Published August 21, 2009: 09:22 AM ET by CNNMoney

Drug maker Eli Lilly & Co. (LLY) has agreed to pay $22.5 million to settle a lawsuit in which West Virginia’s attorney general accused Lilly of improperly promoting the antipyschotic Zyprexa.

It’s the latest Lilly payout for Zyprexa. In recent years, the company has agreed to pay at least $2.6 billion to settle various personal-injury lawsuits and government investigations of its marketing practices related to the drug. Zyprexa is Lilly’s best-selling drug, generating $2.3 billion in sales for the first half of 2009.

The massive litigation stems largely from allegations that use of Zyprexa caused high blood sugar and diabetes in users, and that Lilly improperly warned of these risks. In addition, Lilly marketed the drug for unapproved uses such as helping nursing-home patients fall asleep, which authorities say caused improper reimbursement claims for the drug to be submitted to government health-insurance programs.

Indianapolis-based Lilly reached the settlement with West Virginia in late July and the pact was unsealed by a court Thursday. In the second quarter ended June 30, Lilly booked a pretax charge of $105 million to cover anticipated settlements with various U.S. states. Lilly is in advanced discussions with several states, the company said.

The West Virginia payout comprises $15.75 million to the state, plus $6.75 million to its outside attorneys, said spokeswoman Marni Lemons. Non-monetary terms of the deal include Lilly’s commitment to proper promotional practices, dissemination of Lilly’s funding of continuing-medical education for doctors, and disclosure of Zyprexa clinical trial data.

Lilly didn’t admit any wrongdoing under the agreement.

The states with pending cases against Lilly are Arkansas, Connecticut, Idaho, Louisiana, Mississippi, Minnesota, Montana, New Mexico, Pennsylvania, South Carolina and Utah.

This week, a U.S. judge in Brooklyn who is overseeing the Zyprexa litigation sent letters to some state judges urging that the remaining state and federal cases be resolved in a coordinated settlement.

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