Eli Lilly have announced that they are unable to obtain and retain insurance coverage for Zyprexa.
According to investigative reporter Eveylyn Pringle:
“In light of these insurance problems, Lilly could be likened to a dog chasing its tail. While on one hand, it is being sued for illegally marketing Zyprexa off-label, if it stops the illegal conduct profits will plummet and it won’t have the money to pay the litigation costs.
“However, Lilly has apparently decided to take the low road, because to date, settling with 26,500 Zyprexa cases out of court by paying out over $1.2 billion has done nothing to lower the off-label sales figures for Zyprexa. In fact, in 2006, sales of the drug increased 12%, according to SEC filings.”
That is an unsustainable business practice. To put out highly dangerous drugs that are known to have horrendous, not to say deadly, side effects, and to no longer be able to able to cover ones liabilities with insurance is a recipe for bankrupcy pure and simple.
Investors would do well to short Big Pharma as they are going down. Not because of the FDA who have been as ‘in the pocket’ of Big Pharma as the psychiatric industry; not because of our ever-vigilant media (just a little joke), not because of our government legislature who are not quite so strident in their support of Big Pharma anymore (I think ‘scurrying for cover’ would be the right term), but because they are about to be wrung dry by the legal system.
Zyprexa is just the start. Insurance companies are suddenly looking rather more closely at the liabilities they take on with a range of Big Pharma drugs. Big Pharma without bags of cash to throw around will be without a friend in the world. They will be savaged mercilessley by those who have been paid off in the past and who will be desperate to establish their anti-Big Pharma credentials in the future.