Eli Lilly 2009 Annual Report Download - page 27

Other Product Liability Litigation
We are currently a defendant in a variety of product liability lawsuits in the United States involving
primarily Zyprexa, thimerosal, Byetta, and DES.
We have been named as a defendant in approximately 200 actions in the U.S., involving approximately
270 claimants, brought in various state courts and federal district courts on behalf of children with autism
or other neurological disorders who received childhood vaccines (manufactured by other companies) that
contained thimerosal, a generic preservative used in certain vaccines in the U.S. beginning in the 1930s.
We purchased patents and conducted research pertaining to thimerosal in the 1920s. We have been named
in the suits even though we discontinued manufacturing the raw material in 1974 and discontinued selling
it in the United States to vaccine manufacturers in 1992. The lawsuits typically name the vaccine
manufacturers as well as Lilly and other distributors of thimerosal, and allege that the children’s exposure
to thimerosal-containing vaccines caused their autism or other neurological disorders. We strongly deny
any liability in these cases. There is no credible scientific evidence establishing a causal relationship
between thimerosal-containing vaccines and autism or other neurological disorders. In addition, we
believe the majority of the cases should not be prosecuted in the courts in which they have been brought
because the underlying claims are subject to the National Childhood Vaccine Injury Act of 1986.
Implemented in 1988, the Act established a mandatory, federally administered no-fault claims process for
individuals who allege that they were harmed by the administration of childhood vaccines. Under the Act,
claims must first be brought before the U.S. Court of Claims for an award determination under the
compensation guidelines established pursuant to the Act. Claimants who are unsatisfied with their awards
under the Act may reject the award and seek traditional judicial remedies.
We have been named a defendant in approximately 55 Byetta product liability lawsuits involving approxi-
mately 280 plaintiffs, primarily seeking to recover damages for pancreatitis experienced by patients
prescribed Byetta. We are aware of approximately 40 additional claimants who have not yet filed suit. The
majority of the cases are filed in California and coordinated in a Los Angeles Superior Court. In June 2009,
a lawsuit was filed in Louisiana State Court (Ralph Jackson v. Eli Lilly and Company, et al.) seeking to
assert similar product liability claims on behalf of Louisiana residents who were prescribed Byetta;
however, the plaintiff dropped the class action allegations in a recently-filed amended complaint. We
believe these claims are without merit and are prepared to defend against them vigorously.
In approximately 25 U.S. lawsuits against us involving approximately 50 claimants, plaintiffs seek to
recover damages on behalf of children or grandchildren of women who were prescribed DES during
pregnancy in the 1950s and 1960s. In December 2009, a lawsuit was filed in U.S. District Court in
Washington, D.C. against Lilly and other manufacturers (Michele Fecho, et al v. Eli Lilly and Company, et al)
seeking to assert product liability claims on behalf of a putative class of men and women allegedly
exposed to the medicine who claim to have later developed breast cancer. We believe these claims are
without merit and are prepared to defend against them vigorously.
Other Marketing Practices Investigations
In November 2008, we received a subpoena from the U.S. Department of Health and Human Services
Office of Inspector General in coordination with the U.S. Attorney for the Western District of New York
seeking production of a wide range of documents and information relating to reimbursement of Alimta.
We are cooperating in this investigation.
In August 2003, we received notice that the staff of the SEC is conducting an investigation into the
compliance by Polish subsidiaries of certain pharmaceutical companies, including Lilly, with the U.S. For-
eign Corrupt Practices Act of 1977. The staff has issued subpoenas to us requesting production of
documents related to the investigation. In connection with that matter, staffs of the SEC and the
Department of Justice (DOJ) have expanded their investigation and have asked us to voluntarily provide
additional information related to certain activities of Lilly affiliates in a number of other countries. The
SEC staff has also issued a subpoena related to activities in these countries. We are cooperating with the
SEC and the DOJ in this investigation.
Shareholder Derivative Litigation
In 2007, the company received two demands from shareholders that the board of directors cause the
company to take legal action against current and former directors and others for allegedly causing
damage to the company through improper marketing of Evista, Prozac, and Zyprexa. In accordance with
procedures established under the Indiana Business Corporation Law (Ind. Code § 23-1-32), the board has
appointed a committee of independent persons to consider the demands and determine what action, if
any, the company should take in response. Since January 2008, we have been served with seven
shareholder derivative lawsuits: Lambrecht, et al. v. Taurel, et al., filed January 17, 2008, in the United
States District Court for the Southern District of Indiana; Staehr, et al. v. Eli Lilly and Company, et al., filed
March 27, 2008, in Marion County Superior Court in Indianapolis, Indiana; Waldman, et al., v. Eli Lilly and
Company, et al., filed February 11, 2008, in the United States District Court for the Eastern District of New
York; Solomon v. Eli Lilly and Company, et al., filed March 27, 2008, in Marion County Superior Court in
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FORM 10-K