Eli Lilly (LLY) 10-K risk factor changes: FY2022 vs FY2021

- [removed: The] [added: Public health outbreaks, epidemics, or pandemics, such as the] COVID-19 [removed: pandemic has] [added: pandemic, have] adversely impacted and may [removed: continue to] [added: in the future] adversely impact our business and [removed: operations.][added: operations.]

[removed: The focus of resources on COVID-19, widespread protective measures implemented to control the spread of COVID-19,] [added: - Cost inflation] and [removed: the resulting] strain on global transportation, manufacturing, and labor [removed: markets] [added: markets, which] have negatively impacted development, manufacturing, supply, distribution, and sales of our [added: medicines, including through increased costs to provide, and in some cases disruptions in supply or shortages of, our] medicines.

[removed: Although in-person interactions with healthcare professionals have largely resumed, we continue to see a lack of "normal" access and fewer] [added: - Fewer] in-person interactions [removed: by] [added: among] patients and [added: healthcare providers and] our employees with healthcare [removed: professionals.][added: professionals in certain markets.]

These [removed: factors may] [added: pressures have] negatively [removed: affect] [added: affected, and could continue to negatively affect,] our [added: consolidated] results of operations.

These and other risks related to [added: the] COVID-19 [added: pandemic and other actual or threatened public health outbreaks, epidemics, or pandemics] could affect other aspects of our business or intensify other risks inherent in our [removed: business, including potentially resulting in delays or denials in the approval or launch of other products or indications.][added: business.]

The degree to which the COVID-19 pandemic [removed: continues] [added: could continue] to affect us [added: and other actual or threatened public health outbreaks, epidemics, or pandemics could affect us,] will depend on developments that are highly uncertain and beyond our knowledge or control, [removed: including, but not limited to,] [added: including] the duration and severity of the [removed: pandemic,] [added: public health threat,] the actions taken to reduce its transmission, [removed: including widespread availability and efficacy of vaccines,] the introduction and spread of new [removed: variants of the coronavirus that may be resistant to currently approved vaccines,] [added: variants,] the [removed: continuation of existing or implementation] [added: degree and extent] of [removed: new] government restrictions [added: on economic activity, government spending,] and [added: access to healthcare, and] the speed with which, and extent to which, [removed: more stable] economic and operating conditions [removed: resume.][added: recover.]

[added: Should the COVID-19 pandemic, or any other actual or threatened public health outbreak, epidemic, or pandemic, as well as any associated or resulting cost of inflation, supply chain disruption, labor] market impact, recession, [added: depression,] or [removed: depression] [added: other negative contingency,] continue for a prolonged period, these risks could be exacerbated, causing further impact on our business and [removed: operations in the future.][added: operations.]

- Pharmaceutical research and development is very costly 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 [removed: soon] lose intellectual property protection or are displaced by competing products or therapies.

New product candidates that appear 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, [added: the application of pricing controls,] limited scope of approved 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.

[removed: Delays] [added: Delays, uncertainties, unpredictabilities,] and [removed: uncertainties] [added: inconsistencies] in drug approval processes [added: across markets and agencies] can result in delays in product [removed: launches and] [added: launches,] lost market [removed: opportunity.][added: opportunity, potential impairment of inventories, and other negative impacts.]

In addition, it can be very difficult to predict revenue growth rates of [added: or variability in demand for] new products and indications.

We must maintain a continuous flow of successful new products and successful new indications or [removed: brand] [added: line] extensions for existing products, both 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 [added: become subject to pricing controls,] lose intellectual property [removed: exclusivity] [added: exclusivity,] or are displaced by competing products or therapies.

Increased focus on business combinations in our industry, including by the Federal Trade [removed: Commission,] [added: Commission] and [added: 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 difficulties in integrating or retaining new personnel or the operations of the businesses, products, or assets we acquire (including related technology, commercial operations, compliance programs, [added: information security,] manufacturing, distribution, and general business operations and procedures) may affect our ability to realize the expected benefits of business development transactions and may result in our incurrence of substantial asset impairment or restructuring charges.

[removed: Accordingly, business] development transactions may not be completed in a timely manner (if at all), may not result in successful [added: development outcomes or successful] commercialization of any product, and may give rise to legal proceedings or regulatory scrutiny.

See Item 1, [removed: "Business - Research] [added: "Business—Research] and [removed: Development - Phases] [added: Development—Phases] of New Drug Development" and Item 7, "Management's Discussion and [removed: Analysis - Results of Operations - Executive Overview - Late-Stage] [added: Analysis—Executive Overview—Late-Stage] Pipeline," for more details about our current product pipeline.

- We depend on products with intellectual property protection for most of our revenues, cash flows, and earnings; [removed: we have lost or soon will lose] [added: the loss of] effective intellectual property protection for [removed: a number] [added: certain] of our [removed: products, which] [added: products] has [removed: resulted] [added: resulted,] and [added: in the future] is likely to continue to [removed: result] [added: result,] in rapid and severe declines in [removed: revenues.][added: revenues for those products.]

