As we’ve noted before, Mississippi AG Jim Hood isn’t shy about filing lawsuits. But so far, his aggressive posture against Eli Lilly in a case involving the controversial anti-psychotic Zyprexa hasn’t paid off. In a 116-page decision issued Tuesday (available here, via Pharmalot) Brooklyn federal district court Judge Jack Weinstein knocked out most of Hood’s suit, which sought to recover billions of dollars that Mississippi’s Medicaid system paid for Zyprexa. Hood’s suit alleged that Lilly improperly marketed the drug for off-label uses and failed to disclose its side effects.
Mississippi now finds itself in the uncomfortable position of being one of very few states that hasn’t collected on Zyprexa-related claims against Lilly.
Like several other states, Mississippi opted not to participate in Lilly’s record-setting $1.4 billion False Claims Act settlement last January because it wanted to pursue its own litigation against Lilly. But most of those other states have since settled. Last fall, Lilly reached a $62 million deal with 32 states, leaving only 12 states with pending claims. And of those 12, according to LegalNewsline, most have reached official or tentative settlements, including Connecticut ($25.1 million); West Virginia ($22 million-plus); Idaho ($13 million); Utah ($24 million); and South Carolina ($45 million).
Mississippi continued litigating, though, with claims that Weinstein (who was assigned jurisdiction over most of the federal Zyprexa litigation by the Judicial Panel on Multidistrict Litigation) criticized in his summary judgment ruling. “If allowed to proceed in their entirety, the state’s claims could result in serious harm or bankruptcy for this defendant and the pharmaceutical industry generally,” he wrote. “For the legal system to be used for this slash-and-burn style of litigation would arguably constitute an abuse of the legal process. Constitutional, statutory, and common law rights of those injured to seek relief from the courts must be recognized. But courts cannot be used as an engine of an industry’s destruction.”
Weinstein’s ruling left standing only Mississippi’s claims based on the difference between the market price of Zyprexa and the value the state received. According to Weinstein, that issue is before the 2nd U.S. Circuit Court of Appeals.
We left messages with both the Mississippi AG’s office and its outside counsel, Mike Perrin of Bailey Perrin Bailey, but didn’t hear back.
Lilly, which told LegalNewline it was “pleased” with the decision, is represented by Pepper Hamilton attorneys Andrew Rogoff, Matthew Hamilton, Nina Gussack, Allan Andrew Thoen, Samuel Abate Jr., John Brenner and George Lehner.
This article first appeared on The Am Law Litigation Daily blog on AmericanLawyer.com.