updated 6/9/2005 8:47:02 PM ET 2005-06-10T00:47:02

Eli Lilly & Co. has agreed to pay up to $690 million to settle claims from an estimated 8,000 people who claim the company did not properly list risks associated with its anti-psychosis drug Zyprexa.

The company announced Thursday that it entered into an agreement in principle with plaintiffs' attorneys involved in the Zyprexa claims. The settlement, when finalized, will resolve the majority of Zyprexa claims pending in the United States, according to a Lilly news release.

"While we believe the claims are without merit, we took this difficult step because we believe it is in the best interest of the company, the patients who depend on this medication, and their doctors," Lilly Chairman and CEO Sidney Taurel said in the statement.

Most of the lawsuits claimed that before September 2003, the information on Zyprexa labels regarding the risk of hyperglycemia and diabetes was not adequately displayed.

In September 2003, the FDA required label changes for all atypical anti-psychotic drugs to warn against the risk.

Christopher Seeger, a member of the plaintiffs' steering committee, said the group was pleased with the agreement.

"The patient population to which this drug is given has difficult medical histories," Seeger said. "Protracted litigation was in no one's interest."

The Indianapolis-based company plans to take a $700 million charge in the second-quarter to establish the settlement fund, and to cover other claims not covered in the agreement.

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