Newspaper’s Report of Record Zyprexa Deal Proves True

Pharmaceutical giant Eli Lilly has announced it will pay $1.42 billion in a settlement and fines to resolve state and federal allegations that it illegally marketed its anti-psychotic drug Zyprexa.

News of a possible settlement first leaked last fall, when a lawyer from Pepper Hamilton sent an e-mail about confidential settlement talks intended for Sidley Austin lawyer Bradford Berenson to New York Times reporter Alex Berenson. The journalist later said the e-mail was cryptic and not a “really big blunder.”

Eli Lilly will pay a $615 million criminal fine and $800 million to resolve civil suits or probes by the federal government and more than 30 states, report the Associated Press and Bloomberg News. The company was accused of illegally marketing Zyprexa as a treatment for dementia.

The settlement is a record in a corporate whistle-blower case, the Wall Street Journal reports (sub. req.). The company will plead guilty to a misdemeanor violation of the Food, Drug and Cosmetic Act.