We are a party to various legal actions, government investigations, and environmental proceedings. The most significant of these are described below. While it is not possible to determine the outcome of these matters, we believe that, except as specifically noted below, the resolution of all such matters will not have a material adverse effect on our consolidated financial position or liquidity, but could possibly be material to our consolidated results of operations in any one accounting period.

Patent Litigation

We are engaged in the following U.S. patent litigation matters brought pursuant to procedures set out in the Hatch-Waxman Act (the Drug Price Competition and Patent Term Restoration Act of 1984):

•    Cymbalta:  Sixteen generic drug manufacturers have submitted Abbreviated New Drug Applications (ANDAs) seeking permission to market generic versions of Cymbalta prior to the expiration of our relevant U.S. patents (the earliest of which expires in 2013). Of these challengers, all allege non-infringement of the patent claims directed to the commercial formulation, and nine allege invalidity of the patent claims directed to the active ingredient duloxetine. Of the nine challengers to the compound patent claims, one further alleges invalidity of the claims directed to the use of Cymbalta for treating fibromyalgia, and one alleges the patent having claims directed to the active ingredient is unenforceable. In November 2008 we filed lawsuits in U.S. ;nbsp;District Court for the Southern District of Indiana against Actavis Elizabeth LLC; Aurobindo Pharma Ltd.; Cobalt Laboratories, Inc.; Impax Laboratories, Inc.; Lupin Limited; Sandoz Inc.; and Wockhardt Limited, seeking rulings that the patents are valid, infringed, and enforceable. We filed similar lawsuits in the same court against Sun Pharma Global, Inc. in December 2008 and against Anchen Pharmaceuticals, Inc. in August 2009. The cases have been consolidated and actions against all but Wockhardt Limited have been stayed pursuant to stipulations by the defendants to be bound by the outcome of the litigation through appeal./font/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt 0.4in; text-indent: -0.2in;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"#8226;font class="_mt"nbsp;nbsp;nbsp; Gemzar#174;:nbsp;nbsp;Mayne Pharma (USA) Inc., now Hospira, Inc. (Hospira); Fresenius Kabi Oncology Plc (Fresenius); Sicor Pharmaceuticals, Inc., now Teva Parenteral Medicines, Inc. (Teva); and Sun Pharmaceutical Industries Inc. (Sun) each submitted one or more ANDAs seeking permission to market generic versions of Gemzar prior to the expiration of our relevant U.S.nbsp;patents (compound patent expiring in 2010 and method-of-use patent expiring in 2013), and alleging that these patents are invalid. Sandoz Inc. (Sandoz) and APP Pharmaceuticals, LLC (APP) have similarly challenged our method-of-use patent. We filed lawsuits in the U.S.nbsp;District Court for the Southern District of Indiana against Teva (February 2006), Hospira (October 2006, January 2 008, and March 2010), Sandoz (October 2009), APP (December 2009), and Fresenius (February 2010), seeking rulings that our patents are valid and are being infringed. In November 2007, Sun filed a declaratory judgment action in the United States District Court for the Eastern District of Michigan, seeking rulings that our method-of-use and compound patents are invalid or unenforceable, or would not be infringed by the sale of Sun#8217;s generic product. The status of these cases is as follows:/font/font/p p class="MsoNormal" style="margin: 0in 0in 0pt 0.4in; text-indent: -0.2in;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoListParagraphCxSpFirst" style="margin: 0in 0in 0pt 49.5pt; text-indent: -0.25in; text-align: left;" align="left"font style="font-family: Wingdings;" class="_mt"font class="_mt"font size="2" class="_mt"#167;/fontfont style="font: 7pt 'Times New Roman';" class="_mt"nbsp; font size="2" class="_mt"font style="font-family: 'DIN-Medium','sans-serif';" class="_mt"In August 2009, the district court in Michigan granted a motion by Sun for partial summary judgment, invalidating our method-of-use patent. We have appealed this decision, and the oral argument will be heard in the U.S. Court of Appeals for the Federal Circuit in May 2010. The outcome of litigation with several generic companies, some of which have tentative or final marketing approval for generic gemcitabine, depends on the outcome of the appeal, and an affirmation of the district court's decision could result in generic product on the market in the U.S. as early as Nove mber 2010. The trial originally scheduled for December 2009 has been postponed while the court considers Sun#8217;s second summary judgment motion, related to the validity of our