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"The Case for Giving Eli Lilly the Corporate Death Penalty"

By Bruce E. Levine, Posted March 3, 2009.

At this point, the pharmaceutical company Eli Lilly is basically a public menace.

Eli Lilly & Company's rap sheet as a public menace is so long that for Lilly watchers to overcome the "banality-of-Lilly-sleaziness" phenomenon, the drug company must break some type of record measuring egregiousness. Lilly obliged earlier this year, receiving the largest criminal fine ever imposed on a corporation.

On January 15, 2009, Lilly pled guilty to charges that it had illegally marketed its blockbuster drug Zyprexa for unapproved uses to children and the elderly, two populations especially vulnerable to its dangerous side effect. Lilly plead guilty to a misdemeanor charge and agreed to pay $1.42 billion, which included $615 million to end the criminal investigation and approximately $800 million to settle the civil case.

One of the eight whistle-blowers in this case, former Lilly sales representative Robert Rudolph, says the settlement will not completely change Lilly's business practices, and he wants jail time for executives. "You have to remember, with Zyprexa," said Rudolph, "people lost their lives."

Rudolph is not exaggerating. Zyprexa, marketed as an "atypical" antipsychotic drug, has been promoted as having less dangerous adverse effects than "typical" antipsychotic drugs such as Thorazine and Haldol. However, on February 25, 2009, the Journal of the American Medical Association reported that the rate of sudden cardiac death in patients taking either typical or atypical antipsychotic drugs is double the death rate of a control group of patients not taking these drugs.

Zyprexa -- though not nearly as well known as Lilly's previous blockbuster Prozac -- is today one of the biggest-selling drugs in the world. Zyprexa has grossed more than $39 billion since its approval in 1996, with $4.8 billion of that in 2007 (and it was projected to equal or surpass that gross in 2008 when earnings are reported).

Lilly has had other Zyprexa scandals, but in this current one, Lilly executives matched Charles Dickens scoundrels. Zyprexa is approved by the Food and Drug and Administration (FDA) for schizophrenia and bipolar disorder, but Lilly illegally marketed it for sleep difficulties, aggression, and other unapproved uses. Lilly sales reps aggressively pushed Zyprexa as a wonderful drug to chill out disruptive children and the elderly who were not schizophrenic or bipolar. The lawsuit against Lilly stated, "In truth, this was Lilly's thinly veiled marketing of Zyprexa as an effective chemical restraint for demanding, vulnerable and needy patients."

Doctors can prescribe drugs for unapproved uses (called "off-label prescribing"), but drug companies are not allowed to market drugs for unapproved uses. Many drug companies break this rule, but Lilly broke it with gusto. “The company made hundreds of millions of dollars by trying to convince health care providers that Zyprexa was safe for unapproved uses," said Laurie Magid, acting U.S. Attorney for the Eastern District of Pennsylvania where the case was prosecuted. Magid said that Lilly was responsible for "putting thousands and thousands of patients at risk."

One marketing effort consisted of the Lilly sales force urging geriatricians to use Zyprexa to sedate unruly nursing home and assisted-living facilities patients. Lilly sales reps distributed a study claiming that elderly patients taking Zyprexa required fewer skilled nursing staff hours than were necessary for patients taking competing medications. Magid stated that Lilly sales reps were "trained to use the slogan five at five, meaning five milligrams at 5 o'clock at night will keep these elderly patients quiet." Illegally marketing Zyprexa for elderly patients was especially troubling for prosecutors because Zyprexa increases the risks of heart failure and life-threatening infections such as pneumonia in older patients.

In addition to targeting the misbehaving elderly, Lilly also targeted annoying kids. New York Times reporters Gardiner Harris and Alex Berenson, who have been covering Eli Lilly and Zyprexa for several years, reported on January 14, 2009, "The company also pressed doctors to treat disruptive children with Zyprexa, court documents show, even though the medicine's tendency to cause severe weight gain and metabolic disorders is particularly pronounced in children ... The children receiving Zyprexa gained so much weight during the study that a safety monitoring panel ordered that they be taken off the drug."

