Eli Lilly & Company

Public Company
Founded: 1876
Incorporated: 1881
Employees: 40,500
Sales: $20.37 billion (2008)
Stock Exchanges: New York Boston Cincinnati NASDAQ Philadelphia Basel Geneva Zurich Tokyo London
Ticker Symbol: LLY
NAICS: 325411 Medicinal and Botanical Manufacturing; 325412 Pharmaceutical Preparation Manufacturing; 334517 Irradiation Apparatus Manufacturing; 339112 Surgical and Medical Instrument Manufacturing; 424210 Drugs and Druggists’ Sundries Merchant Wholesalers; 541712 Research and Development in the Physical, Engineering, and Life Sciences (Except Biotechnology)

Eli Lilly and Company (Lilly) is the 10th-largest pharmaceutical company in the world. It discovers, develops, manufactures, and markets ethical drugs (those requiring a doctor’s prescription) for a wide variety of human ailments. Lilly has a worldwide presence. The company conducts research in more than 50 countries, maintains research and development (R&D) facilities in 8 countries, has manufacturing plants in 13 countries, and markets its products in 143 countries.

Lilly introduced the world’s first commercial insulin in the 1920s and in 2002 was the leading producer of products for people with diabetes. Its best-selling antidepressant, Prozac, continues to be a controversial drug, even though its U.S. patent protection expired in 2001. The company’s Elanco Animal Health subsidiary sells animal health products in over 100 countries. Like many other large corporations, Lilly has numerous collaborations or joint ventures with other firms. As a major player in the pharmaceutical industry, Lilly has faced controversies such as the high cost of prescription drugs, advertising and marketing policies, and the handling of potential side effects.

Despite its huge domestic and international operations, Lilly continues to maintain a close allegiance to the U.S. Midwest and wields significant influence in its native city, Indianapolis, Indiana. Much of this community loyalty stems from Lilly’s long history of paternalism and generosity.

LILLY’S LATE 19TH-CENTURY ORIGINS AND COMMUNITY COMMITMENTS

In 1876 Colonel Eli Lilly, a Civil War veteran, built a laboratory in Indianapolis and began to manufacture ethical drugs. The business established itself successfully with the innovation of high-quality gelatin-coated capsules, and it was not long before Colonel Lilly was able to contribute to Indianapolis in a variety of ways. He served as president of the Commercial Club to help in the development of the city and chaired a committee to help the indigent during the financial panic of 1893. He also donated his own personal funds to build a children’s hospital in memory of his 13-year-old daughter who died of diphtheria.

This civic consciousness was passed on to the second and third generations of Lilly management. During the Great Depression, the colonel’s grandson, also named Eli Lilly, refused to lay off any employees. Instead, he had them help with general maintenance of the facility until they could return to their normal jobs.

In 1937 the Lilly family established the Lilly Endowment to provide financial support for educational, cultural, and religious institutions. The family donated $5 million worth of rare books to Indiana University, and later the Smithsonian Institution acquired a family coin collection worth $5.5 million. The endowment also funded new buildings, music schools, student centers, and laboratories in most colleges and universities in Indiana and in several other states.

Lilly also laid the foundation for its reputation for marketing ingenuity in those early years. After the 1906 San Francisco earthquake, the company sent as much of its stock as it could to the disaster area at the request of sales personnel and wholesalers. From that point on the ready availability of Lilly’s products was central to its marketing strategy. With aggressive advertising campaigns and a large, eager sales force, this availability has been key to Lilly’s marketing success. Its sales marketing department was formally established around 1922.

DEVELOPER OF IMPORTANT DRUGS: TWENTIES THROUGH SIXTIES

Besides being a pioneer in pharmaceutical marketing, Lilly was known for its development of many important drugs. In the 1920s Lilly began selling the world’s first commercially available insulin, Iletin, which would benefit millions of people with diabetes. In subsequent years it remained the leading manufacturer of insulin, commanding at least 75 percent of the U.S. market in the early 1990s.

