Overview
Eli Lilly and
Company (LLY) was incorporated in 1901 in Indiana to succeed to the drug
manufacturing business founded in Indianapolis, Indiana, in 1876 by Colonel Eli
Lilly. Eli Lilly discover, develop, manufacture, and market products in two
business segments —human pharmaceutical
products and animal health products. The mission
of human pharmaceutical business is to make medicines that help people live
longer, healthier, more active lives. Most of the products they sell today were
discovered or developed by their own scientists, and their success depends to a
great extent on our ability to continue to discover, develop, and bring to
market innovative new medicines. Animal health business, operating through Elanco
division, develops, manufactures, and markets products for both food animals
and companion animals. Eli Lilly manufacture and distribute products through
facilities in the United States (U.S.), Puerto Rico, and 11 other countries. Their
products are sold in approximately 120 countries.
Eli
Lilly’s Products
Human Pharmaceutical
Products
|
Endocrinology
products
|
Humalog®, Humulin®,
Trajenta®, Jentadueto®, Jardiance®, Trulicity™, Glyxambi®, Forteo®, Evista®, Humatrope®,
Axiron®
|
Neuroscience
products
|
Cymbalta®, Zyprexa®,
Strattera®, Prozac®, Amyvid®
|
Oncology products
|
Alimta®, Erbitux®,
Gemzar®, Cyramza®
|
Cardiovascular
products
|
Cialis®, Effient®,
ReoPro®
|
Animal Health
Products
|
Food animals
|
Rumensin®, Posilac®,
Paylean®, Optaflexx®, Tylan®, Micotil®, Pulmotil®, Pulmotil AC™, Coban®,
Monteban®, Maxiban®, Surmax™ (sold as Maxus™ in some countries)
|
Companion
animals
|
Trifexis®, Comfortis®
|
Novartis AH*
products
|
Denagard®, Milbemax®,
Atopica®, Fortekor™
|
*On January 1, 2015,
we completed our acquisition of Novartis Animal Health (Novartis AH) in an
all-cash transaction for approximately $5.4 billion. Novartis AH operates in
approximately 40 countries.
|
Competition:
Highly Competitive
Human
pharmaceutical products compete globally with products of many other companies
in highly competitive markets. Animal health products compete globally with
products of animal health care companies as well as pharmaceutical, chemical,
and other companies that operate animal health businesses.
Generic Pharmaceuticals
In the U.S.
and the EU, the regulatory approval process for human pharmaceuticals (other
than biological products (biologics)) exempts generics from costly and
time-consuming clinical trials to demonstrate their safety and efficacy,
allowing generic manufacturers to rely on the safety and efficacy of the
innovator product. Therefore, generic manufacturers generally invest far less
than Eli Lilly do in research and development and can price their products much
lower than our branded products. Also, public and private payers typically
encourage the use of generics as alternatives to brand-name drugs in their healthcare
programs.
Biosimilars
Several of Eli
Lilly’s current products, including Cyramza, Erbitux, and ReoPro, and many of
the new molecular entities (NMEs) in their research pipeline are biologics.
Competition for Lilly’s biologics may be affected by the approval of follow-on
biologics, also known as biosimilars*. Globally, governments
have or are developing regulatory pathways to approve biosimilars as
alternatives to innovator-developed biologics, but the patent for the existing,
branded product must expire in a given market before biosimilars may enter that
market. The extent to which a biosimilar, once approved, will be substituted
for the innovator biologic in a way that is similar to traditional generic substitution
for non-biologic products, is not yet entirely clear, and will depend on a
number of regulatory and marketplace factors that are still developing.
*A biosimilar is a biologic
for which marketing approval is granted based on less than a full safety and
efficacy package due to the physical/structural similarity of the
biosimilar to an already-approved biologic as well as reliance on the finding
of safety and efficacy of the already-approved product.
Managed Care
Organizations
The growth
of MCOs* in the U.S. is also a major factor in the
competitive marketplace for human pharmaceuticals. It is estimated that approximately
two-thirds of the U.S. population now participates in some version of managed
care. MCOs have been consolidating into fewer, larger entities, thus enhancing
their purchasing strength and importance. Pharmaceutical companies compete
aggressively to have their branded products included. Where possible, companies
compete for inclusion based upon unique features of their products, such as
greater efficacy, fewer side effects, or greater patient ease of use. A lower
overall cost of therapy is also an important factor. Price is becoming an
increasingly important factor in MCO formulary decisions, particularly in
treatment areas in which the MCO has taken the position that multiple branded
products are therapeutically comparable.
* MCOs can include
medical insurance companies, medical plan administrators, health-maintenance
organizations, Medicare Part D prescription drug plans, alliances of hospitals
and physicians, and other physician organizations. MCOs typically maintain
formularies specifying which drugs are covered under their plans. Exclusion of
a drug from a formulary can lead to its sharply reduced usage in the MCO
patient population.
Risk
A number of Eli
Lilly’s top-selling human pharmaceutical products have recently lost, or will
lose in the next several years, significant patent protection and/or data
protection in the United States (U.S.) as well as key countries outside the
U.S., as illustrated in the tables below:
Product
|
Revenues
($ in millions)
|
Worldwide Revenues
|
Patent / Data Protection - U.S.
|
Alimta
|
1,229.50
|
6%
|
Compound
patent plus pediatric exclusivity 2017;
Vitamin
dosage regimen patent plus pediatric exclusivity 2022
|
Cialis
|
1,039.90
|
5%
|
Compound
patent 2017
|
Forteo
|
539.00
|
3%
|
Formulation
and related process patents 2018; use patents 2019
|
Strattera
|
452.50
|
2%
|
Use patent
plus pediatric exclusivity 2017
|
Effient
|
394.50
|
2%
|
Compound
patent 2017; use patents 2022
|
Evista
|
207.20
|
1%
|
Use patents
March 2014
|
|
|
Revenues
($ in millions)
|
Worldwide
Revenues
|
Patent / Data
Protection - Major Europe / Japan
|
Alimta
|
1,562.50
|
8%
|
Major European countries: compound patent December
2015, vitamin dosage regimen patent 2021;
Japan: compound patent December 2015, use patent to
treat cancer concomitantly with vitamins 2021
|
Cialis
|
1,251.10
|
6%
|
Major European countries: compound patent 2017
|
Cymbalta
|
1,194.20
|
6%
|
Major European countries: data package protection 2014;
Japan: data package protection 2018
|
Zyprexa
|
917.50
|
5%
|
Japan: Compound patent December 2015
|
Forteo
|
783.00
|
4%
|
Japan: Data package protection 2018; formulation and
related process patent 2019
|
*Numbers are from 2014 annual report.
Reference:
Eli Lilly's Annual Report
