Friday, October 24, 2008

Lilly Will Take $1.42 Billion Charge in Zyprexa Probe (Update1)

Eli Lilly & Co. said it is having ``advanced discussions'' to settle investigations by U.S. and state authorities over marketing the antipsychotic Zyprexa and will take a $1.42 billion charge in the third quarter.

The charge will amount to $1.29 a share and reflects Lilly's ``currently estimable exposure'' to investigations into whether it promoted Zyprexa for unapproved uses, the Indianapolis-based company said today in a statement.

Investigations by the U.S. Attorney's Office for the Eastern District of Pennsylvania and more than 30 state Medicaid fraud units focus on Lilly's marketing to U.S. doctors and the drugmaker's payments to consulting physicians and other advisers. The announcement follows Lilly's Oct. 7 settlement of consumer fraud investigations by 32 states and the District of Columbia into the company's marketing of Zyprexa, its top-selling drug.

``The government's investigation of Zyprexa has been ongoing for five years and we now have a heightened sense of responsibility to all our stakeholders to intensify efforts to resolve these issues,'' said Robert A. Armitage, Lilly's general counsel, in the statement. The company is cooperating with the investigations, Lilly said.


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