In the 1920s the company produced a liver extract for the treatment of pernicious anemia. In the 1930s Lilly laboratories synthesized barbituric acids, essential to the production of drugs used in surgery and obstetrics. In 1955 Lilly manufactured 60 percent of the Salk polio vaccine. Nevertheless, the company’s greatest contribution to human health was in the production of penicillins and other antibiotics that revolutionized the treatment of disease.

Throughout this era of innovation and expansion and up until the late 1980s, Lilly’s management remained a constant. Every president and almost every member of the board of directors was either a direct descendant of Colonel Lilly or a native of the Midwest, if not of Indiana. After the colonel’s death in 1898, his son Josiah Lilly ran the company for the next 34 years. Josiah was succeeded by son Eli and later by Josiah Jr. During the 16-year presidency of the younger Eli Lilly, sales rose from $13 million in 1932 to $117 million in 1948. After Eli relinquished his executive powers to his brother, he became the titular chairperson of the company. Upon his death at age 91, he had lived to see the company reach $1 billion in sales.

Josiah Jr.’s presidency marked the last reign of a direct family descendant, followed by presidents Eugene N. Beesley, Burton E. Beck, and Thomas H. Lake. Richard Wood, who advanced to the chief executive officer (CEO) position in 1973, was, of course, born and raised in Indiana and was a longtime Lilly employee.

In 1971 members and descendants of the Lilly family owned $1 billion of the $4 billion in company stock, while the Lilly Endowment (controlled by the family) owned another $900 million. Furthermore, the Endowment resisted making large disbursements, and it was not until the 1969 Tax Reform Act that the Endowment was forced to loosen its 25 percent hold on stock. Nonetheless, in 1979 the Endowment continued to hold 18.6 percent of company shares.

Lilly’s conservative management paralleled the outspoken ideology of the Lilly Endowment, although the company and the Endowment were separate and distinct organizations. During the 1960s, the Lilly Endowment professed a specific political mission. It supported anticommunism, free enterprise, and limited government. Despite what some have called an anachronistic approach to business, no one can dispute Lilly’s financial success.

THE BOOMING SEVENTIES

While the rest of the drug industry in the 1970s was depressed, Lilly doubled in size. When the pharmaceutical business was hit hard by competition from generic drugs that flooded the marketplace after the expiration of patents for drugs discovered in the 1950s and 1960s, Lilly diversified into agricultural chemicals, animal health products, medical instruments, and beauty care products.

Meanwhile, Lilly increased its expenditure on R&D of pharmaceuticals, spending $235 million in those areas in 1981 alone. The immediate result was three new drugs: Ceclor, an oral cephalosporin antibiotic; Dobutrex, a heart-failure treatment; and Mandol, an injectable cephalosporin effective against a broad spectrum of hospital-acquired infections. The release of the new cephalosporins represented a significant step for Lilly. The company had always been dominant in the antibiotic market, but competition from Merck, Smith Kline, and foreign drug companies threatened Lilly’s supremacy. With the new drugs, the company was able to recapture hegemony of the cephalosporin market; of the $3.27 billion in company sales in 1985, $1.05 billion was from the sale of antibiotics.

A similar success story resulted after the company bought Elizabeth Arden for $38 million in 1971. At first glance, the purchase of the beauty care company seemed an unwise move. Elizabeth Arden had been a money loser and continued to lose money for five years after Lilly acquired it. Lilly management seemed to have no idea of the intense competition in the beauty industry. In an unusual move, however, Lilly hired outsiders to fill its subsidiary’s top executive positions and by 1982 Elizabeth Arden’s sales were up 90 percent from 1978, with profits doubling to nearly $30 million.

The introduction of several new drugs in the late 1970s and early 1980s increased Lilly’s sales and challenged the market boundaries of competing products. Page 179  |  Top of ArticleLilly released Nalfon, an anti-inflammatory drug, to compete with Merck’s top-selling Indocin. In addition, the company introduced Cinobac, an antibacterial agent used to treat urinary-tract infections; Eldisine, a treatment for childhood leukemia; Moxam, a potent antibiotic licensed from Shionogi & Co., Ltd., a Japanese drug company; and Benoxaprofen, an antiarthritic introduced in the United Kingdom. Moreover, the company introduced Humulin in 1982, the first healthcare product made from recombinant DNA technology (genetic engineering). This breakthrough promised to protect Lilly’s majority share of the insulin market.

