1、Eli Lilly and Company2022 Annual Report on Form 10-K United StatesSecurities and Exchange CommissionWashington,D.C.20549Form 10-K Annual report pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934for the fiscal year ended December 31,2022Commission file number 001-06351ELI LILLY AND

2、 COMPANY(Exact name of Registrant as specified in its charter)Indiana35-0470950(State or other jurisdiction of(I.R.S.Employerincorporation or organization)Identification No.)Lilly Corporate Center,Indianapolis,Indiana 46285(Address and zip code of principal executive offices)Registrants telephone nu

3、mber,including area code(317)276-2000 Securities registered pursuant to Section 12(b)of the Exchange Act:Title of Each ClassTrading Symbol(s)Name of Each Exchange On Which RegisteredCommon Stock(no par value)LLYNew York Stock Exchange7 1/8%Notes due 2025LLY25New York Stock Exchange1.625%Notes due 20

4、26LLY26New York Stock Exchange2.125%Notes due 2030LLY30New York Stock Exchange0.625%Notes due 2031LLY31New York Stock Exchange0.500%Notes due 2033LLY33New York Stock Exchange6.77%Notes due 2036LLY36New York Stock Exchange1.625%Notes due 2043LLY43New York Stock Exchange1.700%Notes due 2049LLY49ANew Y

5、ork Stock Exchange1.125%Notes due 2051LLY51New York Stock Exchange1.375%Notes due 2061LLY61New York Stock ExchangeSecurities registered pursuant to Section 12(g)of the Exchange Act:NoneIndicate by check mark if the Registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities A

6、ct.Yes No Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d)of the Exchange Act.Yes No Indicate by check mark whether the Registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Exchange Act during the preceding 12 mo

7、nths(or for such shorter period that the Registrant was required to file such reports)and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuan

8、t to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the Registrant was required to submit such files).Yes No Indicate by check mark whether the Registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a sm

9、aller reporting company,or an emerging growth company.See the definitions of large accelerated filer,accelerated filer,smaller reporting company,and emerging growth company in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filerNon-accelerated filer Smaller reporting companyEmerg

10、ing growth companyIf an emerging growth company,indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the

11、 Registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial reporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.If sec

12、urities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.Indicate by check mark whether any of those error corrections are r

13、estatements that required a recovery analysis of incentive-based compensation received by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark whether the Registrant is a shell company(as defined in Rule 12b-2 of the Exchange A

14、ct):Yes No Aggregate market value of the common equity held by non-affiliates computed by reference to the price at which the common equity was last sold as of the last business day of the Registrants most recently completed second fiscal quarter:approximately$274,342,000,000.Number of shares of com

15、mon stock outstanding as of February 17,2023:950,296,118Portions of the Registrants Proxy Statement for the 2023 Annual Meeting of Shareholders have been incorporated by reference into Part III of this report.Eli Lilly and CompanyForm 10-KFor the Year Ended December 31,2022 Table of ContentsPagePart

16、 IItem 1.Business5Item 1A.Risk Factors24Item 1B.Unresolved Staff Comments34Item 2.Properties34Item 3.Legal Proceedings34Item 4.Mine Safety Disclosures34Part IIItem 5.Market for the Registrants Common Equity,Related Stockholder Matters,and Issuer Purchases of Equity Securities35Item 6.Reserved37Item

17、7.Managements Discussion and Analysis of Results of Operations and Financial Condition37Item 7A.Quantitative and Qualitative Disclosures About Market Risk55Item 8.Financial Statements and Supplementary Data56Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure1

18、13Item 9A.Controls and Procedures113Item 9B.Other Information113Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections113Part IIIItem 10.Directors,Executive Officers,and Corporate Governance114Item 11.Executive Compensation114Item 12.Security Ownership of Certain Beneficial Owne

19、rs and Management and Related Stockholder Matters115Item 13.Certain Relationships and Related Transactions,and Director Independence115Item 14.Principal Accountant Fees and Services115Item 15.Exhibits and Financial Statement Schedules116Item 16.Form 10-K Summary1172Forward-Looking StatementsThis Ann

20、ual Report on Form 10-K and our other publicly available documents include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934(Exchange Act),and are subject to the safe harbor created thereby under the Priv

21、ate Securities Litigation Reform Act of 1995.In particular,information appearing under Business,Risk Factors,and Managements Discussion and Analysis of Results of Operations and Financial Condition includes forward-looking statements.Forward-looking statements include all statements that do not rela

22、te solely to historical or current facts,and generally can be identified by the use of words such as may,believe,will,expect,project,estimate,intend,anticipate,plan,continue,or similar expressions or future or conditional verbs.Forward-looking statements inherently involve many risks and uncertainti

23、es that could cause actual results to differ materially from those expressed in forward-looking statements.Where,in any forward-looking statement,we express an expectation or belief as to future results or events,it is based on managements current plans and expectations,expressed in good faith and b

24、elieved to have a reasonable basis.However,we can give no assurance that any such expectation or belief will result or will be achieved or accomplished.Investors therefore should not place undue reliance on forward-looking statements.The following include some but not all of the factors that could c

25、ause actual results or events to differ materially from those anticipated:the significant costs and uncertainties in the pharmaceutical research and development process,including with respect to the timing and process of obtaining regulatory approvals;the impact and outcome of acquisitions and busin

26、ess development transactions and related integration costs;the expiration of intellectual property protection for certain of our products and competition from generic and/or biosimilar products;our ability to protect and enforce patents and other intellectual property;changes in patent law or regula

27、tions related to data package exclusivity;competitive developments affecting current products and our pipeline;market uptake of recently launched products;information technology system inadequacies,breaches,or operating failures;unauthorized access,disclosure,misappropriation,or compromise of confid

28、ential information or other data stored in our information technology systems,networks,and facilities,or those of third parties with whom we share our data;the impact of global macroeconomic conditions,trade disruptions,disputes,unrest,war,regional dependencies,or other costs,uncertainties and risks

29、 related to engaging in business globally;unexpected safety or efficacy concerns associated with our products;litigation,investigations,or other similar proceedings involving past,current,or future products or commercial activities as we are largely self-insured;issues with product supply and regula

30、tory approvals stemming from manufacturing difficulties,disruptions,or shortages,including as a result of unpredictability and variability in demand,labor shortages,third-party performance,quality,or regulatory actions related to our facilities;dependence on certain products for a significant percen

31、tage of our total revenue and an increasingly consolidated supply chain;reliance on third-party relationships and outsourcing arrangements;the impact of public health outbreaks,epidemics,or pandemics,such as the COVID-19 pandemic;regulatory changes or other developments;regulatory actions regarding

32、operations and products;continued pricing pressures and the impact of actions of governmental and private payers affecting pricing of,reimbursement for,and access to pharmaceuticals;devaluations in foreign currency exchange rates or changes in interest rates and inflation;changes in tax law,tax rate

33、s,or events that differ from our assumptions related to tax positions;asset impairments and restructuring charges;3changes in accounting and reporting standards promulgated by the Financial Accounting StandardsBoard and the Securities and Exchange Commission(SEC);regulatory compliance problems or go

34、vernment investigations;andactual or perceived deviation from environmental-,social-,or governance-related requirements orexpectations.Investors should also carefully read the factors described under Item 1A,Risk Factors in this Annual Report on Form 10-K for a description of certain risks that coul

35、d,among other things,cause our actual results to differ from those expressed in forward-looking statements.Investors should understand that it is not possible to predict or identify all such factors and should not consider the risks described above and under Item 1A,Risk Factors to be a complete sta

36、tement of all potential risks and uncertainties.All forward-looking statements speak only as of the date of this Annual Report and are expressly qualified in their entirety by the risk factors and cautionary statements included in this Annual Report.Except as is required by law,we expressly disclaim

37、 any obligation to publicly release any revisions to forward-looking statements to reflect events after the date of this Annual Report.4Part IItem 1.BusinessEli Lilly and Company(referred to as the company,Lilly,we,or us)was incorporated in 1901 in Indiana to succeed to the drug manufacturing busine

38、ss founded in Indianapolis,Indiana,in 1876 by Colonel Eli Lilly.We discover,develop,manufacture,and market products in a single business segmenthuman pharmaceutical products.Our purpose is to unite caring with discovery to create medicines that make life better for people around the world.Most of th

39、e products that we sell today were discovered or developed by our own scientists,and our long-term success depends on our ability to continually discover or acquire,develop,and commercialize innovative medicines.We manufacture and distribute our products through facilities in the United States(U.S.)

