NEW YORK (Legal Newsline) - New Mexico Attorney General Gary King has finalized a settlement with Eli Lilly & Co. in his lawsuit over the prescription antipsychotic drug Zyprexa.

Lilly will pay $15.5 million to settle claims it marketed for Zyprexa for off-label uses and that the drug caused weight gain-related side effects like diabetes. Out of a group of 12 states that didn't participate in a 33-state agreement reached in Oct. 2008, New Mexico is the sixth to finalize a settlement.

The settlement was filed in U.S. District Court for the Eastern District of New York on Monday, a week after Judge Jack Weinstein awarded Lilly summary judgment in Mississippi Attorney General Jim Hood's Zyprexa lawsuit.

Former New Mexico Attorney General Patricia Madrid originally filed the suit. More than one-third of the settlement ($5,409,292) will go to the attorneys representing the State.

The private attorneys who represented New Mexico were: Rachel Adams of San Francisco; Hersh & Hersh of San Francisco; Hamilton Morgan Sexton & Berry of Lexington, Ky.; and Heard Robins Cloud & Lubel of Santa Fe.

Bill Robins of the Heard firm donated $10,000 to King in 2006.

Eli Lilly has paid $1.4 billion to settle federal civil and criminal claims stemming from the alleged off-label marketing.

The payment also benefited the Medicaid programs of more than 30 states that collectively received approximately $362 million. Thirty-three states settled their consumer protection claims for $62 million.

In addition to New Mexico, the other states that have settled since are:

The states that have settled are:

-Connecticut settled for $25.1 million;

-West Virginia settled for more than $22 million ($6.75 went to outside counsel hired by state Attorney General Darrell McGraw);

-Idaho settled its case for $13 million ($2.5 went to outside counsel hired by state Attorney General Lawrence Wasden);

-Utah settled for $24 million (more than $4 million went to outside counsel hired by state Attorney General Mark Shurtleff); and

-South Carolina settled for $45 million (more than $6.5 million went to outside counsel hired by state Attorney General Henry McMaster).

Pennsylvania and Arkansas still have their claims pending in state courts. Minnesota, Montana and Louisiana have reached tentative settlement agreements that have not been finalized.

In granting Lilly's motion for summary judgment, Weinstein was critical of Hood's lawsuit, filed by Houston firm Bailey Perrin Bailey.

"If allowed to proceed in their entirety, the State's claims could result in serious harm or bankruptcy for this defendant and the pharmaceutical industry generally," he wrote.

"For the legal system to be used for this slash-and-burn style of litigation would arguably constitute an abuse of the legal process. Constitutional, statutory and common law rights of those injured to seek relief from the courts must be recognized. But courts cannot be used as an engine of an industry's destruction."

One of Mississippi's claims was stayed pending the outcome of an appeal.

From Legal Newsline: Reach John O'Brien by e-mail at jobrienwv@gmail.com.