The State of Mississippi has recovered some much needed cash, as drug giant Eli Lilly has agreed to an $18.5 million fraud settlement over the drug Zyprexa.

The drug was only approved for major psychotic disorders, but the state alleged that the drug company promoted the drug to doctors for many unapproved uses such as minor depression. The company's studies showed the drug caused diabetes, but publication of the studies was suppressed, according to state officials.

The money, said Mississippi Attorney General Jim Hood, comes at a critical time.

"We recovered every penny we spent on the drug by Medicaid and the State Insurance Plan, plus penalties," Hood said. "Hopefully, the Legislature will use this money to prevent the shut down of our courts, prosecutors, law enforcement and other vital government services."

By settling the claims, Eli Lilly admits to no wrongdoing. The agreement with Eli Lilly ensures, among other things, that the company:

• will not make any written or oral claim that is false, misleading or deceptive regarding Zyprexa

• will not promote Zyprexa for off-label uses

• communications concerning off-label uses of Zyprexa shall not be false, misleading or deceptive

Any violation of the above, and the other settlement terms negotiated, will result in further penalties for Eli Lilly, Hood said.

The State of Mississippi began pursuing its claims against Eli Lilly nearly four years ago as a means to recover funds expended by the State of Mississippi in purchasing the prescription drug known as Zyprexa for non-medically necessary uses, and to recover funds expended by the state in purchasing Zyprexa for uses in which the efficacy of the medication was outweighed by the dangerous side effects associated with the drug.

Thirteen months ago, Eli Lilly agreed to a massive $1.42 billion Zyprexa settlement with both state and federal governments. Approximately 30 states, including Mississippi, were involved in the suit.

Among Hood's allegations against Eli Lilly were that the company's pre-clinical studies demonstrated that the drug causes weight gain and hyperglycemia, which is linked to diabetes. Additionally, Eil Lilly allegedly knew of Zyprexa's propensity to cause diabetes nearly a year and a half before it first warned of the risk of diabetes in the United States, and the company consistently suppressed attempts within the company to make the association between drug induced weight gain and hyperglycemia public.

Hood also said the company misled doctors regarding the safety and efficacy of the drug.