40、,including Puerto Rico,and 7 other countries.Our products are sold in approximately 110 countries.ProductsOur products include:Diabetes products,including:Basaglar,in collaboration with Boehringer Ingelheim,a long-acting human insulin analog for thetreatment of diabetes.Humalog,Humalog Mix 75/25,Hum

41、alog U-100,Humalog U-200,Humalog Mix 50/50,insulin lispro,insulin lispro protamine,and insulin lispro mix 75/25,human insulin analogs for the treatment ofdiabetes.Humulin,Humulin 70/30,Humulin N,Humulin R,and Humulin U-500,human insulins of recombinantDNA origin for the treatment of diabetes.Jardian

42、ce,in collaboration with Boehringer Ingelheim,for the treatment of type 2 diabetes;to reducethe risk of cardiovascular death in adult patients with type 2 diabetes and established cardiovasculardisease;and to reduce the risk of cardiovascular death and hospitalizations for heart failure in adults.Mo

43、unjaro,a glucose-dependent insulinotropic polypeptide and glucagon-like peptide-1 receptor agonist,for the treatment of adults with type 2 diabetes in combination with diet and exercise to improve glycemiccontrol.Trulicity,for the treatment of type 2 diabetes in adults and pediatric patients 10 year

44、s of age and older,and to reduce the risk of major adverse cardiovascular events in adult patients with type 2 diabetes andestablished cardiovascular disease or multiple cardiovascular risk factors.Oncology products,including:Alimta,for the first-line treatment,in combination with two other agents,o

45、f advanced non-small cell lungcancer(NSCLC)for patients with non-squamous cell histology and no epidermal growth factor receptoror anaplastic lymphoma kinase genomic tumor aberrations;for the first-line treatment,in combinationwith another agent,of advanced non-squamous NSCLC;for the second-line tre

46、atment of advanced non-squamous NSCLC;as monotherapy for the maintenance treatment of advanced non-squamous NSCLCin patients whose disease has not progressed immediately following chemotherapy treatment;and incombination with another agent for the treatment of malignant pleural mesothelioma.Cyramza,

47、for use as monotherapy or in combination with another agent as a second-line treatment ofadvanced or metastatic gastric cancer or gastro-esophageal junction adenocarcinoma;in combinationwith another agent as a second-line treatment of metastatic NSCLC;in combination with another agentas a second-lin

48、e treatment of metastatic colorectal cancer;as a monotherapy as a second-line treatmentof hepatocellular carcinoma;and in combination with another agent as a first-line treatment of adultpatients with metastatic NSCLC with activating epidermal growth factor receptor mutations.Erbitux,indicated both

49、as monotherapy and in combination with another agent for the treatment ofcertain types of colorectal cancers;and as monotherapy,in combination with chemotherapy,or incombination with radiation therapy for the treatment of certain types of head and neck cancers.5JaypircaTM,for the treatment of adult

50、patients with relapsed or refractory mantle cell lymphoma(MCL)after at least two lines of systemic therapy,including a BTK inhibitor.Retevmo,for the treatment of metastatic NSCLC with a rearranged during transfection(RET)gene fusion in adult patients;for the treatment of advanced metastatic medullar

51、y thyroid cancer with a RET mutation who require systemic therapy in adult and pediatric patients;for the treatment of advanced or metastatic thyroid cancer with a RET gene fusion in adult and pediatric patients who require systemic therapy and are radioactive iodine-refractory;and for the treatment

52、 of adult patients with locally advanced or metastatic solid tumors with a RET gene fusion that have progressed on or following prior systemic treatment or who have no satisfactory alternative treatment options.Tyvyt,in collaboration with Innovent Biologics,Inc.,for the treatment of relapsed or refr

53、actory classic Hodgkins lymphoma;for the first-line treatment of non-squamous NSCLC in combination with Alimta and another agent;for the first-line treatment of squamous NSCLC in combination with two other agents;for the first-line treatment of hepatocellular carcinoma in combination with another ag

54、ent;for the first-line treatment of esophageal squamous cell carcinoma in combination with certain other agents;and for the first-line treatment of gastric cancer in combination with two other agents,each in China.Verzenio,for use as monotherapy or in combination with endocrine therapy for the treat

55、ment of HR+,HER2-metastatic breast cancer and in combination with endocrine therapy for treatment of HR+,HER2-,node positive,early breast cancer at high risk of recurrence and a Ki-67 score at least 20 percent,as determined by a U.S.Food and Drug Administration(FDA)approved test.Immunology products,

56、including:Olumiant,in collaboration with Incyte Corporation,for the treatment of adults with moderately-to-severely active rheumatoid arthritis,moderate to severe atopic dermatitis,and severe alopecia areata,and for the treatment of hospitalized adults with COVID-19 who require supplemental oxygen,m

57、echanical ventilation,or extracorporeal membrane oxygenation.Taltz,for the treatment of adults and pediatric patients aged 6 years or older with moderate-to-severe plaque psoriasis,adults with active psoriatic arthritis,adults with ankylosing spondylitis,and adults with active non-radiographic axial

58、 spondyloarthritis.Neuroscience products,including:Cymbalta,for the treatment of major depressive disorder,diabetic peripheral neuropathic pain,generalized anxiety disorder,fibromyalgia,and chronic musculoskeletal pain due to chronic low back pain or chronic pain due to osteoarthritis.Emgality,for m

59、igraine prevention and the treatment of episodic cluster headache in adults.Zyprexa,for the treatment of schizophrenia,acute mixed or manic episodes associated with bipolar I disorder,and bipolar maintenance.Other products and therapies,including:Bamlanivimab and etesevimab,administered together,for

60、 the treatment of mild-to-moderate COVID-19 in adults and pediatric patients from birth to 12 years old with positive results of direct SARS-CoV-2 viral testing and who are at high risk for progression to severe COVID-19,including hospitalization or death(Emergency Use Authorization(EUA)granted in 2

61、021).In May 2022,the FDA announced that bamlanivimab and etesevimab are not currently authorized for emergency use for any U.S.region.Bebtelovimab,for the treatment of mild-to-moderate COVID-19 in adults and pediatric patients(12 years of age and older and weighing at least 40 kilograms)with positiv

62、e results of direct SARS-CoV-2 viral testing,and who are at high risk for progression to severe COVID-19,including hospitalization or death,and for whom alternative COVID-19 treatment options approved or authorized by the FDA are not accessible or clinically appropriate(EUA granted in 2022).In Novem

63、ber 2022,the FDA announced that bebtelovimab is not currently authorized for emergency use for any U.S.region.Cialis,for the treatment of erectile dysfunction and benign prostatic hyperplasia.Forteo,for the treatment of osteoporosis in postmenopausal women and men at high risk for fracture and for g

64、lucocorticoid-induced osteoporosis in men and postmenopausal women.6Marketing and DistributionWe sell most of our products worldwide.We adapt our marketing methods and product emphasis in various countries to meet local customer needs and comply with local regulations.U.S.We promote our major produc

65、ts in the U.S.through sales representatives who engage with physicians and other healthcare professionals.We also educate healthcare providers about our products in various other ways,including promoting in online channels,distributing literature and samples of certain products to physicians,and exh

66、ibiting at medical meetings.In addition,we advertise certain products directly to consumers in the U.S.,and we maintain websites and other media channels with information about our major products.We supplement our employee sales force with contract sales organizations to leverage our resources and r

67、each additional patients in need.We maintain special business groups to service wholesalers,pharmacy benefit managers,managed care organizations,group purchasing organizations,government and long-term care institutions,hospitals,and certain retail pharmacies.We enter into arrangements with these org

68、anizations providing for discounts or rebates on our products.In the U.S.,most of our products are distributed through wholesalers that serve pharmacies,physicians and other healthcare professionals,and hospitals.In 2022,2021,and 2020,three wholesale distributors in the U.S.McKesson Corporation,Amer

69、isourceBergen Corporation,and Cardinal Health,Inc.each accounted for a significant percentage of our consolidated revenue.No other customer accounted for more than 10 percent of our consolidated revenue in any of these years.For additional information,see Item 8,Financial Statements and Supplementar

70、y DataNote 2:Revenue.Outside the U.S.The products we market and distribution of our products vary from country to country.Outside the U.S.,we promote our products to healthcare providers through sales representatives and other channels.In most countries in which we operate,we maintain our own sales

71、organizations,but in some countries we market our products through third parties,some of which we have engaged through distribution and promotion arrangements.Marketing CollaborationsCertain of our products are marketed in arrangements with other pharmaceutical companies.For example,we and Boehringe

72、r Ingelheim have a global agreement to develop and commercialize a portfolio of diabetes products,including Trajenta,Jentadueto,Jardiance,Glyxambi,Synjardy,Trijardy XR,and Basaglar.For additional information,see Item 8,Financial Statements and Supplementary DataNote 4:Collaborations and Other Arrang

73、ements.CompetitionOur products compete globally with many other pharmaceutical products in highly competitive markets.Important competitive factors include effectiveness,safety,and ease of use;formulary placement,price,payer coverage and reimbursement rates,and demonstrated cost-effectiveness;regula

74、tory approvals;marketing effectiveness;and research and development of new products,processes,modalities,and uses.Most new products or uses that we introduce must compete with other branded,biosimilar,or generic products already on the market or that are later developed by competitors.When competito

75、rs introduce new products,uses,or delivery systems with therapeutic or cost advantages,including by developing new modalities,our products become subject to decreased sales volumes,progressive price reductions,or both.We believe our long-term competitive success depends on discovering and developing

76、(either alone or in collaboration with others)or acquiring innovative,cost-effective products that provide improved outcomes for patients and deliver value to payers,and continuously improving the productivity of our operations in a highly competitive environment.There can be no assurance that our e

77、fforts will result in commercially successful products,and it is possible that our products will be,or will become,uncompetitive from time to time as a result of products or uses developed by our competitors.7Generic PharmaceuticalsOne of the biggest competitive challenges we face is from generic ph

78、armaceuticals.In the U.S.,Europe,Japan,and other jurisdictions,the regulatory approval process for pharmaceuticals(other than biological products(biologics)exempts generics from costly and time-consuming clinical trials to demonstrate their safety and efficacy,allowing generic manufacturers to rely

79、on the safety and efficacy of the innovator product.As a result,generic manufacturers generally invest far fewer resources than we do for our branded products in research and development and can price their products significantly lower than our branded products.Accordingly,when a branded non-biologi

80、c pharmaceutical loses its market exclusivity,it normally faces intense price competition from generic forms of the product,which can result in the loss of a significant portion of the products revenue in a very short period of time.Moreover,governments in some countries leverage generic entrants to

81、 drive price concessions through the utilization of volume-based procurement bidding and other measures.Further,public and private payers typically encourage the use of generics as alternatives to brand-name drugs in their healthcare programs.Laws in the U.S.generally allow,and in many cases require

82、,pharmacists to substitute generic drugs that have been rated under government procedures to be essentially equivalent to a brand-name drug.Where substitution is mandatory,it must be made unless the prescribing physician expressly forbids it.In certain countries outside the U.S.,intellectual propert

83、y protection is weak,and we must compete with generic or counterfeit versions of our products relatively shortly after launch.BiosimilarsA number of our products and potential new medicines in our clinical-stage pipeline are biologics.In the U.S.,the FDA regulates biologics under the Federal Food,Dr

