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07-041 April 30, 2007

Eli Lillys Project Resilience: Anticipating the Future of the Pharmaceutical Industry
Rebecca M. Henderson

It was early May 2004, and Peter Johnson found himself looking forward to the Senior Management Forum that he was scheduled to moderate at the end of the month. As the Executive Director of Corporate Strategic Planning at Eli Lilly and Company (Lilly), it was his job to support the companys senior team in the kinds of in depth strategic discussions that were fundamental to maintaining Lillys leadership position in the rapidly evolving pharmaceutical industry. Nearly twelve months before, in response to the widespread perception that the industry was facing an unprecedented set of challenges, Peter had been asked to undertake a comprehensive review of how the industry was likely to evolve and whether Lilly should consider making significant changes in core strategy and/or its business model as a result. In response, Peter had pulled together a cross functional team of high profile people from across the company to look at the key environmental uncertainties facing the industry, and to answer the question, What might Lilly need to do to compete in the future? The team calling itself Project Resilience after Gary Hamels article The Quest for Resilience had divided its work into three interrelated phases: scenario planning, business model evaluation, and core capabilities assessment.
How might the future evolve? How could Lilly compete?
Alternative Business Models

What should Lilly do?

Scenarios

Capabilities Required

Competitive Dynamics

Alternatives for Lilly

Recommendations

The first two phases had taken months of work, but were now largely complete. Peter was fairly confident that the team had a good sense of the different directions in which the industry was likely to
This case was prepared by Rebecca M. Henderson. Professor of Management. Professor Henderson is the Eastman Kodak Leaders for Manufacturing

Copyright 2007, Rebecca M. Henderson. This work is licensed under the Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 Unported License. To view a copy of this license visit http://creativecommons.org/licenses/by-nc-nd/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.

ELI LILLYS PROJECT RESILIENCE: ANTICIPATING THE FUTURE OF THE PHARMACEUTICAL INDUSTRY
Rebecca M. Henderson

evolve, and of the ways in which Lilly and its competitors might be able to compete under the different scenarios that the team had described. Now, however, the team was grappling with the last, and toughest phase what should Lilly do? They needed to come up with some concrete recommendations for Lillys senior management as to which business models the firm should explore and how Lilly should develop new capabilities to position the firm for the future. Peter sighed as he turned back to his desk. It was going to be a long night. Turmoil in the Pharmaceutical Industry? On the surface, the global pharmaceutical industry appeared to be in robust health. Global sales for the industry were approximately $550 billion in 2004 (Table A). About 42% of this total could be attributed to members of PhRMA, the Pharmaceutical Research and Manufacturers of America, a group that included the majority of all U.S. firms. Net incomes were also very robust, and in general pharmaceutical stocks had performed well since the stock market crash of 2000.
Table A 2004 Worldwide Pharmaceutical Sales by Region Sales (US$ billions) $550.0 $248.0 $144.0 $5.8 $9.5 $90.5

Region Total Worldwide Market North America (U.S. & Canada) European Union Japan China All Other
Source: MedAd News, May, 2005.

% Growth vs. 2003 7% 8% 6% 2% 28% NA

% Share 100.0% 45.1% 26.2% 1.7% 1.7% 16.5%

At the same time the industry was coming under significant pressure on a variety of fronts. Most noticeably, there was some evidence that the research productivity of the industry was declining. Measuring pharmaceutical research productivity is notoriously difficult, since it can take as long as 10-12 years to bring a new drug to market and the number of drugs released in any given year reflects investments and actions made over many years. Nevertheless it appeared that while real research spending in the industry was accelerating dramatically, outputat least as crudely measured by the number of new drugs introduced every yearwas falling (Exhibit 1). For example, the cost of discovering, developing and launching a drug which was roughly $318 million in 1990 1 topped $1.7 billion in 2003. 2 Meanwhile, one in 13 drugs in the preclinical development stage reached the market

Bruce Rasmussen, Implications of the Business Strategies of Pharmaceutical Companies for Industry Developments in Australia, Working Paper No. 1,

Center for Strategic Economic Studies, Victoria University of Technology, March. 2002.
2

Drug Development Costs Hits $1.7 billion, DrugResearcher.com, December 8, 2003. 2

April 30, 2007

ELI LILLYS PROJECT RESILIENCE: ANTICIPATING THE FUTURE OF THE PHARMACEUTICAL INDUSTRY
Rebecca M. Henderson

compared to one in eight from 1995-2000. 3 In turn, the industry was witnessing the emergence of smaller, more nimble companies which specialized in particular therapeutic areas and which, due to limited financial resources, built their pipelines by relying on products and molecules that were already available in the marketplace. 4 Simultaneously, advances in tools such as genetics and genomics had led to waves of entry by small, specialized biotech firms. While these firms had yet to yield significant returns to their investors according to some observers, aggregate returns to the venture capital that had been invested in the industry were barely positiveaccording to the Boston Consulting Group, while they represented only 3% of the drug industrys total R&D spending, 67% of the drugs in clinical trials in 2003 were from small biotech companies. 5 Industry growth was also under attack. In 2004, the global pharmaceutical market grew only 7%, marking the first time the industry had not reached double digit growth since 1995, 6 and over the next five years $40 billion of branded pharmaceuticals were expected to lose patent protection. 7 These trends were placing significant financial pressures on large pharmaceutical companies like Lilly. Average pharmaceutical revenues for a large firm were on the order of $10 billion/year, and their valuations implied that the equity markets were expecting them to grow on the order of 10% a year. Since the typical successful new product yielded revenues of around $300-$400 million a year, each company required roughly two to three new launches annually to meet expectations. Unfortunately, while success rates varied dramatically across companies, on average the large firms were introducing major products at a rate of roughly one every two years. At the same time, the conventional technologies of drug discovery were being challenged by an explosion of new science. Advances in genomics and genetics, imaging technology and fields such as protein chemistry, molecular biology and cellular mechanics were opening up promising new areas of enquiry. Some scientists were calling for an entirely new field of systems biology. In January 2003, for example, MITs Computational and Systems Biology Initiative held its first conference, attracting 300 participants. There was also some evidence that scientific advances and the pressure on the industry were causing a move away from large, primary care blockbuster products. The heart of the Fully Integrated Pharmaceutical Company (FIPCO) model in which each company had its own discovery, development, manufacturing, sales and marketing functions for the majority of products in its pipeline, the blockbuster model relied on the development and distribution of a small number of drugs that could achieve global sales in excess of $1 billion annually by focusing on very large markets.

