Eli Lilly’s Zyprexa is back in the news after the company said that it has settled another 18,000 lawsuits which alleged that the firm did not adequately warn patients that the anti-psychotic increased the risk of diabetes.

Lilly noted that the agreement covers the “vast majority of remaining product liability claims” relating to Zyprexa (olanzapine) and while the terms of the settlements were not disclosed, the firm said that it would take a fourth-quarter settlement charge that is not expected to exceed $500 million.

The news means that Lilly is shelling out “substantially less” than in a June 2005 settlement when it agreed to pay $700 million to resolve more than 8,000 similar lawsuits. Most of the suits had alleged that the information in the package insert, which listed the risk of hyperglycemia and diabetes as an infrequent adverse event since 1996, was not adequately displayed, though this changed in September 2003, when the US Food and Drug Administration required label changes for all atypical antipsychotics.

Lilly insists that the claims are without merit and is also preparing for the 1,200 remaining suits not covered in the agreements, saying it will vigorously defend Zyprexa. Chief executive Sidney Taurel said that the firm had taken “this difficult step” to settle “because we believe it is in the best interest of the company, the patients who depend on this medication, and their physicians.” He claimed that the complex litigation “stirred concern for physicians and spread fear among patients and caregivers, which has interfered with the process of physicians making treatment decisions.”

The settlements represent good news for Lilly with most analysts believing that the firm is likely to prevail in the remaining lawsuits and that most of the impact on sales stemming from Zyprexa's side-effect profile has already occurred. The company also recently announced its successful defence of Zyprexa patents which are valid until 2011.

Row with New York Times rumbles on

Lilly will probably like to see no more stories about Zyprexa for a while, but that seems unlikely if the New York Times has anything to do with it. The firm has been involved in a spate with the newspaper for the last month as the latter published a number of articles, based on leaked documents, which suggested, among other things, that Lilly has been downplaying the dangers of Zyprexa. Yet another article was published about the plight of John Eric Kaufmann, a Zyprexa patient who died in March.

Lilly immediately responded with a statement saying that “it is inaccurate to imply that any single factor – including medication – was the cause of the unfortunate death of the patient profiled in today's New York Times.”

The firm added that “we are disappointed that the Times chose to focus its entire article on only one patient rather than speaking with additional patients and/or family members who have different views and experiences with Zyprexa.”

Lilly went on to say that “our deepest sympathy goes out to [Mr Kaufmann’s] family and friends and, “though we do want to protect this patient's privacy,” he had “a complicated medical history that may have led to this unfortunate outcome.”