compound patent. font style="font-family: 'DIN-Medium','sans-serif';" class="_mt"Sun#8217;s ANDA has received tentative approval from the FDA./font/font/font/font/font/font/p p class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 49.5pt;"font style="font-family: 'DIN-Medium','sans-serif';" class="_mt"font size="2" class="_mt"nbsp;nbsp;/font/font/p p class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 49.5pt; text-indent: -0.25in; text-align: left;" align="left"font style="font-family: Wingdings;" class="_mt"font class="_mt"font size="2" class="_mt"#167;/fontfont style="font: 7pt 'Times New Roman';" class="_mt"nbsp; font style="font-family: 'DIN-Medium','sans-serif';" class="_mt"font size="2" class="_mt"The trial against Teva was held in September 2009. In March 2010, the district court in Indiana upheld the validity of our compound patent. The court also ruled in our favor on all invalidity theories brought forward by Teva on our method-of-use patent, except for obviousness-type double patenting. The court applied collateral estoppel with regard to this theory, given the ruling in the Sun case. Teva#8217;s ANDAs have been approved by the FDA./font/font/font/font/font/p p class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.5in;"font style="font-family: 'DIN-Medium','sans-serif';" class="_mt"font size="2" class="_mt"nbsp;nbsp;/font/font/p p class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 49.5pt; text-indent: -0.25in; text-align: left;" align="left"font style="font-family: Wingdings;" class="_mt"font class="_mt"font size="2" class="_mt"#167;/fontfont style="font: 7pt 'Times New Roman';" class="_mt"nbsp; font size="2" class="_mt"font style="font-family: 'DIN-Medium','sans-serif';" class="_mt"Two suits against Hospira have been administratively closed, and the parties have agreed to be bound by the results of the Teva suit. font style="font-family: 'DIN-Medium','sans-serif';" class="_mt"The remaining suit is in the early stages./font/font/font/font/font/font/p p class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 49.5pt;"font style="font-family: 'DIN-Medium','sans-serif';" class="_mt"font size="2" class="_mt"nbsp;nbsp;/font/font/p p class="MsoListParagraphCxSpLast" style="margin: 0in 0in 0pt 49.5pt; text-indent: -0.25in;"font style="font-family: Wingdings;" class="_mt"font class="_mt"font size="2" class="_mt"#167;/fontfont style="font: 7pt 'Times New Roman';" class="_mt"nbsp; font style="font-family: 'DIN-Medium','sans-serif';" class="_mt"font size="2" class="_mt"Sandoz withdrew its ANDA and the suit against it was dismissed in February 2010./font/font/font/font/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-family: 'DIN-Medium','sans-serif';" class="_mt"font class="_mt"nbsp;nbsp;/font/font/p p class="MsoListParagraphCxSpFirst" style="margin: 0in 0in 0pt 49.5pt; text-indent: -0.25in; text-align: left;" align="left"font style="font-family: Wingdings;" class="_mt"font class="_mt"font size="2" class="_mt"#167;/fontfont style="font: 7pt 'Times New Roman';" class="_mt"nbsp; font style="font-family: 'DIN-Medium','sans-serif';" class="_mt"font size="2" class="_mt"APP filed a motion to dismiss our suit, based on the decision in the Sun case.font class="_mt"nbsp; APP#8217;s ANDA has received tentative approval from the FDA, but APP is prohibited from entering the market by a 30-month stay, which expires in May 2012.font class="_mt"nbsp;nbsp;/font/font/font/font/font/font/font/p p class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 49.5pt;"font style="font-family: 'DIN-Medium','sans-serif';" class="_mt"font size="2" class="_mt"nbsp;nbsp;/font/font/p p class="MsoListParagraphCxSpLast" style="margin: 0in 0in 0pt 49.5pt; text-indent: -0.25in; text-align: left;" align="left"font style="font-family: Wingdings;" class="_mt"font class="_mt"font size="2" class="_mt"#167;/fontfont style="font: 7pt 'Times New Roman';" class="_mt"nbsp; font style="font-family: 'DIN-Medium','sans-serif';" class="_mt"font size="2" class="_mt"The Fresenius case is in the early stages.bfont class="_mt"nbsp;nbsp;/font/b/font/font/font/font/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt 0.4in; text-indent: -0.2in;"font lang="ES" style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"#8226;font class="_mt"nbsp;nbsp;nbsp; Alimta#174;:nbsp;nbsp;Teva Parenteral Medicines, Inc. font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"(Teva), APP, and Barr Laboratories, Inc. (Barr) each submitted ANDAs seeking approval to market generic versions of Alimta prior to the expiration of the relevant U.S.nbsp;patent (licensed from the Trustees of Princeton University and expiring in 2016), and alleging the patent is invalid. We, along with Princeton, filed lawsuits in the U.S.nbsp;District Court for the District of