Mainstream reporters were so appalled by Lilly's recent actions that some voiced caustic commentaries about the relatively small price Lilly paid for its transgressions. CBS reporter Sharyl Attkisson (January 15, 2009) noted, "Eli Lilly has pled guilty to marketing the sometimes dangerous drug Zyprexa in ways never proven safe or effective ... Lilly has agreed to pay $1.4 billion, including the largest criminal fine ever imposed on a corporation. Ironically, that's about as much as the company's Zyprexa sales in the first quarter last year." However, the mainstream media failed to provide the context of Lilly's horrendous history which goes back decades.

The New York Times 2009 article did at least go back as far as 2006, reminding readers of the Times exclusive on another Zyprexa scandal. In December 2006, a whistle blower handed over to the Times hundreds of internal Lilly documents and e-mail messages among top company managers that showed how Lilly had downplayed Zyprexa's association with weight gain and metabolic disorders such as diabetes.

A Rolling Stone piece earlier this year ("Marketing Lilly's Zyprexa, a Phony ‘Miracle' Drug") details how Lilly minimized Zyprexa's relationship with dramatic weight gain. In 1995, prior to FDA approval of Zypexa , Lilly's own panel of experts concluded that Zyprexa produced an average weight gain of 24 pounds in a single year (one in six patients gained more than 66 pounds); that kind of weight gain can elevate blood-sugar levels and cause diabetes. This data, however, was not submitted by Lilly to the FDA.

Lilly-Zyprexa scandals didn't just start in 2006. A 2003 Lilly-Zyprexa scandal involved Medicaid and the National Alliance for the Mentally Ill (NAMI), ostensibly a consumer organization. That year, Zyprexa grossed $2.63 billion in the United States, 70 percent of that attributable to government agencies, mostly Medicaid. Zyprexa cost approximately twice as much as similar drugs, and state Medicaid programs, going in the red in part because of Zyprexa, were attempting to exclude it in favor of similar, less expensive

drugs. When Kentucky's Medicaid program attempted to exclude Zyprexa -- its single largest drug expense -- from its list of preferred medications, NAMI bused protesters to hearings, placed full-page ads in newspapers, and sent faxes to state officials. What NAMI did not say at the time was that the buses, ads, and faxes were paid for by Lilly.

The Lilly-NAMI financial connection had already been exposed by Ken Silverstein in Mother Jones in 1999. Silverstein reported that NAMI took $11.7 million from drug companies over a three-and-a-half-year period from 1996 through 1999, with the largest donor being Lilly, which provided $2.87 million. Lilly's funding also included loaning NAMI a Lilly executive, who worked at NAMI headquarters but whose salary was paid for by Lilly.

The year 2002 was a banner one for "Lillygates," with "60 Minutes II" ultimately airing another juicy Lilly scandal. Lilly's patent for Prozac had run out, and the drug company began marketing a new drug, Prozac Weekly. Lilly sales representatives in Florida gained access to patient information records, and, unsolicited, mailed out free samples of Prozac Weekly. Though they primarily targeted patients diagnosed with depression who were receiving competitor antidepressants, at least one such Prozac Weekly sample was mailed to a sixteen-year-old boy with no history of depression or antidepressant use. Law suits followed.

The most cinematic of all Lilly scandals began in 1989 and culminated in1997. One month after Joseph Wesbecker began taking Lilly's antidepressant Prozac, he opened fire with his AK-47 at his former place of employment in Louisville, Kentucky, killing eight people and wounding twelve before taking his own life. British journalist John Cornwell covered the trial for the London Sunday Times Magazine and ultimately wrote a book about it.

*************** See Part 2 ************

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...Cornwell's The Power to Harm is not simply about a disgruntled employee becoming violent after taking Prozac; the book is about Lilly's power to corrupt a judicial system.

