Eli Lilly Paper

History

Before he founded Eli Lilly and Company in Indianapolis, Indiana in 1876, Colonel Eli Lilly had already tried to launch several unsuccessful business ventures. When he started his pharmaceutical company, he found the right formula. From the outset, his goals were to make pharmaceutical products of the highest possible quality, develop only medicines that would be prescribed by physicians, and to base his products on the best scientific knowledge. A veteran of the American Civil War, Colonel Lilly was 38 years old at the time. He was motivated by a frustration with the inadequate medicines then available and the lack of medicines in the horizon.

Headquartered in Indianapolis, Indiana, Eli Lilly and Company is probably best known for introducing the world to Prozac, a pharmaceutical treatment for clinical depression. However, the organization boasts a large portfolio of products. Eli Lilly and Company is a global, research-based company that discovers, develops, manufactures, and sells products in a large business segment called Pharmaceutical Products. It stresses innovation in its laboratories located around the world. Through its research division, Lilly Research Laboratories, the company discovers, develops, and evaluates therapies and products to help diagnose, prevent, and treat human diseases. The company also manufactures and sells animal health products. All of Lilly's products are sold in approximately 160 countries.

Government regulation is a major consideration for pharmaceutical companies. The Federal Drug Administration (FDA) clears all drugs for use and most importantly limits the application of the drug through its labeling clearance. Currently, the pharmaceutical industry is lobbying for quicker application review timelines. The industry feels that the FDA tends to delay the clearance of applications, which limits their marketing period and profitability. The FDA denies that application review times are slow, and in fact, state that the average approval review period for 2001 was 14 months (Adams & Hensley, 2002). This is a significant improvement since 1993 when the median approval time was 26.9 months (Adams & Hensley, 2002). The FDA is cautious in this area since they do not want to delay the introduction of important new drug therapies for the public, but at the same time, they are held accountable for any mistakes that may occur. This was the situation a couple of years ago when the diabetes drug, Rezulin, was fast-tracked through the approval review process only later to be withdrawn from the market due to hundreds of deaths linked to the drug.

The pharmaceutical industry is a consolidated industry, and each of the big pharmaceutical companies recognizes the power they can apply when working together. Through their organization, the Pharmaceutical Research and Manufacturers of America, they lobby Congress for legislation that will have a positive impact on their industry. They also use this organization to combat challenges that may arise resulting in negative implications for the industry as a whole. The industry benefits from growing demand, particularly since the baby boomer population is aging. This leads to more ailments and health conditions requiring pharmaceutical treatment.

Innovation is the life-blood of pharmaceutical companies and this is no exception for Eli Lilly. The company continually increases its investment in their own research and development (R&D) efforts. Their investments include both human and financial by expanding its resource capabilities in adding 700 scientists, and increasing its R&D investment to $2 billion in 2000, an increase of 13% increase from the previous year. This represents a higher investment in R&D than industry average as a percent of sales.

This continuous investment has led to great strides in their attainment of development and research-productivity targets. Nearly all their molecules in development have proved to be potentially viable drug candidates in early phase trials. One of Lilly's core strengths is in the development and production of natural protein medicines. Discovering proteins for use in fighting major diseases has been enhanced with the recent advances in the human genome project. Lilly is ready to capitalize on their expertise in identifying proteins and their effect on genes and transforming these discoveries into drug products.

A threat from the technological environment for the pharmaceutical industry is the impact of biotechnology. Due to the bust of the dot.com era, venture capitalists (VCs) have been eager to return to solid investments in companies that have viable products and business models. The biotechnology segment has gained much attention from VCs and is reaping the benefits of large capital investments. This enables the biotechnology firms to continue investing in new research and development as some of their other drug therapies continue along the clinical trial phases. There are now over 300 publicly traded companies in the United States developing novel medicines using biotechnology. In fact, biotech companies have approximately 100 drugs in Phase III (final stage) FDA clinical studies in 2002 (O'Keefe, 2002). This will bring a flood of new drug products onto the market over the next few years--not from the big pharmaceutical companies.

Since Eli Lilly and Company was founded more than 130 years ago, there have been several major milestones in its history:

1880s- First company to hire a full time pharmaceutical chemist.

1920s- Created the world's first commercially available insulin.

1940s- One of the first companies to produce penicillin in mass quantities.

1950s- Introduced vancomycin and erythromycin for hospital infections.

1960s- Produced more oral antibiotics as well as injectable antibiotics.

1970s- Introduced Ceclor which was world's best selling antibiotic.

1980s- Introduced Humilin and Prozac.

1990s- Brought several innovative products to market including, Humalog and Evista.

2000s- Lilly launched another first-in-class product, Xigris.

In 2002, Cialis, a medication to treat male erectile dysfunction, was approved.

In 2004, Symbyax, the first and only FDA-approved medication to treat bipolar depression, was launched in the U.S.

In 2005, Byetta, a first in a new class of medicines known as incretin mimetics to treat