Supreme Court backs Lilly in Zyprexa class action

Eli Lilly has gotten a break from the U.S. Supreme Court. The justices nixed an appeal in a proposed class action over Zyprexa. The group of plaintiffs--including pension funds, unions and insurers--had been seeking $6.8 billion, saying Lilly's improper marketing induced them to spend more on the antipsychotic drug than they would have otherwise.

The plaintiffs sued on behalf of thousands of third-party payers, claiming that they overpaid for Zyprexa because Lilly aggressively promoted the drug for off-label uses, and the company misrepresented the drug's efficacy and safety. A trial judge allowed the class action, but a U.S. circuit court stopped the suit cold, saying the plaintiffs had shown no direct link between the prices they paid for Zyprexa and Lilly's alleged mismarketing.

The Supreme Court has effectively sided with the appeals panel. Without commenting on the claims themselves, the justices said the case didn't fit the requirements for a class action. They ordered the trial judge to consider whether the individual plaintiffs--which include Sergeants Benevolent Association Health and Welfare Fund--can pursue their claims individually.

Obviously, this isn't the only Zyprexa-related legal trouble Lilly has faced. The company agreed to pay $1.4 billion to settle a U.S. Justice Department probe into its marketing of the drug. The settlement deal included criminal and civil fines. And Lilly has been fighting liability lawsuits over Zyprexa side effects, including claims that the drug caused patients to develop diabetes.

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