Victims of Joseph Wesbecker sued Lilly, claiming that Prozac had pushed Wesbecker over the edge. The trial took place in 1994 but received little attention as America was obsessed at the time by the O.J. Simpson spectacle. While Lilly had been quietly settling many Prozac violence suits, the drug company was looking for a showcase trial that it could actually win. Although a 1991 FDA "Blue Ribbon Panel" investigating the association between Prozac and violence had voted not to require Prozac to have a violence warning label, by 1994 word was getting around that five of the nine FDA panel doctors had ties to drug companies -- two of them serving as lead investigators for Lilly-funded Prozac studies.

Thus with the FDA panel now known to be tainted, Lilly wanted a Prozac trial it could win, and it believed that Wesbecker's history was such that Prozac would not be seen as the cause of his mayhem.

A crucial component of the victims' attorneys' strategy was for the jury to hear about Lilly's history of reckless disregard. Victims' attorneys especially wanted the jury to hear about Lilly's anti-inflamatory drug Oraflex, introduced in 1982 but taken off the market three months later. A U.S. Justice Department investigation linked Oraflex to the deaths of more than one hundred patients, and concluded that Lilly had misled the FDA. Lilly was

charged with 25 counts related to mislabeling side effects and plead guilty.

In the Wesbecker trial, Lilly attorneys argued that Oraflex information would be prejudicial, and Judge John Potter initially agreed that the jury shouldn't hear it. However, when Lilly attorneys used witnesses to make a case for Lilly's superb system of collecting and analyzing side effects, Judge Potter said that Lilly itself had opened the door to evidence to the contrary, and he ruled that Oraflex information would now be permitted.

To Judge Potter's amazement, victims' attorneys never presented the Oraflex evidence, and Eli Lilly won the case.

Later it was discovered why victims' attorneys remained silent about Oraflex. In a manipulation Cornwell described as "unprecedented in any Western court," Lilly cut a secret deal with victims' attorneys to pay them and their clients not to introduce the Oraflex evidence. However, Judge Potter smelled a rat and fought for an investigation, and in 1997 Lilly quietly agreed to the verdict being changed from a Lilly victory to "dismissed as settled."

If Americans want to take on Lilly, they might want to do it during a time when the Bush family is out of power. Sidney Taurel, former Lilly CEO and George W. Bush appointee to the Homeland Security Advisory Council, is not the only Bush family-Lilly connection. George Herbert Walker Bush once sat on the Eli Lilly board of directors, as did Bush family crony Ken Lay, the Enron chief convicted of fraud before his death. Mitch Daniels, George W.

Bush's first-term Director of Management and Budget, had actually been a Lilly vice president, and in 1991 he had co-chaired a Bush-Quayle fundraiser that collected $600,000. This is the same Mitch Daniels who is now governor of Indiana, Lilly's home state.

Currently, the public's right to revoke corporate charters is still recognized by the courts, but attorneys general today rarely exercise this option, and then only against small corporations. Loyola Law School Professor Robert Benson, who in 1998 petitioned California's attorney general to revoke the corporate charter of Union Oil of California (Unocal), notes that state attorneys general "don't hesitate to draw this particular arrow from their quivers when the target is some small, unpopular or socially marginal

enterprise." But when it comes to egregious large multinationals, Benson concludes, "They don't even want you to know about it because they don't want to appear to be soft on corporate crime."

In his book When Corporations Rule the World, David Korten, former Harvard Business School Professor writes, "In the young American republic, there was little sense that corporations were either inevitable or always appropriate." Early in American history, Americans were very much concerned about any entity achieving too much power, and so in corporate charters there were clear limits placed on: years permitted to exist, borrowing, land ownership, extent of enterprise, and sometimes even on profits. Korten notes that in

the first half of the nineteenth century, "Action by state legislators to amend, revoke, or simply fail to renew corporate charters was fairly common."


p.s., not mentioned here is that internal Lilly documents were leaked showing that their own drug studies of Prozac did make a certain % of people turn violent. I.e., they knew people would die, so they lied to the FDA to get Prozac approved.

