Eli Lilly is to take a charge of over $1.4 billion in the third quarter after saying that it is in “advanced discussions” to resolve ongoing criminal investigations with the US Attorney’s Office into its past marketing of the antipsychotic blockbuster Zyprexa.

Lilly notes that it has “now incorporated an enhanced compliance programme,” which includes guidelines issued by the US Department of Health and Human Service’s Office of Inspector General for the pharmaceutical industry. The firm’s general counsel, Robert Armitage, said that the government's investigation of Zyprexa (olanzapine) has 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”.

In November 2007, Lilly received a grand jury subpoena for a broad range of documents related to Zyprexa and more than 30 states are involved in the investigation of any Medicaid-related claims relating to the marketing and promotion of the drug. Eleven other states (Louisiana, Mississippi, Montana, New Mexico, Pennsylvania, South Carolina, Utah, West Virginia, Connecticut, Arkansas and Idaho) have filed lawsuits over Zyprexa and are not participating in the coordinated investigation.

Lilly said the charge reflects the company's “currently estimable exposure with respect to these matters”. The firm added that if the ongoing discussions are successfully concluded, it expects that they would settle the Zyprexa-related federal claims, as well as similar Medicaid-related claims of states participating in the settlement.

This case is in addition to the settlement agreed earlier this month which resolved a multi-state investigation under the consumer protection laws of 32 states and the District of Columbia related to Zyprexa for $62 million. In March, Lilly entered into a $15 million settlement with Alaska, which concluded an ongoing trial involving various issues surrounding the drug.