3 4 5 6

Drug Development Costs Hits $1.7 billion, DrugResearcher.com, December 8, 2003. Celia M. Henry, Morphing the Model, Chemical and Engineering News, March 7, 2005. Catherine Arnst, The Waning of the Blockbuster Drug, BusinessWeek, October 18, 2004. Michael Rosen, Though Pharma Growth Slides, Blockbusters Reach New Records, Wisconsin Technology Network, June 6, 2005. Evolving Generic Competition Global Competitive Intelligence report, Jan 2004. 3

April 30, 2007

ELI LILLYS PROJECT RESILIENCE: ANTICIPATING THE FUTURE OF THE PHARMACEUTICAL INDUSTRY
Rebecca M. Henderson

(See Exhibit 2 for a list of some blockbuster drugs.) In 2001, 35 blockbuster drugs accounted for on average 46% of the top 10 pharmaceutical companies sales. 8 (Exhibit 3.) The success of the blockbuster model depended on achieving large returns from a small number of drugs in order to pay for the high cost of drug discovery and development. An aggressive sales and marketing strategy was paramount. The larger pharmaceutical companies relied on their 10,000 to 15,000 person sales forces to get products into the hands of doctors. At the same time, since the Food and Drug Administration (FDA) had eased direct-to-consumer (DTC) regulations in 1997, pharmaceutical companies were attempting to reach consumers through television and Internet advertising. Mercks VIOXX and Pfizers Celebrex, a new class of prescription strength pain killers, were the first to ride this wave. In 2000, Mercks DTC budget for VIOXX reached $161 million, $40 million more than PepsiCo spent marketing its Pepsi product. 9 Within a year of being launched, VIOXX and Celebrex together had captured 40% of the market from traditional anti-inflammatories like ibuprofen. 10 Financially, the blockbuster model made pharmaceutical companies share price particularly vulnerable. In 2001, Mercks announcement that sales of several of its blockbuster drugs would not meet expectations and that there was a 12-month gap in the blockbuster pipeline was met with a 15% reduction in the companys share price. 11 Revenue for VIOXX, however, topped $2.6 billion that same year, a 44% increase over 2000. When Merck withdrew VIOXX from the market in September 2004, because of concerns about patient safety, Mercks stock lost nearly 25% of its value. As in other industries, there was also a new and growing trend towards developing more personalized products and services. The success of Genentechs drug Herceptin had made this approach particularly salient. Herceptin was approved in 1998 for the treatment of metastatic breast cancer. For patients with the appropriate genotype (something that could be determined with the aid of an appropriate diagnostic test known as the HercepTest), Herceptin appeared to perform significantly better than common alternative treatments; for other women the drug performed no better than the standard treatment. The drug, therefore, served a smaller market than a more conventional therapy, by some estimates 15% to 20% of breast cancer patients. 12 Herceptin, which would not have reached the market without an accompanying diagnostic test enabling doctors to identify patients whose gene type made them eligible for the therapy, was one example of the synergies that could be created between a therapeutic and a diagnostic. 13
8

Bruce Rasmussen, Implications of the Business Strategies of Pharmaceutical Companies for Industry Developments in Australia, Working Paper No. 1,

Center for Strategic Economic Studies, Victoria University of Technology, March. 2002.
9

Stephen P. Bradley and James Weber, The Pharmaceutical Industry: Challenges in the Next Century, Harvard Business School Case No. 703-489. Barry Meier, Medicine Fueled by Marketing Intensified Trouble for Pain Pills, The New York Times, December 19, 2004. Bruce Rasmussen, Implications of the Business Strategies of Pharmaceutical Companies for Industry Developments in Australia, Working Paper No. 1,

10 11

Center for Strategic Economic Studies, Victoria University of Technology, March. 2002.
12 13

Matthew Bell, Unraveling the Pharmaceutical Industry, Arthur D. Little, 2002. Theranostics: Guiding Therapy, Med Ad News, December 1, 2004. 4

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ELI LILLYS PROJECT RESILIENCE: ANTICIPATING THE FUTURE OF THE PHARMACEUTICAL INDUSTRY
Rebecca M. Henderson

While Herceptin appeared to have been quite financially successful for its developer, Genentech (a full course of treatment is currently priced at about $70,000, and in 2006 total revenues from Herceptin were $1.2 billion), many industry observers were concerned that many personalized drugs were likely to be much less financially attractive than conventional blockbuster drugs. The trend of using biomarkers and diagnostics to better segment patient populations would inevitably result in fewer patients for a given therapy. Furthermore, many researchers were beginning to realize that complex illnesses such as cancer and cardiovascular diseases, required drugs that hit more than one target simultaneously. 14 There were also concerns that the conventional blockbuster FIPCO model was at risk due to further changes in the pharmaceutical marketplace. Here, two trends in particular were key. The first was the impact of patent expirations, as generic competition was continuing to raise the competitive hurdle for branded prescription (or Rx) products, especially in large and crowded primary care markets. The $40 billion of branded pharmaceuticals that were expected to lose patent protection in the next five years would, for example, create significant competition for new drugs. The second was the increasing saturation of the main selling channel for the blockbuster FIPCO modelthe sales representative detailing individual physiciansresulting in declining returns on investments in this channel. Both physicians and payers were objecting with increasing volubility to the promotional practices required by the blockbuster FIPCO model. The industry was also coming under increasing political pressure. Health care expenditures as a percentage of GDP were rising dramatically, and pharmaceutical costs which were sometimes not fully reimbursed by either federal or private health plans were becoming increasingly visible. (See Exhibit 4.) At the same time, some of the practices of the industry were coming under scrutiny. For example, in The Truth about Drug Companies Marcia Angell who had been Editor in Chief at the New England Journal of Medicine made the following claims: The pharmaceutical industry claims to be innovative, but only a small fraction of its drugs are truly new: most are simply variations on older drugs. Contrary to popular belief, big drug companies spend far less on research and development than on marketing. The pharmaceutical industry has an iron grip on Congress and the White House. It has the largest lobby in Washington and contributes heavily to political campaigns. Drug companies promote diseases to match their drugs. Millions of normal Americans have to come to believe that they have dubious or exaggerated ailments like generalized anxiety disorder. Drug companies have enormous influence over what doctors are taught about drugs and what they prescribe.

