Lilly's Xigris Becomes First and Only Medical Product Approved for BIPA Payment in Medicare Patients

     
BW20020731002544  20020731T205744Z UTC


( BW)(ELI-LILLY)(BC43) Lilly's Xigris Becomes First and Only Medical
Product Approved for BIPA Payment in Medicare Patients

    Business Editors
    UK REGULATORY NEWS

    INDIANAPOLIS--(BUSINESS WIRE)--July 31, 2002--

         Approval Affirms Xigris' Ability to Help Save Lives

Today, Xigris(R) (drotrecogin alfa (activated)) discovered and
marketed by Eli Lilly and Company (NYSE:LLY) became the first and only
new medical product to be granted new technology status from the
Centers for Medicare and Medicaid Services (CMS-formerly HCFA) under
the provisions of the Benefits Improvement Act of 2000 (BIPA).
Beginning Oct. 1, 2002, this designation will allow hospitals that use
Xigris in the treatment of Medicare patients with life-threatening
severe sepsis to receive additional reimbursement.

"We congratulate CMS on this landmark decision and believe it
positively reinforces the value of Xigris. We believe that CMS is
sending a strong signal to hospitals, healthcare providers and its
beneficiaries that Xigris represents a substantial improvement in the
treatment of adult patients with life threatening severe sepsis vs.
conventional care." said Elaine K. Sorg, Lilly U.S. Critical Care
Business Unit Leader. "Receiving new technology status for Xigris is
an important interim step in our long-term goal of making positive
changes in the reimbursement hospitals receive for treating adult
patients with life-threatening severe sepsis. Specifically, our
primary goal is to work with CMS to facilitate the creation of the new
DRG for severe sepsis."

About BIPA

The Benefits Improvement and Protection Act of 2000 requires the
Medicare program to make additional payments for certain approved new
medical services and technologies furnished under the hospital
prospective payment system (PPS) until the DRG (diagnosis related
group) system is eventually adjusted to account for the cost of the
new technology. Until this law was passed, Medicare paid for new
technologies by assigning them to existing DRGs and not increasing the
overall DRG payment. Payment for each DRG is determined prospectively,
based on the average relative costs of treating patients with that
diagnosis. The diagnoses and procedures included in a DRG are
identified by ICD-9 codes (ICD-9 is the abbreviation for the
International Classification of Diseases 9th Edition-Clinical
Modification, the procedural coding system for inpatient services).

To be eligible for the special payments, a technology must meet three
criteria:

1.  The technology must present a substantial improvement in the
    diagnosis or treatment of Medicare beneficiaries,

2.  the technology must be new; and

3.  total charges per case for patients undergoing procedures
    involving the new technology must be demonstrated to be
    significantly more than the average charges for all cases in the
    DRG to which the new technology would be assigned.

Under the new technology provision, CMS will make additional payments
to hospitals on a case-by-case basis, covering 50 percent of the costs
of the case in excess of the standard DRG payment for cases involving
new technologies, as long as the additional payment does not exceed 50
percent of the estimated average cost of the new technology. The
special payments for new technologies would be made for two to three
years, until the regular payments for the appropriate DRG can be
adjusted to reflect the new technology's costs or the cases using the
new technology can be assigned to a more appropriate DRG.

Regarding Severe Sepsis

Severe sepsis occurs when an infection (viral, bacterial or fungal) -
often the result of trauma, surgery, burns or cancer - triggers a
cascade of immune system responses that can lead to acute organ
dysfunction and often death. Three of every 10 patients with sepsis
will die within one month. Before FDA approval of Xigris, treatment
options included treatment for the infection and supportive care such
as mechanical ventilation and kidney dialysis.

The number of severe sepsis cases has been rising significantly over
the past few decades - growing nearly 300 percent over the past 25
years(1) - and the incidence is expected to continue climbing. This
year alone, more than 750,000 Americans will develop severe sepsis,
and at least 215,000 of them will die from the disorder - about as
many as die as a result of an acute heart attack. Research suggests
more than 6.8 million new cases of severe sepsis will occur in the
United States between 2003 and 2010. Approximately 95 percent of these
will be among people who are 65 or older, with the majority of these
cases - nearly 60 percent - occurring among people aged 65-75.
(2)Nonetheless, sepsis can strike regardless of a person's age.