[removed: A number of our products, including Alimta and Forteo, have recently lost, or soon will lose, significant patent protection and/or data protection in the U.S. as well as in key jurisdictions outside the U.S.] We have faced, and remain exposed to, generic competition following the [added: expiration or] loss of such intellectual property protection.

See Item 7, "Management's Discussion and [removed: Analysis - Results of Operations - Executive Overview - Other Matters - Patent] [added: Analysis—Executive Overview—Other Matters—Patent] Matters," and Item 1, [removed: "Business - Patents,] [added: "Business—Patents,] Trademarks, and Other Intellectual Property Rights," for more details.

Our long-term success depends on our ability to continually discover or acquire, develop, and commercialize innovative [removed: new] medicines.

Without strong intellectual property protection, we would be unable to generate the returns necessary to support our significant investments in research and development, as well as the other expenditures required to bring new drugs [added: and indications] to the market.

Changes to such [removed: laws] [added: laws, regulations,] and [removed: regulations] [added: enforcement practices] could reduce protections for our innovative [removed: products.][added: products and indications.]

[removed: In] [added: Changes proposed by] the [added: USPTO to limit the number of, and differences between, patents obtained could also affect the scope of patent protection for our products in the U.S. Also in the] U.S., in addition to the process for challenging patents set forth in the BPCIA, which applies to biologic products, the Hatch-Waxman Act provides generic companies substantial incentives to seek to invalidate our patents covering pharmaceutical products.

As a result, we expect that our U.S. patents on major pharmaceutical products, including biologics, will continue to be routinely challenged in litigation [removed: and may not be upheld.]

[removed: However, if] [added: If] our patents are challenged through this expedited review process, even if we prevail in demonstrating the validity of our patent, our win provides limited precedential value at the PTAB and no precedential value in federal district court, meaning the same patent can be challenged by other competitors.

[removed: Patents,] [added: See Item 1, "Business—Patents,] Trademarks, and Other Intellectual Property Rights," and Item 8, "Financial Statements and Supplementary [removed: Data - Note] [added: Data—Note] 16: Contingencies," for more details.

Our revenues can also be adversely affected by treatment [removed: innovations] [added: innovations, including new modalities,] that eliminate or minimize the need for treatment with our drugs.

Particularly for biosimilars, [removed: recent] health authority guidelines and legislative [removed: proposals] [added: actions] could make it less burdensome for competitor products to enter the market and further incentivize uptake of biosimilars.

[removed: In the U.S., the FDA has begun issuing "interchangeability"] [added: These] designations [removed: for biosimilar products, which] could – subject to state law requirements – enable pharmacies to substitute biosimilars for innovator biological products.

See Item 1, [removed: "Business - Competition"] [added: "Business—Competition"] and [removed: "Business - Research] [added: "Business—Research] and Development," for more details.

To continue to commercialize our products, and advance the research, development, and commercialization of additional [removed: modalities] [added: modalities, indications,] and product candidates, we [removed: may] [added: have expanded, and will likely] need to [removed: expand] [added: further expand,] our workforce, including in the areas of manufacturing, clinical trials management, regulatory affairs, and sales and marketing, both in and outside the U.S. We continue to face intense competition for qualified individuals from numerous multinational pharmaceutical companies, biotechnology companies, academic and other research institutions, as well as employers near our manufacturing and other facilities, which has and may continue to increase our labor costs.

Our ability to attract and retain talent in our increasingly competitive environment may be further complicated by evolving employment [removed: trends arising from the COVID-19 pandemic,] [added: trends,] including [removed: vaccination mandates,] [added: as related to] increased preferences for [removed: remote, alternative,] [added: remote] or flexible work [removed: arrangements,] [added: arrangements; public health outbreaks, epidemics, or pandemics, such as the COVID-19 pandemic; political, social, civil, or cultural unrest; emergence or escalation of,] and [removed: other factors.][added: responses to, war and unrest; or the threat of or perceived potential for any of the foregoing events.]

Our failure to compete effectively for talent could negatively affect sales of our current and any future [removed: approved products, and could result in material financial, legal, commercial, or reputational harm to our business.]

Maintaining the security, confidentiality, [removed: integrity] [added: integrity,] and availability of our IT systems and confidential information is vital to our business.

Our failure, or the failure of our [removed: third party] [added: third-party] service providers, to protect and maintain the security, confidentiality, integrity, and availability of our (or their) IT systems and our confidential information and other data could significantly harm our reputation as well as result in significant costs, including those related to fines, litigation, and obligations to comply with applicable data breach laws.

IT systems are vulnerable to system inadequacies, operating failures, service interruptions or failures, security breaches, malicious intrusions, or cyber-attacks from a variety of [removed: sources.][added: sources, which may remain undetected for significant periods of time.]

Cyber-attacks come in many forms, including the deployment of harmful malware, exploitation of vulnerabilities (including those of third-party software or systems), denial-of-service attacks, the use of social engineering, and other means to compromise the confidentiality, [removed: integrity] [added: integrity,] and availability of our IT systems, confidential information, and other data.

