ABA Health eSource
March 2009 Volume 5 Number 7

Eli Lilly Pleads Guilty to Illegal Marketing of Zyprexa
By Marilyn Mann, 1 U.S. Securities and Exchange Commission, Washington, DC

I. Off-Label Marketing of Zyprexa

On January 15, 2009, the Department of Justice announced 2 that Eli Lilly and Company (Lilly) had agreed to plead guilty and pay $1.415 billion for promoting its drug Zyprexa (olanzapine) for uses not approved by the Food and Drug Administration (FDA). This included a criminal fine of $515 million, the largest ever in a health care case, and the largest criminal fine for an individual corporation ever imposed in a U.S. criminal prosecution. The criminal information 3 charged the company with promoting Zyprexa for such unapproved uses as treatment for dementia in elderly persons. In the plea agreement Lilly admitted its guilt to a misdemeanor criminal charge. It also entered into a civil settlement agreement under which it will pay up to an additional $800 million to the federal government and certain state governments to resolve civil allegations originally brought in four separate lawsuits under the qui tam provisions of the federal False Claims Act. 4

Under the federal Food, Drug, and Cosmetic Act (FDCA), a company must specify the intended uses of a drug in its New Drug Application (NDA) to the FDA. 5 Before approving a drug, the FDA must determine that the drug is safe and effective for the uses specified in the NDA. Once approved, a drug may not be marketed for unapproved (“off-label”) uses. 6

Zyprexa has been approved for the treatment of schizophrenia and bipolar disorder. 7 The criminal information alleges that, beginning in 1999, Lilly promoted Zyprexa for the treatment of agitation, aggression, hostility, dementia, depression and generalized sleep disorder. The information alleges that Lilly used its long-term care sales force to promote the use of Zyprexa in nursing homes and assisted living facilities. In addition, the information alleges that, beginning in 2000, Lilly began an off-label marketing campaign targeting primary care physicians (PCPs), even though primary care physicians generally do not treat people with schizophrenia or bipolar disorder. 8 According to the information, Lilly trained its sales force to promote Zyprexa to PCPs by focusing on symptoms rather than diagnoses.

As part of a global settlement, Lilly entered into a Corporate Integrity Agreement (CIA) with the Office of Inspector General of the Department of Health and Human Services. 9 In addition to various measures designed to ensure the adequacy of Lilly’s compliance program, the CIA requires that Lilly send doctors a letter notifying them of the global settlement and post on its website information about payments to doctors, such as honoraria, travel or lodging.

Lilly’s promotion of Zyprexa for dementia was far from a victimless crime. Zyprexa and other antipsychotics have been linked to an increased risk of death in elderly patients 10 and have also been shown to be of little or no value in reducing dementia-related symptoms. 11 Zyprexa can also cause significant weight gain, elevated cholesterol levels and diabetes. 12 Thus, the available medical evidence suggests that Lilly’s off-label marketing of Zyprexa led to widespread adverse effects and a significant number of deaths. 13

II. Other Off-Label Marketing Cases

Lilly is not the only pharmaceutical company to engage in off-label marketing. For example, on September 29, 2008, Cephalon, Inc. agreed to pay $425 million and plead guilty to a misdemeanor because it engaged in off-label marketing of its drugs Actiq (fentanyl), Gabitril (tiagabine hydrochloride) and Provigil (modafinil). Actiq is a strong and highly addictive narcotic that is approved only for cancer patients who are already opioid-tolerant and suffering from breakthrough pain. Yet, with the slogan “Pain is pain,” Cephalon marketed Actiq to PCPs for non-cancer patients for such common ailments as back pain and migraine headaches. 14 Cephalon also promoted Actiq for use in patients who were not yet opioid-tolerant, for whom it is particularly dangerous.

