Eli Lilly and Co. has reached a resolution with the U.S. Attorney for the Eastern District of Pennsylvania (EDPA) and the Office of Consumer Litigation of the Department of Justice regarding the government investigation into the company’s marketing and promotional practices for antipsychotic drug Zyprexa.

Lilly has agreed to plead guilty to one misdemeanor violation of the Food, Drug, and Cosmetic Act for the off-label promotion of Zyprexa between September of 1999 and March of 2001. The plea states that Lilly promoted the drug in elderly populations as treatment for dementia, including Alzheimer’s dementia, indications for which it is not approved. As part of this agreement, Lilly has agreed to pay $615 million. The company will also enter into a settlement agreement resolving the government’s civil investigation including civil investigations by the State Medicaid Fraud Control Units of the states that have coordinated with the EDPA in its investigation. 

To resolve its civil investigations, Lilly has agreed to make payments totaling nearly $800 million. Approximately $438 million will be paid to the federal government and $362 million will be made available for settling the states. Lilly took a charge of $1.4 billion in 3Q08 in connection with this investigation. 

“We deeply regret the past actions covered by the misdemeanor plea,” said John C. Lechleiter, Ph.D., Lilly’s chairman, president and chief executive officer. “At Lilly we take seriously our responsibilities to abide by all the laws governing our business practices, and we realize that we have a tremendous responsibility to the patients and healthcare professionals we serve. Every day and with every interaction we strive to operate in a responsible and compliant manner. Doing the right thing is non-negotiable at Lilly, and I remain personally committed to all of us at Lilly maintaining the highest standards of conduct.”

Also, Lilly has entered into a corporate integrity agreement with the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS). This will require Lilly to maintain its compliance program and to undertake a set of defined corporate integrity obligations for five years. The terms of the corporate integrity agreement are consistent with the company’s existing compliance program. They also provide for an independent third-party review organization to report on the company’s systems, processes, policies, procedures and practices.

The settlement is subject to approval by the federal court in Philadelphia and the company anticipates a hearing on the settlement within the next few weeks.