84、ug and Cosmetic Act,the Public Health Service Act,and implementing regulations.Competition for Lillys biologics may be affected by the approval of follow-on biologics,also known as biosimilars.A biosimilar is a subsequent version of an approved innovator biologic that,due to its analytical and clini

85、cal similarity to the innovator biologic,may be approved based on an abbreviated data package that relies in part on the full testing required of the innovator biologic.Approval by the FDA ultimately depends on many factors,including a showing that the biosimilar is highly similar to the original pr

86、oduct and has no clinically meaningful differences from the original product in terms of safety,purity,and potency.Globally,most governments have developed abbreviated regulatory pathways to approve biosimilars as follow-ons to innovator-developed biologics,including the Biologics Price Competition

87、and Innovation Act of 2009(the BPCIA)in the U.S.A number of biosimilars have been licensed under the BPCIA,as well as in Europe and Japan.The patent and regulatory exclusivity for the existing innovator biologic generally must expire in a given market before biosimilars may enter that market.In addi

88、tion,the extent to which a biosimilar,once approved,will be substituted for the innovator biologic in a way that is similar to traditional generic substitution for non-biologic products is not yet entirely clear,and will depend on a number of regulatory and marketplace factors that are still develop

89、ing.In the U.S.,currently only a biosimilar product that is determined to be interchangeable by the FDA will be considered substitutable for the original biologic product without the intervention of the healthcare provider who prescribed the original biologic product.The FDA requirements for interch

90、angeability are evolving but the FDA has issued several interchangeable designations for biosimilar products,including for competitive insulin products,and is expected to continue doing so in the future.Regulatory interpretation of important aspects of the laws regulating biosimilars continues to ev

91、olve and,therefore,the impact of these laws on our business remains subject to substantial uncertainty.Biosimilars may present both competitive challenges and opportunities.While competitors have developed biosimilars that compete with our products,we have developed,and may continue to develop,our o

92、wn biosimilars.U.S.Private Sector DynamicsIn the U.S.private sector,consolidation and integration among healthcare organizations significantly affects the competitive marketplace for pharmaceuticals.Health plans,managed care organizations,pharmacy benefit managers,wholesalers,and other supply chain

93、stakeholders have been consolidating into fewer,larger entities,thus enhancing their market power and importance.Private third-party insurers,as well as governments,typically maintain formularies that specify coverage(the conditions under which drugs are included on a plans formulary)and reimburseme

94、nt(the associated out-of-pocket cost to the consumer)to control costs by negotiating discounts or rebates in exchange for formulary inclusion and placement.8Formulary placement can lead to reduced usage of a drug for the relevant patient population due to coverage restrictions,such as prior authoriz

95、ations and formulary exclusions,or due to reimbursement limitations that result in higher consumer out-of-pocket cost,such as non-preferred co-pay tiers,increased co-insurance levels,and higher deductibles.Consequently,pharmaceutical companies face increased pressure in negotiations,and compete fier

96、cely for formulary placement,not only on the basis of product attributes such as efficacy,safety profile,or patient ease of use,but also by providing rebates or other concessions.As payers and pharmaceutical companies continue to negotiate formulary placement and rebates,value-based agreements,where

97、 rebates may be based on achievement(or not)of specified outcomes,are another tool that has become increasingly prevalent.Cost is an increasingly important factor in formulary decisions,particularly in treatment areas in which the payer has taken the position that multiple branded products are thera

98、peutically comparable.These pressures have negatively affected,and could continue to negatively affect,our consolidated results of operations.In addition to formulary placement,changes in insurance designs continue to drive greater consumer cost-sharing through high deductible plans and higher co-in

99、surance or co-pays.For additional information on pricing and reimbursement for our pharmaceutical products,see Regulations and Private Payer Actions Affecting Pharmaceutical Pricing,Reimbursement,and AccessU.S.Patents,Trademarks,and Other Intellectual Property RightsOverviewIntellectual property pro

100、tection is critical to our ability to successfully commercialize our life sciences innovations and invest in the search for new medicines and uses.We own,have applied for,or are licensed under,a large number of patents in the U.S.and many other countries relating to products,product uses,formulation

101、s,and manufacturing processes.In addition,as discussed below,for some products we have effective intellectual property protection in the form of data protection under pharmaceutical regulatory laws.The patent protection anticipated to be of most relevance to pharmaceuticals is provided by national p

102、atents claiming the active ingredient(the compound patent)for our products,particularly those in major markets such as the U.S.,major European countries,and Japan.These patents may be issued based upon the filing of international patent applications,usually filed under the Patent Cooperation Treaty(

103、PCT).Patent applications covering compounds are generally filed during the discovery phase of the drug discovery process,which is described in the Research and Development section below.In general,national patents in each relevant country are available for a period of 20 years from the filing date o

104、f the PCT application,which is often years prior to the launch of a commercial product.Further patent term adjustments and restorations may extend the original patent term:Patent term adjustment is a statutory right available to all U.S.patent applicants to provide relief in theevent that a patent g

105、rant is delayed during examination by the U.S.Patent and Trademark Office(USPTO).Patent term restoration is a statutory right provided to U.S.patent holders that claim inventions subject toreview by the FDA.To compensate for a portion of the time invested in clinical trials and the FDA reviewprocess

106、,a single patent for a pharmaceutical product may be eligible for patent term restoration.Patentterm restoration is determined by a formula that cannot be calculated until product approval due to theuncertainty of the duration of clinical trials and the time it takes the FDA to review an application

107、.There isa five-year cap on any restoration,and no patents expiration date may be extended beyond 14 yearsfrom FDA approval.Some countries outside the U.S.similarly offer forms of patent term restoration forpatents claiming inventions subject to a local review by a regulatory agency.For example,Supp

108、lementary Protection Certificates are available to extend the life of a European patent up to anadditional five years(subject to a 15-year cap from European Medicines Agency(EMA)approval).Also,in Japan,South Korea,Australia,and other jurisdictions,patent terms can be extended up to five years,depend

109、ing on the length of regulatory review and other factors.9Loss of effective patent protection for pharmaceuticals,especially for non-biologic products,typically results in the loss of effective market exclusivity for the product,often leading to a severe and rapid decline in revenues for the product

110、.However,in some cases the innovator company may retain exclusivity despite approval of the generic,biosimilar,or other follow-on versions of a new medicine beyond the expiration of the compound patent through manufacturing trade secrets,later-expiring patents on manufacturing processes,methods of u

111、se or formulations,or data protection that may be available under pharmaceutical regulatory laws.Changes to the laws and regulations governing these protections could result in earlier loss of effective market exclusivity.The primary forms of data protection are as follows:Regulatory authorities in

112、major markets generally grant data package protection for a period of years following new drug approvals in recognition of the substantial investment required to complete clinical trials.Data package protection prohibits other manufacturers from submitting regulatory applications for marketing appro

113、val in reliance on the innovator companys regulatory submission data for the drug.The base period of data package protection depends on the country.For example,the period is generally five years in the U.S.(12 years for new biologics as described below),effectively 10 years in Europe,and eight years

114、 in Japan.The period begins on the date of product approval and runs concurrently with the patent term for any relevant patent.Under the BPCIA,the FDA has the authority to approve biosimilars.A competitor seeking approval of a biosimilar must file an application to show its molecule is highly simila

115、r to an approved innovator biologic and include a certain amount of safety and efficacy data that the FDA will consider on a case-by-case basis.Under the data protection provisions of this law,the FDA cannot approve a biosimilar application until 12 years after initial marketing approval of the inno

116、vator biologic,subject to certain conditions.In the U.S.,the FDA has the authority to grant additional data protection for approved drugs where the sponsor conducts specified testing in pediatric or adolescent populations within a specified time period.If granted,this pediatric exclusivity provides

117、an additional six months of exclusivity,which is added to the term of data protection and,for products other than biologics,to the term of any relevant patents,to the extent these protections have not already expired.While the term of the pediatric exclusivity begins upon the expiration of the relev

118、ant patent,pediatric exclusivity is a regulatory exclusivityi.e.,a bar to generic or biosimilar approval,not a patent right.Under the U.S.orphan drug law,a specific use of a drug or biologic can receive orphan designation if it is intended to treat a disease or condition affecting fewer than 200,000

119、 people in the U.S.,or affecting more than 200,000 people but not reasonably expected to recover its development and marketing costs through U.S.sales.Among other benefits,orphan designation entitles the particular use of the drug to seven years of market exclusivity,meaning that the FDA cannot(with

120、 limited exceptions)approve another marketing application for the same drug for the same indication until expiration of the seven-year period.Unlike pediatric exclusivity,the orphan exclusivity period is independent of and runs in parallel with any applicable patents.Outside the major markets,the ad

121、equacy and effectiveness of intellectual property protection for pharmaceuticals varies widely,and in a number of these markets we are unable to patent our products or to enforce the patents that we receive for our products.Under the Trade-Related Aspects of Intellectual Property(TRIPs)Agreement adm

122、inistered by the World Trade Organization,more than 140 countries have agreed to provide non-discriminatory protection for most pharmaceutical inventions and to assure that adequate and effective rights are available to patent owners.Certain developing countries limit protection for biopharmaceutica

123、l products under their interpretation of flexibilities allowed under the TRIPs Agreement.Thus,some types of patents,such as those on new uses of compounds or new forms of molecules,are not available in certain developing countries.Further,many developing countries,and some developed countries,do not

124、 provide effective data package protection even though it is specified in the TRIPs Agreement.Our Intellectual Property PortfolioWe consider intellectual property protection for certain products,processes,uses,and formulationsparticularly with respect to those products discussed belowto be important

125、 to our operations.In addition to the patents and data protection identified below,we may hold patents on manufacturing processes,formulations,devices,or uses that extend exclusivity beyond the dates shown below.For approved products,dates include,where applicable,pending or granted patent term exte

126、nsions.10The most relevant U.S.patent protection or data protection and associated expiry dates for our major or recently launched patent-protected marketed products are as follows:Cyramza is protected by a compound patent and biologics data protection(2026).Emgality is protected by a compound paten

