Lilly pony up $500 million for "meritless" Zyprexa suits

Eli Lilly and Co. said Thursday it will settle about 18,000 additional lawsuits alleging the drugmaker did not adequately warn patients that its anti-psychotic medication Zyprexa carries a heightened risk of diabetes.

Lilly did not disclose the amount of the settlement but said in a statement it would take a fourth-quarter settlement charge that's not expected to exceed $500 million.

The announcement follows a June 2005 settlement under which the Indianapolis-based company agreed to pay about $700 million to resolve more than 8,000 similar lawsuits involving Zyprexa, its top-selling drug.

Lilly spokeswoman Tarra Ryker said in an interview that the new settlement covered more plaintiffs for less money because the 18,000 cases were less viable due to a 2003 Zyprexa labeling change, which addressed the drug's possible diabetes risk.

She said the company plans to go to trial, beginning in April, to defend itself against the 1,200 remaining claims, which she said are not being settled for "various reasons." Lilly declined to elaborate on the specific reasons.

Sales of Zyprexa, which is used to treat schizophrenia and bipolar disorder, accounted for 28 percent of Lilly's $3.86 billion in revenue in the most recent quarter.

"While we remain confident that these claims are without merit, we took this difficult step because we believe it is in the best interest of the company, the patients who depend on this medication, and their physicians," Lilly chairman and chief executive Sidney Taurel said in a statement.

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