14

Simon Frantz, Playing Dirty, Nature, October 13, 2005. 5

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ELI LILLYS PROJECT RESILIENCE: ANTICIPATING THE FUTURE OF THE PHARMACEUTICAL INDUSTRY
Rebecca M. Henderson

Drug companies have substantial control over clinical trials of their drugs. There is good reason to believe that much of the company supported research on prescription drugs is biased as a result.

These kinds of claims were hotly contested by the pharmaceutical companies themselves, but they nonetheless signaled a potentially troubling erosion of public support for the industry. Yet another threat on the horizon was the possibility of aggressive entry from India and China. Companies such as Ranbaxy Laboratories had set their sights on becoming International researchbased pharmaceutical companies and by some estimates, Chinese pharmaceutical firms sold over $19 billion worth of product in 2002. Eli Lilly: More than 125 years of history Eli Lilly and Company was founded in May 1876 by Colonel Eli Lilly in Indianapolis, Indiana. A 38year-old pharmaceutical chemist and a veteran of the U.S. Civil War, Colonel Lilly was frustrated by the poorly prepared, often ineffective medicines of his day. Consequently, he made these commitments to himself and to society:

He would found a company that manufactured pharmaceutical products of the highest possible quality. (Lilly was the first pharmaceutical company to ask physicians and hospitals to give feedback on the efficacy and safety of its products. 15 ) His company would develop only medicines that would be dispensed at the suggestion of physicians rather than by eloquent sideshow hucksters. Lilly pharmaceuticals would be based on the best science of the day.

Eventually, Colonel Lillys son, Josiah K. Lilly Sr., and two grandsons, Eli Lilly and Josiah K. Lilly Jr., each served as president of the company. Each contributed a distinctive approach to management, and together, these management styles established a corporate culture in which Lilly employees were viewed as the companys most valuable assets, a belief that the company claimed was still the cornerstone of its corporate philosophy. While some analysts had speculated that Lillys location in Indianapolis put it at something of a disadvantage, the company believed that its strong Midwestern roots and deep history gave it a unique competitive advantage. The company described its values as: Respect for people, which includes our concern for the interests of all people worldwide who touch or are touched by our company: customers, employees, shareholders, partners, suppliers, and communities; Integrity that embraces the very highest standards of honesty, ethical behavior and exemplary moral character;

15

Margaret L. Eaton, Developing and Marketing a Blockbuster Drug: Lessons from Eli Lillys Experience with Prozac, Stanford Graduate School of

Business Case No. BME-6.

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ELI LILLYS PROJECT RESILIENCE: ANTICIPATING THE FUTURE OF THE PHARMACEUTICAL INDUSTRY
Rebecca M. Henderson

Excellence that is reflected in our continuous search for new ways to improve the performance of our business to become the best at what we do. With 2004 revenues of $13.9 billion, 42,000 employees worldwide and medicines marketed in 142 countries, Lilly was one of the worlds 20 largest pharmaceutical companies. (Exhibit 5 gives key financial information for the firm.) The company, which prided itself on its strong record of sciencebased research productivity, spent more on R&D as a percentage of sales (21%) than any other major pharmaceutical company. (GSK spent 15% and Merck 14%. 16 ) It had major research and development facilities in nine countries and conducted clinical trials in more than 60 countries. Lillys four therapeutic areas included neurosciences (44% of revenue), endocrinology (31%), oncology (10%) and cardiovascular (5%). 17 Zyprexa, a treatment for schizophrenia, bipolar mania and bipolar maintenance, accounted for 32% of Lillys revenue topping $4.4 billion. Several lawsuits brought during 2004 contesting the validity of Zyprexas patent and some of Lillys marketing and sales efforts surrounding the drug caused the companys stock price to fall 19% during the year. Lilly was one of the only major pharmaceutical companies not caught up in the merger and acquisition activity of the late 1980s and 1990s. (See Exhibit 6.) The company was able to safeguard its independence by looking internally for core capabilities it could develop and exploit including improving speed to market, leveraging existing products, narrowing its R&D focus from eight to five therapeutic areas, spinning off its non-core medical device and diagnostic businesses, and creating multi-functional, product-focused teams (known internally as heavyweight product development teams) which focused exclusively on the development of a single compound. This included all activities related to drug discovery, manufacturing, sales, marketing and distribution. 18 Meanwhile, sales of the companys blockbuster anti-depressant Prozac, which topped $2.8 billion in 1996 (43% of revenue) despite bad press and lawsuits, enabled the company to heavily invest in new product development, further safeguarding its independence. These efforts appeared to pay off. In 2002, two years after Prozacs patent expiration, Lilly was immersed in the most productive new drug launch in its 127-year history and in 2004 Lilly launched five new products, of which three were first in class or the first drugs to reach the market exploiting a particular mechanism of action. First-in-class drugs tended to be more difficult to manage than already established therapeutic classes due to the fact that knowledge about the disease, drug and market was far less certain. 19 (Exhibit 7 shows major introductions by year for the period 1983-2004.)

16 17 18 19

Jeff Swiatek, Eli Lilly Looking for Forumula to Cut Drug Costs, The Indianapolis Star, October 18, 2004. Animal Health and other pharmaceuticals made up the remaining 7% of revenue. Matthew C. Verlinden, Eli Lilly: The Evista Project, Harvard Business School, Case No. 699-016. Margaret L. Eaton, Developing and Marketing a Blockbuster Drug: Lessons from Eli Lillys Experience with Prozac, Stanford Graduate School of

Business Case No. BME-6.