During this time, the initial flurry over the possible hazardous side effects of a popular analgesic called Darvon seemed to have subsided. Critics had charged that the drug introduced in 1957 was ineffective and had a dangerous potential for abuse, but Lilly mounted an educational campaign on proper use of the drug and continued to hold 80 percent of the prescription analgesic market. Darvon generated annual sales of $100 million.

With a 19 percent increase in sales in 1978, a 24 percent return on equity, and impressive results from Wood’s foreign-market campaign, Lilly’s prospects seemed excellent. Shortly thereafter, however, company growth began to fall short of projected figures. In 1982 a miscalculation of inventory and expected sales caused Lilly to produce far more Treflan (a soybean herbicide) than it could sell. With the patents expiring on Treflan and two animal products, and with the overproduction of Treflan, income from agricultural products suddenly did not look as promising as it once had. Furthermore, profits from Moxam had to be shared with Shionogi, the Japanese partner in the joint venture. In addition, the patent on Keflin, an injectable cephalosporin that had been generating $100 million in sales, expired in November 1982.

Lilly’s diversification into medical instruments through the 1977 acquisition of IVAC Corporation, a manufacturer of systems that monitored vital signs and equipment for intravenous fluid infusion, and Cardiac Pacemakers Inc., a manufacturer of heart pacemakers, acquired in 1978, cost Lilly $286 million in stock, a significant investment with an unknown potential for profits. In addition, the combined assets of its medical instrument subsidiaries and Elizabeth Arden represented only 20 percent of the entire company’s assets. Therefore, projected profits from the two were not expected to have a substantial effect on company profits as a whole. Elizabeth Arden was sold to Fabergé, Inc., for $657 million in 1987.

NEW DRUG CONTROVERSIES

Of more concern, however, was the reemerging specter of Darvon’s addictive qualities. Ralph Nader’s consumer-advocacy group demanded a ban on Darvon because of its alleged associations with suicides, overdoses, and abuse by addicts. Joseph Califano, the U.S. secretary of the Department of Health, Education, and Welfare, harshly criticized the sincerity of Lilly’s educational campaign and went so far as to recommend that Darvon and other propoxyphene products not be prescribed unless there was really no alternative, and then only with care. The U.S. Food and Drug Administration (FDA) charged that Lilly’s educational campaign actually amounted to ingenious marketing in that Lilly sales representatives not only gave doctors educational material that emphasized the drug’s positive attributes but also conveniently left samples. This litigation did not remove Darvon from the market, and it was found by the FDA to be safe and effective when used as directed.

To the company’s dismay, Darvon was not the only drug to cause a controversy. Oraflex, the U.S. version of Benoxaprofen, was withdrawn from the market in August 1982. Only one month after the FDA had approved Oraflex, a British medical journal documented five cases of death due to jaundice in patients taking the drug. The FDA accused Lilly of suppressing unfavorable research findings. Initial warnings about the possibility of side effects were later amended to include the threat of jaundice, but only after the company had already applied for FDA approval. Package inserts were amended to recommend a reduced dosage for elderly patients.

At a time when drug regulation reform would have allowed companies to interpret the results of their own lab tests, the Oraflex controversy represented a major disaster. Furthermore, publicity for the drug, which was projected to be a $100 million seller (prescriptions for Oraflex increased by 194,000 in just one month), had been unwittingly distorted. Reports from outside the company had falsely claimed that the drug could cure arthritis.

On August 21, 1985, the Oraflex controversy culminated in the U.S. Department of Justice filing criminal charges against Lilly and Dr. William Ian H. Shedden, the former vice president and chief medical officer of Lilly Research Laboratories. The Justice Department accused the defendants of failing to inform the government about four deaths and six illnesses related to Oraflex. Lilly pleaded guilty to 25 criminal counts, which resulted in a $25,000 fine. Shedden pleaded no contest to 15 criminal counts and was fined $15,000. All 40 counts were misdemeanors; there was no charge of intentional deception against Lilly.