More About Xigris

Xigris (drotrecogin alfa (activated)) is a recombinant form of human
Activated Protein C. It is administered by intravenous infusion and is
available in 5 and 20 mg vials.

In November 2001, the Food and Drug Administration (FDA) approved the
use of Xigris for the reduction of mortality in adult patients with
severe sepsis (sepsis associated with acute organ dysfunction) who
have a high risk of death, e.g., as determined by APACHE II(a).
Efficacy of Xigris has not been established in adult patients with
severe sepsis and a lower risk of death. Safety and efficacy have not
been established in pediatric patients with severe sepsis.

Bleeding events are common in patients with severe sepsis. In the
PROWESS (Recombinant Human Activated Protein C Worldwide Evaluation in
Severe Sepsis) trial, bleeding was the most common adverse reaction
associated with Xigris therapy. Serious bleeding events were observed
during the 28-day study period in 3.5 percent of Xigris-treated
patients and 2.0 percent of placebo-treated patients. The difference
in serious bleeding occurred primarily during the 96-hour period of
infusion.

Intracranial hemorrhage (ICH) may occur in patients with severe
sepsis. In PROWESS, the incidence of intracranial hemorrhage was 0.2
percent for Xigris-treated patients and 0.1 percent for
placebo-treated patients. ICH has been reported in Xigris-treated
patients in non-placebo controlled trials with an incidence of
approximately 1 percent during infusion. The risk of ICH may be
increased in patients with risk factors for bleeding.

This year, Lilly plans to begin large-scale trials involving
approximately 13,000 patients to investigate the use of Xigris in
lower-risk patients with severe sepsis, the use of Xigris in children
with severe sepsis, and the optimal use of low-dose heparin with
Xigris.

For complete Xigris (drotrecogin alfa (activated)) prescribing
information and labeling, call 800-423-2313 or visit www.Xigris.com.

About Eli Lilly and Company

Lilly, a leading innovation-driven corporation, is developing a
growing portfolio of best-in-class pharmaceutical products by applying
the latest research from its own worldwide laboratories and from
collaborations with eminent scientific organizations. Headquartered in
Indianapolis, Ind., Lilly provides answers - through medicines and
information - for some of the world's most urgent medical needs.
Additional information about Lilly is available at www.lilly.com.

This news release contains forward-looking statements that reflect
management's current beliefs about the potential for drotrecogin alfa
(activated) in the treatment of severe sepsis, but actual results may
differ materially due to various factors. As with any pharmaceutical
under development, there are significant risks and uncertainties in
the process of development and regulatory review. The product's
results may also be affected by such factors as competitive
developments in the field, the timing of anticipated regulatory
approvals and launches in various countries, other regulatory
developments, the impact of governmental actions regarding coverage
and reimbursement for pharmaceuticals, and the impact of exchange
rates. For additional information about the factors that affect the
company's business, please , see Exhibit 99 to the most recent Form
10-Q filed with the SEC in May 2002.The company undertakes no duty to
update forward-looking statements.

Xigris(R)(drotrecogin alfa (activated), Lilly)

(1) Society of Critical Care medicine web site
    (www.sccm.org/pressroom/sepsis_info.html)

(2) Angus D, et al. Epidemiology of severe sepsis in the United
    States: analysis of incidence, outcome, and associated costs of
    care. Crit Care Med 2001; 29(7): 1303-1310.

(a) Acute Physiology and Chronic Health Evaluation Score

   Short Name: Lilly (Eli) & Co
   Category Code: MSC
   Sequence Number: 00000565
   Time of Receipt (offset from UTC): 20020731T212047+0100

    --30--db/in*

    CONTACT: Eli Lilly and Company
             Debbie Davis, 317/277-1172 

    KEYWORD: INDIANA UNITED KINGDOM INTERNATIONAL EUROPE
    INDUSTRY KEYWORD: PHARMACEUTICAL MEDICAL PRODUCT
    SOURCE: Lilly (Eli) & Co

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