Delaware against Teva, APP, and Barr seeking rulings that the compound patent is valid and infringed. Trial is scheduled for November 2010 against Teva and APP./font/font/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt 0.4in; text-indent: -0.2in;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"#8226;font class="_mt"nbsp;nbsp;nbsp; Evista#174;:nbsp;nbsp;In 2006, Teva Pharmaceuticals USA, Inc. (Teva) submitted an ANDA seeking permission to market a generic version of Evista prior to the expiration of our relevant U.S.nbsp;patents (expiring in 2012-2017) and alleging that these patents are invalid, not enforceable, or not infringed. In June 2006, we filed a lawsuit against Teva in the U.S.nbsp;District Court for the Southern District of Indiana, seeking a ruling that these patents are valid, enforceable, and being infringed by Teva. The trial against Teva was completed in March 2009. In September 2009, the court upheld our method-of-use patents (the last expires in 2014) and Teva has appealed that ruling. In addition, the court held that our particle-size patents (expiring 2017) amp;nbsp;are invalid, and we have appealed that ruling. InvaGen Pharmaceuticals, Inc. (InvaGen) submitted an ANDA in 2008 seeking approval to market a generic version of Evista prior to the expriation of the particle-size patents at issue in the Teva matter.font class="_mt"nbsp; We filed suit against InvaGen in January 2009 in the U.S. District Court for the Southern District of Indiana.font class="_mt"nbsp; That action has been stayed pending the outcome of the Teva appeal./font/font/font/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt 0.4in; text-indent: -0.2in;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"#8226;font class="_mt"nbsp;nbsp;nbsp; Strattera#174;:nbsp;nbsp;Actavis Elizabeth LLC (Actavis), Apotex Inc. (Apotex), Aurobindo Pharma Ltd. (Aurobindo), Mylan Pharmaceuticals Inc. (Mylan), Sandoz Inc. (Sandoz), Sun Pharmaceutical Industries Limited (Sun), and Teva Pharmaceuticals USA, Inc. (Teva) each submitted an ANDA seeking permission to market generic versions of Strattera prior to the expiration of our relevant U.S.nbsp;patent (expiring in 2017), and alleging that this patent is invalid. In 2007, we brought a lawsuit against Actavis, Apotex, Aurobindo, Mylan, Sandoz, Sun, and Teva in the United States District Court for the District of New Jersey. The court has ruled on all pending summary judgment motions, and granted our infringement motion. The remaining invalidity defenses will be de cided at trial, scheduled for May 2010. Several companies have received tentative approval to market generic atomoxetine, but are prohibited from entering the market by a 30-month stay that expires in November 2010. font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"An adverse court decision prior to November 2010 would terminate the stay and enable one or more companies to launch generic atomoxetine./font/font/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"We believe each of these Hatch-Waxman challenges is without merit and expect to prevail in this litigation. However, it is not possible to determine the outcome of this litigation, and accordingly, we can provide no assurance that we will prevail. An unfavorable outcome in any of these cases could have a material adverse impact on our future consolidated results of operations, liquidity, and financial position./font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"We have received challenges to Zyprexa#174; patents in a number of countries outside the U.S.:/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt 0.4in; text-indent: -0.2in;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"#8226;font class="_mt"nbsp;nbsp;nbsp; In Canada, several generic pharmaceutical manufacturers have challenged the validity of our Zyprexa patent (expiring in 2011). In April 2007, the Canadian Federal Court ruled against the first challenger, Apotex Inc. (Apotex), and that ruling was affirmed on appeal in February 2008. In June 2007, the Canadian Federal Court held that an invalidity allegation of a second challenger, Novopharm Ltd. (Novopharm), was justified and denied our request that Novopharm be prohibited from receiving marketing approval for generic olanzapine in Canada. Novopharm began selling generic olanzapine in Canada in the third quarter of 2007. In September 2009, the Canadian Federal Court ruled against us in the Novapharm suit, finding our patent invalid. We have appealed this decision, and the ap peal is scheduled to be heard in June 2010. If the decision is upheld, we could face liability for damages related to delays in the launch of generic olanzapine products; however, we have concluded at this time that the damages are not probable or