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US: Lilly Pleads Guilty to Misdemeanor Violation

December 21st, 2005

Eli Lilly and Co. said on Wednesday it will plead guilty to a misdemeanor violation as part of a settlement with the government over its marketing and promotional practices for an osteoporosis drug.

The investigation, which began in July 2002, led to government charges that in 1998 certain Lilly employees promoted the company's drug Evista to prevent and reduce the risk of breast cancer and certain heart problems.

While doctors are allowed to prescribe drugs for conditions for which a drug is not approved, companies are not allowed to actively market them for other uses. Evista is approved to prevent and treat osteoporosis in post-menopausal women.

The government also filed a civil complaint claiming similar Evista-related conduct continued into 2000. The company did not admit to these allegations, but said it agreed to settle the dispute over them to close the investigation.

Lilly agreed to pay $36 million in connection with the settlement. The company took a charge in the fourth quarter of 2004 to cover any settlement, which was enough to cover the final agreement. The company said it will take no further charges related to it.

The company, which agreed to the settlement with the Department of Justice's Office of Consumer Litigation and the U.S. Attorney's Office for the Southern District of Indiana, also agreed to a civil consent decree which will require it to continue its compliance program and establish a set of corporate integrity policies related to Evista for five years.

In a separate, previously disclosed investigation, the U.S. Attorney's Office for the Eastern District of Pennsylvania told Lilly that a whistleblower action has been filed claiming the company engaged in unlawful marketing practices related to Evista.

The office said that if today's settlement is accepted by the court, it will not pursue further action on Evista and will close the Evista part of its investigation.

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