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Lilly was cited as a defendant in a lawsuit filed against drug manufacturers and distributors of diethylstilbestrol (DES). The drug, which was prescribed to pregnant women during the 1940s and 1950s to prevent miscarriages, caused vaginal cancer and related problems in the children of the patients. Lilly was the first and largest manufacturer of DES, and it was estimated that 40 percent of the drug came from Lilly production facilities. In 1981 a court ordered the company to pay $500,000 in damages to one plaintiff, and in 1985 Lilly was ordered to pay $400,000 to the first male seeking damages in a DES-related case. Other claims asked for damages totaling in the billions of dollars.

ACQUISITIONS

In the early 1980s Lilly continued acquiring manufacturers of medical devices and diagnostic equipment. Lilly added both Physio-Control Corp. in 1980 and Advanced Cardiovascular Systems Inc. in 1984 through share exchanges. Hybritech, a California diagnostic products company, was purchased for $350 million in 1986. Lilly added Devices for Vascular Intervention, Inc., in 1989 and Pacific Biotech, Inc., the next year. These companies (along with Origin Medsystems, a 1992 acquisition) constituted Lilly’s Medical Devices and Diagnostics Division, which contributed about 20 percent of the pharmaceutical corporation’s annual revenues in the early 1990s. Heart Rhythm Technologies, Inc., was acquired in 1992. Nonetheless, even this new business interest had its problems, not the least of which was intense competition from Abbott Laboratories.

While company CEO Wood concentrated on these domestic acquisitions, Lilly’s competitors expanded internationally, where two-thirds of the world’s pharmaceutical market awaited. Although Lilly’s top two drugs, Ceclor (an antibiotic) and Prozac (an antidepressant introduced in 1987) were highly profitable, the company’s $1 billion annual investment in R&D did not yield any new blockbuster breakthroughs during this time.

PROZAC CONTROVERSY IN THE EARLY NINETIES

By the beginning of the 1990s, the company’s star antidepressant Prozac had become a major medical, legal, and social controversy. Many users reported relief from the sufferings of depression. About two million individuals worldwide had taken the drug by the summer of 1990. Some patients, however, reported that Prozac caused them to become suicidal. Lawsuits were filed and some politicians argued that their opponents were unstable because they took Prozac. Those who thought they were hurt by Prozac formed support groups in several states, while Lilly and the FDA continued to defend the drug’s usefulness and safety. Eventually several books were written about the pros and cons of using drugs such as Prozac to treat depression and other mental illnesses.

In 1991 Wood abdicated Lilly’s chief executive office and chose Vaughn D. Bryson, a longtime executive, as his successor. Lilly’s employees reportedly appreciated Bryson’s management style, which was much less formal than that of his predecessor. Unfortunately for Bryson, however, patent expirations, a dearth of new drugs, and general volatility in the pharmaceutical industry combined to thwart his stint at the top. The company lost over 30 percent of its market value during his 18-month tenure and recorded its first quarterly loss in its history in the fall of 1992. Wood, who had retained Lilly’s chairmanship, orchestrated a boardroom revolt to oust his protégé in 1993.

In June of that year, Randall Tobias was selected CEO and chairperson. Unlike all his predecessors, Tobias was recruited from outside Lilly’s employee roster. The former vice chairman of American Telephone and Telegraph Co. (AT&T) had served on Lilly’s board since 1986 and was by his own admission inexperienced in pharmaceuticals. Nonetheless, after just six months at Lilly’s helm, Tobias announced a reorganization of the venerable drug company.

His plan included divestment of the profitable, but distractive, Medical Devices and Diagnostics Division, through which he hoped to raise $550 million. A cost-reduction program included the elimination of 4,000 employees through early retirement. Tobias planned to use these savings to acquire the distributors needed in a pharmaceutical industry that was increasingly influenced by budget-conscious managed care organizations. In line with this focus, Lilly announced its plan to acquire PCS Health Systems Inc., the United States’s largest pharmacy benefit manager, from McKesson Corp. for $4 billion in mid-1994. Tobias, who had orchestrated AT&T’s overseas expansion, also worked to expand Lilly’s international sales from their 1993 level of about 39 percent of total revenues.

