Eli Lilly 2009 Annual Report Download - page 33

the creation of an independent commission to propose changes to Medicare, with a particular focus on the
cost of biopharmaceuticals in Medicare Part D, which lowers the projections for future government
spending in Medicare; and a government-run public option with biopharmaceutical price-setting capabili-
ties. Additionally, various proposals could legalize the importation of prescription drugs and either allow,
or require, the Secretary of Health and Human Services to negotiate drug prices within Medicare Part D
directly with pharmaceutical manufacturers. In addition, the federal government is considering creating an
expedited regulatory approval pathway for biosimilars (copies of biological compounds) for biologic
products in the U.S.; the proposals vary as to which biologic products would be eligible, how quickly a
biosimilar might reach the market, and the ability to interchange the biosimilar and the original biologic
product at the pharmacy. We expect pricing pressures at the federal and state levels to become more
severe, which could have a material adverse effect on our consolidated results of operations.
In its budget submission to Congress in February 2010, the Obama administration proposed changes to
the manner in which the U.S. would tax the international income of U.S.-based companies. While it is
uncertain how the U.S. Congress may address this issue, reform of U.S. taxation, including taxation of
international income, continues to be a topic of discussion for the U.S. Congress. A significant change to
the U.S. tax system, including changes to the taxation of international income, could have a material
adverse effect on our consolidated results of operations.
International operations also are generally subject to extensive price and market regulations, and there
are many proposals for additional cost-containment measures, including proposals that would directly or
indirectly impose additional price controls, limit access to or reimbursement for our products, or reduce
the value of our intellectual property protection. These proposals are expected to increase in both
frequency and impact, given the effect of the downturn in the global economy on local governments.
OPERATING RESULTS—2009
Revenue
Our worldwide revenue for 2009 increased 7 percent, to $21.84 billion, driven primarily by growth of
Alimta, Cymbalta, Humalog, and Zyprexa, and the inclusion of Erbitux revenue as a result of the ImClone
acquisition. Worldwide sales volume increased 7 percent, while selling prices contributed 3 percent of
revenue growth, partially offset by the unfavorable impact of foreign exchange rates of 3 percent. Revenue
in the U.S. increased 12 percent, to $12.29 billion, due to higher prices and higher demand. Revenue
outside the U.S. increased 1 percent, to $9.54 billion, due to increased demand, partially offset by the
negative impact of foreign exchange rates and lower prices.
The following table summarizes our revenue activity in 2009 compared with 2008:
Product U.S.
1
Outside U.S. Total
3
Year Ended
December 31, 2008
Total
Percent
Change
from 2008
Year Ended
December 31, 2009
(Dollars in millions)
Zyprexa . . .................... $ 2,331.7 $2,583.9 $ 4,915.7 $ 4,696.1 5
Cymbalta . .................... 2,551.8 523.0 3,074.7 2,697.1 14
Humalog . .................... 1,208.4 750.6 1,959.0 1,735.8 13
Alimta . . . .................... 815.6 890.4 1,706.0 1,154.7 48
Cialis . . . . .................... 623.3 935.8 1,559.1 1,444.5 8
Gemzar . . .................... 747.4 615.8 1,363.2 1,719.8 (21)
Animal health products . . . ....... 672.2 535.0 1,207.2 1,093.3 10
Evista . . . .................... 682.2 348.1 1,030.4 1,075.6 (4)
Humulin . .................... 402.4 619.6 1,022.0 1,063.2 (4)
Forteo . . . .................... 518.3 298.4 816.7 778.7 5
Strattera . .................... 445.6 163.7 609.4 579.5 5
Other pharmaceutical products . . . . 739.9 1,168.4 1,908.1 1,887.5 1
Total net product sales . . ....... 11,738.8 9,432.7 21,171.5 19,925.8 6
Collaboration and other revenue
2
. . . 555.6 108.9 664.5 446.1 49
Total revenue . . . . . . . . . ....... $12,294.4 $9,541.6 $21,836.0 $20,371.9 7
1
U.S. revenue includes revenue in Puerto Rico.
2
Collaboration and other revenue is primarily composed of Erbitux royalties and 50 percent of Byetta’s gross margin in
the U.S.
3
Numbers may not add due to rounding.
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FORM 10-K