Breaches resulting in the compromise, disruption, degradation, manipulation, loss, theft, destruction, or unauthorized disclosure or use of confidential information, or the unauthorized access to, disruption of, or interference with our IT systems, products and services, can occur in a variety of ways, including [removed: but not limited to,] negligent or wrongful conduct by employees or others with permitted access to our systems and information, or wrongful conduct by hackers, competitors, certain governments or nation-states, or other current or former company personnel.

The healthcare industry has been and continues to be a target for cyber-attacks, and the number of threats has [removed: only] increased over time.

Numerous federal agencies that monitor and regulate internet and cyber-crime have issued guidance, alerts and directives warning of software vulnerabilities that require immediate patching, malicious actors targeting [removed: healthcare related] [added: healthcare-related] systems and nation-state sponsored hacking designed to steal valuable information.

Accordingly, business

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 patent protection as a result of successful third-party challenges.

For example, following the expiration of patent exclusivity for Alimta in Europe and Japan in June 2021, we have 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 pediatric 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.

For example, potential reforms to pharmaceutical legislation in the European Union may threaten the predictability and length of certain pharmaceutical intellectual property incentives.

and may not be upheld.

Recently, the USPTO issued an interim procedure regarding the use of discretionary denials of IPR proceedings when there is parallel district court litigation.

However, it is not clear how this interim procedure could affect the ability of our competitors to institute IPR proceedings after institution of litigation.

In the U.S., the FDA has issued several "interchangeability" designations for biosimilar products, and is expected to continue doing so in the future.

approved products, and could result in material financial, legal, commercial, or reputational harm to our business.

Such vulnerabilities, inadequacies, or failures are in many cases more acute for IT systems associated with recently acquired businesses, and we may be unable to address such vulnerabilities, inadequacies, or failures immediately after acquiring a business.

As a result, our newly acquired businesses could be more vulnerable to potential interruptions, breaches, intrusions, or attacks.

Unassociated third parties present further risks, including by propagating misinformation related to our products, business, and industry.

regulations around the world and could damage public trust in our company.

Similarly significant economic downturns could limit our ability to access capital markets.

As a further example, the financial impact of higher energy prices, defense spending, and inflation due, in part, to the Russia-Ukraine war and resulting geopolitical and economic disruptions, particularly following the COVID-19 pandemic, has further exacerbated financial pressures on governments with single-payer or government funded healthcare systems, leading to increased impetus for increases in rebates, clawbacks, and other reforms to reimbursement systems, particularly in Europe.

For more details, see Item 1, "Business—Regulations and Private Payer Actions Affecting Pharmaceutical Pricing, Reimbursement, and Access."

We are subject to a substantial number of claims involving various current and historical products, litigation and investigations.

In select cases, supply constraints may also lead to pauses, discontinuations or other product availability issues in one or more markets, which could have a material adverse effect on our consolidated results of operations and cash flows.

Regional dependencies may in some cases accentuate risks related to manufacturing and supply.

For example, we, and the pharmaceutical industry generally, depend on China-based partners for integral chemical synthesis, reagents, starting materials, and ingredients.

For example, we have experienced challenges in meeting demand for our incretin products, partially due to the limited availability of competitor therapies.

Despite our ongoing efforts to meet significant expected demand by obtaining additional internal and contracted manufacturing capacity, there can be no assurances that such capacity increases will be realized as expected.

Delays or challenges in operationalizing additional manufacturing capacity would limit our ability to capitalize on expected demand.

Conversely, unexpected contingencies that limit demand for our incretin products would undermine our ability to realize the full benefit of significant capital expenditures that we have incurred, and expect to continue to incur, to augment manufacturing capacity and may also subject us to contractual payment obligations.

The foregoing risks and uncertainties could negatively impact our consolidated results of operations and reputation.

- We derive a significant percentage of our total revenue from relatively few products and sell our products through increasingly consolidated supply chain stakeholders, which may subject us to, or exacerbate, various risks.

We derived direct product and/or alliance revenues of more than $1 billion for each of Trulicity, Verzenio, Taltz, Jardiance (including Glyxambi, Synjardy, and Trijardy XR), Humalog (including Insulin Lispro), our COVID-19 antibodies, and Humulin that collectively accounted for 69 percent of our total revenues in 2022.

In particular, Trulicity accounted for 26 percent of our total revenues in 2022 and we expect GLP-1s, including Mounjaro, which we launched in 2022, to represent a significant and growing portion of our business.

Loss of patent protection, changes in prescription rates, material product liability litigation, unexpected side effects or safety concerns, significant changes in demand, regulatory proceedings, negative publicity affecting doctor or patient confidence, pressure from existing or new competitive products, changes in labeling, pricing, and access pressures, or supply shortages or disruptions for these products or any of our other major products could materially impact our results of operations.