Tobias’s plan also focused Lilly’s R&D on five broad disease categories: central nervous system diseases, endocrine diseases (including diabetes and osteoporosis), infectious diseases, cancer, and cardiovascular diseases. In line with these strategic imperatives, Lilly released Lys-Pro, a new type of insulin for the treatment of diabetes, in 1995, and Zyprexa (olanzapine), indicated for schizophrenia, in 1996.

FDA APPROVAL IN THE MID-NINETIES

In 1996 the FDA approved Lilly’s Gemzar as the nation’s first drug to treat pancreatic cancer. Two years later the FDA approved using Gemzar for non-small-cell lung cancer. According to the company’s Web site, in 2002 more than 85 countries had approved Gemzar and almost 80 percent of U.S. patients with pancreatic cancer used Gemzar.

In 1997 the FDA authorized using Evista to help prevent osteoporosis in postmenopausal women. Evista sales of $552 million in 2000 made it one of the company’s major products. Other new products were Humalog, a human insulin analog, and ReoPro, a cardiovascular product discovered and developed by Centocor Inc.

After the FDA eased rules in 1997 on mass media advertising for prescription drugs, Lilly and others in the pharmaceutical industry increased their spending on television spots. Lilly spent $7 million in direct-to-consumer (DTC) promotions in 1999. The following year $46.5 million was spent, mostly for Prozac as the end of its patent protection neared.

Although the evidence was not conclusive, television advertising in particular was linked to increasing consumer sales but perhaps with a hidden cost. “The issues raised by DTC advertising are serious,” said health policy researcher Steven Findlay in Marketing Health Services in spring 2000. “They touch upon questions of public health, corporate responsibility, advertising ethics, and consumers’ capacity to understand complex medical and pharmaceutical information.”

PROZAC LOSES PATENT PROTECTION: 2001

In August 2001 Lilly lost U.S. patent protection for Prozac after a series of legal conflicts. At that point Barr Laboratories gained a six-month exclusive right to make a generic Prozac equivalent. Declining Prozac sales in the fourth quarter of 2001 led to a 14 percent reduction in company revenues. In January 2002 the U.S. Supreme Court rejected Lilly’s final patent appeal without comment, which opened the door to several other companies making generic versions of the antidepressant drug. The loss of patent protection for Prozac ended a major chapter in Lilly’s history.

Also in January 2002, the federal government settled an investigation into whether Lilly violated its own privacy policies by releasing e-mail addresses of over 600 Prozac patients. According to the New York Times on January 19, 2002, the case was “the first the Federal Trade Commission … pursued over suspected unintentional violation of a Web site’s privacy policies.”

Lilly continued to introduce numerous innovative drugs that became known as the best in their class and were sometimes the first drugs ever developed for a new class of drugs. Forteo (teriparatide), a synthetic form of a naturally occurring hormone, was approved for marketing in the United States in 2002 and provided a good example of Lilly’s innovative practices. The drug stimulated new bone formation in osteoporosis patients and worked by increasing the number and activity level of bone-forming cells. Until Forteo, osteoporosis treatments had worked by decreasing the number and activity level of cells that break down bone. In August 2002 Lilly disclosed that it had received a grand jury subpoena in relation to a federal investigation into whether the company had illegally promoted the osteoporosis drug Evista for off-label uses during 1998.

INNOVATION CONTINUES IN THE 21ST CENTURY

In January 2003 Strattera became the first new drug in 30 years approved to treat the symptoms of attention-deficit hyperactivity disorder (ADHD). Strattera was approved for use among children and adolescents and was the first ADHD medication approved for adults. The first nonstimulant drug developed to treat ADHD, Strattera was characterized by its ability to provide daylong symptom control without causing insomnia.

Also in 2003, Lilly’s joined the ranks of pharmaceutical companies seeking to gain a share of the profits seen by Pfizer Inc.’s highly successful Viagra medication to treat male erectile dysfunction. Lilly’s erectile dysfunction drug, Cialis, went on the market in the United States in late November and achieved sales of $108.3 million in its first full quarter in 2004.

