Eli Lilly & Co., after agreeing to pay more than $2.6 billion to settle claims by the federal government and an assortment of state governments over the marketing of its anti-psychotic drug Zyprexa, still faces lawsuits that might cost the company an additional $2 billion.
That is because only certain states settled in the original settlement agreement, announced last week. There are currently 12 state suits pending, and additional states, such as Virginia, could bring suit any time to reclaim the money fraudulently obtained from our Medicaid coffers.
The states claim Lilly withheld information about the side effects of Zyprexa, such as diabetes, and encouraged sales of the drug for unapproved, or off-label, purposes. The states who have brought claims have asked for damages and fines for violations of their state false claims acts.
I suppose I will leave it to Attorney General Bob McDonnell to explain why Virginia has not filed its own lawsuit to claim its share–General McDonnell has done a very good job of making sure Virginia reclaims its money for the most part, so I hope it is just a matter of time.
Perhaps the biggest flaw in McDonnell’s administration of the OAG has been his failure to see the importance of hiring outside counsel to prosecute claims his office is too overwhelmed to handle.
Like some politicians in both parties, McDonnell brings to the table an inherent bias against trial lawyers, and especially a bias against hiring outside counsel on a contingency-fee basis. In some cases, he is quite correct that a state would be better off paying for its outside lawyers on an hourly basis.
Given the Commonwealth’s current budget crisis, however, I doubt very much that Virginia has the funds to pay outside counsel by the hour to pursue its share of the Zyprexa settlement. In this current climate, McDonnell would do well to reconsider his ban on hiring outside counsel on a contingency fee basis.
The take away message is this–big pharmaceutical companies have been gorging themselves on our state and federal tax dollars for many years, and they are just now starting to pay the piper. The battleground is shifting to state governments–specifically, to the various state Attorney Generals who have the authority to prosecute false claims made to the Medicaid programs of each state.
And THAT, ladies and gentlemen, is why this blog sometimes discusses politics and specifically the 2009 Virginia Attorney General race. In order to maximize our state expenditures, we need our next Attorney General to get tough with everyone gorging themselves on our state tax dollars. That includes “big pharma”–i.e., the big pharmaceutical manufacturers–but it also includes everyone else that does business with the Commonwealth, from Fortune 500 companies to the Wall Street traders that handle our bond sales to the mom and pop operations that provide mulch on our interstates.
Virginia has one of the lowest tax burdens in the entire country, and Virginia’s government does much with a little, but we could do so much more.