Eli Lilly 2008 Annual Report Download - page 34

FINANCIALS
32
part of the MDL proceedings in the EDNY. The Alaska
case was settled in March 2008 for a payment of $15.0
million, plus terms designed to ensure, subject to cer-
tain limitations and conditions, that Alaska is treated as
favorably as certain other states that may settle with us
in the future over similar claims. The following cases
have been set for trial in 2009: Connecticut in the EDNY
in June, Pennsylvania in November, and South Carolina
in August, in their respective states.
In 2005, two lawsuits were fi led in the EDNY pur-
porting to be nationwide class actions on behalf of all
consumers and third-party payors, excluding govern-
mental entities, which have made or will make payments
for their members or insured patients being prescribed
Zyprexa. These actions have now been consolidated into
a single lawsuit, which is brought under certain state
consumer protection statutes, the federal civil RICO
statute, and common law theories, seeking a refund of
the cost of Zyprexa, treble damages, punitive damages,
and attorneys’ fees. Two additional lawsuits were fi led
in the EDNY in 2006 on similar grounds. In September
2008, Judge Weinstein certifi ed a class consisting of
third-party payors, excluding governmental entities and
individual consumers. We appealed the certifi cation
order, and Judge Weinstein’s order denying our motion
for summary judgment, in September 2008. In 2007, The
Pennsylvania Employees Trust Fund brought claims in
state court in Pennsylvania as insurer of Pennsylvania
state employees, who were prescribed Zyprexa on simi-
lar grounds as described in the New York cases. As with
the product liability suits, these lawsuits allege that we
inadequately tested for and warned about side effects of
Zyprexa and improperly promoted the drug. The Penn-
sylvania case is set for trial in October 2009.
We cannot determine with certainty the additional
number of lawsuits and claims that may be asserted.
The ultimate resolution of Zyprexa product liability and
related litigation could have a material adverse impact
on our consolidated results of operations, liquidity, and
fi nancial position.
In addition, we have been named as a defendant
in numerous other product liability lawsuits involving
primarily diethylstilbestrol (DES) and thimerosal. The
majority of these claims are covered by insurance, sub-
ject to deductibles and coverage limits.
Because of the nature of pharmaceutical products,
it is possible that we could become subject to large
numbers of product liability and related claims for
other products in the future. In the past few years,
we have experienced diffi culties in obtaining product
liability insurance due to a very restrictive insurance
market. Therefore, for substantially all of our currently
marketed products, we have been and expect that
we will continue to be completely self-insured for
future product liability losses. In addition, there is no
assurance that we will be able to fully collect from our
insurance carriers in the future.
PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995—A CAUTION CONCERNING FORWARD-LOOKING
STATEMENTS
Under the safe harbor provisions of the Private Securi-
ties Litigation Reform Act of 1995, we caution investors
that any forward-looking statements or projections
made by us, including those made in this document, are
based on management’s expectations at the time they
are made, but they are subject to risks and uncertain-
ties that may cause actual results to differ materially
from those projected. Economic, competitive, govern-
mental, technological, legal, and other factors that
may affect our operations and prospects are discussed
earlier in this section and our most recent report on
Forms 10-Q and 10-K fi led with the Securities and
Exchange Commission. We undertake no duty to update
forward-looking statements.