estimable./font/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt 0.4in; text-indent: -0.2in;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"#8226;font class="_mt"nbsp;nbsp;nbsp; In Germany, the German Federal Supreme Court upheld the validity of our Zyprexa patent (expiring in 2011)nbsp;in December 2008, reversing an earlier decision of the Federal Patent Court. Following the decision of the Supreme Court, the generic companies who launched generic olanzapine based on the earlier decision either agreed to withdraw from the market or were subject to injunction. We have negotiated settlements of the damages arising from infringement with most of the generic companies./font/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt 0.4in; text-indent: -0.2in;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"#8226;font class="_mt"nbsp;nbsp;nbsp; We have received challenges in a number of other countries, including Spain, Austria, Australia, and several smaller European countries. In Spain, we have been successful at both the trial and appellate court levels in defeating the generic manufacturers#8217; challenges, but additional actions against multiple generic companies are now pending. In March 2010, the District Court of Hague ruled against us and revoked our compound patent in the Netherlands.font class="_mt"nbsp; We plan to appeal this decision./font/font/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"We are vigorously contesting the various legal challenges to our Zyprexa patents on a country-by-country basis. We cannot determine the outcome of this litigation. The availability of generic olanzapine in additional markets could have a material adverse impact on our consolidated results of operations./font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"Xigris#174; and Evista:nbsp;In June 2002, Ariad Pharmaceuticals, Inc. (Ariad), the Massachusetts Institute of Technology, the Whitehead Institute for Biomedical Research, and the President and Fellows of Harvard College in the U.S.nbsp;District Court for the District of Massachusetts sued us, alleging that sales of two of our products, Xigris and Evista, were inducing the infringement of a patent related to the discovery of a natural cell signaling phenomenon in the human body, and seeking royalties on past and future sales of these products. Following jury and bench trials on separate issues, the U.S.nbsp;District Court of Massachusetts entered final judgment in September 2007 that Ariad#8217;s claims were valid, infringed, and enforceable, and finding damages in the amount of $65nbsp;million plus a 2.3nbsp;percent royalty on net U.S.nbsp;sales of Xigris and Evista since the time of the jury decision. However, the court deferred the requirement to pay any damages until after all rights to appeal are exhausted. In April 2009, the Court of Appeals for the Federal Circuit overturned the District Court judgment, concluding that Ariad#8217;s asserted patent claims are invalid. In August 2009, the Court of Appeals agreed to review this decision en banc, thereby vacating the Court of Appeals decision. In March 2010, the Court of Appeals ruled in our favor.font class="_mt"nbsp; The plaintiffs may seek review of this decision by the U.S. Supreme Court, but we believe the likelihood of success in such an appeal is remote./font/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"bfont style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"Zyprexa Litigation/font/b/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"We have been named as a defendant in a large number of Zyprexa product liability lawsuits in the U.S.nbsp;and have been notified of many other claims of individuals who have not filed suit. The lawsuits and unfiled claims (together the #8220;claims#8221;) allege a variety of injuries from the use of Zyprexa, with the majority alleging that the product caused or contributed to diabetes or high blood-glucose levels. The claims seek substantial compensatory and punitive damages and typically accuse us of inadequately testing for and warning about side effects of Zyprexa. Many of the claims also allege that we improperly promoted the drug. Almost all of the federal lawsuits are part of a Multi-District Litigation (MDL)nbsp;proceeding before The Honorable Jack Weinstein in the Federal District Court for the Eastern District of New York (EDNY) (MDL No. nbsp;1596)./font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"Since June 2005, we have entered into agreements with various claimants#8217; attorneys involved in U.S.nbsp;Zyprexa product liability litigation to settle a substantial majority of the claims. The agreements cover a total of approximately 32,670 claimants, including a large number of previously filed lawsuits and other asserted claims. The two primary