Anchorage, Alaska is the host of the first jury trial over the risks from Eli Lilly’s antipsychotic Zyprexa. The attorney for Alaska alleges that the company failed to adequately warn doctors and patients of dangerous side effects associated with its high-grossing drug (it had sales of $4.8 billion in 2007).

"If they put a warning on this product, their sales would fall," lawyer Scott Allen said to AP. "They would lose money. People would choose another drug, and they decided not to disclose what they knew."

In the suit filed in Alaska state court before Judge Mark Rindner, the state is demanding that Eli Lilly pays for the medical expenses of Medicaid patients who have contracted diabetes or other diseases after taking Zyprexa.

On the other hand, the company alleges that Zyprexa’s benefits in treating schizophrenia and other disorders outweigh its risks and it will bring several expert witnesses, such as Dr. R. Duane Hopson, the medical director of the state-financed Alaska Psychiatric Institute, to testify in this direction.

If Alaska wins, Lilly could be ordered to pay hundreds of millions of dollars.

Olanzapine was approved by the FDA for the treatment of schizophrenia in 1990, then for depressive episodes associated with bipolar disorder, as part of the Symbyax formulation, in 2003 and acute manic episodes and maintenance treatment in bipolar disorder in 2004.

The drug's Adhera form is currently under review by the FDA. The company, Lilly, will lose monopoly over olanzapine in 2011 and struggles to develop new uses for the drug which may continue to bring it strong profits.

Schizophrenia affects around 1 percent of Americans. The illness is characterized by impairments in the perception or expression of reality which may take different forms. There is no laboratory test for schizophrenia, it is diagnosed based solely on the patient's self-reported experiences and observed behavior by the healthcare professional.