April 30, 2007

ELI LILLYS PROJECT RESILIENCE: ANTICIPATING THE FUTURE OF THE PHARMACEUTICAL INDUSTRY
Rebecca M. Henderson

Building the Scenarios for Project Resilience Scenario planning is a disciplined method for thinking about the future and its inherent uncertainties. Peter Schwartz, president of the Global Business Network and a leading expert on scenario planning, calls scenarios stories about how the world might turn out tomorrow, and adds that the purpose of scenario planning is not an accurate picture of tomorrow, but better decisions about the future. 20 To accomplish this, scenario planning creates a number of different future worlds that are both plausible and also sufficiently differentiated so as to enable decision makers to compare and contrast them and their strategic implications. For Project Resilience, the working team created four scenarios for the future of the research-based pharmaceutical industry that were set in 2020, approximately 15 years away. Given the industrys long R&D cycles, the team decided that 15 years was enough time to allow Lillys senior managers to imagine future worlds that were substantially different from the current industry environment. The team also decided to focus their scenarios on the U.S. market, both because of its overriding size and importance to the sales and profits of the pharmaceutical industry, (in 2004, more than 50% of Lillys sales were in the U.S., and some industry observers speculated that the U.S. market accounted for a disproportionate share of profits for every major pharmaceutical firm) and also because the external environment in the U.S., which for many years had been relatively stable and supportive of the industrys business model, was becoming increasingly turbulent. If the pharmaceutical business model was going to be forced to change, the team reasoned, it would be because of what happened in the U.S. market. Understanding how this market might evolve was a critical first step in assessing future strategic options for the industry in general and for Lilly in particular. The scenarios were developed by first selecting the two most critical and uncertain of the many external factors (called, in the language of scenario planning, driving forces) that could impact the future evolution of the pharmaceutical industry. The project team tested a number of possible driving forces before ultimately selecting R&D Output and Rx Purchase and Prescribing Decisions as the two forces to use for their scenario planning exercise. They reviewed their choice with both senior Lilly colleagues and outside consultants who were well versed in both scenario planning and the pharmaceutical industry environment. These two driving forces became the scenario axes, with each end of an axis representing opposite outcomes of the driving force that the axis describes (see Figure 1). For example, one end of the R&D Output axis represents R&D output that produces breakthrough innovation, while the other end represents output resulting in incremental innovation.

20

For more on scenario planning, see, fro example, Peter Schwartzs book The Art of the Long View (Currency: 1996). 8

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ELI LILLYS PROJECT RESILIENCE: ANTICIPATING THE FUTURE OF THE PHARMACEUTICAL INDUSTRY
Rebecca M. Henderson

Figure 1

R&D Output
Rationing Innovation
Tight formularies and utilization controls Innovation rationed to patients judged most likely to benefit; Restrictions on off-label prescribing by MDs Right drug to right patient thru accepted treatment algorithms developed by credible thought leaders Companies must demonstrate big improvements over current therapies to obtain price premium for new products Products in new therapy areas most likely to command price premiums

Breakthrough innovation

Haves and Have-nots


HSAs in widespread use; patients pay out-of-pocket for many Rx drugs Middle class and rich can supplement employer HSA contributions (pre-tax and after tax) to ensure access to new therapies; poorer consumers cannot Increased consumer price sensitivity and access inequities create pricing pressures on new therapies At same time, very expensive biotech products covered thru high-deductible catastrophic insurance plans, so pricing pressure on these products is less acute

Rx Purchase and Prescribing Decisions


Centralized (public or private) Individual (patient/prescriber focus)

Payers Rule
Rx prices regulated by govt (price ceilings) Very tight formularies and utilization controls Even with price regulation, companies must offer big discounts to play on formularies Restrictions on promotional spending and programs FDA focus on safety increases cost of clinical trials Massive pharma industry consolidation

Price Sensitive Patients


Employers continue to pass ever larger share of healthcare costs onto employees, so patients are price sensitive Most seniors still have significant out-of-pocket drug costs Heavy use of generics, OTC products (FDA speeds Rx to OTC switching in many categories) and alternative medicines Small share of population willing to pay premium for branded products based on heavy DTC marketing efforts; most not Companies focus on NILEX and promotional efforts to drive sales

Incremental Innovation

The axes were defined as follows: Vertical Axis: R&D Output (measures both quantity and quality of industry innovation) Breakthrough Innovation: Pharmaceutical industry R&D is very productive, with 40-50 NMEs submitted annually for regulatory approval. Many of these NMEs New Molecular Entities (>30%) offer major advances in safety, efficacy, and/or customization (tailored therapeutics) vs. currently available therapies. (By contrast, the industry currently produces about 20 NMEs per year, with approximately 15% receiving priority consideration from the FDA.) Pharmaceutical industry R&D productivity remains stagnant, with about 20 NMEs submitted annually for regulatory review. Most of these NMEs (approximately 90%) do not represent significant advances in safety, efficacy or customization (tailored therapeutics) vs. currently available therapies.

Incremental Innovation:

April 30, 2007

ELI LILLYS PROJECT RESILIENCE: ANTICIPATING THE FUTURE OF THE PHARMACEUTICAL INDUSTRY
Rebecca M. Henderson

Horizontal Axis: Rx Purchase and Prescribing Decisions Individual Decision Making: The decision about which Rx therapy will be used is determined primarily through interactions between individual patients, who are paying most of the cost of their medicines, and prescribers. Centralized Decision Making: The decision about which Rx therapy will be used is determined primarily by the government health system or by a consolidated group of private insurers who are paying most of the costs of Rx drugs.

Putting the two axes together defined four future worlds: Haves and Have-nots, Price Sensitive Patients, Payers Rule and Rationing Innovation. The team then spent a considerable amount of time thinking through what each of these worlds was likely to look like. Abbreviated versions of their descriptions follow below: Scenario 1: Have and Have-Nots In this scenario, consumers are paying out-of-pocket for most of the cost of their prescription (Rx) drugs, either because their insurance plans have limited or capped coverage of Rx drugs, or because they have switched to Health Savings Accounts (HSAs) that give them pre-tax dollars to spend directly on healthcare products and services. Many fewer people are uninsured, as HSAs and limitedcontribution plans are more affordable for small business owners, although they are often not able to be as generous in their HSA contributions as larger employers. Since patients are paying more out of pocket, they are more sensitive to the costs of Rx drugs. They also aggressively search out information sources to help them understand the range of therapeutic choices open to them to discuss with their doctors. After many years of false starts, the pharmaceutical industry is using advances in genomics, proteomics, IT and other technologies to both increase R&D output (40-50 new NMEs annually), and to produce a range of new products that represent clear and significant improvements over currently available therapies. Deeper knowledge of the genetics of disease, and the development of sophisticated and relatively cheap diagnostic tools, has led to the creation of more customized therapeutic alternatives in some key therapeutic categories. The new products are more expensive than existing therapies, as companies seek to recoup the evergrowing costs of R&D, even though pharmaceutical companies realize that patients are paying out-ofpocket for a substantial portion of these costs. These new products are available globally at prices roughly equivalent to those charged in the U.S. The increased efficacy of the products, and the ability to focus their use on patient segments most likely to benefit from them, means that government payers in many countries are willing to pay the premium demanded by manufacturers.
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ELI LILLYS PROJECT RESILIENCE: ANTICIPATING THE FUTURE OF THE PHARMACEUTICAL INDUSTRY
Rebecca M. Henderson