In addition, in the U.S., most of our products are distributed through wholesalers and if one of these significant wholesalers should encounter financial or other difficulties, it might decrease the amount of business the wholesaler does with us or we might be unable to timely collect the amounts that the wholesaler owes us, which could negatively impact our results of operations.

See Item 1, “Business—Marketing and Distribution,” for more details.

Moreover, the negotiating power of health plans, managed care organizations, pharmacy benefit managers, and other supply chain stakeholders has increased due to consolidation, regulatory, and other market impacts, and they, along with governments, increasingly employ formularies to control costs and encourage utilization of certain drugs, including through the use of formulary inclusion, or favorable formulary placement.

Such stakeholders have also increasingly imposed utilization management tools favoring the use of generic products.

As these practices expand, including due to potential further consolidation of U.S. private third-party payers, we may face difficulty in obtaining or maintaining timely or adequate pricing or formulary placement of our products.

We expect that consolidation of supply chain stakeholders will continue to increase competitive and pricing pressures on pharmaceutical manufacturers.

For additional information on pricing and reimbursement for our pharmaceutical products, see "U.S. Private Sector Dynamics" and "Regulations and Private Payer Actions Affecting Pharmaceutical Pricing, Reimbursement, and Access—U.S."

Actual or threatened public 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.

The

We are currently unable to predict the full extent to which the COVID-19 pandemic or any future pandemic, epidemic, or similar public health threat will adversely impact our business and operations in the future.

The COVID-19 pandemic continues to burden healthcare systems worldwide.

As the COVID-19 pandemic continues to develop, we may decide to halt such in-person interactions in the future and, in those cases, expect to resume such interactions as it is safe to do so and in compliance with applicable guidance and requirements.

The strain on global transportation, logistics, and labor markets caused by the COVID-19 pandemic and an increase in overall demand in our industry for certain materials resulting in changed buying patterns and constrained supply have had, and may continue to have, a number of impacts on our business, including increased costs to provide a consistent supply of our medicines where they are needed and disruptions and shortages in the supply of our medicines.

We also face risks and uncertainties related to our COVID-19 therapies, including heightened regulatory scrutiny of our manufacturing practices, quality assurance, and similar regulations, restrictions on administration that limit widespread and timely access to our therapies, and risks related to handling, return, and/or refund of product after delivery by us.

In addition, expedited authorization processes have allowed restricted distribution of products with less than typical safety and efficacy data, and additional data that become available may call into question the safety or effectiveness of our COVID-19 therapies.

The availability of superior or competitive therapies, including therapies that can be administered more easily, or preventative measures such as vaccines, coupled with the unpredictable nature of pandemics, have and could further negatively impact or eliminate demand for our COVID-19 therapies.

We also expect that additional revenue from the sale of bamlanivimab and etesevimab after the first quarter of 2022 will be limited.

Mutations or the spread of other variants of the coronavirus have in some cases impacted the effectiveness of our COVID-19 therapies, and may further render our therapies more or less effective or ineffective.

Furthermore, the FDA has revised, and may in the future revise, any EUA for our COVID-19 therapies in response to the prevalence of variants against which our therapies have varying degrees of efficacy.

It remains difficult to reasonably assess or predict the full extent of the ongoing impact of the COVID-19 pandemic on us.

Should the COVID-19 pandemic, or any future pandemic, epidemic, or similar public health threat, and any associated supply chain disruption, labor

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In particular, we expect that the entry of generic competition for Alimta in the U.S. following the loss of patent exclusivity will cause a rapid and severe decline in revenue for the product and have a material adverse effect on our consolidated results of operations and cash flows.

See Item 1, "Business -

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Similarly, in the event of a significant economic downturn, we could have difficulty accessing credit markets.

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We are currently unable to predict the full extent to which the COVID-19 pandemic or any future pandemic, epidemic, or similar public health threat will adversely impact our business and operations in the future."

In addition, difficulties in predicting or variability in demand for our

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These pressures could continue to negatively affect our future revenues and net income.

For example, pending legislation in the U.S. could result in government negotiation of the price of some of our medicines, including insulin.

However, we cannot predict the likelihood, nature, or extent of current and future health care reform efforts.

While we seek to manage a portion of these exposures through hedging and other risk management techniques, significant fluctuations in currency rates, interest rates, and inflation can have a material impact, either positive or negative, on our

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results of operations.

In addition, the discontinuation, modification, or other reform of the London Interbank Offered Rate (LIBOR), or the replacement of LIBOR with a different reference rate, could increase our interest expense, decrease our cash flows, and/or require us to amend certain of our existing agreements.

- Changes in tax laws or exposure to additional tax liabilities could increase our income taxes and decrease our net income.

For example, in December 2017, the U.S. enacted tax reform legislation significantly revising U.S. tax laws, and a number of other countries are also actively considering or enacting tax changes.

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Management's discussion and analysis of results of operations and financial condition is intended to assist the reader in understanding and assessing significant changes and trends related to [removed: the] [added: our company's] results of operations and financial [removed: position of our consolidated company.][added: position.]

