This is the Zyprexa trial we’re talking about. The state, you may recall, sued Lilly in 2006, alleging the drugmaker failed to warn of weight gain and diabetes caused by Zyprexa, and wants Lilly to cover treatment costs of Medicaid patients who suffered serious health problems.

The civil suit is being closely watched by state and federal prosecutors investigating the drugmaker, because this is the first lawsuit filed by a state against Lilly to make it to trial. The outcome - and even the evidence - could, therefore, influence settlement talks under way with the US Attorney in Phildelphia and state attorneys general. An unfavorable verdict could also prompt other states to file lawsuits, although eight others already have done so. (By the way, if you want to read the controversial Zyprexa documents, visit Furious Seasons).

For its part, Lilly argues the state has two irreconcilable positions - at the same time Alaska is suing the drugmaker, the state continues to seek court orders to force mental patients to take the very drug it says is harmful. These are the slides Lilly’s lawyers used in court.

In opening arguments, a lawyer for the state, Scott Allen, told the jury that memorandums from Lilly execs showed the drugmaker knew of Zyprexa’s dangers soon after the drug was introduced in 1996. But Lilly deliberately played down the side effects, so that sales of Zyprexa would not be hurt. Lilly’s conduct was “reprehensible,” Allen told them, according to The New York Times.

Allen went on to describe internal memos and e-mails in which Lilly execs were concerned as early as 1999 that Zyprexa’s sales might be hurt if doctors believed that the drug caused diabetes. In one memorandum in October 2000, a Lilly manager wrote that a panel of doctors convened by the company had warned that “unless we come clean on this, it might get much more serious.” (To see countless Zyprexa documents, visit Furious Seasons).

Nonetheless, Lilly continued to encourage its sales reps to play down the risk of weight gain and diabetes, the memos showed. In a July 2001 memo, a Lilly exec wrote that the drugmaker was “betting the farm on Zyprexa.” Only last year, under pressure from the FDA, the Times reminds us, did the drugmaker in the product labeling that Zyprexa appears to have bigger risks for high blood sugar than other medicines for schizophrenia. Allen ended his remarks with a reference to the July 2001 memorandum. “It’s time to call that bet,” he told the jury.

In their own opening arguments, Lilly’s lawyers argued the drugmaker had done nothing wrong and was proud to sell Zyprexa, which they described as a breakthrough treatment for people with severe mental illnesses.

About a dozen lawyers and support team members for Lilly have come to Anchorage for the trial, occupying rooms on two floors of the Hotel Captain Cook across the street from the Nesbitt Courthouse downtown. Many come from the Pepper Hamilton law firm. Among the hired guns at the state of Alaska table: Tommy Fibich of Houston, Texas, who specializes in product-liability litigation involving prescription drugs.

Meanwhile, a national business hired a local photographer to set up cameras and technical equipment in the courtroom for a daily live feed to interested paying clients, once the trial begins. You can either watch streaming live video, or get video on demand of trial events after the fact for $300 a day, or both for $400, John Shin of CourtroomLive tells The Anchorage Daily News.