$9B Actos award against Eli Lilly and Takeda cut by 99%

That whopping $9 billion punitive damage award by a jury against Eli Lilly and Co. and its partner over the diabetes medicine Actos?

It's been sharply reduced by a federal judge, to just $36.8 million.

The $9 billion award was excessive and should be reduced "to the maximum amount a jury could have properly awarded" under current U.S. law, U.S. District Judge Rebecca Doherty in Lafayette, La., has ruled.

The judge agreed with jurors that the Japanese drug firm Takeda and Indianapolis-based Lilly hid the health risks of the drug and should pay some punitive damages. The judge said Takeda is 75 percent liable for the reduced damage claim and owes $27.6 million and Lilly is liable for the remainder of $9.2 million.

In her ruling Monday, the judge also denied Takeda's and Lilly's request for a new trial.

Under the original award earlier this year, the jury assigned $6 billion in damages to Takeda and $3 billion to Lilly. But Lilly maintained that Takeda bore full responsibility under its partnership agreement for paying the full damage award.

With the damage award now reduced by more than 99 percent, the indemnification question between Lilly and Takeda might not be an issue.

Lilly said in a statement that it still doesn't think it's liable for damages in the lawsuit brought by Terrence Allen, a former hardware store manager from Attica, N.Y., who alleged he developed bladder cancer after taking Actos for more than five years starting in 2006.

"While we have empathy for the plaintiff, we believe the evidence did not support his claims," said Mike Harrington, senior vice president and general counsel at Lilly. "We will continue working vigorously to overturn the verdict."

The trial was part of a multidistrict litigation where thousands of Actos lawsuits have been combined. Takeda still faces more than 8,000 U.S. suits accusing it of mishandling Actos.

Lilly was Takeda's U.S. partner in selling and marketing the drug over seven years starting in 1999. The partnership ended in 2006, with Lilly retaining rights to sell Actos in parts of Asia and Europe as well as in Canada and Mexico.

Actos' sales peaked in in 2010-11 at $4.5 billion. The drug now faces generic competition and sales have waned.

Richard Arsenault, a lawyer for Allen, the plaintiff, said he was pleased the judge denied the companies' bid for a new trial and supported the jury's finding that the companies deserve to pay punitive damages for downplaying the drug's alleged cancer-causing potential.

Bloomberg News contributed to this report.

Call Star reporter Jeff Swiatek at (317) 444-6483. Follow him on Twitter: @JeffSwiatek.