Update: Zyprexa and Diabetes

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August 10, 2006

Zyprexa users await settlement payments

8,362 to receive checks related to side effects

 

By Jeff Swiatek

 

jeff.swiatek

August 10, 2006

More than 8,000 users of Eli Lilly and Co.'s top-selling drug should find out this month how much their pain and suffering is worth.

Notices of injury payouts to Zyprexa users, in Lilly's largest-ever liability settlement, will be mailed as early as this week to those who hoped to enjoy the pharmaceutical benefits of the antipsychotic drug but ended up with diabetic side effects.

The long-awaited award notices will be followed within weeks or months by checks from a $700 million fund Lilly has set up to settle claims from 8,362 people. Many are vulnerable patients with schizophrenia and manic depression, the two main conditions Zyprexa treats.

The payouts, ranging from a minimum fixed amount of $5,000 to well over $100,000 a person, amount to a windfall for patients, most of whom are poor enough to qualify for federal Medicaid assistance.

"The awards are significant," said Chris Seeger, a New York attorney who serves on a steering committee that represents plaintiffs. Payouts of more than $100,000 will be common, he said, with fewer than 1,000 people getting the $5,000 base award for those who suffered the least harm from the drug.

"People are anxious to get paid," said Seeger, who helped hammer out the agreement with Lilly in 2005. "They're very anxious to receive their compensation."

Deborah F. Wagers of Shelby County, who is part of the settlement, said she hopes to collect on a claim of $112,500. She said she was prescribed Zyprexa for depression from about 2001 to 2003, and she blames the drug for causing her to become diabetic. She said she injects herself with insulin five times a day now and has had difficulty finding a job. Unemployed, she previously worked as a gas station cashier.

"I think they should be paying it out," she said of Lilly's mass settlement. "I'm the one who has to suffer."

Wagers said she hopes to use her check to pay more than $10,000 in medical bills.

The settlement by the Indianapolis drug maker was part of an effort to head off a mass class- action lawsuit against it by trial lawyers around the country who signed on thousands of clients alleging they gained weight from Zyprexa or acquired blood-sugar problems. Many of the lawsuits were consolidated in one federal court in New York, where Judge Jack B. Weinstein has overseen the settlement.

At times, the elderly judge has chastised plaintiffs' attorneys for being slow in getting payments to their clients who are in the settlement. In June, Weinstein called the delay in processing claims "intolerable" and demanded the work be speeded up, saying, "I want to terminate this case. I have my 86th birthday Aug. 10."

The lawyers did pick up their pace, reaching the agreed-upon threshold of processing 90 percent of the filed claims by late July, said Seeger. Lilly could have rejected the settlement if the attorneys didn't get enough of their clients to take the money and drop their legal cases.

With more than 8,000 claims now processed, "the deal is a final deal. No backing out by either side," Seeger said last week.

The only imminent holdup to paying out the money: A few state governments, including Ohio, want a share of the settlement money to reimburse them for Medicaid payments the states made for patients, to cover diabetes-related expenses linked to their use of Zyprexa.

"A number of states are giving us a hard time over . . . lien amounts," Seeger said. "We'll be forced to hold back (payments) in states where we can't reach agreement."

Indiana hasn't objected to payments to its residents, so checks likely won't be held up to Indiana residents, he said.

Tom Beaury, an informational technology worker from Lake Luzerne, N.Y., said he is awaiting payment on a claim topping $200,000. He said he became disabled partly because of diabetes-related symptoms linked to using Zyprexa six years ago.

Beaury, 35, said he will use his check, in part, to pay off $30,000 in medical bills he has run up since his Zyprexa-related health problems began.

He is not bitter toward Lilly.

"I don't know how to comment on Zyprexa. Was it a mistake? Was it gross negligence? They had a mishap, and it affected me. But I think they've done a lot of people good."

Lilly spokesman Phil Belt said plaintiffs' attorneys are handling the payouts.

"We are pleased to hear that the process is moving forward," he said.

The settlement will produce a windfall for attorneys, too, although Judge Weinstein has capped legal fees at 35 percent for most claims paid. Still, that will amount to more than $200 million going to attorneys.

The settlement covered about 75 percent of the known Zyprexa claims against Lilly. But hundreds more have flooded into federal and state courts.

"The money attracts more cases," said Peter H. Woodin, a New York attorney appointed by the court as a special master to handle claims.

Lilly has set aside another $300 million to cover potential liability from the unsettled cases, which it has said it will fight in court.

The first trial from the unsettled claims could happen next year. Lilly employees are being deposed by trial lawyers, and the company has turned over more than 10 million pages of documents sought by plaintiffs' attorneys, Woodin said.