January 15, 2009
Jefferson City, Mo. - The Missouri Medicaid program will recover nearly $18 million from drug giant Eli Lilly and Company in a settlement announced today by Attorney General Chris Koster. The agreement with Missouri, several other states and the federal government settles allegations that Lilly ran a marketing campaign that improperly promoted the anti-psychotic drug Zyprexa. Lilly will pay the states and the federal government a total of $800 million in damages and penalties to compensate Medicaid and various federal healthcare programs for harm suffered as a result of this conduct.
"Medicaid fraud is a critical problem in our state's health care system," Koster said. "Prosecuting Medicaid fraud is an absolute priority in my administration, and today's announcement represents the benefits that vigilant enforcement brings."
Missouri's involvement in the case began under the direction of Attorney General Jay Nixon.
"While I have the pleasure of announcing this settlement, the bulk of the work in this matter was completed under the administration of Attorney General Nixon, and his role should be properly recognized," Koster said.
The states and the federal government alleged that from 1999 to 2005 Lilly promoted Zyprexa in a campaign called "Viva Zyprexa" for uses not approved by the Food and Drug Administration. The campaign was aimed not only at psychiatrists, but at primary care physicians and promoted such unapproved uses as the treatment of depression, anxiety, irritability, disrupted sleep, nausea and gambling addiction.
As a result of these promotions, physicians prescribed Zyprexa for children and adolescents, dementia patients in long-term care facilities, and in unapproved dosage amounts, all of which violated state Medicaid reimbursement rules.
"Missouri's Medicaid dollars will be guarded tightly by my administration, just as they were under the previous administration," Koster said. "The excessive and improper billing of Medicaid will not be tolerated at any time, especially during an economic climate that has state government facing historic budget challenges."
In a separate legal action, federal authorities in Pennsylvania brought misdemeanor criminal charges against Lilly based on the same allegations. In a plea agreement filed with the court, Lilly has agreed to pay a $615 million criminal fine to the federal government to resolve the charges.
Missouri's involvement in the case was handled by the Attorney General's Medicaid Fraud Control Unit, which has authority under state law to investigate and prosecute, both civilly and criminally, allegations of fraud against Missouri's Medicaid program. The unit has recovered nearly $140 million in Medicaid fraud cases since its creation in 1994.