Billion dollar fine: The cost of just doing business?

Jan/31/2008 05:54 Filed in: Regulatory Environment Pharma Business
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Lilly is discussing a settlement with federal prosecutors into the marketing of Zyprexa and the settlement could reach $1 billion. The question we have to ask now is "what is Lilly, and the industry, going to do to prevent this from happening again"? Is the pharma industry just going to look at this as a "risk of doing business" and possible litigation as an expense?



Six years ago when I moved my dad to a nursing home in Carmel Indiana his physician put him on Zyprexa because he thought he was suffering from depression and dementia. My wife, who is a Pharm D, asked the physician about the prescriptions and he said that Zyprexa was a good product for treating dementia much to her surprise since this wasn't in the label. We had to pay an extra $170+ a month for his Zyprexa Rx but we went with the doctors recommendation to see what effect it would have.


Well it seems that Lilly was promoting and marketing Zyprexa for dementia and when all hell broke lose Lilly denied but settled other Zyprexa litigation tied to the weight gain side effects. So Lilly is going to plead guilty and pay a record fine for the off label marketing but when you look at Zyprexa sales over the life of the product this is just a small percentage of total sales.


So one has to ask if Lilly has learned their lesson from this costly mistake and what actions are they going to take to ensure that it never happens again? The key people who were responsible for this serious misjudgment have all left the company and I know that some are working for a competitor on their product to treat schizophrenia.


Worldwide sales of Zyprexa were a little over $4 billion last year...hmmm, let's see $4 billion times how many years on the market minus a $1 billion fine? Seems to me that Lilly is still going to make a nice healthy profit on the life of Zyprexa and instead of holding people accountable they simply open up the check book as a cost of doing business.
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