This section provides an overview of our financial results, [removed: recent product and] late-stage pipeline developments, and other matters affecting our company and the pharmaceutical industry.

[removed: COVID-19 Pandemic][added: *COVID-19 Pandemic*]

[removed: In response to] [added: As] the COVID-19 [removed: pandemic,] [added: pandemic evolves,] we [removed: have] [added: remain] focused on [removed: maintaining a supply of our medicines; reducing the strain on the medical system; developing treatments for COVID-19;] protecting the health, safety, and well-being of our employees; supporting [added: the medical system and] our communities; and [removed: ensuring] affordability of and access to our [removed: medicines, particularly insulin.][added: medicines.]

[removed: The] [added: In addition, cost inflation, the] strain on global transportation, logistics, and labor markets [removed: caused] [added: (including as exacerbated] by the COVID-19 pandemic and [added: the emergence or escalation of, and responses to, war or unrest, including the Russia-Ukraine war), global economic downturns or uncertainty, and] an increase in overall demand in our industry for certain [removed: materials resulting in changed buying patterns] [added: products] and [removed: constrained supply] [added: materials] have had, and may continue to have, a number of impacts on our business, including increased costs [removed: to provide a consistent supply of our medicines where they are needed] and [removed: potential] disruptions in the supply of our [removed: medications.][added: medicines.]

The degree to which the COVID-19 pandemic [removed: continues] [added: could continue] to affect us will depend on developments that are highly uncertain and beyond our knowledge or control.

| Revenue | | | $ | [removed: 28,318.4] [added: 28,541.4] | | | | | $ | [removed: 24,539.8] [added: 28,318.4] | | | | | [removed: 15] [added: 1] | | |

| Gross margin | | | [removed: 21,005.6] [added: 21,911.6] | | | | | | [removed: 19,056.5] [added: 21,005.6] | | | | | | [removed: 10] [added: 4] | | |

| Gross margin as a percent of revenue | | | [removed: 74.2] [added: 76.8] | | % | | | | [removed: 77.7] [added: 74.2] | | % | | | | | | |

| Acquired in-process research and development [added: (IPR&D) and development milestones] | | | [removed: 874.9] [added: 908.5] | | | | | | [removed: 660.4] [added: 970.1] | | | | | | [removed: 32] [added: (6)] | | |

| Asset impairment, restructuring, and other special charges | | | [removed: 316.1] [added: 244.6] | | | | | | [removed: 131.2] [added: 316.1] | | | | | | [removed: NM] [added: (23)] | | |

| Other—net, (income) expense | | | [removed: 201.6] [added: 320.9] | | | | | | [removed: (1,171.9)] [added: 201.6] | | | | | | [removed: NM] [added: 59] | | |

| Net income | | | [removed: 5,581.7] [added: 6,244.8] | | | | | | [removed: 6,193.7] [added: 5,581.7] | | | | | | [removed: (10)] [added: 12] | | |

Revenue [added: outside the U.S.] increased [removed: in 2021] [added: 12 percent,] driven by increased [removed: volume and, to a lesser extent,] [added: volume, partially offset by] the [removed: favorable] [added: unfavorable] impact of foreign exchange [removed: rates, partially offset by] [added: rates and, to a lesser extent,] lower realized prices.

The following highlighted items affect comparisons of our [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] financial results:

As the COVID-19 pandemic evolved during 2021, we incurred a net inventory impairment charge primarily due to the combination of changes to [removed: current and forecasted] demand from U.S. and international governments, including changes to our agreement with the U.S. government, and near-term expiry dates of COVID-19 antibodies.

Acquired [removed: In-Process Research] [added: IPR&D] and Development [removed: (IPR&D)] [added: Milestones] (Note 3 to the consolidated financial statements)

Acquired IPR&D [added: and Development Milestones] (Note 3 to the consolidated financial statements)

- We recognized [removed: $1.44 billion] [added: $410.7 million] of net investment [removed: gains] [added: losses] on equity securities.

The following certain new molecular entities (NMEs) are currently in Phase II or Phase III clinical trials or have been submitted for regulatory review [added: or have received regulatory approval] in the U.S., Europe, or Japan.

The following table reflects the status of certain NMEs, including certain other [removed: developments since our Quarterly] [added: developments, up to the time of the filing of this Annual] Report on Form [removed: 10-Q for the quarter ended September 30, 2021.][added: 10-K:]

| Heart failure with preserved ejection fraction | | | Phase III | | | Phase III trials are ongoing. | | | | | | [removed: | | |]

| Nonalcoholic steatohepatitis | | | Phase II | | | Phase II trial is ongoing. | | | | | | [removed: | | |]

| Basal Insulin-Fc | | | Type 1 and 2 diabetes | | | Phase [removed: II] [added: III] | | | Phase [removed: II] [added: III] trials [removed: are ongoing.] [added: initiated in 2022 and 2023.] | | | | | |