127、t(2033)and biologics data protection(2030).Jardiance,and the related combination product Glyxambi,is protected by a compound patent(2028).Jaypirca is protected by a compound patent(2037)and by data protection(2028).Mounjaro is protected by a compound patent(2036)and by data protection(2027).Olumiant

128、 is protected by a compound patent(2032).Retevmo is protected by a compound patent(2037)and by data protection(2025).Reyvow is protected by a compound patent(2030).Taltz is protected by a compound patent(2030)and by biologics data protection(2028).Trulicity is protected by a compound patent(2027)and

129、 by biologics data protection(2027).Verzenio is protected by a compound patent(2031).Outside the U.S.,important patent protection or data protection includes:Baqsimi is protected by data protection in Japan(2026).Cyramza is protected by a compound patent(2028)and by data protection(2024)in major Eur

130、opeancountries,and by a compound patent(2026)and by data protection(2023)in Japan.Emgality is protected by a compound patent(2033)and by data protection(2028)in major Europeancountries,and by a compound patent(2035)and by data protection(2029)in Japan.Jardiance is protected by a compound patent in m

131、ajor European countries(2029)and Japan(2030).Mounjaro is protected by a compound patent in major European countries(2037)and Japan(2040).Olumiant is protected by a compound patent(2032)and by data protection(2027)in major Europeancountries,and by a compound patent(2033)and by data protection(2025)in

132、 Japan.Retevmo is protected by a compound patent(2037)and by data protection(2031)in major Europeancountries,and by a compound patent(2038)and by data protection(2029)in Japan.Reyvow is protected by data protection(2032)in major European countries,and a compound patent(2028)and by data protection(20

133、32)in Japan.Taltz is protected by a compound patent(2031)and data protection(2027)in major European countriesand a compound patent(2030)and data protection(2024)in Japan.Trulicity is protected by a compound patent(2029)and by data protection(2024)in major Europeancountries and by a compound patent(2

134、029)and by data protection(2023)in Japan.Verzenio is protected by a compound patent(2033)and data protection(2028)in major Europeancountries and by a compound patent(2034)and data protection(2026)in Japan.The following product candidates are the most relevant currently under regulatory review.Upon a

135、pproval,we expect relevant compound patent and data protections to apply:Donanemab has been submitted for regulatory review in the U.S.for the treatment of early Alzheimersdisease.In January 2023,the FDA issued a complete response letter for our accelerated approvalsubmission.Phase III trials are on

136、going.Lebrikizumab has been submitted for regulatory review in the U.S.and Europe for the treatment of atopicdermatitis.Mirikizumab has been submitted for regulatory review in the U.S.,Europe,and Japan for the treatment ofulcerative colitis.11Worldwide,we sell all of our major products under tradema

137、rks consisting of our product names,logos,and unique product appearances(e.g.,the appearance of our Trulicity autoinjector)that we consider in the aggregate to be important to our operations.Trademark protection varies throughout the world,with protection continuing in some countries as long as the

138、mark is used,and in other countries as long as it is registered.Registrations are normally for fixed but renewable terms.Trademark protection typically extends beyond the patent and data protection for a product.Patent Licenses and CollaborationsMost of our major products are not subject to signific

139、ant license and collaboration agreements.For information on our license and collaboration agreements,see Item 8,Financial Statements and Supplementary DataNote 4:Collaborations and Other Arrangements.Patent Challenges In the U.S.,the Drug Price Competition and Patent Term Restoration Act of 1984,com

140、monly known as the Hatch-Waxman Act,authorizes the FDA to approve generic versions of innovative pharmaceuticals(other than biologics,which are discussed below in more detail)when the generic manufacturer has not conducted safety and efficacy studies but files an Abbreviated New Drug Application(AND

141、A).In an ANDA,the generic manufacturer must demonstrate only pharmaceutical equivalence and bioequivalence between the generic version and the New Drug Application(NDA)-approved-drug,not safety and efficacy.Establishing pharmaceutical equivalence and bioequivalence is generally straightforward and i

142、nexpensive for the generic company.Absent a patent challenge,the FDA cannot approve an ANDA until after certain of the innovators patents expire.However,after the innovator has marketed its product for four years,a generic manufacturer may file an ANDA alleging that one or more of the patents listed

143、 in the innovators NDA are invalid or not infringed.This allegation is commonly known as a Paragraph IV certification.If the innovator responds by filing suit against the generic manufacturer,the FDA is then prohibited from approving the generic companys application for a 30-month period(which can b

144、e shortened or extended by the trial court judge hearing the patent challenge).If one or more of the NDA-listed patents are challenged,the first filer(s)of a Paragraph IV certification may be entitled to a 180-day period of market exclusivity over all other generic manufacturers.Generic manufacturer

145、s use Paragraph IV certifications extensively to challenge patents on innovative pharmaceuticals.In addition,generic companies have shown willingness to launch at risk,i.e.,after receiving ANDA approval but before final resolution of their patent challenge.Under the BPCIA,the FDA cannot approve an a

146、pplication for a biosimilar product until data protection expires,12 years after initial marketing approval of the innovator biologic,and an application may not be submitted until four years following the date the innovator biologic was first approved.However,the BPCIA does provide a mechanism for a

147、 prospective biosimilar competitor to challenge the validity of an innovators patents as early as four years after initial marketing approval of the innovator biologic.The patent litigation scheme under the BPCIA,and the BPCIA itself,is complex and continues to be interpreted and implemented by the

148、FDA,as well as by courts.Courts have held that biosimilar applicants are not required to engage in the BPCIA patent litigation scheme and patent holders retain the right to bring suit under normal patent law procedures if a biosimilar applicant attempts to commercialize a product prior to patent exp

149、iration.Further,in the U.S.,the increased likelihood of generic and biosimilar challenges to innovators intellectual property has increased the risk of loss of innovators market exclusivity.See also CompetitionBiosimilars.In addition,there is a procedure in U.S.patent law,known as inter partes revie

150、w(IPR),which allows any member of the public to file a petition with the USPTO seeking the review of any issued U.S.patent for validity.IPRs are conducted before Administrative Patent Judges in the USPTO using a lower standard of proof than used in federal district court.In addition,the challenged p

151、atents are not accorded the presumption of validity as they are in federal district court.Generic drug companies and even some investment firms have engaged in the IPR process in attempts to invalidate our patents.The use of IPR proceedings after the institution of litigation pursuant to the BPCIA o

152、r Hatch-Waxman Act is currently a topic of debate among legislators.We have also observed,and may continue to observe,changes at the Patent Trial and Appeal Board(PTAB),including with respect to the PTABs policy to discretionarily deny an otherwise meritorious petition for IPR in light of a concurre

153、nt district court proceeding.See Item 1A,Risk FactorsRisks Related to Our BusinessOur long-term success depends on intellectual property protection;if our intellectual property rights are invalidated,circumvented,or weakened,our business will be adversely affected.12Outside the U.S.,the legal doctri

154、nes and processes by which pharmaceutical patents can be challenged vary widely.In recent years,we have experienced an increase in patent challenges from generic manufacturers in many countries outside the U.S.For more information on administrative challenges and litigation involving our intellectua

155、l property rights,see Item 8,Financial Statements and Supplementary DataNote 16:Contingencies.Government Regulation of Our OperationsOur operations are regulated extensively by numerous national,state,and local agencies.Regulation of Products The lengthy process of laboratory and clinical testing,da

156、ta analysis,manufacturing development,and regulatory review necessary for governmental approvals of our products is extremely costly and can significantly delay product introductions and revenue generation.In addition,our operations are subject to complex federal,state,local,and foreign laws and reg

157、ulations concerning relationships with healthcare providers and suppliers,the environment,occupational health and safety,data privacy,and other matters.Evolving regulatory priorities have intensified governmental scrutiny of our operations,including with respect to current Good Manufacturing Practic

158、es(cGMP),quality assurance,and similar regulations.Compliance with the laws and regulations affecting the manufacture and sale of current products and the discovery,development,and introduction of new products and uses will continue to require substantial effort,expense,and capital investment.Of par

159、ticular importance to our business is regulation by the FDA in the U.S.Pursuant to laws and regulations that include the Federal Food,Drug,and Cosmetic Act,the FDA has jurisdiction over all of our products and devices in the U.S.and administers requirements covering the testing,safety,effectiveness,

160、manufacturing,quality control,distribution,labeling,marketing,promotion,advertising,dissemination of information,and post-marketing surveillance of those products and devices.Following approval,our products remain subject to regulation by various agencies in connection with labeling,import,export,st

161、orage,recordkeeping,advertising,promotion,and safety reporting.We conduct extensive post-marketing surveillance of the safety of the products we sell.The FDA may withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after a product reaches

162、the market.The FDA also strictly regulates marketing,labeling,advertising,and promotion of products that are placed on the market.Pharmaceutical products may be promoted only for approved indications and in accordance with the provisions of the approved label.The FDA and other agencies actively enfo

163、rce the laws and regulations prohibiting the promotion of off-label uses.Outside the U.S.,our products and operations are subject to similar regulatory requirements,notably by the EMA in Europe,the Ministry of Health,Labor and Welfare in Japan,and the National Medical Products Administration in Chin

164、a.Specific regulatory requirements vary from country to country.Regulatory and compliance requirements,as well as approval processes outside the U.S.,may differ from those in the U.S.and may involve additional costs,uncertainties,and risks.The FDA and other regulatory agencies outside the U.S.extens

165、ively regulate all aspects of manufacturing quality for pharmaceuticals under their cGMP regulations.We make substantial investments of capital and operating expenses to implement comprehensive,company-wide quality systems and controls in our manufacturing,product development,and process development

166、 operations in an effort to maintain sustained compliance with cGMP and other regulations.However,in the event we fail to adhere to these requirements,we become subject to potential government investigations,regulatory and legal actions,product recalls and seizures,fines and penalties,interruption o

