Eli Lilly Wants Insurers to Pay $1 billion in Zyprexa claims – AP
Tue, 13 Sep 2005
The Associated Press reported that Eli Lilly is trying to pass the buck to insurers–
In addition to the $700 million Lilly agreed to pay to settle a lawsuit over the company having concealed the risk of diabetes for patients taking Zyprexa– the company wants insurers to pay half of the next round of suits expected to be $1 billion.
“The insurers argue that if they had known about Zyprexa’s serious side effects, they “would not have agreed to insure Lilly at all, would have excluded coverage for Zyprexa ”
Physicians everywhere beware! Insurance companies may not cover lawsuits for harm to patients for whom physicians knowingly prescribed a drug as harmful as Zyprexa.
The good news is: US sales of Zyprexa dropped 21%
Contact: Vera Hassner Sharav
Lilly wants insurers to pay much of $1 billion in Zyprexa claims
Fri, Sep. 02, 2005
INDIANAPOLIS – Eli Lilly and Co. wants its insurers to cover nearly half of the $1 billion the drug maker has set aside to pay product-liability claims involving its top-selling drug, the anti-psychotic treatment Zyprexa.
Lilly is seeking about $465 million from the insurers, company spokesman Phil Belt said Friday. The Indianapolis-based company, which is suing five of its insurers to try to force them to pay, had partially detailed the amount it is seeking in previously filed court records.
A $465 million payout by insurers would help cover the $1.07 billion Zyprexa-related write-off Lilly took in the second quarter regarding claims over Zyprexa.
Four of the insurers are fighting Lilly’s lawsuit, filed in March in federal court in Indianapolis. They argue Lilly bought liability coverage for Zyprexa in 2000 without disclosing that it knew then the drug could cause harmful, diabetes-related side effects in some users.
Hiding that information was “egregious” behavior by Lilly and voids the coverage, the insurers say in court motions.
The insurers argue that if they had known about Zyprexa’s serious side effects, they “would not have agreed to insure Lilly at all, would have excluded coverage for Zyprexa … or would have provided insurance coverage to Lilly on terms and conditions substantially different.”
“Lilly knew Zyprexa represented a serious liability exposure to it and to any insurer that provided coverage to Lilly,” said SR International Business Insurance Co., one of the companies Lilly is suing.
Lilly has filed a counterclaim denying those allegations, Belt said.
The other companies Lilly is suing are North American Specialty Insurance Co., Winterthur Schweizerische Versicherungs AG, Gerling-Konzern Allgemeine Versicherungs AG, and ELCO Insurance Co.
All but ELCO have refused to pay claims Lilly has submitted to reimburse it for legal bills and other costs related to Zyprexa product-liability litigation.
ELCO said it should be dismissed from the lawsuit because ELCO has not refused to pay claims it has gotten from Lilly. Based in Bermuda, ELCO is a Lilly fully-owned subsidiary.
Lilly sued its own subsidiary because “we are obliged to treat ELCO as an arm’s-length independent entity,” Lilly spokeswoman Joan Todd told The Indianapolis Star.
The five companies provided about $400 million in coverage that Lilly wants them to honor, Todd said. Lilly is in discussions with additional insurers regarding the remaining amount in Zyprexa liability coverage, Belt said.
In June, Lilly announced a deal with trial lawyers to settle most of the 8,000 U.S. claims against it from Zyprexa users, who allege the drug caused diabetes-related side effects. The settlement of existing and new claims will cost about $1 billion, the company said.
Zyprex is Lilly’s top-selling drug, although the company reported that worldwide sales of the drug fell 10 percent to $1.1 billion in the second quarter, from $1.21 billion a year ago.
In the U.S., the drug’s sales dropped 21 percent to $549.3 million.
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