Eli Lilly is to pay $1.42 billion to settle US criminal and civil charges related to a government investigation into alleged illegal marketing of its blockbuster schizophrenia drug Zyprexa.

This morning the company announced that it has reached resolution with the US Attorney for the Eastern District of Pennsylvania and the Office of Consumer Litigation of the Department of Justice regarding the investigation into Lilly's past marketing and promotional practices for Zyprexa (olanzapine). As part of the settlement, Lilly has agreed to plead guilty to one misdemeanor violation of the Food, Drug, and Cosmetic Act.

The company noted that even though it "disagrees with and does not admit to the civil allegations", it has agreed to settle the dispute over these allegations. Chief executive John Lechleiter said that "we deeply regret the past actions covered by the misdemeanour plea".

He added that "we take seriously our responsibilities to abide by all the laws governing our business practices, and we realise that we have a tremendous responsibility to the patients and healthcare professionals we serve". Dr Lechleiter went on to say that "doing the right thing is non-negotiable at Lilly" and the company's "comprehensive compliance program is an embedded part of our company's culture".

He claimed that "these are not just words to us" and "all of our employees are aware of the imperative for them to be models of compliance and of ethical behaviour." The misdemeanour plea is for the off-label promotion of Zyprexa between September 1999-March 2001 and specifically states that Lilly promoted the drug in elderly populations as treatment for dementia, including Alzheimer's, although Zyprexa is not approved for such uses. As part of this agreement regarding the criminal investigation, Lilly has agreed to pay $615 million.

Under terms for the resolution of the civil investigations, Lilly will make payments totalling nearly $800 million. Of that, $438 million will be paid to the federal government and approximately $362 million will be made available for payment to settling states.

In October Lilly revealed that it was in “advanced discussions” to resolve the investigations. The company took a $1.4 billion charge in the third quarter of 2008, and at the time, Lilly’s general counsel, Robert Armitage, said that the government's investigation of Zyprexa had been ongoing for five years “and we now have a heightened sense of responsibility to all our stakeholders to intensify efforts to resolve these issues”.