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Executive Summary

Lilly pleaded guilty Aug. 21 in the U.S. Southern District Court of Indiana to: (1) unintentionally providing inadequate label warnings on 15 shipments of Oraflex (benoxaprofen) made immediately after the drug's approval; and (2) being unintentionally late in filing 10 liver or liver-kidney adverse reactions to Oraflex. In a same day press release, Lilly explained that "since there was no allegation ]by the Justice Dept.[ that Lilly or any of its employees acted intentionally to conceal information or mislead the FDA, the company has agreed to plead guilty to these two types of technical misdemeanors, and be subject to a maximum fine of $25,000, in order to avoid the time and expense of prolonged litigation and to bring the Oraflex matter to a conclusion." Lilly's plea agreement concludes a lengthy review by the Justice Dept. of Lilly's actions with respect to the anti-arthritic drug. In 1983, FDA requested the dept. to determine whether Lilly was guilty of "intentionally scheming to conceal important information from the agency." In addition to the maximum $25,000 fine the company agreed to pay, Ian Shedden, MD, former VP and chief medical officer of Lilly Research Labs, agreed to a total maximum fine of $15,000. Shedden joined Glaxo in July 1983. Lilly asserted in a letter to shareholders that "in bringing the two technical charges, the dept. has made some factual errors, seriously mischaracterized certain events, and omitted pertinent facts." The company presented its position on the two charges in attachments to the shareholder letter. With respect to initial U.S. labeling, Lilly said that at the time the labeling was developed "neither the company nor the FDA had determined any need for a warning statement concerning possible liver-kidney reactions. As the Dept. of Justice knows but did not state, the company had reported six clinical trial cases involving liver-kidney or kidney reactions to the FDA before the NDA was approved." According to the firm, "FDA acknowledged that it had received those reports before the drug was approved but did not consider such reactions 'exceptional' or 'noteworthy' for this type of drug." In addition, Lilly said the FDA officer principally responsible for approval of Oraflex "said that, while in hindsight he would have made certain changes in the labeling, he still would have approved the drug and would not have required a different statement in the initial labeling concerning liver reactions." Lilly told "The Pink Sheet" that "substantially fewer than 100" liability cases are pending in the U.S. Lilly also told its shareholders that in late February 1982 preliminary results of a postmarketing surveillance study "showed no unusual pattern of serious adverse reactions associated with the widespread use of Oraflex in the U.K. and did not suggest any problem with liver-kidney reactions." The firm added that U.K. regulatory authorities have stated "they did not perceive a problem with liver-kidney reactions until well after the time Oraflex was approved in the U.S." Lilly said when it learned of such reactions in the spring of 1982 it notified FDA of its intentions to revise the labeling, but that FDA asked the firm to delay the labeling change until the agency's Arthritis Advisory Cmte. considered the British reports in the context of adverse reactions with all nonsteroidal antiinflammatory drugs. Judge S. Hugh Dillin, in concluding remarks on the case, stated he is "satisfied that these ]misdemeanors[ were totally and completely inadvertent but, nevertheless, a violation of the regulations."

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