UPDATE 2-Connecticut sues Eli Lilly over Zyprexa marketing

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NEW YORK, March 11 (Reuters) - The state of Connecticut sued Eli Lilly and Co (LLY.N: Quote, Profile, Research) on Tuesday, accusing the drugmaker of illegally marketing and concealing serious side effects of its top-selling schizophrenia medicine, Zyprexa.

Attorney General Richard Blumenthal, who announced the suit, is seeking to recover "millions of taxpayer and consumer dollars improperly spent on Zyprexa as a result of its illegal marketing, and millions more spent for treatment of serious side effects from Zyprexa," according to a press statement from his office.

Lilly is already in court against the state of Alaska in a trial that began earlier this month in which it is facing similar accusations involving marketing and side effects associated with the antipsychotic drug.

Zyprexa, by far Lilly's biggest product, had sales of $4.76 billion in 2007, including U.S. sales of $2.24 billion.

In the lawsuit filed Tuesday, Lilly is accused of promoting Zyprexa for unapproved uses, including the treatment of children, and of hiding dangerous side effects, such as increased risk of diabetes, weight gain and heart problems.

"Through a complex series of illegal rackets and lies, Eli Lilly built a multibillion-dollar drug enterprise at the expense of taxpayers, consumers and patient lives," Blumenthal said in a scathing statement.

He accused Lilly of promoting the drug for anxiety, depression and attention deficit disorder in children despite its not receiving FDA approval for those uses.

While doctors may prescribe medicines in any way they see fit, companies are allowed to promote them only for uses approved by U.S. health regulators.