Eli Lilly & Co. Sued For Paying CVS Unit To Promote Zyprexa
June 25, 2009
On June 14, 2009, Bloomberg News announced a suit against AdvancePCS (APCS), a subsidiary of CVS Caremark Corp., America’s largest drugstore chain. APCS, a pharmacy benefit manager (PBM), offered to use information to which it has access as a prescription processor in a mass mailing promoting Eli Lilly & Co.’s Zyprexa antipsychotic. The unit of CVS said it would charge $5 per letter touting Zyprexa, Lilly’s top-selling drug that brought in $4.7 billion in sales in 2008.
PBMs such as CVS’s APCS are hired by health insurance companies and pension plans to advise them on which medicines should be covered by their plans, and to bargain with pharmaceutical companies for the cheapest price. In the United States, PBMs process about 75 percent of the retail prescriptions written annually.
“The problem is that PBMs are negotiating these hidden deals while at the same time telling employers that they represent them at the negotiating table,” said Gerry Purcell, a former PBM executive who advises companies on their drug plans.
The suit brought against Lilly—CVS is not a defendant—insists that the company, the biggest maker of psychiatric drugs, pay as much as $6.8 billion in damages for marketing Zyprexa for unapproved uses and downplaying its health risks in an attempt to increase profits.
Over 10,000 documents have been unsealed in the case. They reveal that Lilly officials engaged in “ghostwriting,” when the officials would write medical journal studies about Zyprexa and then ask doctors to sign them. The documents also prove that Lilly urged doctors to prescribe Zyprexa for patients with dementia, an unapproved use for the antipsychotic, despite the fact that Lilly had evidence the medicine did not work for such patients.
“These documents will add fuel to the perception that the companies and the PBMs are in cahoots with each other,” Purcell said.
Lilly declined to comment on whether it accepted CVS’s $5-per-letter offer.
Richard Beck, the executive director of the Texas Pharmacy Business Council, said the conflicts of interest for companies that both represent health insurers in their search for cheaper medicines and market those drugs for the drug makers “are just too obvious to ignore.”
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