167、f production leading to product shortages,import bans or denials of import certifications,delays or denials in new product approvals or line extensions or supplemental approvals of current products pending resolution of the issues,and reputational harm,any of which would adversely affect our busines

168、s.Certain of our products are manufactured by third parties,and their failure to comply with these regulations could adversely affect us,including through failure to supply product to us or delays in approvals of new products or indications.Any determination by the FDA or other regulatory authoritie

169、s of manufacturing or other deficiencies could adversely affect our business and reputation.We are also subject to a variety of federal,state,local,and foreign environmental,health and safety,and other laws and regulations that may affect our research,development or production efforts.13Emergency Us

170、e AuthorizationsThe Secretary of Health and Human Services may issue an EUA to authorize unapproved medical products,or unapproved uses of approved medical products,to be manufactured,marketed,and sold in the context of an actual or potential emergency that has been designated by the government.An E

171、UA terminates when the emergency determination underlying the EUA terminates,and EUAs can be revoked under other circumstances,the timing of which may occur unexpectedly or be difficult to predict.Outside the U.S.,the emergency use of medical products is subject to regulatory processes and requireme

172、nts that vary and differ from those in the U.S.The COVID-19 pandemic has been designated as a national emergency in the U.S.On the basis of such determination,the FDA granted EUAs for bamlanivimab and etesevimab administered together,certain COVID-19-related uses of baricitinib,and bebtelovimab,and

173、similar actions have been taken by other regulators in certain jurisdictions outside the U.S.However,the FDA has revised,and may in the future further revise,these EUAs in response to the changing conditions of the COVID-19 pandemic,such as the prevalence of variants against which our antibodies hav

174、e varying degrees of efficacy.In May and November 2022,respectively,the FDA announced that bamlanivimab and etesevimab are,and bebtelovimab is,not currently authorized for emergency use for any U.S.region.Other Laws and RegulationsThe marketing,promotional,and pricing practices of pharmaceutical man

175、ufacturers,as well as the manner in which manufacturers interact with purchasers,prescribers,and patients,are subject to various other U.S.federal and state laws,as well as analogous foreign laws and regulations,including the federal anti-kickback statute,the False Claims Act,and state laws governin

176、g kickbacks,false claims,unfair trade practices,and consumer protection.These laws are administered by,among others,the Department of Justice,the Office of Inspector General of the Department of Health and Human Services,the Federal Trade Commission,the Office of Personnel Management,and state attor

177、neys general.State,federal,and foreign governments,agencies,and other regulatory bodies are active in their oversight,enforcement activities,and coordination with respect to pharmaceutical companies,which has resulted in intensified scrutiny,litigation costs,corporate criminal sanctions,and substant

178、ial civil settlements in the pharmaceutical industry.The U.S.Foreign Corrupt Practices Act of 1977(FCPA)prohibits certain individuals and entities,including U.S.publicly traded companies,from promising,offering,or giving anything of value to foreign officials with the corrupt intent of influencing t

179、he foreign official for the purpose of helping the company obtain or retain business or gain any improper advantage.The FCPA also imposes specific recordkeeping and internal controls requirements on U.S.publicly traded companies.As noted above,our business is heavily regulated and therefore involves

180、 significant interaction with officials outside the U.S.Additionally,in many countries outside the U.S.,healthcare providers who prescribe pharmaceuticals are employed by the government and purchasers of pharmaceuticals are government entities;therefore,our interactions with these prescribers and pu

181、rchasers are subject to regulation under the FCPA.In addition to the U.S.application and enforcement of the FCPA,the various jurisdictions in which we operate and supply our products have laws and regulations aimed at preventing and penalizing corrupt and anticompetitive behavior.In recent years,sev

182、eral jurisdictions have enhanced their laws and regulations in this area,increased their enforcement activities,and/or increased the level of cross-border coordination and information sharing.We are,and could in the future become,subject to administrative and legal proceedings and actions,which coul

183、d include claims for civil penalties(including treble damages under the False Claims Act),criminal sanctions,and administrative remedies,including exclusion from U.S.federal and other healthcare programs.It is possible that an adverse outcome in future actions could have a material adverse impact on

184、 our consolidated results of operations,liquidity,and financial position in any given period.We are also subject to a variety of federal,state,local,and foreign environmental,health and safety,and other laws and regulations that may affect our research,development,or production efforts.14Regulations

185、 and Private Payer Actions Affecting Pharmaceutical Pricing,Reimbursement,and Access U.S.There continues to be considerable public and government scrutiny of pharmaceutical pricing.In addition,U.S.government actions to reduce federal spending on entitlement programs,including Medicare and Medicaid,m

186、ay affect payment for our products or services associated with the provision of our products.In August 2022,the U.S.government enacted the Inflation Reduction Act of 2022(IRA).Among other measures,the IRA will require the U.S.Department of Health and Human Services to effectively set prices for cert

187、ain single-source drugs and biologics reimbursed under Medicare Part B and Part D.Generally,these government prices apply nine(medicines approved under an NDA)or thirteen(medicines approved under a Biologics License Application)years following initial FDA approval and will be capped at a statutory c

188、eiling price that is likely to represent a significant discount from average prices to wholesalers and direct purchasers.It is too soon to tell how the U.S.government will set these prices as the law specifies a ceiling price,but not a minimum or floor price.One or more of our significant products m

189、ay be selected,which would have the effect of accelerating revenue erosion prior to patent expiry.The effect of reducing prices and reimbursement for certain of our products would significantly impact our business and consolidated results of operations.The establishment of payment limits or other re

190、strictions by drug affordability review boards and other state level actors would similarly impact us.Other IRA provisions provide for rebate obligations on drug manufacturers that increase prices of Medicare Part B and Part D medicines at a rate greater than the rate of inflation and Part D benefit

191、 redesign that includes replacing the Part D coverage gap discount program with a new manufacturer discounting program.Manufacturers that fail to comply with the IRA may be subject to various penalties,including civil monetary penalties,which could be significant.The IRA takes effect progressively s

192、tarting in 2023,with the first government-set prices effective in 2026.The IRA may meaningfully influence our business strategies and those of our competitors.In particular,the nine-year timeline to set prices for medicines approved under an NDA may reduce the attractiveness of investment in small m

193、olecule innovation.The implications to us of a competitors product being selected for price setting are also uncertain.Provisions of the IRA may be subject to legal challenges or other reformation,and the full impact of the IRA on our business and the pharmaceutical industry remains uncertain.Height

194、ened governmental scrutiny over the manner in which drug manufacturers price their marketed products has also resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to,among other things,bring more transparency to product pricing,review the relati

195、onship between pricing and manufacturer patient programs,and reform government program reimbursement methodologies for drug products.Restrictive or unfavorable pricing,coverage,or reimbursement determinations for our medicines or product candidates by governments,regulatory agencies,courts,or privat

196、e payers could also adversely impact our business and financial results.For example,in April 2022,the Centers for Medicare&Medicaid Services issued the Monoclonal Antibodies Directed Against Amyloid for the Treatment of Alzheimers Disease national coverage determination(the Alzheimers Monoclonal Ant

197、ibody NCD)limiting coverage of FDA-approved monoclonal antibodies that target amyloid for the treatment of Alzheimers disease for people with Medicare only if they are enrolled in qualifying clinical trials.In its current form,the Alzheimers Monoclonal Antibody NCD would result in significantly redu

198、ced coverage for,and negatively impact,our product candidate donanemab,and may negatively impact our business and financial results.Additional policies,regulations,legislation,or enforcement,including those proposed or pursued by the U.S.Congress,the current U.S.presidential administration,and regul

199、atory authorities worldwide,could intensify these efforts and adversely impact our business and consolidated results of operations.15In the U.S.,we are required to provide rebates to the federal government and state governments on their purchases of our pharmaceuticals under various federal and stat

200、e healthcare programs,including state Medicaid and Medicaid Managed Care programs(minimum of 23.1 percent plus adjustments for price increases above the consumer price index over time)and discounts to private entities who treat patients in certain types of healthcare facilities intended to serve low

201、-income and uninsured patients(known as 340B covered entities).Additionally,an annual fee is imposed on pharmaceutical manufacturers and importers that sell branded prescription drugs to specified government programs.Since 2019,the Bipartisan Budget Act has required manufacturers of brand-name drugs

202、,biologics,and biosimilars to provide a discount of 70 percent of the cost of branded prescription drugs for Medicare Part D participants who are in the doughnut hole(the coverage gap in Medicare prescription drug coverage).Beginning in October 2024,under the IRA the 70 percent discount will be repl

203、aced by a 10 percent discount for all Medicare Part D beneficiaries that have met their deductible and incurred out of pocket drug costs below a$2,000 threshold and a 20 percent discount for beneficiaries that have incurred out of pocket drug costs above the$2,000 threshold.Rebates are also negotiat

204、ed in the private sector.We pay rebates to private payers that provide prescription drug benefits to seniors covered by Medicare and to private payers that provide prescription drug benefits to their customers.These rebates are affected by the introduction of competitive products and generics in the

205、 same class.Our approach to the rebates we offer to private payers that provide prescription drug benefits to seniors covered by Medicare may be impacted by the 2020 regulatory amendments to the anti-kickback statutes discount safe harbor,which have currently been stayed until at least January 1,203

206、2.For a discussion of risks related to how we price our products,see Item 1A,Risk FactorsRisks Related to Our BusinessWe face litigation and investigations related to our products,how we price our products,and how we commercialize our products;we could face large numbers of claims in the future,whic

207、h could adversely affect our business,and we are self-insured for such matters.Outside the U.S.Globally,public and private payers are increasingly restricting access to pharmaceuticals based on assessments of comparative effectiveness and value,including through the establishment of formal health te

208、chnology assessment processes.In addition,third-party organizations,including professional associations,academic institutions,and non-profit entities associated with payers,conduct and publish comparative effectiveness and cost/benefit analyses on medicines,the impact of which are uncertain.In most