The year 2004 saw the introduction of other innovative drugs. Symbyax was introduced to treat patients with bipolar depression. Alimta was approved for use in treating a particular form of lung cancer (mesothelioma) caused by exposure to asbestos. That year the FDA also approved the antidepressant Cymbalta for the maintenance treatment of major depression and for the relief of pain caused by nerve damage from diabetes. Controversy regarding the schizophrenia drug Zyprexa increased significantly in 2004 when the American Diabetes Association advised that Zyprexa was more likely to cause diabetes than other drugs commonly prescribed to treat schizophrenia and bipolar disorder.

In 2005 Lilly introduced a new drug, Byetta, intended for people with type 2 diabetes, which does not require insulin injections. Patients using other diabetes therapies often reported gaining weight after beginning treatment, but patients on Byetta reported losing weight. As a result, Lilly experienced difficulty in 2006 keeping up with demand for the drug.

Lilly withdrew its application to market the antidepressant Cymbalta as a treatment for urinary incontinence in January 2005. Federal authorities reported in June 2005 what they called a “higher than expected rate of suicide attempts” among women taking Cymbalta to treat urinary incontinence. In response to these reports, the FDA repeated prior warnings that antidepressants might lead some patients to become suicidal.

COMPANY PAYS FINE: 2005

In December 2005 Lilly pleaded guilty to charges stemming from the federal investigation into whether it had illegally promoted the osteoporosis drug Evista for off-label uses during 1998. Among other charges, the company was accused of sending unsolicited letters to physicians promoting unapproved indications for Evista. The company agreed to pay a $36 million fine. In addition to the fine, independent reviewers were assigned to oversee Lilly’s marketing of Evista for five years.

In 2005 Lilly paid $690 million to settle 8,000 lawsuits brought by patients who had developed diabetes and other metabolic diseases after treatment with the schizophrenia and bipolar disorder drug Zyprexa. The suits alleged that between 1996 and 2003, when adverse side effects were first reported, Lilly did not adequately disclose the drug’s risks.

In the fall of 2005, FDA officials began to investigate reports that linked use of the ADHD drug Strattera with increased suicidal thoughts and behavior among children and adolescents. In late 2005 the FDA issued a public health advisory to alert health-care providers, parents, and other caregivers to closely monitor behavior among these patients and note any unusual changes.

By 2006 the cancer drug Gemzar, originally introduced in 1996 to treat pancreatic cancer, accounted for 9 percent of Lilly’s worldwide sales. That same year, Lilly received approval for additional indications for Gemzar including treatment of biliary tract cancers. Gemzar was the first new drug approved for treatment of these cancers in 23 years. Also in 2006, the FDA approved Gemzar to treat women with recurrent ovarian cancer. The approval marked the fourth cancer treatment indication approved for Gemzar. Certain types of lung and breast cancer were also treated with Gemzar in combination with other drugs.

Evista, an osteoporosis drug, received additional approval from the FDA in 2007 for use in reducing the risk of invasive breast cancer in postmenopausal women with osteoporosis and in postmenopausal women at high risk for breast cancer. Also that year, the FDA approved the antidepressant Cymbalta for additional use in the maintenance treatment of major depressive disorder in adults. In the two years since its release, the drug had nearly doubled its sales, which totaled $1.3 billion in 2006.

Additionally in 2007, Lilly addressed some of the long-standing concerns regarding the schizophrenia drug Zyprexa by adding definitive warnings to the drug’s label. For the first time, the label acknowledged that the drug caused high blood sugar more readily than other drugs widely used to treat schizophrenia and bipolar disorder. It also acknowledged Zyprexa’s tendency to cause weight gain and high cholesterol. Although prescriptions for Zyprexa had decreased gradually because of concerns raised since 2004, the revenue the drug produced for Lilly did not. The company succeeded in introducing price increases sufficient to maintain a steady income from Zyprexa. Lilly received FDA approval in 2008 to market the antidepressant Cymbalta for the relief of pain caused by fibromyalgia, an especially painful chronic condition.

