. US sales of all anti-psychotics doubled between 2001 and 2004, largely because of purchases by Medicaid.

On September 29, 2005, Bloomberg News reported that Medicaid programs may reduce the $5.5 billion it spends annually on schizophrenia drugs for the poor after a study found a cheaper generic about as effective as new pills, including Zyprexa.

"The 40-year-old drug perphenazine costs less than $1.50 a day," Bloomberg wrote, "while the newer medicines can cost 10 times as much."

When buying a three-month supply, the retail price for Zyprexa in September, 2005 at drugstore.com, was $1,500. By comparison, a 3 month supply of perphenazine, was only $135.

"It seems that doctors were prescribing only the new drugs," said Marian McDonough, an assistant professor at Oregon Health and Science University in Portland, to Bloomberg News. She helps state and private insurers decide which drugs to encourage doctors to use, and said the new study "may very much change" that.

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Evelyn Pringle is a columnist for OpEd News and investigative journalist focused on exposing corruption in government and corporate America.
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