209、international markets,we operate in an environment of government-mandated cost-containment programs,which may include price controls,international reference pricing(to other countries prices),discounts and rebates,therapeutic reference pricing(to other,often generic,pharmaceutical choices),restricti

210、ons on physician prescription levels,and mandatory generic substitution.In October 2022,the German Parliament passed cost cutting reforms and these reforms were followed by activation of a clawback mechanism in France and implementation of increased mandatory rebates in the United Kingdom.These chan

211、ges may be followed in 2023 by biopharmaceutical-focused austerity measures in more countries in Europe and in other markets.Reforms,including those that may stem from periods of economic downturn or uncertainty,or as a result of high inflation,emergence or escalation of,and responses to,war or unre

212、st(including the Russia-Ukraine war),or government budgeting priorities(including as exacerbated by the COVID-19 pandemic),may continue to result in added pressure on pricing and reimbursement for our products.We cannot predict the extent to which our business may be affected by these or other poten

213、tial future legislative,regulatory,or payer developments.However,in general we expect to see continued focus on regulating pricing,resulting in additional state,federal,and international legislative and regulatory developments that could have further negative effects on pricing and reimbursement for

214、 our products.See Item 7,Managements Discussion and AnalysisExecutive OverviewOther MattersTrends Affecting Pharmaceutical Pricing,Reimbursement,and Access for additional information regarding recent legislative,administrative,and other pricing initiatives and their impact on our results.16Research

215、and DevelopmentOur commitment to research and development dates back more than 140 years.We invest heavily in research and development because we believe it is critical to our long-term competitiveness.At the end of 2022,we employed approximately 9,000 people in pharmaceutical research and developme

216、nt activities,including a substantial number of physicians,scientists holding graduate or postgraduate degrees,and highly skilled technical personnel.Our internal pharmaceutical research focuses primarily on the areas of obesity&diabetes,immunology,neuroscience,and oncology.At the outset of the COVI

217、D-19 pandemic,we also focused on researching and developing potential treatments for COVID-19.In addition to discovering and developing new medicines,we seek to expand the value of existing products through new uses,formulations,and therapeutic approaches that provide additional value to patients.To

218、 supplement our internal efforts,we collaborate with others,including academic institutions and research-based pharmaceutical and biotechnology companies.We use the services of physicians,hospitals,medical schools,and other research organizations worldwide to conduct clinical trials to establish the

219、 safety and effectiveness of our medicines.We also invest in external research and technologies that we believe complement and strengthen our own efforts.These investments can take many forms,including,among others,licensing arrangements,co-development agreements,co-promotion arrangements,joint vent

220、ures,acquisitions,and equity investments.Pharmaceutical development is time-consuming,expensive,and risky.Very few of the candidates discovered by researchers ultimately become approved medicines.The process from discovery to regulatory approval can take over a decade.Candidates can fail at any stag

221、e of the process,and even late-stage candidates sometimes fail to receive regulatory approval or achieve commercial success.The following describes in more detail the research and development process for pharmaceutical products:Phases of New Drug DevelopmentDiscovery PhaseIn the discovery phase,scie

222、ntists identify,design,and synthesize promising candidates by analyzing their effect on biological targets thought to play a role in disease.Targets are often unproven and only candidates that have the desired effect on the target and meet other design criteria move to the next phase of development,

223、which includes the initiation of studies in animals to support regulatory and safety requirements for clinical research in humans.The discovery phase can take years and the probability of any one candidate becoming a medicine is extremely low.Early Development PhaseEarly development includes initial

224、 testing for safety and efficacy and early analyses of manufacturing requirements.Safety testing is initially performed in laboratory tests and animals,as necessary.In general,the first human tests(often referred to as Phase I)are conducted in small groups of subjects to assess safety and evaluate t

225、he potential dosing range.Subsequently,larger populations of patients are studied(Phase II)to identify initial signs of efficacy while continuing to assess safety.In parallel,scientists work to identify safe,effective,and economical manufacturing processes.Long-term animal studies continue to test f

226、or potential safety issues.Of the candidates that enter the early development phase,approximately 10 percent move to the late development phase.The early development phase varies but can take several years to complete.Late Development PhaseLate phase development projects(typically Phase III)have met

227、 initial safety requirements and shown initial evidence of efficacy in earlier studies.As a result,these candidates generally have a higher likelihood of success and trials include larger patient populations to demonstrate safety and efficacy in the disease.These studies are designed to demonstrate

228、the benefit and risk of the potential new medicine and may be compared to competitive therapies,placebo,or both.Phase III studies are generally conducted globally and are designed to support regulatory filings for marketing approval.The duration of Phase III testing varies by disease and may take tw

229、o to four years.17Submission PhaseOnce a potential new medicine is submitted to regulatory agencies,the time to final marketing approval can vary from several months to several years,depending on the disease state,the strength and complexity of available data,the degree of unmet need,and the time re

230、quired for the regulatory agency(ies)to evaluate the submission,which can depend on prioritization by regulators and other factors.There is no guarantee that a potential medicine will receive marketing approval,or that decisions on marketing approvals or indications will be consistent across geograp

231、hic areas.We believe our investments in research,both internally and in collaboration with others,have resulted in a robust pipeline of potential new medicines and new treatment indications in all stages of development.We have a number of new medicine candidates in clinical development or under regu

232、latory review,and we have a larger number of projects in the discovery phase.See Item 7,Managements Discussion and AnalysisExecutive OverviewLate-Stage Pipeline,for more information on our late-stage product candidates.Raw Materials and Product SupplyMost of the principal materials we use in our man

233、ufacturing operations are available from more than one source.However,we obtain certain raw or intermediate materials primarily from only one source.We generally seek to maintain sufficient inventory to supply the market until an alternative source of supply can be implemented,in the event one of th

234、ese suppliers becomes unable to provide the materials or product.However,various developments have led,and may in the future lead,to interruption or shortages in supply until we establish new sources,implement alternative processes,bring new manufacturing facilities online,or pause or discontinue pr

235、oduct sales in one or more markets.The majority of our revenue comes from products produced predominantly in our own facilities.Our principal active ingredient manufacturing occurs at sites we own in the U.S.,including Puerto Rico,and Ireland.Finishing operations,including formulation,filling,assemb

236、ling,delivery device manufacturing,and packaging,take place at a number of sites throughout the world.We utilize third parties for certain active ingredient manufacturing and finishing operations.We manage our supply chain(including our own facilities,contracted arrangements,and inventory)in a way t

237、hat is intended to allow us to meet substantially all expected product demand while maintaining flexibility to reallocate manufacturing capacity to improve efficiency and respond to changes in supply and demand.To maintain supply of our products,we use a variety of techniques,including comprehensive

238、 quality systems,inventory management,and back-up sites.However,pharmaceutical production processes are complex,highly regulated,and vary widely from product to product.Shifting or adding manufacturing capacity can be a very lengthy process requiring significant capital expenditures,process modifica

239、tions,and regulatory approvals.Accordingly,developments such as unplanned plant shutdowns,manufacturing or quality assurance difficulties at one of our facilities or contracted facilities,failure or refusal of a supplier or contract manufacturer to supply contracted quantities,increases in demand on

240、 a supplier,or difficulties in predicting or variability in demand for our products and those of our competitors have led,and may in the future lead,to interruption or higher costs in the supply of certain products,product shortages,or pauses or discontinuations of product sales in one or more marke

241、ts.Further,global transportation and logistics challenges,cost inflation,and tight labor markets,have caused,and in the future may cause,delays in and/or increased costs related to distribution of our medicines,the construction or acquisition of manufacturing capacity,procurement activity,and suppli

242、er or contract manufacturer arrangements.For more information on the additional risks we face in connection with any difficulties,disruptions,and shortages in the manufacturing,distribution,and sale of our products,see Item 1A,Risk FactorsRisks Related to Our BusinessManufacturing,quality,or supply

243、chain difficulties,disruptions,or shortages could lead to product supply problems.In addition,cost inflation,the strain on global transportation,logistics,and labor markets(including as exacerbated by the COVID-19 pandemic and the emergence or escalation of,and responses to,war or unrest,including t

244、he Russia-Ukraine war),global economic downturns or uncertainty,and an increase in overall demand in our industry for certain products and materials have had,and may continue to have,a number of impacts on our business,including increased costs and disruptions in the supply of our medicines.For more

245、 information,see Item 1A,Risk FactorsRisks Related to Our BusinessPublic health outbreaks,epidemics,or pandemics,such as the COVID-19 pandemic,have adversely impacted and may in the future adversely impact our business and operations.and Item 7,Managements Discussion and AnalysisExecutive OverviewOt

246、her MattersCOVID-19 Pandemic.18Quality AssuranceOur success depends in great measure on customer confidence in the quality of our products and in the integrity of the data that support their safety and effectiveness.Product quality requires a total commitment to quality in all parts of our operation

247、s,including research and development,purchasing,facilities planning,manufacturing,distribution,and dissemination of information about our medicines.Quality of production processes involves strict control of ingredients,equipment,facilities,manufacturing methods,packaging materials,and labeling.We pe

248、rform tests at various stages of production processes and on the final product in an effort to ensure that the product meets all applicable regulatory requirements and our internal standards.These tests may involve chemical and physical chemical analyses,microbiological testing,testing in animals,or

249、 a combination thereof.Additional assurance of quality is provided by quality assurance groups that audit and monitor all aspects of quality related to pharmaceutical manufacturing procedures and systems in company operations and at third-party suppliers.Executive Officers of the CompanyThe followin

250、g table sets forth certain information regarding our current executive officers.The term of office for each executive officer expires on the date of the annual meeting of the board of directors,to be held on May 1,2023 in connection with the companys annual meeting of shareholders,or on the date his

251、 or her successor is chosen and qualified.No director or executive officer has a family relationship with any other director or executive officer of the company,as that term is defined for purposes of this disclosure requirement.There is no understanding between any executive officer or director and

