In a surprising move that Eli Lilly�s president, Sidney Taurel, described as being "in the best interest of the company," the pharmaceutical giant agreed to pay up to $690 million into a settlement fund designed to dispose of some 8,000 claims by patients who alleged they were injured by taking the antipsychotic drug, Zyprexa.

Specifically, these claims were based on allegations that prior to September 2003, Lilly failed to adequately warn those taking Zyprexa of an increased risk of developing diabetes, hyperglycemia, and related illnesses.

While Lilly did not admit its best-selling drug caused the injuries in question, its potential exposure in the litigation far exceeded the settlement figure. Thus, as a business decision, resolving about 75% of the claims six months before trial made sense. The uncertainties associated with a jury trial in this type of a case also influenced Lilly�s decision.

Jerrold S. Parker, senior partner in the prominent New York personal injury law firm of Parker & Waichman, told reporters that: "It�s really remarkable to arrive at a settlement of this magnitude so far in advance of trial." Mr. Parker said that the plaintiffs� litigation team, made up of some of the foremost products liability attorneys, "was able to convince Lilly that plaintiffs� case was a strong one, with a good likelihood of success, if it proceeded to trial.

The fund will be administered by a panel named by the plaintiffs� attorneys which will allocate compensation to the plaintiffs based mostly on the extent of their injuries which range from weight gain to death. The plaintiffs will be permitted to opt out of the settlement and pursue their claims individually. In most cases of this type, however, the majority of the claimants choose to accept the settlement rather than continue their lawsuit.

Zyprexa, like two other powerful antipsychotic drugs, Risperdal (Jannsen Pharmaceuticals) and Seroquel (AstraZeneca), has been found to cause serious side effects in patients, especially those who have already been diagnosed with diabetes and related illnesses. Knowledge of the dangers of Zyprexa was discovered as a result of a series of findings beginning in 2001 when the FDA was alerted to 19 case reports of diabetes associated with the drug. One of these cases resulted in death due to necrotizing pancreatitis, a condition in which cells in the pancreas die. In May 2003, forty additional reports of hyperglycemia (elevated blood sugar), diabetes mellitus, or exacerbation of diabetes were received in the UK including one which proved to be fatal.

An emergency report issued by the Japanese Health and Welfare Ministry in April of 2002 concerning the side effects of Zyprexa noted that there had been two deaths of patients who had diabetes prior to taking the anti-psychotic medication. It also reported that there had been seven other patients who lost consciousness or slipped into comas after taking the drug.

In April of 2003, the Wall Street Journal ran a front page article on Zyprexa and other anti-psychotics and their link to the development diabetes6. The article estimated that somewhere around 11 million people have taken Zyprexa. An eight-year study found that nearly 300 patients developed diabetes, 75 became seriously ill, and 23 died. Although the FDA was aware of these cases, it did not require Lilly (and the manufactures of similar antipsychotic drugs) to add a significant warning regarding these risks until September 2003.

Zyprexa has been prescribed to more than 17 million people worldwide since it was first marketed in 1996. It became Lilly�s best selling medication, after Prozac lost U.S. patent protection in 2001, with annual sales of $4.4 or almost 33% of Lilly�s total sales of $13.86 billion.

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