Indiana

Eli Lilly Qui tam fraud Settlement

"Whistleblowers have a lot to celebrate in the wake of the recent $1.4 billion settlement from drug maker, Eli Lilly. The drug giant, Eli Lilly, plead guilty to promoting its drug Zyprexa for uses not approved by the Food and Drug Administration (FDA). Included is 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 United States criminal prosecution of any kind. Eli Lilly will also pay up to $800 million in a civil settlement with the federal government and the states. Whistleblowers will share in about 20% of the government's share in the $800,000."
http://amlawdaily.typepad.com/amlawdaily/2009/01/the-am-law-litigation-daily-january-16-2009.html

Back in November, we told you that in the first 11 months of 2008, the Justice Department collected $1.4 billion in False Claims Act Settlements--a big decline from its take in 2006 and 2007. This year is off to a considerably better start. On Thursday, with one record-setting deal, Justice matched its 2008 total: Eli Lilly made history when it agreed to plead guilty and pay $1.4 billion to settle charges that it promoted its antipsychotic Zyprexa drug for uses not approved by the Food and Drug Administration.

The Justice Department said that the resolution includes $800 million to settle civil suits against the pharma giant, as well as a $515 million criminal fine--the largest ever imposed on an individual corporation. (Here are the plea and sentencing memorandum, which were filed in the Eastern District of Pennsylvania.)

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Might the eye-popping settlement inspire more whistle-blowers, whose False Claims Act cases, The Washington Post reported last summer, have been languishing at the Justice Department? John O'Connor of Anderson Kill Olick, who was not involved in the Zyprexa case told us it would. "Companies that do any kind of business with the federal government should make sure that their procedures for deterring, detecting, and dealing with any form of potentially fraudulent behavior are absolutely airtight," O'Connor said. "They should be aware that the Lilly case may stimulate false as well as legitimate whistle-blower complaints, and take appropriate protective measures."

Full post as published by Indiana Civil & Business Lawyer on April 13, 2009 (boomark / email).