252、 any other person pursuant to which the executive officer was selected.19NameAgeTitles and Business ExperienceDavid Ricks55Chair,President,and Chief Executive Officer(CEO)(since 2017).Previously,Mr.Ricks held various leadership roles with Lilly,including senior vice president and president,Lilly Bio

253、-Medicines.Mr.Ricks has 26 years of service with Lilly.Anat Ashkenazi 50Executive Vice President and Chief Financial Officer(since 2021).Previously,Ms.Ashkenazi held various leadership roles with Lilly,including senior vice president,controller and chief financial officer,Lilly Research Laboratories

254、,and vice president,finance and chief financial officer,Lilly Diabetes and Lilly global manufacturing and quality.Ms.Ashkenazi has 21 years of service with Lilly.Eric Dozier56Executive Vice President,Human Resources and Diversity(since 2022).Previously,Mr.Dozier held various leadership roles with Li

255、lly,including senior vice president,chief commercial officer for LoxoLilly,and vice president,global ethics and compliance officer.Mr.Dozier has 25 years of service with Lilly.Anat Hakim53Executive Vice President,General Counsel and Secretary(since 2020).Prior to joining Lilly,Ms.Hakim was senior vi

256、ce president,general counsel and secretary of WellCare Health Plans,Inc.(WellCare)from 2016 to 2018,and executive vice president,general counsel and secretary of WellCare from 2018 to 2020.Prior to joining WellCare,she served as divisional vice president and associate general counsel of intellectual

257、 property litigation at Abbott Laboratories from 2010 to 2013 and divisional vice president and associate general counsel of litigation from 2013 to 2016.Ms.Hakim has three years of service with Lilly.Edgardo Hernandez48Executive Vice President and President,Manufacturing Operations(since 2021).Prev

258、iously,Mr.Hernandez held various leadership roles with Lilly,including senior vice president,global parenteral drug product,delivery devices and regional manufacturing,and vice president,Fegersheim operations.Mr.Hernandez has 18 years of service with Lilly.Patrik Jonsson56Executive Vice President an

259、d President,Lilly Immunology,Lilly USA,and Chief Customer Officer(since 2021).Previously,Mr.Jonsson held various leadership roles with Lilly,including senior vice president and president,Lilly USA,and chief customer officer,senior vice president and president,Lilly Bio-Medicines and president and ge

260、neral manager,Lilly Japan.Mr.Jonsson has 32 years of service with Lilly.Michael Mason 56Executive Vice President and President,Lilly Diabetes(since 2020).Previously,Mr.Mason held various leadership roles with Lilly,including senior vice president,connected care and insulins and vice president of U.S

261、.Diabetes.Mr.Mason has 33 years of service with Lilly.Johna Norton56Executive Vice President,Global Quality(since 2017).Previously,Ms.Norton held various leadership roles with Lilly,including vice president,global quality assurance API manufacturing and product research and development.Ms.Norton has

262、 32 years of service with Lilly.Leigh Ann Pusey60Executive Vice President,Corporate Affairs and Communications(since 2017).Prior to joining Lilly,Ms.Pusey was president and chief executive officer of the American Insurance Association from 2009 to 2017.Ms.Pusey has five years of service with Lilly.D

263、iogo Rau48Executive Vice President and Chief Information and Digital Officer(since 2021).Prior to joining Lilly,Mr.Rau was senior director of information systems and technology for retail and online stores of Apple Inc.from 2011 to 2021.Prior to his tenure at Apple,he served as a partner at McKinsey

264、&Company.Mr.Rau has two years of service with Lilly.Daniel Skovronsky,M.D.,Ph.D.49Executive Vice President,Chief Scientific and Medical Officer,and President,Lilly Research Laboratories(since 2021).Previously,Dr.Skovronsky held various leadership roles with Lilly,including senior vice president,chie

265、f scientific officer,and president,Lilly Research Laboratories,and senior vice president,clinical and product development.Dr.Skovronsky has 12 years of service with Lilly.Jacob Van Naarden38Executive Vice President,CEO,LoxoLilly,and President,Lilly Oncology(since 2021).Previously,Mr.Van Naarden serv

266、ed as Chief Executive Officer-Loxo Oncology at Lilly,and Chief Operating Officer-Loxo Oncology at Lilly.Mr.Van Naarden joined Lilly in 2019 when the company acquired Loxo Oncology,Inc.,where he was the chief operating officer.In previous roles,Mr.Van Naarden worked in various biotechnology investing

267、,operating,and advisory capacities,including positions with HealthCor Management,Aisling Capital,and Goldman Sachs.Mr.Van Naarden has four years of service with Lilly.Alonzo Weems52Executive Vice President,Enterprise Risk Management,and Chief Ethics and Compliance Officer(since 2021).Previously,Mr.W

268、eems held various leadership roles with Lilly,including vice president and deputy general counsel for corporate legal functions,general counsel for Lilly USA,and general counsel for biomedicines and diabetes.Mr.Weems has 25 years of service with Lilly.Anne White54Executive Vice President and Preside

269、nt,Lilly Neuroscience(since 2021).Previously,Ms.White held various leadership roles with Lilly,including senior vice president and president,Lilly Oncology,vice president of Portfolio Management,Chorus,and Next Generation Research and Development.Ms.White has 27 years of service with Lilly.Ilya Yuff

270、a48Executive Vice President and President,Lilly International(since 2021).Previously,Mr.Yuffa held various leadership roles with Lilly,including senior vice president and president,Lilly Bio-Medicines,vice president of U.S.Diabetes,general manager of Italy Hub,and vice president,global ethics and co

271、mpliance officer since 2014.Mr.Yuffa has 26 years of service with Lilly.20Human Capital ManagementOur core valuesintegrity,excellence,and respect for peopleshape our approach to attracting,retaining,engaging,and developing a highly skilled and ethical workforce,which is critical to executing our str

272、ategy.We believe the strength of our workforce significantly contributes to our financial performance and enables us to make life better for people around the world.For instance,most of the products we sell today were discovered or developed by our own scientists,and our long-term success depends on

273、 our ability to continually discover or acquire,develop,and commercialize innovative medicines.We believe that fostering a positive culture that values the contributions of our talented colleagues helps drive our success.We are committed to creating a safe,supportive,ethical,and rewarding work envir

274、onment through strategic focus on our human capital management process,fairness and nondiscrimination in our employment practices,robust training and development opportunities,and competitive pay and benefits.We believe our dedication to promoting diversity,equity,and inclusion(DEI)within our compan

275、y reflects our values and is a key driver of business success and growth.We regularly conduct anonymous employee surveys to seek feedback from our workforce on a variety of topics.These results are reviewed and analyzed by our leaders to identify opportunities to adjust our policies and benefits to

276、improve our employees experience.As a result of our efforts,we believe that we have a highly performing,cohesive workforce and that our employee relations are good.At the end of 2022,we employed approximately 39,000 people,including approximately 21,000 employees outside the U.S.Our employees includ

277、e approximately 9,000 people engaged in research and development activities.Strategy and OversightIn order to build diverse and inclusive teams,our CEO and executive committee set expectations for inclusive leadership and hold leaders accountable for achieving results.Because dedication to human cap

278、ital management is also a core component of our corporate governance,our board of directors regularly engages with management and facilitates a system of reporting designed to monitor human capital management initiatives and progress as part of the overarching framework that guides how we attract,re

279、tain,engage,and develop a workforce that aligns with our values and mission.Diversity,Equity,and InclusionWe are committed to fairness and nondiscrimination in our employment practices,and we deeply value diverse backgrounds,skills,and global perspectives.To fulfill our purpose,we believe we must lo

280、ok at challenges from multiple viewpoints and understand the diverse experiences of the patients who depend on us.We believe that fostering DEI begins with understanding.For example,our Employee Journeys research has yielded important insights about the experiences of women,Black/African American,La

281、tinx,Asian,and LGBTQ+employees at Lilly.The results of this research are reviewed by our senior leadership,and we deploy actions and activities in response to these insights to improve our workplace and corporate culture.In 2020,as part of our DEI and community initiatives,Lilly and the Lilly Founda

282、tion launched the Racial Justice Commitment,with Lilly pledging 25,000 volunteer hours and the Lilly Foundation committing$25 million over five years to help decrease the burden of racial injustice and its effects on communities of color.The Racial Justice Commitment aims to drive change across five

283、 areas:internal people development,health equity,social impact,diversity partners,and family sustaining jobs,through the use of financial and people resources.From 2020 through 2022,we have made progress in these efforts,including nearly tripling our spending with Black-owned businesses,committing o

284、ver$98 million in minority-led venture capital firms,serving over 30,000 volunteer hours to advance racial justice initiatives,and expanding our Skills First Program at Lilly for individuals without four-year college degrees.Since 2017,we have committed to increasing women,Black/African American,Lat

285、inx,and Asian representation in leadership roles,and we actively monitor our progress.From the end of 2018 through the end of 2022,we increased the percentage of women in management globally from 42 percent to 49 percent.For minority group members(MGM)in the U.S.over the same period,we increased man

286、agement representation from 19 percent to 25 percent.Across all levels of our workforce,from the end of 2018 through the end of 2022,we have seen increased representation for MGMs in the U.S.and women globally.Our focus on DEI is also evident at our executive committee and board of directors.Five of

287、 15 current members(approximately 33 percent)of our executive committee(which includes our CEO)are women and three are MGMs.In addition,as of the filing of this report,the companys 13-member board of directors includes five women and six members who are MGMs.21Our efforts in DEI and workplace benefi

288、ts have garnered numerous recognitions,including,in 2022,Top 50 Companies for Diversity by DiversityInc.,Top Companies for Board of Directors by DiversityInc.,Top Companies for Supplier Diversity by DiversityInc.,Top Companies for ESG by DiversityInc.,Americas Best Employers for Women by Forbes,Perf

289、ect Score on the Human Rights Campaign Foundation Corporate Equality Index,Worlds Most Ethical Companies by Ethisphere,Perfect Score on Disability Equity Index Best Places to Work by Disability:IN,Pharmaceutical Innovation Index,Zero Project Award for Access Lilly,and Top Companies for Executive Wom

