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Eli Lilly & Co ethics upgrade

US firm agrees to employ ethics 'watchdogs' as part of lawsuit settlements

Eli Lilly & Co has announced it will create four new positions in senior management to promote ethical and compliant behaviour as part of the settlement of two lawsuits after the company was found guilty in 2009 of illegally marketing and promoting several of its drugs.

Under the settlement agreement, Lilly has agreed to create openings for a vice president of global compliance strategy, vice president of global ethics, a senior director of enterprise risk management and a project manager to implement and monitor new policies.

According to reports in US state newspaper the Indy Star, Lilly spokesman Mark Taylor said the new roles are in the process of being filled and all four people would report to Anne Nobles, chief ethics and compliance officer at the company. 

In 2009, the firm was fined $1.4bn – the largest criminal fine ever imposed on a US company – over the illegal marketing of Zyprexa. The drug, which is approved for use for the treatment of bipolar disorder and schizophrenia, was unlawfully promoted for the treatment of agitation, aggression, hostility, dementia, depression and generalised sleep disorder.

In addition, Lilly was also accused of improperly marketing osteoporosis drug, Evista and antidepressant, Prozac.

In response to the court ruling, a number of shareholders sued Lilly on the grounds that it breached fiduciary duty in connection with illegal marketing, exposing the company to significant risk of damage. The lawsuits, known as derivative claims, seek to force Lilly to take corrective steps.

Lilly has agreed to pay $35,000 to the named shareholders and pay $8.75m in legal fees, including $450,000 to plaintiffs.

The settlement, which has yet to be approved by a federal judge, covers two of seven outstanding 'derivative shareholder' cases spread across the courts.


 

9th March 2010

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