Medicare, Medicaid Claim Portion of Zyprexa Settlement

By Elizabeth Rhein

Published on September 06, 2006

Eli Lilly and Co. plan to disburse $700 million to patients across the United States who filed lawsuits against the drugmaker. These patients claim that Zyprexa, a Lilly-manufactured drug intended to treat bipolar disorder and schizophrenia, caused diabetes and diabetes-related ailments.

A recent agreement reached between a federal court and class action lawyers will create Medicaid and Medicare liens against the giant nationwide settlement. The liens are intended to siphon off money from settlements awarded to patients who were covered by the agencies while they were taking Zyprexa. Both Medicare and Medicaid justify their portion of the award by citing the extra cost of paying for patients’ Zyprexa-related illnesses.

Medicaid, the state-run health coverage plan for disabled and poor residents, stands to reap the larger award from the Eli Lilly settlement. In some states, Medicaid will claim up to 30 percent of each of their patients' awards. Medicare, the federal program that covers people over the age of 65, will be allotted no more than 15 percent of the award given to each of its covered patients.

Eli Lilly consented to the settlement in June 2005, in response to the threat of thousands of individual liability claims related to Zyprexa.

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