Lilly wins reversal of class status on Zyprexa

A federal appeals court decertified a class of unions and insurers that accused Eli Lilly and Co of overpricing its Zyprexa anti-psychotic drug after misrepresenting its efficacy and side effects. The US Second Circuit Court of Appeals on Friday also said a lower court judge had erred in denying Lilly's motion for summary judgment on the overpricing claims.

Expert witnesses for the plaintiffs had estimated that damages could reach several billion dollars. The court returned the case to US District Judge Jack Weinstein, who oversees Zyprexa litigation in the federal court in Brooklyn, New York. Zyprexa is used to treat schizophrenia and symptoms of bipolar disorder, and is Lilly's biggest drug by revenue. Sales totaled $4.92 billion in 2009, or 23 percent of the Indianapolis-based company's total, but prescriptions began falling after the use of Zyprexa was linked to diabetes, hyperglycemia and weight gain. The drug should face generic competition next year when Lilly loses patent protection.