settlements were as follows:/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt 0.4in; text-indent: -0.2in;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"#8226;font class="_mt"nbsp;nbsp;nbsp; In 2005, we settled and paid more than 8,000 claims for $690.0nbsp;million, plus $10.0nbsp;million to cover administration of the settlement./font/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt 0.4in; text-indent: -0.2in;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"#8226;font class="_mt"nbsp;nbsp;nbsp; In 2007, we settled and paid more than 18,000 claims for approximately $500nbsp;million./font/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"We are prepared to continue our vigorous defense of Zyprexa in all remaining claims. The U.S.nbsp;Zyprexa product liability claims not subject to these agreements include approximately 150 lawsuits in the U.S.nbsp;covering approximately 240 plaintiffs, of which about 125 cases covering about 140 plaintiffs are part of the MDL. The MDL cases have been scheduled for trial in groups, the earliest trial groups have been tentatively scheduled for September and October 2010. We also have trials scheduled in Texas state court in August and December 2010 and in Ohio in December 2010./font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"In January 2009, we reached resolution with the Office of the U.S.nbsp;Attorney for the Eastern District of Pennsylvania (EDPA), and the State Medicaid Fraud Control Units of 36nbsp;states and the District of Columbia, of an investigation related to our U.S.nbsp;marketing and promotional practices with respect to Zyprexa. As part of the resolution, we pled guilty to one misdemeanor violation of the Food, Drug, and Cosmetic Act for the off-label promotion of Zyprexa in elderly populations as treatment for dementia, including Alzheimer#8217;s dementia, between September 1999 and March 2001. We recorded a charge of $1.42nbsp;billion for this matter in the third quarter of 2008. In 2009, we paid substantially all of this amount, as required by the settlement agreements. As part of the settlement, we have entered into a corporate integrity agreem ent with the Office of Inspector General (OIG) of the U.S.nbsp;Department of Health and Human Services (HHS), which requires us to maintain our compliance program and to undertake a set of defined corporate integrity obligations for five years. The agreement also provides for an independent third-party review organization to assess and report on the company#8217;s systems, processes, policies, procedures, and practices./font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"In October 2008, we reached a settlement with 32nbsp;states and the District of Columbia related to a multistate investigation brought under various state consumer protection laws. While there is no finding that we have violated any provision of the state laws under which the investigations were conducted, we accrued and paid $62.0nbsp;million and agreed to undertake certain commitments regarding Zyprexa for a period of six years, through consent decrees filed with the settling states./font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"We have been served with lawsuits filed by the states of Alaska, Arkansas, Connecticut, Idaho, Louisiana, Minnesota, Mississippi, Montana, New Mexico, Pennsylvania, South Carolina, Utah, and West Virginia alleging that Zyprexa caused or contributed to diabetes or high blood-glucose levels, and that we improperly promoted the drug. These suits seek to recover the costs paid for Zyprexa through Medicaid and other drug-benefit programs, as well as the costs alleged to have been incurred and that will be incurred by the states to treat Zyprexa-related illnesses. The Connecticut, Idaho, Louisiana, Minnesota, Mississippi, Montana, New Mexico, and West Virginia cases are part of the MDL proceedings in the EDNY. The Alaska case was settled in March 2008 for a payment of $15.0nbsp;million, plus terms designed to ensure, subject to certain limitations and conditions, tha t Alaska is treated as favorably as certain other states that may settle with us in the future over similar claims. We are in advanced discussions with the attorneys general for several of these states, seeking to resolve their Zyprexa-related claims, and we have agreed to settlements with the states of Arkansas, Connecticut, Idaho, Louisiana, Mississippi, Montana, New Mexico, South Carolina, Utah, and West Virginia. In the second and third quarters of 2009, we incurred pretax charges of $105.0nbsp;million and $125.0nbsp;million, respectively, reflecting the currently probable and estimable exposures in connection with these claims. The Pennsylvania case is set for trial in June 2010 in state court./font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"In 