U.S. District Judge Jack Weinstein of Brooklyn, New York, has ruled that institutional buyers – so-called “thirty-party payors” – that include pension funds, unions and insurance companies, may enter their claims in a class action suit, and are entitled to a jury trial.

The plaintiffs’ claim comes under the Racketeer-Influenced and Corrupt Organizations Act (RICO) by which Eli Lilly is accused of overpricing Zyprexa by making excessive claims about its usefulness.
Zyprexa is approved to treat schizophrenia and bipolar disorder. It is Eli Lilly’s top-selling drug, with earnings of almost $ 2.4 billion dollars in the first six months of 2008, the 8th best-selling drug worldwide.

“There is sufficient evidence of fraud'' by Eli Lilly in selling the drug to justify a jury trial, said Judge Weinstein in a 294-page decision.

The ruling is nearly identical to a draft that Weinstein issued on July 2, as part of an attempt to persuade both sides to settle. Class certification gives the plaintiffs more leverage to settle the dispute.

Initially, the plaintiffs were individually seeking as much as $ 7.7 billion dollars in damages covering a 10-year period. The ruling limits the time frame for damages to four years, from June 20, 2001 until June 20, 2005 when the suit was filed. Without the individual patients who paid for Zyprexa themselves, damages sought by the other plaintiffs were as high as $ 6.8 billion dollars over the ten-year period, Weinstein stated.

The judge said the third-party payors include: the United Federation of Teachers Welfare Fund (UFCW) a Philadelphia-based fund representing 20,000 food and commercial workers; Mid-West Life Insurance; and the Sergeant Benevolent Association Health and Welfare Fund, which represents current and retired New York City Police sergeants and their families.

An Eli Lilly spokeswoman said the company will appeal the class certification ruling which it regards as being “in error.'' She added that the judge recognized in his opinion that Zyprexa is a valuable and effective medicine.

She stated that the information that has become public in recent years – in reference to the fact that patients using the drug have a high risk of suffering adverse effects such as diabetes and cardiovascular events – hasn´t convinced insurers to remove Zyprexa from their lists of approved drugs.