Another case of off-label marketing is the promotion of Neurontin (gabapentin), a Warner-Lambert anti-seizure drug approved in 1993 and widely promoted for off-label uses in the 1990s. In May 2004, Warner-Lambert admitted guilt and agreed to pay $430 million in relation to criminal and civil liability regarding the promotion of Neurontin for off-label uses. 15 Interestingly, documents obtained in litigation show that the company’s marketing plan included many strategies that are legally permissible or reside in a gray area, such as recruitment of physicians for “peer-to-peer” selling programs, payments to academic physician “thought leaders” in the form of honoraria, research grants, funding of continuing medical education programs through “unrestricted educational grants,” and ghostwriting of research and review articles on off-label uses. 16 The use of methods in which the promotional purpose is hidden appears to be a particularly effective way for pharmaceutical companies to increase sales for off-label uses of their products. 17

On February 25, 2009, the Department of Justice filed a complaint against Forest Laboratories, Inc. for alleged False Claims Act violations arising from the company’s marketing of the drugs Celexa and Lexapro for unapproved pediatric use and for paying kickbacks to induce physicians to prescribe the drugs. 18

III. Conclusion

While it is easy to find fault with pharmaceutical companies that promote drugs for off-label uses, it also should be recognized that pharmaceutical companies do not directly administer drugs – physicians do. Owing to recent revelations about the influence of the pharmaceutical industry over the practice of medicine, 19 public perception of the relationship of the drug industry, doctors and scientists is at an historic low. 20 A number of proposals for increased transparency in relationships between the pharmaceutical industry and medical profession are being circulated. 21 Several states have enacted laws that require disclosure of payments made by pharmaceutical companies to physicians, 22 and similar legislation that would impose such requirements on a national level has been introduced in Congress. 23 To this observer, it seems likely that the trend will be toward increased disclosure of financial relationships between the medical profession and the pharmaceutical industry as health reform proposals are enacted over the next couple of years.

1 Marilyn Mann is a branch chief in the Division of Investment Management, U.S. Securities and Exchange Commission. The Commission disclaims responsibility for any private publication or statement of any Commission employee or Commissioner. This article expresses the author’s views and does not necessarily reflect those of the Commission, the Commissioners, or other members of the staff. Marilyn can be reached at mannm@comcast.net.
2 United States Department of Justice press release, Eli Lilly and Company Agrees to Pay $1.415 Billion to Resolve Allegations of Off-label Promotion of Zyprexa, Jan. 15, 2009, available at http://www.usdoj.gov/opa/pr/2009/January/09-civ-038.html.
3 United States v. Eli Lilly and Company, Crim No. ___, available at http://www.usdoj.gov/usao/pae/News/Pr/2009/jan/lillyinfo.pdf
4 The federal share of the civil settlement amount is $438 million. Under the terms of the civil settlement, Lilly will pay up to $361 million to those states that opt to participate in the agreement.

To obtain approval for a new drug, a manufacturer must submit a new drug application (NDA) for the FDA’s review. 21 U.S.C. § 355. An NDA must include all information bearing on a drug’s safety and effectiveness, including the results of animal testing, pharmacological studies, and full reports of all clinical trials performed on human subjects. Once a drug is approved for at least one indication, it may be prescribed off-label for a different condition, a different population, or in a different dose than what the drug is approved for.

Some off-label use is beneficial. However, off-label use of drugs has been associated with serious adverse effects. For example, the appetite suppressant Pondimin (fenfluramine), approved for short-term use, was widely prescribed with phentermine for long-term use. The off-label combination “fen-phen” caused valvular heart disease. U.S. General Accounting Office (now the U.S. Government Accountability Office), Drug safety: Most drugs withdrawn in recent years had greater health risks for women, GAO-01-286R, available at http://www.gao.gov/new.items/d01286r.pdf.

