Shareholders sue Lilly over Zyprexa

As if patient lawsuits and government investigations weren't enough, now Eli Lilly shareholders are suing. The shareholders accuse Lilly execs and directors of blowing off the risks of pushing off-label uses for Zyprexa. The two suing shareholders say Lilly should have known the FDA and others would crack down if the company promoted Zyprexa for uses not approved by drug regulators.

Lawsuits over the antipsychotic drug--and Lilly's alleged failure to warn patients about its potential to cause diabetes and excessive weight gain--already have cost the company more than $1 billion. And with the feds and several states investigating Zyprexa marketing, Lilly faces some hefty fines, perhaps as much as $1 billion, according to the New York Times.

Lilly officials say the suit is "groundless," and they say the NYT--which first broke the news that Lilly downplayed the drug's risks and marketed it off-label--has published stories full of inaccuracies. Government officials involved in the negotiations reported yesterday confirmed that they and Lilly are talking, but wouldn't go so far as to confirm that they're negotiating a deal.

But even the company admits it's not inaccurate to say that the investigators are circling. In a recent SEC filing, Lilly coughed up information about the various and sundry folk probing its Zyprexa marketing. Among the interrogations: A Pennsylvania grand jury subpoenaed documents; attorneys general in California, Florida, and Illinois have issued subpoenas; and thirty states have banded together to investigate possible violations of consumer protection laws.

- read the shareholder lawsuit report from the Associated Press
- check out this LA Times article about Lilly's disclosure to the SEC