| [removed: GGG Tri-Agonist] [added: SSTR4 Agonist] | | | [removed: Obesity] [added: Pain] | | | Phase II | | | Phase II trials are ongoing. | | | | | |

| [removed: GLP-1R NPA | | | Obesity] [added: Crohn's Disease] | | | Phase [removed: II] [added: III] | | | Phase [removed: II] [added: III] trials are ongoing. | | | | | | [added: | | |]

| [removed: Mirikizumab] [added: Abemaciclib (Verzenio®)] | | | [removed: Crohn's Disease] [added: Prostate cancer] | | | Phase III | | | Phase III trials are ongoing. | | | [removed: | | |]

| [removed: IL-2 Conjugate] [added: Rezpegaldesleukin] | | | Systemic lupus erythematosus | | | Phase II | | | Phase II [removed: trials are] [added: trial is] ongoing. | | | | | |

| [removed: PD-1 MAB Agonist] [added: Peresolimab] | | | Rheumatoid arthritis | | | Phase II | | | Phase II trial is ongoing. | | | | | |

| Donanemab | | | Early Alzheimer's disease | | | [removed: Submission initiated] [added: Complete Response Letter] | | | Granted [removed: FDA] [added: U.S. Food and Drug Administration (FDA)] Breakthrough Therapy [removed: designation(3). Initiated a rolling submission] [added: designation(2). Submitted] in the U.S. [added: in 2022 under the accelerated approval pathway. In January 2023, the FDA issued a complete response letter] for [added: the] accelerated approval [removed: in 2021.] [added: submission.] Phase III trials are ongoing. | | | | | |

| GBA1 Gene Therapy (PR001) | | | Parkinson's disease | | | Phase II | | | [removed: Acquired in the Prevail acquisition in 2021.] Granted FDA Fast Track [removed: designation(2).] [added: designation(3).] Phase II [removed: trials are] [added: trial is] ongoing. | | | | | |

| GRN Gene Therapy (PR006) | | | Frontotemporal dementia | | | Phase II | | | [added: Granted FDA Fast Track designation(3). Phase II trial is ongoing.] | | | | | |

| [removed: Imlunestrant | | |] ER+HER2- metastatic breast cancer | | | Phase III | | | Phase III trial is ongoing. | | | | | | [added: | | |]

[removed: (2)] [added: (3)] Fast Track designation is designed to [removed: expedite] [added: facilitate] the development and [added: expedite the] review of [removed: new therapies] [added: medicines] to treat serious conditions and [removed: address] [added: fill an] unmet medical [removed: needs.][added: need.]

The following certain NILEX products for use in the indication described are currently in Phase II or Phase III clinical trials or have been submitted for regulatory review [added: or have received regulatory approval] in the U.S., Europe, or Japan.

The following table reflects the status of certain NILEX products, including certain other [removed: developments since our Quarterly] [added: developments, up to the time of the filing of this Annual] Report on Form [removed: 10-Q for the quarter ended September 30, 2021:][added: 10-K:]

| [removed: Chronic kidney disease] [added: Tirzepatide (Mounjaro®)] | | | [removed: Phase III] [added: Obesity] | | | [added: Submission initiated | | |] Granted FDA Fast Track [removed: designation(3).] [added: designation(2) in 2022. Initiated a rolling submission in the U.S. in 2022.] Phase III trials are ongoing. | | | [removed: | | |]

| [removed: Prostate] [added: Thyroid] cancer | | | [removed: Phase III] [added: Approved(4)] | | | Phase III trial is ongoing. | | | | | | [added: | | |]

[removed: (3)] [added: (2)] Fast Track designation is designed to [removed: expedite] [added: facilitate] the development and [added: expedite the] review of [removed: new therapies] [added: medicines] to treat serious conditions and [removed: address] [added: fill an] unmet medical [removed: needs.][added: need.]

New product candidates that appear 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, [added: the application of pricing controls,] limited scope of approved 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.

| | | | 2022 | | | | | | 2021 | | | | | | | | |

| Research and development | | | $ | 7,190.8 | | | | | $ | 6,930.7 | | | | | 4 | | |

| Marketing, selling, and administrative | | | 6,440.4 | | | | | | 6,431.6 | | | | | | — | | |

| | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

| Earnings per share - diluted | | | 6.90 | | | | | | 6.12 | | | | | | 13 | | |

Research and development expenses increased in 2022, driven primarily by higher development expenses for late-stage assets, partially offset by lower development expenses for COVID-19 antibodies and the favorable impact of foreign exchange rates.

Marketing, selling, and administrative expenses in 2022 remained relatively flat compared to 2021 as increased costs associated with launches of new products and indications were offset by the favorable impact of foreign exchange rates.

2022

- We recognized $908.5 million of acquired IPR&D and development milestones that included the buy-out of substantially all future obligations that were contingent upon the occurrence of certain events linked to the success of our mutant-selective PI3kα inhibitor and a purchase of a Priority Review Voucher.

- We recognized charges of $244.6 million primarily related to an intangible asset impairment for GBA1 Gene Therapy (PR001) due to changes in estimated launch timing.