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Guest ASchwartz


I have a number of comments in reaction to your postings:

1. There appears to be no connection between your "part one" and your "part two." I believe the reason for this is that, even though you posted in "General Support" forum, you did so under two different threads. The result is that readers may not be able to find any connection between the two posts and, thus, make no sense of what you are saying.

2. These two postings read like research and are immensely impersonal and dull. You do not discuss your self in any way. You provide lots of boring details that made me want to skip and not read. Others may have the same problem. Also, so, what is your point? Do you have an ax to grind with Eli Lilly company? Or, is it just psychiatric medications you do not like?

3. You refer to Prozac but, as a retired therapist with decades of experience, I must inform you that I did not see a single case where someone on Prozac had any problem with it and, when they were able, thanks to psychotherapy, were able to wean off of it.

Lastly, I do not mean to come across critical of you but want to encourage you to write in ways that have more to do with you and others, in other words, in a more personal and meaningful way.


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I have merged the two posts into one for convenience.

Thank you for sharing the article with us, poet. But, I agree with Allan that these two posts lack a personal element to it. What are your thoughts concerning Levine's article?


I tried to make the article a single post but i got a message box saying it was too long, hence i simply broke it into 2 parts.

It's not a personal story. It's simply a wire piece that i picked up. And my thoughts were/are: People are in danger and they need to know when they're in danger; that people in a state of weakness are being exploited and taken advantage of, and the public should know how they aren't being protected by giant Rx mega-corporations and said corporations don't care about having blood on their hands.

Yes Allan, that's it exactly. I simply have "an axe to grind", i have no regard for justice or truth or for people being put at risk without their consent or knowledge.

Your 3rd point is interesting; as a dedicated researcher for decades, i have actually heard from people who lost a loved one that was on Prozac. I'm pretty certain i mentioned the internal documents re the human test phase, wherein the company talks about the danger of their product to human life.

I believe i actually have written posts in a personal and meaningful way.

People are dying, Allen. I mean, youdo understand that right? And you chose to pick apart a news article rather than express any sort of outrage or dismay (in a personal way) about this appalling behavior toward the mentally ill.



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Hi Poetdowns

If this is the case & you are right in what you say, Then I understand exactly where your coming from! I too would be annoyed at these people taking advantage of the aged & people under mental health, & being so vunerable.

I would be the same!

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Guest ASchwartz

Hi Poetdowns,

My intent was not to pick apart an article you are concerned about. It's just that the whole thing is a lot clearer now and I appreciate that.

However, I still have to say that, in my experience, a long one, no one has been harmed by Prozac. I really mean that none of them were harmed and, in fact, most were helped a great deal.

Please understand: I am not defending Eli Lilly or any of these corporations. I agree that they have become too powerful and are often far from ethical in the way they treat the public. And, I do NOT mind your having an "axe to grind" with regard to these giant drug corporations. It is just that, in the case of this drug, I have had no bad experiences with it and the psychiatrists I have worked with over the years never reported bad experiences. Yes, I did discuss the Prozac suicide issue with many of them and none had such an experience. If anything, Prozac wears off in its effectiveness in a few years and patients are often then switched to another drug.


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Hi Poet-

Please don't feel "beseiged." While I did not read every word of the article you provided, I did skim it & and got what I believe is the gist of what it is saying.

I do have "an axe to grind" with regard to pharmaceutical companies. Unfortunately, their motive is purely a profit driven one, IMO. :mad: Yes, they may have commercials that tout their caring and service to mankind but ultimately, if they don't turn a good profit, the shareholders aren't happy and this endangers the companies' very existence.

In my own life, I have been much better off since stopping any prescription medications. (I have only been prescribed them for depression, by the way--I am otherwise quite healthy). I have less depression than I did when taking some very expensive meds and no longer siffer the side effects of them either.

As some of my other posts have indicated, I take a very dim view of pharmaceutical marketing, especially when it is directed specifically at the consumer, with the usual directive: "Ask your doctor of "X" is right for you." This puts undue pressure on physicians to write scripts just to satisfy the patient rather than to act in the patient's best interest.

Ayway, thanks for the article, Poet :)


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