2005, two lawsuits were filed in the EDNY purporting to be nationwide class actions on behalf of all consumers and third-party payors, excluding governmental entities, which have made or will make payments for their members or insured patients being prescribed Zyprexa. These actions have now been consolidated into a single lawsuit, which is brought under certain state consumer protection statutes, the federal civil RICO statute, and common law theories, seeking a refund of the cost of Zyprexa, treble damages, punitive damages, and attorneys#8217; fees. Two additional lawsuits were filed in the EDNY in 2006 on similar grounds. In September 2008, Judge Weinstein certified a class consisting of third-party payors, excluding governmental entities and individual consumers. We appealed the certification order, and Judge Weinstein#8217;s order denying our moti on for summary judgment, in September 2008. While the Second Circuit Court of Appeals heard oral arguments on the appeal in December 2009, no opinions have been rendered. In 2007, The Pennsylvania Employees Trustnbsp;Fund brought claims in state court in Pennsylvania as insurer of Pennsylvania state employees, who were prescribed Zyprexa on similar grounds as described in the New York cases. As with the product liability suits, these lawsuits allege that we inadequately tested for and warned about side effects of Zyprexa and improperly promoted the drug. In December 2009, the court granted our summary judgment motion dismissing the case. Plaintiffs have appealed this decision./font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"In early 2005, we were served with four lawsuits seeking class action status in Canada on behalf of patients who took Zyprexa. One of these four lawsuits has been certified for residents of Quebec, and a second has been certified in Ontario and includes all Canadian residents except for residents of Quebec and British Columbia. The allegations in the Canadian actions are similar to those in the product liability litigation pending in the U.S.nbsp;We are in advanced discussions to resolve all Zyprexa class-action litigation in Canada./font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"We cannot determine with certainty the additional number of lawsuits and claims that may be asserted. The ultimate resolution of Zyprexa product liability and related litigation could have a material adverse impact on our consolidated results of operations, liquidity, and financial position./font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"Other Product Liability Litigation/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"We have been named as a defendant in numerous other product liability lawsuits involving primarily diethylstilbestrol (DES), thimerosal, and Byetta. Approximately half of these claims are covered by insurance, subject to deductibles and coverage limits./font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"Product Liability Insurance/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"Because of the nature of pharmaceutical products, it is possible that we could become subject to large numbers of product liability and related claims for other products in the future. In the past several years, we have been unable to attain product liability insurance due to a very restrictive insurance market. Therefore, for substantially all of our currently marketed products, we have been and expect that we will continue to be completely self-insured for future product liability losses. In addition, there is no assurance that we will be able to fully collect from our insurance carriers in the future./font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"Environmental Matters/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"nbsp;nbsp;/font/p p class="MsoNormal" style="margin: 0in 0in 0pt;"font style="font-size: 10pt; font-family: 'DIN-Medium','sans-serif';" class="_mt"Under the Comprehensive Environmental Response, Compensation, and Liability Act, commonly known as Superfund, we have been designated as one of several potentially responsible parties with respect to fewer than 10 sites. Under Superfund, each responsible party may be jointly and severally liable for the entire amount of the cleanup. We also continue remediation of certain of our own sites. We have accrued for estimated Superfund cleanup costs, remediation, and certain other environmental matters. This takes into account, as applicable, available information regarding site conditions, potential cleanup methods, estimated costs, and the extent to which other parties can be expected to contribute to payment of those costs. We have limited liability insurance coverage for certain environmental liabilities./font/p /div!-- body --/div/div /div