Oct. 23 (Bloomberg) -- Eli Lilly & Co. agreed to pay $45 million to South Carolina to settle a lawsuit claiming the drugmaker improperly marketed its antipsychotic Zyprexa.

The amount is the largest won by any individual state in a case involving Lilly, South Carolina Attorney General Henry McMaster said today in a statement. Lilly said Oct. 7 it agreed to settle the suit, averting a trial.

“This is a victory for South Carolina’s taxpayers, who were forced to bear the financial costs of Eli Lilly’s unlawful conduct,” McMaster said. “Our case was sound. The evidence we presented was overwhelming. And I am pleased to say justice has been served.”

South Carolina sued Lilly in 2007, alleging the Indianapolis-based company marketed Zyprexa, approved for schizophrenia and bipolar disorder, for unapproved, or off- label, purposes. The state was seeking as much as $6 billion in fines and damages.

“Putting this issue behind us is not only in the best interest of Lilly but also in the best interest of patients and physicians who relay on Zyprexa as a life-saving drug every day,” Marni Lemons, a Lilly spokeswoman, said in a phone interview.

Zyprexa, Lilly’s best-selling drug, has been the subject of federal and state probes into marketing practices. Lilly resolved a marketing investigation in January with the U.S. Justice Department, promising to pay $1.42 billion, including about $362 million to more than 30 states.

The federal settlement left pending 12 lawsuits brought by individual states. Lilly announced July 22 that it would take a pretax charge of $102 million for settling “several” state lawsuits over Zyprexa.

Connecticut Accord

Connecticut announced Sept. 29 a $25.1 million settlement of its Zyprexa lawsuit. Lilly in August filed a $22.5 million settlement with West Virginia. Settlements with six other states have been reached, a court-appointed official said at a hearing Sept. 21. South Carolina wasn’t one of them.

South Carolina sought reimbursement for the costs of Zyprexa prescriptions and alleged Zyprexa-related illnesses. The state claimed Lilly pushed doctors to prescribe the medication and withheld information about Zyprexa’s side effects, such as weight gain.

The state also sought a $5,000 fine for each of more than 1 million Zyprexa prescriptions dating back to 1997, according to court filings. The civil penalties would total about $5.84 billion, the state’s damages expert said in July.

The settlement leaves pending cases brought by the states of Mississippi, Arkansas and Pennsylvania.

The only trial of a state’s lawsuit ended in March 2008 with an out-of-court settlement in which Lilly agreed to pay Alaska $15 million.

Lilly was scheduled to begin the South Carolina trial Oct. 5 in state court in Spartanburg. The trial was postponed while Lilly appealed a decision by Judge Roger Couch denying dismissal of the suit.

The South Carolina case is State of South Carolina v. Eli Lilly & Co., 2007-CP-42-1855, Common Pleas Court for South Carolina’s Seventh Judicial Circuit (Spartanburg).

To contact the reporters on this story: Sophia Pearson in Wilmington, Delaware, at spearson3@bloomberg.net; Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net; Jef Feeley in Wilmington, Delaware, at jfeeley@bloomberg.net.

Last Updated: October 23, 2009 16:27 EDT