By early 2008 Lilly had paid $1.2 billion in settlements to 30,000 individual plaintiffs who had alleged that the schizophrenia drug Zyprexa caused them to develop diabetes or other metabolic diseases. On March 6, 2008, opening arguments began in a lawsuit filed by the state of Alaska against Eli Lilly. The suit sought reimbursement of medical expenses incurred by the state’s Medicaid recipients who had taken the drug and developed diabetes. The case was the first Zyprexa-related lawsuit to reach a jury trial and was closely watched by the nine other states that had sued Lilly with claims similar to those of Alaska. Another 33 states had not yet filed suit against Lilly at the time of trial but were investigating the company in a joint action and seeking a single settlement. On March 27 the state of Alaska agreed to a $15 million settlement, a fraction of the hundreds of millions of dollars the state originally had sought in restitution. Lilly admitted no wrongdoing in the settlement.

THE DECADE COMES TO A CLOSE

Lilly reported $20.37 billion in net sales in 2008. This marked the first time in its history the company had exceeded $20 billion in annual sales. The company’s Elanco animal care business, along with eight leading individual products (Zyprexa, Cymbalta, Humalog, Gemzar, Cialis, Alimta, Evista, and Humulin), exceeded $1 billion each in annual sales.

In 2009 the FDA approved Lilly’s cardiovascular drug Effient to be used to reduce the risk of adverse cardiovascular events in patients who had received heart stents. In July of that year, the FDA approved additional use of the osteoporosis drug Forteo to treat patients taking glucosteroid medications for rheumatoid arthritis and other inflammatory conditions. Glucosteroids had been identified as a leading cause of secondary osteoporosis, or osteoporosis brought on by other medical treatment or other conditions.

Lilly listed 24 trademarked and actively marketed pharmaceuticals on its Web site in 2009. It continued to seek innovative treatments for a wide range of diseases, including cancer, multiple sclerosis, diabetes, osteoporosis, rheumatoid arthritis, and Alzheimer’s disease. The company described pending development of biotech solutions as well as traditional chemistry-based pharmaceuticals. One of the company’s most promising areas of R&D involved personalized medicine, or therapies individually tailored to the people who would be receiving them.

Key Dates

1876:

Colonel Eli Lilly starts making ethical drugs in Indianapolis.

1920s:

In this decade Eli Lilly and Company begins selling Iletin, the first commercially available insulin.

1971:

Company buys cosmetics manufacturer Elizabeth Arden.

1977:

IVAC Corporation is acquired.

1978:

Cardiac Pacemakers is acquired.

1980:

Company acquires Physio-Control Corporation.

1982:

Lilly introduces Humulin, a human insulin, the first human health-care item made by recombinant DNA technology.

1987:

Elizabeth Arden is sold to Fabergé; U.S. Food and Drug Administration (FDA) approves the use of Prozac for treating depression.

1996:

Zyprexa for schizophrenia and bipolar disorder and Gemzar for advanced pancreatic cancer are introduced.

1997:

FDA authorizes Evista for use in preventing osteoporosis in postmenopausal women.

2001:

Patent protection for Prozac ends in the United States.

2002:

Forteo, a treatment to stimulate new bone formation in osteoporosis patients, is approved for marketing in the United States; company is under investigation for illegally promoting osteoporosis drug Evista for off-label uses.

2003:

Strattera receives FDA approval for treating attention deficit hyperactivity disorder; Cialis, a treatment for male erectile dysfunction, goes on the market in the United States.

2004:

FDA approves Cymbalta for the maintenance treatment of major depression and to relieve pain caused by diabetes.

2005:

Lilly pleads guilty and is fined $36 million in the Evista case; FDA advisory is issued in response to suicidal thinking reported among children and adolescents taking Strattera.

2006:

Gemzar receives approval for use in the treatment of biliary tract cancer and for treating women with recurrent ovarian cancer.

2007:

Evista receives approval from the FDA for use in reducing the risk of invasive breast cancer.

2009:

Effient is approved for use in reducing the risk of adverse cardiovascular events in patients with heart stents.