6 A limited exception to this is that pharmaceutical companies may distribute medical journal articles and scientific or medical reference publications that discuss unapproved uses for approved drugs or medical devices to healthcare professionals under certain circumstances. Food and Drug Administration, Department of Health and Human Services, Good Reprint Practices for the Distribution of Medical Journal Articles and Medical or Scientific Reference Publications on Unapproved New Uses of Approved Drugs and Approved or Cleared Medical Devices (Jan. 2009), http://www.fda.gov/oc/op/goodreprint.html. However, many observers have been critical of the FDA’s off-label guidance. Mike Mitka, Critics Say FDA’s Off-Label Guidance Allows Marketing Disguised as Science, JAMA 2008;299(15):1759-61; Andy Gass & Jennifer Wilson, Marketing Off-Label Uses to Physicians: FDA’s Draft (Mis)Guidance, Am. J. Bioethics, 8(3):1-3 (2008).
7 The FDA originally approved Zyprexa in September 1996 for the treatment of manifestations of psychotic disorders. In March 2000, the FDA approved Zyprexa for the short-term treatment of acute manic episodes associated with Bipolar I Disorder. In November 2000, the FDA approved Zyprexa for the short-term treatment of schizophrenia in place of the management of the manifestations of psychotic disorders. Also in November 2000, the FDA approved Zyprexa for maintaining treatment response in schizophrenic patients who had been stable for approximately eight weeks and were then followed for a period of up to eight months. Zyprexa has never been approved for the treatment of dementia or Alzheimer’s dementia.
8 Alex Berenson, Drug Files Show Maker Promoted Unapproved Use, N.Y. Times, Dec. 18, 2006 (describing internal Lilly marketing documents on “Viva Zyprexa” campaign aimed at increasing Zyprexa prescriptions in the primary care market).
9 Corporate Integrity Agreement Between the Office of Inspector General of the Department of Health and Human Services and Eli Lilly and Company, http://www.usdoj.gov/usao/pae/News/Pr/2009/jan/lillycorpintegagreement.pdf.
10 See S. Gill et al., Antipsychotic drug use and mortality in older adults with dementia, Ann. Intern. Med. 2007 June 5;146(11):775-86 (atypical antipsychotic use is associated with an increased risk for death in older adults with dementia); L. Schneider et al., Risk of death with atypical antipsychotic drug treatment for dementia: meta-analysis of randomized placebo-controlled trials, JAMA 2005 Oct. 19;294(15):1934-43 (atypical antipsychotics are associated with an increased risk for death in patients with dementia); see also Ray et al., Atypical antipsychotic drugs and the risk of sudden cardiac death, NEJM. 2009 Jan. 15;360(3):225-35 (atypical antipsychotics increase the risk of sudden cardiac death).
11 See L. Schneider et al., Efficacy and adverse effects of atypical antipsychotics for dementia: meta-analysis of randomized, placebo-controlled trials, Am. J. Geriatr. Psychiatry. 2006 Mar;14(3):191-210; R. Rosenheck et al., Cost-benefit analysis of second-generation antipsychotics and placebo in a randomized trial of the treatment of psychosis and aggression in Alzheimer disease. Arch. Gen. Psychiatry. 2007 Nov;64(11):1259-68 (no differences in measures of effectiveness between patients on atypical antipsychotics and patients on placebo).
12 See Alex Berenson, Lilly Waited Too Long to Warn About Schizophrenia Drug, Doctor Testifies, N.Y. Times, Mar. 8, 2008 (describing expert testimony by diabetes specialist that enough evidence had accumulated by the fall of 1998 for Lilly to warn doctors about Zyprexa’s link to diabetes).
13 On April 11, 2005, the FDA issued a public health advisory stating that the treatment of behavioral disorders in elderly patients with dementia with atypical antipsychotic medications is associated with increased mortality. Food & Drug Administration, FDA Public Health Advisory, Deaths with Antipsychotics in Elderly Patients with Behavioral Disturbances, available at http://www.fda.gov/cder/drug/advisory/antipsychotics.htm. On June 10, 2005, a black box warning was added to the prescribing information for Zyprexa and other atypical antipsychotics. The warning states, in part, that “[e]lderly patients with dementia-related psychosis treated with atypical antipsychotic drugs are at increased risk of death compared to placebo.”
14 U.S. Department of Justice press release, Pharmaceutical Company Cephalon to pay $425 Million for Off-label Drug Marketing, available at http://www.usdoj.gov/usao/pae/News/Pr/2008/sep/cephalonrelease.pdf; Laurie Magid, Op-Ed: Keeping us safe from drug reps: Eli Lilly and its “off-label marketing” of Zyprexa is not the only case of drug firms risking patients’ health and lives, Philadelphia Inquirer, Jan. 27, 2009.


