Eli Lilly 2003 Annual Report Download - page 81

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PROXY STATEMENT
79
Access and Affordability of Prescription Drugs
Resolved, That the Board of Directors review pricing and marketing policies and prepare a report (at reasonable
cost and omitting proprietary information), available to shareholders by September, 2004, on how our company
will respond to rising regulatory, legislative and public pressure to increase access to and affordability of needed
prescription drugs.
Statement of Support: The pharmaceutical industry faces a number of long-term challenges that threaten our
Company’s viability and could adversely affect shareholder value.
“The pharmaceutical industry and its legal representatives are now beset by a torrent of suits alleging fraud and
predatory pricing, demands for more stringent regulation, and investigation of longstanding practices in patenting,
promoting and producing drugs.” (Drug Wars, American Bar Association Journal, December 2002).
The pharmaceutical industry “depends heavily on public trust” and is particularly vulnerable in times of crisis and/or
controversy, according to Rating Research LLC. (Reputation Strength Rating, Rating Research LLC, June 2003).
Only 13% of people “normally believe a statement by a pharmaceutical company.” (Attitudes to Government Regu-
lation Vary Greatly For Different Industries, Harris Interactive, 2 April 2003).
57% of Americans think our industry “should be more regulated by government.” Only 7% responded they pre-
ferred less regulation. (Attitudes to Government Regulation Vary Greatly For Different Industries, Harris Interac-
tive, 2 April 2003).
In an annual survey conducted by the Kaiser Commission on Medicaid and the Uninsured, nearly all states reported
taking action to rein in prescription drug costs in the past year (Rising Costs Prompt States to Reduce Medicaid
Further, NY Times, 23 September 2003).
Given the social and political pressures to resolve the issue of accessibility and affordability of healthcare in the
US, we believe the directors of our company have a duty to inform shareholders of the steps taken to address the
challenges confronting our industry: negative public perceptions, legal actions at state and federal levels on pre-
scription access and anti-trust issues, law suits alleging antitrust and consumer fraud violations.
Statement in Opposition to the Access and Affordability of Prescription Drugs Proposal
The public policy and compliance committee of the board has reviewed the shareholder proposal and is in agree-
ment with the intent of the proposal.
• The board periodically reviews the company’s pricing and marketing policies from the perspective of access to and
affordability of our products.
• Our website currently contains a report on the company’s access-related programs.
• In December 2003, the company published the 2002 Corporate Responsibility Report. This report will be updated
annually and the 2004 report for 2003 will provide additional detailed information regarding our commitment to
access and affordability.
As a result, the committee believes this proposal is not necessary and recommends that you vote against it.
A report detailing the company’s access-related programs has been available on our website since September
2002, and can be reached by selecting Access to Medicines on the www.lilly.com homepage, or from the Products
page. This report includes information about direct patient assistance, patient initiatives, the company’s work with
advocacy organizations, U.S. state and federal initiatives, and international initiatives. Information on how patients
and physicians can access Lilly programs and links to state-sponsored prescription drug assistance programs
throughout the country are included.
Our most recently announced program is LillyAnswers, a program designed to provide needy seniors with access
to Lilly medicines. Patients enrolled in LillyAnswers pay only a $12.00 administrative fee for a 30-day supply of any
Lilly prescription medication at participating pharmacies. Medicare-eligible individuals who do not have public or
private coverage for prescription medicine, and who have an income below 200 percent of the federal poverty level
are eligible for LillyAnswers. Since its inception, LillyAnswers has enrolled more than 239,000 members and fi lled