290、en,Best Companies for Multicultural Women,Best Companies for Dads,70 percent and Higher Inclusion Index by Seramount.Employee DevelopmentWe believe attracting and retaining the best,diverse talent begins with the hiring process.We therefore require hiring managers to consider a diverse pool of candi

291、dates and we strive to provide a diverse panel of interviewers for open positions.We believe that hiring in this way helps ensure that people from all backgrounds have equal opportunity to advance their careers.In early 2022,we launched Discover,a 12-month new employee onboarding program with multip

292、le touchpoints designed to foster integration into Lilly,to accelerate learning in their new roles and to create connections to further a sense of belonging at Lilly.Discover was shaped in part by external benchmarking,feedback from employees,and learnings from onboarding remotely during the COVID-1

293、9 pandemic.We offer training to enable our employees to perform their duties in our highly regulated industry.We also strive to cultivate a culture that promotes ongoing learning by encouraging employees to seek further education and growth experiences,helping them build rewarding careers.We have in

294、troduced online programming to facilitate access to our learning and development offerings in addition to our in-person programs.Many training courses are designed to improve accessibility for people with disabilities and other unique needs.Across Lilly,we are continuously working to design learning

295、 experiences to be more inclusive and effective.In addition,we have implemented development tools and resources for all employees,improved our talent programs and processes to provide broader access to information,and increased transparency regarding career development and advancement at Lilly.Emplo

296、yee resource groups(ERGs)are another important component of developing talent at Lilly.We currently have 11 ERGs representing groups including women,MGMs,LGBTQ+individuals,veterans,and people with disabilities.ERGs offer our diverse workforce opportunities to build relationships,engage with senior l

297、eaders,advance our caring community,and offer unique insights and perspectives to improve our business.We have continued our efforts to create an inclusive workplace with the goal of ensuring that all employees feel safe to speak up and share their ideas at work.Our Make it Safe to Thrive education

298、and awareness program is designed to help employees and leaders understand how individual psychological safety can be created and enhanced and includes live and online training.In late 2022,we introduced a new version of Make it Safe to Thrive for leaders that continues to focus on psychological saf

299、ety and creating an inclusive environment.Leaders are provided the opportunity to work through challenging conversations and situations currently being navigated in the workplace.Lilly is committed to fostering a culture of diversity and respect in the workplacean environment free of discrimination,

300、harassment,or retaliation of any kind.In 2022,as part of our annual review of The Red Book and related policies and procedures,we revised the Global Conduct in the Workplace procedure to continue to help ensure that we maintain a respectful,safe,inclusive,and professional workplace.Employee Health a

301、nd SafetyWe strive to foster a healthy,vibrant work environment,which includes keeping our employees safe.We seek to create a companywide culture where best-in-class safety practices are consistently followed.To do this,we assess and continuously attempt to improve our companywide safety performance

302、 to promote the well-being of employees and to help safeguard communities where we operate.As the COVID-19 pandemic has evolved,we have continued to take various measures(as necessary)to protect and support the health and safety of our employees globally.We believe a holistic approach and dedication

303、 to safety helps us be our best as we deliver on our company purpose to improve lives around the world.22Information Available on Our WebsiteOur company website is .None of the information accessible on or through our website is incorporated into this Annual Report on Form 10-K.We make available thr

304、ough the website,free of charge,our company filings with the SEC as soon as reasonably practicable after we electronically file them with,or furnish them to,the SEC.These include our Annual Reports on Form 10-K,Quarterly Reports on Form 10-Q,Current Reports on Form 8-K,proxy statements,registration

305、statements,and any amendments to those documents.The link to our SEC filings is copies of the companys Annual Report on Form 10-K and Quarterly Reports on Form 10-Q that are filed with the SEC are available without charge upon written request to:ELI LILLY AND COMPANYc/o General Counsel and Secretary

306、Lilly Corporate CenterIndianapolis,Indiana 46285In addition,the Governance section of our website includes our corporate governance guidelines,board of directors and committee information(including committee charters),and our articles of incorporation and bylaws.The link to our corporate governance

307、information is routinely post important information for investors in the“Investors”section of our website,.We may use our website as a means of disclosing material,non-public information and for complying with our disclosure obligations under Regulation FD.Accordingly,investors should monitor the“In

308、vestors”section of our website,in addition to following our press releases,filings with the SEC,public conference calls,presentations,and webcasts.We may also use social media channels to communicate with investors and the public about our business,products and other matters,and those communications

309、 could be deemed to be material information.The information contained on,or that may be accessed through,our website or social media channels,is not incorporated by reference into,and is not a part of,this Annual Report on Form 10-K.23Item 1A.Risk FactorsIn addition to the other information containe

310、d in this Annual Report on Form 10-K,the following risk factors should be considered carefully in evaluating our company.It is possible that our business,financial condition,liquidity,cash flows,or results of operations could be materially adversely affected by any of these risks.Certain of these ri

311、sks could also adversely affect the companys reputation.Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial could also adversely affect our business and reputation.Risks Related to Our BusinessPharmaceutical research and development is very cost

312、ly and highly uncertain;we may not succeed in developing,licensing,or acquiring commercially successful products sufficient in number or value to replace revenues of products that have lost or will lose intellectual property protection or are displaced by competing products or therapies.There are ma

313、ny difficulties and uncertainties inherent in pharmaceutical research and development,the introduction of new products,and business development activities to enhance our product pipeline.There is a high rate of failure inherent in new drug discovery and development.To bring a drug from the discovery

314、 phase to market can take over a decade and often costs in excess of$2 billion.Failure can occur at any point in the process,including in later stages after substantial investment.As a result,most funds invested in research programs will not generate financial returns.New product candidates that app

315、ear promising in development may fail to reach the market or may have only limited commercial success because of efficacy or safety concerns,inability to obtain or maintain necessary regulatory approvals or payer reimbursement or coverage,the application of pricing controls,limited scope of approved

316、 uses,label changes,changes in the relevant treatment standards or the availability of new or better competitive products,difficulty or excessive costs to manufacture,or infringement of the patents or intellectual property rights of others.Regulatory agencies establish high hurdles for the efficacy

317、and safety of new products and indications.Delays,uncertainties,unpredictabilities,and inconsistencies in drug approval processes across markets and agencies can result in delays in product launches,lost market opportunity,potential impairment of inventories,and other negative impacts.In addition,it

318、 can be very difficult to predict revenue growth rates of or variability in demand for new products and indications.We cannot state with certainty when or whether our products now under development will be approved or launched;whether,if initially granted,such approval will be maintained;whether we

319、will be able to develop,license,or otherwise acquire additional product candidates or products;or whether our products,once launched,will be commercially successful.We must maintain a continuous flow of successful new products and successful new indications or line extensions for existing products,b

320、oth through our internal efforts and our business development activities,sufficient both to cover our substantial research and development costs and to replace revenues that are lost as profitable products become subject to pricing controls,lose intellectual property exclusivity,or are displaced by

321、competing products or therapies.Failure to do so in the short-term or long-term would have a material adverse effect on our business,results of operations,cash flows,and financial position.We engage in various forms of business development activities to enhance our product pipeline,including licensi

322、ng arrangements,co-development agreements,co-promotion arrangements,joint ventures,acquisitions,and equity investments.There are substantial risks associated with identifying successful business development targets and consummating related transactions.Increased focus on business combinations in our

323、 industry,including by the Federal Trade Commission and competition authorities in Europe and other jurisdictions,and heightened competition for attractive targets has and could continue to delay,jeopardize or increase the costs of our business development activities.In addition,failures or difficul

324、ties in integrating or retaining new personnel or the operations of the businesses,products,or assets we acquire(including related technology,commercial operations,compliance programs,information security,manufacturing,distribution,and general business operations and procedures)may affect our abilit

325、y to realize the expected benefits of business development transactions and may result in our incurrence of substantial asset impairment or restructuring charges.We also may fail to generate the expected revenue and pipeline enhancement from business development activities due to developments outsid

326、e our control,including unsuccessful clinical trials,issues related to the quality,integrity,or broad applicability of data,regulatory impediments,and commercialization challenges.Accordingly,business 24development transactions may not be completed in a timely manner(if at all),may not result in suc

327、cessful development outcomes or successful commercialization of any product,and may give rise to legal proceedings or regulatory scrutiny.See Item 1,BusinessResearch and DevelopmentPhases of New Drug Development and Item 7,Managements Discussion and AnalysisExecutive OverviewLate-Stage Pipeline,for

328、more details about our current product pipeline.We depend on products with intellectual property protection for most of our revenues,cash flows,and earnings;the loss of effective intellectual property protection for certain of our products has resulted,and in the future is likely to continue to resu

329、lt,in rapid and severe declines in revenues for those products.In the ordinary course of their lifecycles,our products lose significant patent protection and/or data protection in the U.S.,as well as in key jurisdictions outside the U.S.,after a specified period of time.Some products also lose paten

330、t protection as a result of successful third-party challenges.We have faced,and remain exposed to,generic competition following the expiration or loss of such intellectual property protection.For example,following the expiration of patent exclusivity for Alimta in Europe and Japan in June 2021,we ha

331、ve faced generic competition that has rapidly and severely eroded revenue from prior levels,and we expect such competition will continue to erode revenue from current levels in these markets.In addition,as a result of the entry of multiple generics in the U.S.following the expiration of patent and p

332、ediatric exclusivity for Alimta in in the first half of 2022,we began facing,and expect to continue to face,generic competition that has rapidly and severely eroded revenue from prior levels,and we expect will continue to erode revenue from current levels.Certain other significant products no longer

333、 have effective exclusivity through patent protection or data protection.For non-biologic products,loss of exclusivity(whether by expiration of legal rights or by termination thereof as a consequence of litigation)typically results in the entry of one or more generic competitors,leading to a rapid and severe decline in revenues,especially in the U.S.For biologics(such as Humalog,Humulin,Erbitux,Cy