In the U.S., patients with more generous insurance plans, or with personal resources to supplement employer contributions to HSAs, willingly purchase the new products to improve their health outcomes. But patients with fewer resources are often unwilling or unable to buy such products. As more blockbuster products become generic, these patients have wider treatment options, but there is still a rancorous political debate about access to new therapies. Scenario 2: Price Sensitive Patients In this scenario, employers respond to continuing increases in healthcare and pharmaceutical costs by pushing an ever-greater share of these costs onto employees. Thus, employees are paying out-ofpocket for more than half of their Rx drug costs. As a result, they are much more sensitive to the price of Rx drugs than had previously been the case. Outside the U.S., the industrys relative lack of productivity means that it continues to face severe pricing pressures and access restrictions in countries with government-financed healthcare systems. The pharmaceutical industry has been largely unable to translate advances in genomics, proteomics, and other technologies into new products that represent clear and significant improvements over currently available therapies. The industry is generating only about 10-15 NMEs annually, and most of these new products generally rely on the same targets as existing therapies and produce only modest or incremental improvements in safety and efficacy. Customized therapies are generally limited to oncology and a few other specialized disease states. Although experts continue to debate whether the industrys R&D productivity decline is a cyclical or structural problem, there is no clear evidence that the promise of the new technologies is going to be fulfilled anytime soon. Scenario 3: Payers Rule In this scenario, the Center for Medicaid and Medicare Services (CMS) sets the price of Rx drugs for both Medicare and Medicaid, and establishes tight utilization controls to control growth in Rx demand. In the private sector, health insurers continue to consolidate to achieve growth, having lost the possibility of expanding business by gaining access to the Medicare population. The government expands Medicaid eligibility in order to enable many more low-income Americans to afford health insurance. Four national Pharmacy Benefit Management firms (PBMs) dominate the private Rx benefit market and use their market clout (as well as the governments price precedents) to drive down Rx drugs and strictly control Rx utilization. The pharmaceutical industry has been largely unable to translate advances in genomics, proteomics, and other technologies into new products that represent clear and significant improvements over currently available therapies. The industry is generating only about 10-15 NMEs annually, and most of these new products generally rely on the same targets as existing therapies and produce only modest or incremental improvements in safety and efficacy.

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ELI LILLYS PROJECT RESILIENCE: ANTICIPATING THE FUTURE OF THE PHARMACEUTICAL INDUSTRY
Rebecca M. Henderson

Since the industry is producing relatively little important innovation, the focus of the FDA is on safety, so new products must establish that they are at least as safe as current therapies before they receive marketing approval. Clinical trials are generally larger and longer, unless a product can be shown to be responsive to an important unmet medical need. Outside the U.S., the industrys relative lack of productivity means that it continues to face severe pricing pressures and access restrictions in countries with government-financed healthcare systems. Scenario 4: Rationing Innovation In this scenario, pharmaceutical benefits are provided to both working age employees and the Medicare population by a small group of consolidated private health insurance plans. Pharmaceutical prices are not directly regulated, but the payers use market dominance both to strictly control the Rx utilization decisions of prescribers and to leverage this control to obtain large discounts and rebates from manufacturers seeking access to the patients managed by these payers. Although CMS (the Center for Medicaid and Medicare Services) does not directly provide the Medicare Rx benefit, it does control benefit design and utilization policy through its regulatory authority. After many years of false starts, the pharmaceutical industry is using advances in genomics, proteomics, IT and other technologies to both increase R&D output (40-50 new NMEs annually), and to produce a range of new products that represent clear and significant improvements over currently available therapies. Deeper knowledge of the genetics of disease, and the development of sophisticated and relatively cheap diagnostic tools, has led to the creation of more customized therapeutic alternatives in some key therapeutic categories. These new products are available globally only at prices roughly equivalent to those charged in the U.S. The increased efficacy of the products, and the ability to focus their use on patient segments most likely to benefit from them, means that government payers in many countries are willing to pay the premium demanded by manufacturers. Alternative Business Models The team then turned its attention to exploring the alternative business models that Lilly might consider adopting in order to compete in these quite different worlds. Business models can be defined on several different dimensions of strategic choice, including: 1. Lines of business in which the company operates; 2. Elements of the value chain the company owns and their configuration; 3. Focus/scope of the business. 4. Role of size/scale in competition; and, 5. Key capabilities necessary to create a competitive advantage. Exhibit 8 lists six archetypal pharmaceutical industry models the team considered, each of which differs on several dimensions from Lillys current blockbuster model:

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ELI LILLYS PROJECT RESILIENCE: ANTICIPATING THE FUTURE OF THE PHARMACEUTICAL INDUSTRY
Rebecca M. Henderson

1. Vertical Firm R&D Disintegrated Model A company running the Vertical Firm R&D business model is not fully integrated across the value chain, but instead is a research organization focused solely on discovering large numbers of high quality NMEs. Firms that operate under this model believe the majority of value is created during the discovery of a novel NME. They capture value by licensing their candidate molecules to the best possible partner for commercialization. Revenues are generated through upfront licensing fees, milestone payments and royalties on product sales. These firms have world-class capabilities in identifying the best possible partner, in capturing the maximal value in the candidate molecule, and in managing the partner relationship for the long-term. Value is delivered to the shareholders through running an efficient organization focused on R&D productivity. Since revenues are limited to a royalty stream (perhaps only 15-20% of a products sales), expenses must be controlled to deliver a reasonable return to the shareholders. Product discovery and development costs must be tightly managed and a projects probability of technical success must be carefully monitored to decrease the investments in dry holes. Product cycle times must be short and project teams extremely flexible, so the firm is capable of generating a wealth of licensable candidates each year. 2. Low Cost Innovative FIPCO As its name suggests, the Low Cost Innovative FIPCO model puts cost at the center of every decision made by the firm. Relative to todays FIPCO model, the cost structure of such a firm would be on average 40-50% lower, with sales and marketing expenses probably reduced even further to allow for disproportionate investments in discovery and development. This firm succeeds not by cost-cutting but by making decisions in a completely different framework with costs at its core. A company adopting the Low Cost Innovative FIPCO model relies on external pricing signals to drive its sourcing of services along the entire value chain and aggressively uses sophisticated IT tools to create a global network of suppliers who can provide those services at the lowest possible price. The firm is rigorous about outsourcing all non-core work. The firms cost structure begins to look like that of an Indian pharmaceutical manufacturer, with professional salaries a tenth to a fifth of the U.S. level and a majority of clinical trials executed outside of the U.S. in the lowest cost locations. For this model to work, the U.S. regulatory authorities will need to change some of their policies, particularly around accepting data generated in other countries.

