Eli Lilly Loses Appeal

The following is an extract from a Bloomberg news item:

Lilly Loses Appeal to Limit Damages in Canadian Suit (Update2) 
By Joe Schneider

July 2 (Bloomberg) — Eli Lilly & Co. lost an appeal to limit potential damages in a lawsuit filed by Canadian patients who claimed they developed diabetes after using its Zyprexa schizophrenia drug.

An Ontario appeal court today affirmed a lower court’s decision that plaintiffs in a class-action, or group, suit may try to recover money the Indianapolis-based company made from sales rather than get damages. The plaintiffs sought C$900 million in damages in their initial claim.

Lilly, the world’s biggest maker of psychiatric medicines, is accused of failing to warn the Zyprexa schizophrenia treatment may cause diabetes. Opting to go after a company’s sales is unprecedented in court, said Toronto class-action lawyer Paul Bates, who isn’t involved in the Zyprexa suit.

That has “the power to make defendants liable for truly enormous amounts of money,” Judge Sidney Lederman wrote last July 10 in granting Lilly permission to appeal. “The ramifications of exposure to this type of liability will extend beyond the parties to affect not just the pharmaceutical industry as a whole, but also the securities market.”

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This is potentially a huge blow for pharmaceutical companies.  They make so much money from their drug dealings that hitherto they have been able to laugh off the odd financial smack on the wrist of a few million here and there.

 

If the penalties for killing and maiming people, not to mention creating insanity, are based on the sales of the drugs then it will inject a note of caution into their activities.  That has not been necessary up till now.

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