U.S. Department of Justice press release, Warner-Lambert to pay $430 million to resolve criminal and civil health care liability relating to off-label promotion, available at http://www.usdoj.gov/opa/pr/2004/May/04_civ_322.hrm.
16 See Michael Steinman et al., Narrative Review: The Promotion of Gabapentin: An Analysis of Internal Industry Documents, Ann. Intern. Med. 2006 Aug. 15;145(4):284-93; C. Landefeld et al., The Neurontin Legacy — Marketing through Misinformation and Manipulation, NEJM 2009; 360:103-106.
17 See generally Adriane Fugh-Berman et al., Off-Label Promotion, On-Target Sales, PloS Medicine 2008 Oct;5(10):e210, http://medicine.plosjournals.org/perlserv/?request=get-document&doi=10.1371/journal.pmed.0050210; see also Joseph Ross, Kevin Hill, David Egilman & Harlan Krumholz, Guest Authorship and Ghostwriting in Publications Related to Rofecoxib: A Case Study of Industry Documents From Rofecoxib Litigation, JAMA 2008;299(15):1800-12; Catherine DeAngelis, Impugning the Integrity of Medical Science: The Adverse Effects of Industry Influence, JAMA 2008;299(15):1833.
18 U.S. Department of Justice press release, United States Files Complaint Against Forest Laboratories for Allegedly Violating the False Claims Act, available at http://www.usdoj.gov/opa/pr/2009/February/09-civ-163.html.
19 See Gardiner Harris & Benedict Carey, Researchers Fail to Reveal Full Drug Pay, N.Y. Times, June 8, 2008; Editorial: Expert or Shill?, N.Y. Times, Nov. 30, 2008; Jacob Goldstein, Grassley Says Emory Psychiatrist Didn’t Report $500,000 in Payments, Wall Street Journal Health Blog, Oct. 3, 2008; Marcia Angell, Drug Companies and Doctors: A Story of Corruption, N.Y. Review of Books, Jan. 15, 2009; Jerome Kassirer, On the Take: How Medicine’s Complicity With Big Business Can Endanger Your Health (Oxford University Press, 2005).
20 Harris Interactive, The 9th annual RQ: reputations of the 60 most visible companies: A survey of the U.S. general public, available at http://www.harrisinteractive.com/news/mediaaccess.
21 See, e.g., Senator Max Baucus, Call to Action: Health Reform 2009 69-74 (Nov. 12, 2008); see also Daniel Carlat, Op-Ed: Diagnosis: Conflict of Interest, N.Y. Times, June 13, 2007 (advocating an end to direct or indirect industry funding of Continuing Medical Education (CME) programs); Harlan Krumholz & Joseph Ross, Relationships with the drug industry: More regulation, greater transparency, BMJ 2009; 338:b211 (advocating a series of reforms that would decrease pharmaceutical company influence over physicians).
22 Medicare Payment Advisory Commission, Report to the Congress: Reforming the Delivery System 153 (2008).
23 S. 301, The Physician Payments Sunshine Act, would require drug, biologic, and medical device manufacturers to report certain gifts and payments made to physicians. The information will be registered in a national and publicly accessible online database. Companies failing to report would be subject to financial penalties. The bill requires disclosure of payments to all physicians and physician practices of compensation; food, entertainment or gifts; travel; consulting fees or honoraria; funding for research; funding for education; stock or stock options; ownership or investment interests; and any other economic benefit as described by regulation. The Prescription Project, Fact Sheet: The Physician Payments Sunshine Act, Jan. 27, 2009, available at http://www.prescriptionproject.org/tools/solutions_factsheets/files/0008.pdf.

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