The settlement recovers money the state spent through its Division of Medicaid and the State Insurance Plan, Hood said. The company also will pay $3.7 million in legal fees for the state.

Mississippi is one of 13 states that sued over Zyprexa. Eli Lilly spokeswoman Marni Lemons said settlements have been reached in seven others – Alaska, West Virginia, Connecticut, New Mexico, Idaho, Utah and South Carolina. Suits in Montana, Minnesota, Louisiana, Arkansas and Pennsylvania are still pending, she said.

The company paid a $1.4 billion settlement to the federal government in January 2009 after admitting it had promoted Zyprexa in elderly populations for treatment of dementia between 1999 and 2001.

According to the Atty. Gen. Hood,  Zyprexa was approved by the Federal Drug Administration for “major psychotic problems,” but he said the company hired representatives who promoted the drug to physicians for use for any kind of depression.

“Unfortunately, the studies later found that the drug could cause diabetes so it did more harm than good,” Hood said.

Lemons said there was no scientific proof Zyprexa causes diabetes. The company has not admitted any wrongdoing in the Mississippi settlement.

Under the agreement, the company cannot make any claim about Zyprexa that is false, misleading or deceptive and the drug cannot be promoted for off-label uses, Hood said.

The settlement money will go into Mississippi’s general fund and comes at a time when the state’s revenue collections are projected to be far below estimates for the current fiscal year. Gov. Haley Barbour already has cut $437 million from the state spending plan.

This is yet another example of how improper marketing of pharmaceutical products continues to cost the public financially which has a direct affect on our tax base. The cost of healthcare should not be driven by the marketing practices of the pharmaceutical industry.