Originally published September 27 2005
Drug maker sues insurance company over coverage of consumer claims
by Mike Adams, the Health Ranger, NaturalNews Editor
Drug manufacturer Eli Lilly and Co. is suing five of its insurance providers, claiming they agreed to cover Lilly in the event claims were made against their anti-psychotic drug Zyprexa, but four of the insurers respond that they should not have to pay on the grounds that Lilly knew about (and hid) Zyprexa's harmful side effects when they bought coverage.
Eli Lilly and Co. wants its insurers to cover nearly half of the $1 billion the drug maker has set aside to pay product-liability claims involving its top-selling drug, the anti-psychotic treatment Zyprexa.
Lilly is seeking about $465 million from the insurers, company spokesman Phil Belt said Friday.
The Indianapolis-based company, which is suing five of its insurers to try to force them to pay, had partially detailed the amount it is seeking in previously filed court records.
They argue Lilly bought liability coverage for Zyprexa in 2000 without disclosing that it knew then the drug could cause harmful, diabetes-related side effects in some users.
"Lilly knew Zyprexa represented a serious liability exposure to it and to any insurer that provided coverage to Lilly," said SR International Business Insurance Co., one of the companies Lilly is suing.
The other companies Lilly is suing are North American Specialty Insurance Co., Winterthur Schweizerische Versicherungs AG, Gerling-Konzern Allgemeine Versicherungs AG, and ELCO Insurance Co.
All but ELCO have refused to pay claims Lilly has submitted to reimburse it for legal bills and other costs related to Zyprexa product-liability litigation.
ELCO said it should be dismissed from the lawsuit because ELCO has not refused to pay claims it has gotten from Lilly.
Lilly sued its own subsidiary because "we are obliged to treat ELCO as an arm's-length independent entity," Lilly spokeswoman Joan Todd told The Indianapolis Star.
In June, Lilly announced a deal with trial lawyers to settle most of the 8,000 U.S. claims against it from Zyprexa users, who allege the drug caused diabetes-related side effects.
Zyprex is Lilly's top-selling drug, although the company reported that worldwide sales of the drug fell 10 percent to $1.1 billion in the second quarter, from $1.21 billion a year ago.
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