The Mind Boggles

Eli Lilly and Company, Indianapolis, agreed to pay $1.4 billion and plead guilty to promoting its antipsychotic medication Zyprexa as a treatment for dementia when it was not approved for that use by the FDA, according to the Justice Department.

The penalties for the drugmaker include a $515 million fine, the largest criminal fine ever imposed on an individual corporation in the history of U.S. criminal prosecution, said the Justice Department in a press release. The company also agreed to forfeit $100 million. According to a news release from Eli Lilly, the company agreed to plead guilty to one misdemeanor criminal charge for the off-label promotion of Zyprexa as treatment of dementia between September 1999 and March 2001.

The company also copped to an almost $800 million civil settlement with the federal government and says it will resolve False Claims Act claims and related claims. In a press release, Eli Lilly said the company “disagrees with and does not admit to the civil allegations.”

The guilty plea and settlement must be approved by U.S. District Court.

In another story of costly alleged misbehavior, UnitedHealth will pay $350 million to settle a class-action lawsuit brought by the American Medical Association on behalf of physicians and patients. The lawsuit alleged that the company’s health plans used flawed data administered by its subsidiary Ingenix to justify low reimbursement for out-of-network care.

The AMA argued that UnitedHealth’s rate-setting practice violated the Employee Retirement Income Security Act, the Racketeer Influenced and Corrupt Organizations Act, and antitrust law. The proposed agreement contains no admission of wrongdoing, and the proposed settlement is subject to court approval.

New York Attorney General Andrew Cuomo said in press releases that he will continue to look into similar practices by UnitedHealth’s peers.


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