Eli Lilly 2010 Annual Report Download - page 28

FORM 10-K
Between 2003 and 2005, various municipalities in New York sued us and many other pharmaceutical manufacturers,
claiming in general that as a result of alleged improprieties by the manufacturers in the calculation and reporting of
average wholesale prices for purposes of Medicaid reimbursement, the municipalities overpaid their portion of the
cost of pharmaceuticals. The suits seek monetary and other relief, including civil penalties and treble damages.
Similar suits were filed against us and many other manufacturers by the States of Iowa, Kansas, Louisiana,
Mississippi, Oklahoma, and Utah. These suits are pending either in the U.S. District Court for the District of
Massachusetts or in various state courts. All of these suits are in early stages or discovery is ongoing. We believe
these lawsuits are without merit and are prepared to defend against them vigorously.
In 2004 we, along with several other pharmaceutical companies, were named in a lawsuit in California state court
brought by approximately twenty California pharmacies alleging that pharmaceutical companies prevented
commercial importation of prescription drugs from outside the United States and used Canadian pharmaceutical
prices as an agreed floor for prices in the United States in violation of antitrust laws. The case sought restitution for
alleged overpayments for pharmaceuticals and an injunction against the allegedly violative conduct. Summary
judgment was granted to us and the other defendants and in July 2008, the California Court of Appeals affirmed that
decision. In July 2010, the California Supreme Court overturned the lower court decision and remanded the case to
the state court. We believe the lawsuit has no merit and are prepared to defend against it vigorously.
In June 2009, we received a Civil Investigative Demand from the office of the Attorney General of Texas requesting
documents related to nominal pricing of Axid; we divested the marketing rights for Axid in 2000. We are cooperating
in these matters.
Under the Comprehensive Environmental Response, Compensation, and Liability Act, commonly known as
Superfund, we have been designated as one of several potentially responsible parties with respect to the cleanup of
fewer than 10 sites. Under Superfund, each responsible party may be jointly and severally liable for the entire
amount of the cleanup.
During routine inspections in 2006 and 2007, the U.S. Environmental Protection Agency (EPA) identified potential
gaps in our leak detection and repair program (LDAR). In addition, in 2006 we voluntarily reported to the state and
city environmental agencies that we had exceeded an annual limit for air emissions. In response to these events, we
have implemented numerous corrective actions and enhancements to our LDAR program. We are currently working
with the EPA towards resolution of this matter, which will likely require the payment of a fine. We do not believe the
amount of the fine will be material.
We are also a defendant in other litigation and investigations, including product liability, patent, employment, and
premises liability litigation, of a character we regard as normal to our business.
Item 4. Submission of Matters to a Vote of Security Holders
During the fourth quarter of 2010, no matters were submitted to a vote of security holders.
Part II
Item 5. Market for the Registrant’s Common Equity, Related
Stockholder Matters, and Issuer Purchases of Equity Securities
You can find information relating to the principal market for our common stock and related stockholder matters at
Item 8 under “Selected Quarterly Data (unaudited)” and “Selected Financial Data (unaudited).” That information is
incorporated here by reference.
The following table summarizes the activity related to repurchases of our equity securities during the fourth quarter
ended December 31, 2010:
Period
Total Number of
Shares Purchased
(in thousands)
(a)
Average Price Paid
per Share
(b)
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
(c)
Approximate Dollar Value
of Shares that May Yet Be
Purchased Under the
Plans or Programs
(dollars in millions)
(d)
October 2010 ................. 11 $37.14 0.0 $419.2
November 2010 ............... 4 35.22 0.0 419.2
December 2010 ............... 0 0.00 0.0 419.2
Total ........................ 15 0.0
The amounts presented in columns (a) and (b) above represent purchases of common stock related to our
stock-based compensation programs. The amounts presented in columns (c) and (d) in the above table represent
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