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ELI LILLYS PROJECT RESILIENCE: ANTICIPATING THE FUTURE OF THE PHARMACEUTICAL INDUSTRY
Rebecca M. Henderson

3. Niche, High value FIPCO The Niche High Value FIPCO is built around discovering, developing and commercializing drugs in conjunction with companion diagnostics or IT based tools to help guide the new therapies to patient subpopulations with the highest expected benefit. This approach recognizes that evolving science is exploiting deeper understanding of molecular pathology, yielding biomarkers that have been used to subdivide blockbuster spaces into more rational, mechanistically sound disease definitions. The NHVF model requires a more focused and scientifically sophisticated sales and marketing organization. Medical and marketing must be tightly linked so that the parameters of the market segment that the new project and its biomarker/diagnostic can be understood as early in the development life cycle as possible and appropriate marketing strategies and messages developed. New capabilities and relationships need to be built around alliances to develop and commercialize companion diagnostics and product support tools. Sales forces, likely not the large primary care sales forces of today, will have to develop the capability and experience to sell a targeted therapy with a companion diagnostic. Competitive messages surrounding the impact of products on biomarkers will become common in this model. 4. Health Care Conglomerate This firm provides all the central buyer needs through a diversified portfolio of companies. While the Vertical Firm B2B looks to provide the central buyer all of its pharmaceutical needs, the Healthcare Conglomerate looks to provide all other necessary goods to the central buyer through one-stop shopping. This could include some pharmaceuticals, but also medical devices, medical equipment, hospital products, patient disposables, etc. A broader product portfolio may produce new bundling options to aid in negotiations with the central buyer. The conglomerate would look to leverage channel management capabilities, particularly logistics and supply chain management, across several business lines. Financially, if pharmaceutical earnings are low, investing in alternative lines of business and becoming a conglomerate may be attractive from a shareholder perspective. 5. Services Firm (Disease management) The services firm is focused on reducing the overall healthcare costs of the central buyer. The firm would contract with central organizations to manage either high-risk patients for a particular disease or the top 20% high-cost patients under management. The goal is to manage their total healthcare via exercise, nutrition, diagnostic monitoring and perhaps drug therapy, and reduce cost in the overall system. The firm would need to prove that its protocols generate health outcomes that reduce cost. Revenues would be generated by capturing a portion of the cost savings. A services-based model has the appeal of providing total customer solutions, while managing overall healthcare costs; a noble effort in todays environment.

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ELI LILLYS PROJECT RESILIENCE: ANTICIPATING THE FUTURE OF THE PHARMACEUTICAL INDUSTRY
Rebecca M. Henderson

Framing Concrete Recommendations As Peter reviewed the various scenarios and the business models that the team had considered, he wondered what his recommendations should be. The four industry scenarios seemed plausible enough, but had the team in fact settled on the right axes? Were there other scenarios he should alert the senior team to? And if these were the right scenarios, should he recommend that Lilly pick one as the most plausible, and base its strategy on that one? Which one, was, in fact, the most plausible? Or should the firm position itself for every possible future? What kind of business model should the firm consider as it evaluated how the industry was likely to change? Was every business model viable in every possible world, or were some better suited to one scenario over another? Which did Lilly have the capabilities to adopt? What were competitors likely to do, faced with the same challenges? Most critically, what should Peter recommend that Lilly do, given the apparently robust strength of the current model? Should he, for example, recommend that Lilly set up an independent business unit to experiment with the new model? Should he recommend that Lilly announce the new strategic direction of the firm today and transition the whole firm immediately? Was something else more appropriate? Peter felt excited as he turned back to his desk. This was his opportunity to contribute significantly to strategic thinking and to action inside Lilly. How should he frame the issues? What should he recommend?

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ELI LILLYS PROJECT RESILIENCE: ANTICIPATING THE FUTURE OF THE PHARMACEUTICAL INDUSTRY
Rebecca M. Henderson

Exhibit 1

Trends in Pharmaceutical Productivity

35000 30000 25000 20000

60

50

R&D Spending, $bn

30 15000 20 10000 5000 0 1965 10

1970

1975

1980

1985 Time

1990

1995

2000

0 2005

Source: NIH, FDA, PHRMA

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NDAs approved

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ELI LILLYS PROJECT RESILIENCE: ANTICIPATING THE FUTURE OF THE PHARMACEUTICAL INDUSTRY
Rebecca M. Henderson

Exhibit 2
Drug/Company

Top 27 Blockbuster Drugs, 2004


Disease Sales (in US$ billions)

Lipitor (Pfizer) Zocor (Merck) Advair/Seretide (GlaxoKlineSmith) Norvasc (Pfizer) Zyprexa (Eli Lilly) Nexium (AstraZeneca) Procrit/Eprex (Johnson & Johnson) Zoloft (Pfizer) Effexor (Wyeth) Plavix (Bristol-Myers Squibb) Celebrex (Pfizer) Fosamax (Merck) Diovan/Co-Diovan (Novartis) Risperdal (Johnson & Johnson) Cozaar/Hyzaar (Merck) Neurontin (Pfizer) Pravachol (Bristol-Myers Squibb) Singulair (Merck) Epogen (Amgen) Prevacid (TAP Pharmaceuticals) Aranesp (Amgen) Lovenox/Clexane (Sanofi-Aventis) Remicade (Johnson & Johnson) Plavix/Iscover (Sanofi-Aventis) Duragesic (Johnson & Johnson) Avandia/Avandament (GlaxoSmithKline) Seroquel (AstraZeneca) Total

Cholesterol Cholesterol Asthma Hypertension Schizophrenia Gastrointestinal disorders Anemia Depression Depression Thrombosis Arthritis Osteoporosis Hypertension Schizophrenia Hypertension Seizures Cholesterol Asthma Anemia Gastrointestinal disorders Anemia Deep-vein Thrombosis Arthritis Thrombosis Pain Diabetes (Type II) Schizophrenia

$10.86 $5.20 $4.50 $4.46 $4.42 $3.88 $3.59 $3.36 $3.35 $3.33 $3.30 $3.16 $3.09 $3.05 $2.82 $2.72 $2.64 $2.62 $2.60 $2.59 $2.47 $2.37 $2.15 $2.11 $2.08 $2.04 $2.08 $88.29

Source: Michael Rosen, Though Pharma Growth Slides, Blockbusters Reach New Record, Wisconsin Technology Network, June 6, 2005; Abby Christopher, Blockbuster Patent Expirations Bring a Shift in Business Models, Pharmacy Times, October 2006.