- We recognized $970.1 million of acquired IPR&D and development milestones that included charges resulting from business development transactions with Foghorn Therapeutics Inc. (Foghorn), Rigel Pharmaceuticals, Inc. (Rigel), and Precision Biosciences, Inc. (Precision).

| ANGPTL3 siRNA | | | Cardiovascular disease | | | Phase II | | | Phase II trial initiated in 2022. | | | | | |

| LP(a) Inhibitor | | | Cardiovascular disease | | | Phase II | | | Phase II trial initiated in 2022. | | | | | |

| LP(a) siRNA | | | Cardiovascular disease | | | Phase II | | | Phase II trial initiated in 2022. | | | | | |

| Orforglipron | | | Obesity | | | Phase II | | | Phase II trials were recently completed. | | | | | |

| Retatrutide | | | Obesity | | | Phase II | | | Phase II trials were recently completed. | | | | | |

| Lebrikizumab(1) | | | Atopic dermatitis | | | Submitted | | | Submitted in the U.S. and Europe in 2022. Phase III trials are ongoing. | | | | | |

| Mirikizumab | | | Ulcerative colitis | | | Submitted | | | Submitted in the U.S., Europe, and Japan in 2022. | | | | | |

| BTLA MAB Agonist | | | Systemic lupus erythematosus | | | Phase II | | | Phase II trial initiated in 2022. | | | | | |

| | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | |

| Remternetug | | | Early Alzheimer's disease | | | Phase III | | | Phase III trial initiated in 2022. | | | | | |

| O-GlcNAcase Inh | | | Alzheimer's disease | | | Phase II | | | Phase II trial is ongoing. | | | | | |

| P2X7 Inhibitor | | | Pain | | | Phase II | | | Phase II trials initiated in 2022. | | | | | |

| | | | | | | | | | | | | | | |

| Pirtobrutinib (JaypircaTM) | | | Mantle cell lymphoma | | | Approved(4) | | | FDA granted accelerated approval(4) in the U.S. in January 2023. Phase III trial is ongoing. | | | | | |

| Imlunestrant | | | Adjuvant Breast Cancer | | | Phase III | | | Phase III trial initiated in 2022. | | | | | |

| Empagliflozin (Jardiance®)(1) | | | Chronic kidney disease | | | Submitted | | | Granted FDA Fast Track designation(2). Submitted in the U.S. and Europe in January 2023. | | |

| Obstructive sleep apnea | | | Phase III | | | Phase III trial initiated in 2022. Granted FDA Fast Track designation(2) in 2022. | | | | | |

| | | | | | | | | | | | |

In addition, as a result of the entry of multiple generics in the U.S. following the expiration of patent and pediatric exclusivity 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.

This decline in revenue will continue to impact period-over-period financial results comparisons, particularly during the first half of 2023.

Our compound patents for Humalog® (insulin lispro) have expired in the U.S. and major international markets, and we have also introduced lower-priced versions of Humalog as part of our insulin access and affordability solutions.

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 unrest (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.

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 certain single-source drugs and biologics reimbursed under Medicare Part B and Part D.

Generally, these government prices apply nine (medicines approved under a New Drug Application) or thirteen (medicines approved under a Biologics License Application) years following initial FDA approval and will be capped at a statutory ceiling 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 may be selected, which would have the effect of accelerating revenue erosion prior to patent expiry.

Earnings per share (EPS) data are presented on a diluted basis.

The U.S. Food and Drug Administration (FDA) granted Emergency Use Authorizations (EUA) for bamlanivimab and etesevimab administered together for higher-risk patients who have been recently diagnosed with mild-to-moderate COVID-19 and for baricitinib for treatment with or without remdesivir in hospitalized COVID-19 patients.

In the third quarter of 2021, the FDA expanded the EUA for bamlanivimab and etesevimab administered together to include post-exposure prophylaxis in certain individuals for the prevention of SARS-CoV-2 infection.

We expect that additional revenue from the sale of bamlanivimab and etesevimab after the first quarter of 2022 will be limited.

In February 2022, the FDA granted an EUA for bebtelovimab for certain high-risk patients who have been recently diagnosed with mild-to-moderate COVID-19.

We have agreed with the U.S. government to supply up to 600,000 doses of bebtelovimab no later than March 31, 2022 for at least $720 million with an option of 500,000 additional doses no later than July 31, 2022.

The FDA has revised, and may in the future revise, any EUA for our COVID-19 therapies in response to the prevalence of variants against which our therapies have varying degrees of efficacy.

The COVID-19 pandemic has, and may continue to, adversely impact our business and operations.

The focus of resources on COVID-19, widespread protective measures implemented to control the spread of COVID-19, and the resulting strain on global transportation, manufacturing, and labor markets have negatively impacted development, manufacturing, supply, distribution, and sales of our medicines.

