ELI LILLY AGREES TO SETTLE ZYPREXA LAWSUITS

Eli Lilly said it could spend as much as $500 million to settle most of the remaining product liability claims over its antipsychotic Zyprexa. The company estimated that more than 18,000 claimants have settled, leaving about 1,200 claims outstanding, against which it "will continue to vigorously defend" itself.

The company said that while it cannot reveal the terms of the agreements, the amount it will have to pay will be "substantially less" than the $700 million it had to put aside for the June 2005 settlement that covered approximately 8,000 claimants. The resulting product liability charge on the company's financial statements for the fourth quarter of 2006 "is not expected to exceed $500 million."

The new settlements follow the model used in the June 2005 deal, as well as additional settlements of approximately 2,500 claims. Both federal and state lawsuits are covered in the new settlements, and physicians and other healthcare professionals named as co-defendants will see their cases dismissed. Zyprexa (olanzapine) is used to treat schizophrenia and bipolar disorder.

"While we remain confident that these claims are without merit, we took this difficult step because we believe it is in the best interest of the company, the patients who depend on this medication and their physicians," Sidney Taurel, Eli Lilly chairman and CEO said.