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ELI LILLYS PROJECT RESILIENCE: ANTICIPATING THE FUTURE OF THE PHARMACEUTICAL INDUSTRY
Rebecca M. Henderson

Exhibit 3
Company

Blockbuster Sales by Pharmaceutical Company, 2001


Pharma Sales $ billions Blockbuster Sales Blockbuster Ratio Number of Blockbuster Drugs $18.2 $9.4 $16.6 $4.6 $9.2 $5.5 $2.9 $2.2 $3.1 $6.1 $77.7 68.20% 37.80% 77.60% 26.70% 55.90% 37.30% 21.20% 18.40% 26.00% 52.50% 45.60% 7 6 7 3 2 2 2 2 1 3 35

Pfizer GlaxoSmithKline Merck Bristol-Myer Squibb AstraZeneca Johnson & Johnson Aventis Novartis Pharmacia Eli Lilly Total Top 10

$26.8 $24.8 $21.4 $17.1 $16.5 $14.9 $13.5 $12.0 $11.9 $11.5 $170.4

Source: Bruce Rasmussen, Implications of the Business Strategies of Pharmaceutical Companies for Industry Developments in Australia, Working Paper No. 1, Center for Strategic Economic Studies, Victoria University of Technology, March. 2002.

Exhibit 4

U.S. Drug Expenditure as % of Health Care Expenditures

Source: US Statistical Abstract, PHRMA

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ELI LILLYS PROJECT RESILIENCE: ANTICIPATING THE FUTURE OF THE PHARMACEUTICAL INDUSTRY
Rebecca M. Henderson

Exhibit 5

Eli Lilly Key Financial Data

Consolidated Statements of Income 2004

Year Ended December 31 2003 2002

Net sales Cost of sales Research and development Marketing and administrative Acquired-in-process research and development Asset impairments, restructuring, other charges Interest expense Other income-net

$13,857.9 3,223.9 2,691.1 4,284.2 392.2 603.0 51.6

$12,582.5 2,675.1 2,350.2 4,055.4 -382.2 61.0

$11,077.5 2,176.5 2,149.3 3,424.0 84.0 -79.7 (293.7) 7,619.8_ 3,457.7

(330.0)_______(203.1)_____ 10,916.0 9,320.8____ 2,941.9 1,131.8_____ 3,261.7

Income before income taxes Income taxes (Note 11) Net income Earnings per share-basic (Note 10) Earnings per share-diluted (Note 10)

700.9_______ 748.8 $2,707.9

$1,810.1_____ $2,560.8___ $1.67____ $1.66_____

$2.38_______ $2.51 $2.37_______ $2.50

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ELI LILLYS PROJECT RESILIENCE: ANTICIPATING THE FUTURE OF THE PHARMACEUTICAL INDUSTRY
Rebecca M. Henderson

December 31 Assets Current Assets Cash and cash equivalents Short-term equivalents Accounts receivable, net of allowances of $66.1 (2004) and $69.3 (2003) Other receivables Inventories Deferred income taxes (Note 11) Prepaid expenses Total current assets Other Assets Prepaid pension (Note 12) Investments (Note 5) Sundry (Note 8)

2004

2003

$ 5,365.3 2,099.1 2,058.7 494.3 2,291.6 255.3 ___271.5_____ __ 12,835.8

$ 2,756.3 957.0 1,864.9 477.6 1,963.0 500.6 249.5 8,768.9

2,253.8 561.4 1,665.1____ _ 4,480.3

1,613.3 3,374.6 1,392.5 6,380.4 6,539.0 $21,688.3

Property and Equipment, net

_7,550.9__ _ __ $24,867.0_ __

Liabilities and Shareholders Equity Current Liabilities Short-term borrowings (Note 6) Accounts payable Employee compensation Sales rebates and discounts Dividends payable Income taxes payable (Note 11) Other current liabilities (Note 8) Total current liabilities Other Liabilities Long-term debt (Note 6) Deferred income taxes (Note 11) Other noncurrent liabilities (Note 8) 4,491.9 620.4 _ 1,241.1_ 6,353.4 4,687.8 386.1 __1,288.8 6,362.7 $ 2,020.6 648.6 471.6 475.3 414.4 1,703.9 _ 1,859.3 7,593.7 $ 196.5 875.9 387.4 488.9 398.3 1,749.8 ______ 1,464.0 5,560.8

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ELI LILLYS PROJECT RESILIENCE: ANTICIPATING THE FUTURE OF THE PHARMACEUTICAL INDUSTRY
Rebecca M. Henderson

Commitments and contingencies (Note 13) Shareholders Equity (Notes 7 and 9) Common stock-no par value Authorized shares: 3,200,000,000 Issued shares: 1,132,884,801 (2004) and 1,124,677,097 (2003) Additional paid-in capital Retained earnings Employee benefit trust Deferred costs-ESOP Accumulated other comprehensive income (loss) (Note 14) __

--

--

708.0 3,119.4 9,724.6 (2,635.0) (111.9) 218.6______ 11,023.7

702.3 2,610.0 9,470.4 (2,635.0) (118.6) (160.1) 9,869.0

Less cost of common stock in treasury 2004-942,677 shares 2003-951,578 shares __ 103.8_______ 104.2 10,919.9______9,764.8 $24,867.0___ $21,688.3

(See notes to consolidated financial statements)


Source: Eli Lilly, 2004 Annual report

Exhibit 6

M&A Activity among Top 10 Pharmaceutical Companies Transaction Value (US$ billions) $7.9 $12.1 $14.3 $30.1 $34.6 $89.2 $75.0 $11.1 $7.8 $59.5

Year 1989 1995 1996 1999 2000 2001

2003

Acquirer Beecham Group PLC Bristol-Myers Co. Glaxo Holdings PLC Sandoz AG ZENECA Group PLC Pfizer Glaxo Wellcome Johnson & Johnson Bristol-Myers Squibb Co. Pfizer Inc.

