Eli Lilly and Company has settled a lawsuit filed by the State of Alaska over use of Zyprexa (olanzapine) by the State's Medicaid programme. The trial began March 3, 2008, in Superior Court in Anchorage.

The agreement resulted from ongoing mediation ordered by trial Judge Mark Rindner before the trial began. Presiding Judge Morgan Christen renewed mediation efforts with the parties last week.

The settlement would include payment by Lilly of $15 million plus a term that would ensure that Alaska is treated as favourably as any other state that may settle with Lilly in the future over similar claims.

"I am very pleased with the efforts by Assistant Attorney General Ed Sniffen and our team of trial attorneys," Talis J. Colberg, Alaska Attorney General, said. "We believe this is a good result for the State of Alaska and the Department of Health and Social Services."

"We believe this settlement is in the best interest of the company, the State, and, importantly, of the patients, families and healthcare professionals for whom Zyprexa is an important treatment option," said Robert A. Armitage, senior vice president and general counsel, Eli Lilly.

"While we had a strong defence, we agreed with the State that the best result for everyone is an amicable resolution," Armitage said. "A trial always involves significant time and resources, especially a two-phase trial like this one that posed additional legal hurdles. A settlement helps us get back to what we want to focus on as a company: developing important new medications through research and partnerships with doctors and patients.

"We appreciate all the time and energy the jury invested over more than three weeks in such a complex case," Armitage added.

The agreement involves no admission of wrongdoing on Lilly's part.

The March, 2006 lawsuit claimed the State and healthcare providers were insufficiently warned about possible side effects relating to weight gain, high blood sugar and diabetes, causing harm to the State's Medicaid recipients and increased costs to the State. The lawsuit asked that Lilly pay the State for those costs and pay civil penalties under the Alaska Unfair Trade Practices and Consumer Protection Act (UTPCPA).

Prescribed for more than 23 million people since its initial approval by the FDA in 1996, Zyprexa is regularly prescribed in the US and in more than 80 other countries. One of a class of medications called "atypical antipsychotics," it is approved to treat schizophrenia and bipolar disorder.

"Our decision to resolve this case does not change the fact that Zyprexa can continue to improve the lives of patients around the world who are suffering from schizophrenia and bipolar disorder," Armitage said.

Zyprexa is indicated in the United States for the short- and long-term treatment of schizophrenia, acute mixed or manic episodes of bipolar I disorder, and maintenance treatment of bipolar disorder. Since Zyprexa was introduced in 1996, it has been prescribed to approximately 23 million people worldwide. Zyprexa is not approved for patients under 18 years of age.