Lilly crosses one Zyprexa hurdle, faces another-WEB ONLY

On the same day last week, Eli Lilly and Co. cleared a big hurdle regarding its bestselling drug Zyprexa and immediately found itself facing another one.

Lilly paid dearly – $1.42 billion – for pleading guilty to improperly marketing the antipsychotic Zyprexa between 1999 and 2001 and to settle lawsuits filed by states.

But that same morning, the New England Journal of Medicine published a study about Zyprexa and its peers, known as atypical antispychotics, that concluded these lucrative and widely prescribed drugs are no safer than older and cheaper generic antipsychotics. Both old and new antipsychotics double the risk of sudden death from heart problems, the study concluded, even though the newer drugs largely have replaced the older medications in patient care.

The kicker was the medical journal’s editorial, which said doctors’ prescriptions of atypical antipsychotics to children and seniors with dementia should be “reduced sharply.”

Lilly spokesman Jamaison Schuler noted that Zyprexa is not approved for either children or for elderly patients with dementia. Physicians, however, can prescribe the medicines for uses not approved by U.S. regulators.

“Zyprexa is an important treatment option for patients suffering from the devastating effects of schizophrenia and bipolar disorder and has been prescribed for an estimated 26 million patients around the world,” Schuler said in a statement. He said the study “provides additional information for practicing physicians to consider as they decide how to treat very complex diseases, such as schizophrenia and bipolar disorder.”

If the study causes doctors to change their prescribing habits –

or if the federal Medicare program gives more incentives to prescribe older antipsychotics – it could take a chunk out of Zyprexa’s sales, which totaled nearly $5 billion last year.

Older antipsychotics have been blamed for causing permanent tics, which atypical antipsychotics do not seem to cause.

The Indianapolis drugmaker has worked hard to keep its prescription volume on Zyprexa up even as lawsuits and settlements have mounted. So far, Lilly has spent nearly $2.7 billion to settle thousands of lawsuits related to Zyprexa.

But perhaps the biggest case is still looming: Experts have estimated a class-action suit brought by insurance companies, pension funds and unions could result in damages ranging from $3.9 billion to $7.7 billion.

U.S. District Court Judge Jack Weinstein certified the lawsuit’s class-action status last year. However, at Lilly’s request, the federal Second Circuit Court of Appeals said last week that it would take a second look at whether class-action status is appropriate.