Eli Lilly 2007 Annual Report Download - page 14

FINANCIALS
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requesting documents related to Zyprexa.
In the United States, the Medicare Prescription
Drug, Improvement, and Modernization Act of 2003
(MMA) continues to effectively provide a prescription
drug benefi t under the Medicare program (known as
Medicare Part D). Various measures have been dis-
cussed and/or passed in both the U.S. House of Repre-
sentatives and U.S. Senate that would impose additional
pricing pressures on our products, including proposals
to legalize the importation of prescription drugs and
either allow, or require, the Secretary of Health and Hu-
man Services to negotiate drug prices within Medicare
Part D directly with pharmaceutical manufacturers.
Additionally, various proposals have been introduced
that would increase the rebates we pay on sales to
Medicaid patients. We expect pricing pressures at the
federal and state levels to continue.
In 2007, the Centers for Medicare and Medicaid
Services released a fi nal rule seeking to implement
sections of the Defi cit Reduction Act of 2005. This rule
relates to the Medicaid program and among other
things, sets out a methodology for the calculation and
use of Average Manufacturer Price and Best Price for
pharmaceuticals. We have implemented the fi nal rule,
which has the effect of reducing net selling prices for
Medicaid sales; however, we do not expect the impact
to be material to our consolidated results of operations,
liquidity, or fi nancial position.
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 or reduce the
value of our intellectual property protection.
OPERATING RESULTS—2007
Sales
Our worldwide sales for 2007 increased 19 percent, to
$18.63 billion, driven primarily by the inclusion of Cialis
since our January 29, 2007 acquisition of ICOS and
sales growth of Cymbalta, Zyprexa, Alimta, Gemzar®,
and Humalog®. Worldwide sales volume increased 12
percent, while selling prices and foreign exchange rates
each increased sales by 3 percent. (Numbers do not add
due to rounding.) Sales in the U.S. increased 18 percent,
to $10.15 billion, driven primarily by increased sales of
Cymbalta, Zyprexa, Alimta, and Byetta, and the inclu-
sion of Cialis. Sales outside the U.S. increased 20 per-
cent, to $8.49 billion, driven primarily by the inclusion
of Cialis, and sales growth of Zyprexa, Alimta, Gemzar,
and Cymbalta.
Zyprexa, our top-selling product, is a treatment for
schizophrenia, acute mixed or manic episodes associ-
ated with bipolar I disorder and bipolar maintenance.
Zyprexa sales in the U.S. increased 6 percent in 2007,
driven by higher net selling prices, partially offset by
lower demand. Sales outside the U.S. increased 12 per-
cent, driven by the favorable impact of foreign exchange
rates and increased demand.
Sales of Cymbalta, a product for the treatment
of major depressive disorder, diabetic peripheral
neuropathic pain, and generalized anxiety disorder,
increased 58 percent in the U.S., driven primarily by
strong demand. Sales outside the U.S. increased 70
percent, driven by increased demand and the favorable
impact of foreign exchange rates.
Sales of Gemzar, a product approved to fi ght vari-
ous cancers, increased 10 percent in the U.S., driven by
higher prices and increased demand. Sales outside the
U.S. increased 16 percent, driven by increased demand
and the favorable impact of foreign exchange rates.
Sales of Humalog, our injectable human insulin ana-
log for the treatment of diabetes, increased 9 percent in
the U.S., driven by higher prices and increased demand.
Sales outside the U.S. increased 20 percent, driven by
increased demand and the favorable impact of foreign
exchange rates, partially offset by declining prices.
Total worldwide sales of Cialis, a treatment for erec-
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