US District Court Judge Jack Weinstein says the drugmaker faces a trial unless a settlement is reached in the long-running litigation in his New York court, which was filed by insurers, unions and others who claim the antipsychotic was overpriced and marketed off-label, and that safety risks were hidden.

In a 290-page discussion draft, Weinstein writes he is prepared to grant class-action status for the lawsuit and set a hearing on the proposed order for July 31. And the draft cites damages estimates from two experts - one for $4.9 billion and the other ranging from $3.9 billion to nearly $7.7 billion.
The draft was filed in three parts, so here they are - part one, part two and part three.

“A global settlement for the overpricing claims and any other claims is desirable,” he wrote. “Legal disputes of this nature should be resolved as quickly and comprehensively as possible so that government, the medical profession, and drug manufacturers can get on with their main job - protecting the people’s health effectively at the cheapest practicable cost.” He limited the damages to four years before the lawsuit was filed, or between June 20, 2001, to June 20, 2005.

This amounts to an about-face for Weinstein. In April, he indicated he probably wouldn’t allow patients and insurers who paid for Zyprexa to sue the drugmaker as a group. Although he thought the case “ought to be settled. I really think that we’re not dealing with very much money,” he said at the time. (Here’s the back story).

“There is evidence that off-label use of Zyprexa was excessive and may have been encouraged by Lilly,” Weinstein wrote in the draft filed Wednesday.

A Lilly spokeswoman denied the drugmaker pushed Zyprexa for uses other than prescribed. “Lilly does not promote off-label, … but doctors do prescribe all kinds of medications off label,” she tells the Associated Press. “At this point there’s no evidence that any plaintiffs have been harmed by the drug.” She adds that Lilly attorneys were reviewing details of the draft and emphasized the document was not a final ruling. “I think the main thing is that this is not an order, this is a discussion draft.”

In March, Lilly and the state of Alaska announced a $15 million settlement in a lawsuit over the use of Zyprexa in the state’s Medicaid program. Several other states have also sued the drugmaker.

Zyprexa brought in $4.8 billion in sales last year, accounting for 25 percent of the company’s total sales. So far, though, the drugmaker has spent more than $1 billion to settle product liability claims from patients over Zyprexa, and about 1,200 cases were still pending earlier this year.

“From an investor point of view, this ongoing problem with Zyprexa is going to make people nervous until there’s a resolution,” Les Funtleyder, an analyst at Miller Tabak, tells The Indianapolis Star. “The thing is, we don’t know when there will ever be resolution. It just keeps going on and on.”