The US Justice Department has ordered Eli Lilly and Company to pay penalties totaling $1.415 billion for off-label marketing of its drug, Zyprexa. The company pleaded guilty on January 30 to a misdemeanor charge of marketing the drug for unapproved applications. One portion of that sum is a $515 million criminal fine, the largest criminal fine ever imposed upon an individual US corporation.
Off-label marketing occurs when a pharmaceutical company sells a particular drug to treat medical conditions for which it did not earn federal approval. When a company applies to the Food and Drug Administration (FDA) for approval to market a new drug in the US, the application must state the drug’s intended uses. Once approval is granted, the drug must be marketed for that stated purpose only.
In this case, Zyprexa gained FDA approval for treatment of schizophrenia and bipolar disorder. While the company legally promoted the drug for this purpose, it also illegally promoted it for the treatment of age-related dementia and sleep disorders. One known side effect of the drug is significant weight gain and instead of warning against this side effect, the company promoted it as a therapeutic advantage.
A statement issued by Eli Lilly in the wake of the Justice Department ruling says the “company disagrees with and does not admit to the civil allegations” even though it developed and distributed marketing materials that promoted Zyprexa for the off-label uses in question. It also trained its sales staff to ignore the law and promote the drug for off-label use.
In addition to the $515 criminal fine, Eli Lilly is required to pay an $800 million civil settlement to state and federal governments and it must forfeit $100 million in company assets.