Target SmithKline Beckman Corp. Squibb Corp. Wellcome PLC Ciba-Giegy AG Astra AB Warner-Lambert Co. SmithKline Beecham ALZA Corp. Dupont Pharmaceuticals Co. Pharmacia Corp.

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ELI LILLYS PROJECT RESILIENCE: ANTICIPATING THE FUTURE OF THE PHARMACEUTICAL INDUSTRY
Rebecca M. Henderson

Source: The Pharmaceutical Industry: Challenges in the New Century, HBS Case No. 703-489; Securities Data Company; Thomson Financial.

Exhibit 7

Eli Lilly Major Marketed Products, 2004

2004

Cymbalta

2003

2002 2001 1999 1998 1996

1995

for major depressive disorder for diabetic peripheral neuropathic pain (2004) (co-promoted with Quintiles Transnational Corp. in the U.S., and with Boehringer Ingelheim elsewhere in the world, except Japan) Alimta for malignant pleural mesothelioma For second-line treatment of non-small-cell lung cancer (2004) Symbyax for bipolar depression Yentreve for stress urinary incontinence (not approved in the U.S.) (co-promoted with Boehringer Ingelheim in major markets, except Japan) Cialis for erectile dysfunction (developed in a joint venture with ICOS Corp.; co-promoted by Lilly ICOS in North America and Europe and by Lilly elsewhere) Strattera for attention-deficit hyperactivity disorder in children, adolescents, and adults Forteo for treatment of men and postmenopausal women with osteoporosis who are at high risk for a fracture Xigris for adult severe sepsis patients at high risk of death Actos for type 2 diabetes (co-promoted with Takeda Chemical Industries, Ltd.) Evista for prevention of osteoporosis in postmenopausal women For treatment of osteoporosis in postmenopausal women (1999) Zyprexa for schizophrenia for acute bipolar mania (2000), Zyprexa Zydis tablet (2000) for schizophrenia maintenance (2001) as combination therapy with lithium or valproate for acute bipolar mania (2002) for bipolar maintenance (2003) Rapid-acting IntraMuscular formulation (2004 Zyprexa granules (2004; launched in Japan only) Humalog for treatment of type 1 and type 2 diabetes Humalog mixtures (1999) Gemzar for non-small-cell lung cancer for pancreatic cancer (1996) for bladder cancer (2000 not approved in the U.S.) for metastatic breast cancer (2003)
22

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ELI LILLYS PROJECT RESILIENCE: ANTICIPATING THE FUTURE OF THE PHARMACEUTICAL INDUSTRY
Rebecca M. Henderson

1987

1983

for recurrent ovarian cancer (2004); not approved in the U.S.) ReoPro for prevention of cardiac ischemic complications in patients undergoing coronary intervention, such as angioplasty For unstable angina associated with stent procedure (1997) (developed by Centocor and marketed by Lilly, except in Japan) Humatrope for growth failure caused by pediatric growth hormone deficiency for replacement therapy for adult growth hormone deficiency (1995) for short stature caused by Turner syndrome (1997) for idiopathic short stature (2003 Humulin for type 1 and 2 diabetes

New Drug Applications Under Review by the U.S. Food and Drug Administration Exenatide for type 2 diabetes (co-developing with Amylin Pharmaceuticals, Inc.) Drug Candidates in Late-Stage Investigation Arxxant (ruboxistaurin) Prasugrel Arzoxifene

for diabetic microvascular complications for acute coronary syndrome (co-developing with Sankyo Company, Ltd.) for prevention and treatment of osteoporosis, and for reducing risk of breast cancer

Selected Drug Candidates in Mid-Stage Investigation Enzastaurin Inhaled insulin Factor Xa inhibitor Pruvanserin (5-HT2A antagonist) Naveglitazar Gama-secretase Inhibitor PPAR alpha agonist for glioblastoma, a type of brain tumor; non-Hodgkinss lymphoma; and other cancers for non-injectable delivery of insulin (co-developing with Alkermes, Inc.) for prevention of deep vein thrombosis for insomnia for type 2 diabetes for slowing the progression of Alzheimers disease for reducing the progression of atherosclerosis

Source: Eli Lilly, 2004 Annual Report.

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ELI LILLYS PROJECT RESILIENCE: ANTICIPATING THE FUTURE OF THE PHARMACEUTICAL INDUSTRY
Rebecca M. Henderson

Exhibit 8

Alternative Business Models

Technical Blockbuster Model


Develop products for large patient populations using revenue potential as main criteria

Low Cost Model


Develop innovative products using cost as a primary decision-making criteria

Servicebusiness Model
Manage the total patient using protocols focused on reducing total healthcare costs

Conglomerate Model
Maximize value by leveraging economies of scope and reducing risk via diversification

Disintegrated Model
Focus business on the highest value, part of the value chain and dominate the competition

Proliferation of Products Model


Develop many products targeted at specific patients that are highly effective and valued

Business Lines

Human pharmaceuticals

Human pharmaceuticals

Human healthcare Services-based Sales & Marketing Focused areas of human health Important to manage large pt populations
Designing programs that generate healthcare savings Negotiating contracts with insurers

Multiple business lines

Human pharmaceuticals R&D or S&M (not both) Broad TAs PC customers Important up to critical mass pt (for S&M)
Large flow of potential products (R&D model) External focus on disruptive technologies (R&D) Defining and acquiring customer value (S&M model) In-licensing (S&M) or outlicensing (R&D) products

Human pharmaceuticals

Value Chain

Fully Integrated

Fully Integrated Focused TAs Specialty customers Important up to critical mass pt


Constant flow of low cost products Low cost manufacturing Defining customer value Out-licensing high cost products Portfolio management based on low cost attributes

Fully Integrated

Fully Integrated Focused TAs Specialty customers Scale is not critical


Large flow of potential products Flexible manufacturing Targeting and marketing to specific patient populations Partnering to develop blockbuster compounds

Scope

Broad TAs PC customers Important up to critical mass pt


Constant flow of potential products in R&D Quality manufacturing Defining customer value in marketplace Partnering to access external innovation

Broad

Scale

Scale is important
Decisive company buying/ selling decisions Formula to evaluate companies for buying-selling Decentralized management of business units

Key Capabilities

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