In addition to decreases in new prescriptions, changes in payer segment mix, and the increased use of patient affordability programs in the U.S., we have experienced, and may continue to experience if the COVID-19 pandemic undergoes resurgent or more severe waves, decreased demand as a result of lack of "normal" access and fewer in-person interactions by patients and our employees with healthcare professionals.

34

We also face risks and uncertainties related to our COVID-19 therapies, including heightened regulatory scrutiny of our manufacturing practices, quality assurance, and similar regulations, restrictions on administration that limit widespread and timely access to our therapies, and risks related to handling, return, and/or refund of product after delivery by us.

The availability of superior or competitive therapies, including therapies that can be administered more easily, or preventative measures such as vaccines, coupled with the unpredictable nature of pandemics, have and could further negatively impact or eliminate demand for our COVID-19 therapies.

Mutations or the spread of other variants of the coronavirus have in some cases impacted the effectiveness of our COVID-19 therapies, and may further render our therapies more or less effective or ineffective.

These factors may negatively affect our results of operations.

It remains difficult to reasonably assess or predict the full extent of the ongoing impact of the COVID-19 pandemic on us.

We are currently unable to predict the full extent to which the COVID-19 pandemic or any future pandemic, epidemic or similar public health threat will adversely impact our business and operations in the future.

| | | | 2021 | | | | | | 2020 | | | | | | | | |

| Operating expenses | | | $ | 13,457.5 | | | | | $ | 12,206.9 | | | | | 10 | | |

| Income before income taxes | | | 6,155.5 | | | | | | 7,229.9 | | | | | | (15) | | |

| Income taxes | | | 573.8 | | | | | | 1,036.2 | | | | | | (45) | | |

| EPS | | | 6.12 | | | | | | 6.79 | | | | | | (10) | | |

NM - not meaningful

Operating expenses, defined as the sum of research and development and marketing, selling, and administrative expenses, increased in 2021, driven primarily by higher development expenses for late-stage assets.

The decreases in net income and EPS in 2021 were driven primarily by reduction in other-net, (income) expense and higher operating expenses, partially offset by higher gross margin.

35

As part of our response to the COVID-19 pandemic, and at the request of the U.S. and international governments, we invested in large-scale manufacturing of COVID-19 antibodies at risk, in order to ensure rapid access to patients around the world.

- We recognized acquired IPR&D charges of $874.9 million related to business development transactions.

2020

- We recognized acquired IPR&D charges of $660.4 million related to business development transactions.

- We recognized charges of $131.2 million primarily related to severance costs incurred as a result of actions taken worldwide to reduce our cost structure.

36

| COVID-19 Antibodies | | | | | | | | | | | | | | |

| Bebtelovimab (LY-CoV1404) | | | COVID-19 | | | Emergency Use Authorization | | | The FDA granted EUA for certain high-risk patients recently diagnosed with mild-to-moderate COVID-19 in February 2022. | | | | | |

| Tirzepatide | | | Type 2 diabetes | | | Submitted | | | Submitted in the U.S. using a priority review voucher and in Europe and Japan in 2021. | | | | | |

| Obesity | | | | | | | | | | | | | | |

| Lebrikizumab(1) | | | Atopic dermatitis | | | Phase III | | | Granted FDA Fast Track designation(2). Announced in 2021 that Phase III trials met primary and all key secondary endpoints. Phase III trials are ongoing. | | | | | |

| Ulcerative colitis | | | Announced in 2021 that Phase III trials met primary and all key secondary endpoints. | | | | | | | | | | | |

| Ulcerative colitis | | | | | | | | | | | | | | |

37

54

Most of the products [added: 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 [removed: new] medicines.

Our products are sold in approximately [removed: 120] [added: 110] countries.

- *Jardiance*®, in collaboration with Boehringer Ingelheim, for the treatment of type 2 diabetes; to reduce the risk of cardiovascular death in adult patients with type 2 diabetes and established cardiovascular disease; and to reduce the risk of cardiovascular death and hospitalizations for heart failure in [removed: adults with heart failure and reduced ejection fraction.][added: adults.]

- *Trulicit*y®, for the treatment of type 2 diabetes [added: in adults] and [added: pediatric patients 10 years of age and older, and] to reduce the risk of major adverse cardiovascular events in adult patients with type 2 diabetes and established cardiovascular disease or multiple cardiovascular risk factors.

- *Retevmo*®, for the treatment of metastatic NSCLC [added: with a rearranged during transfection (RET) gene fusion] in adult patients; for the treatment of advanced metastatic medullary thyroid cancer [added: with a RET mutation] who require systemic therapy in adult and pediatric patients; [removed: and] for the treatment of advanced [added: or] metastatic thyroid cancer [added: with a RET gene fusion] in adult and pediatric patients who require systemic therapy and are radioactive [removed: iodin-refractory.][added: iodine-refractory; and for the treatment 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 refractory classic Hodgkin's [removed: lymphoma and] [added: lymphoma;] for the first-line treatment of non-squamous NSCLC in combination with Alimta and another [removed: agent] [added: agent; for the first-line treatment of squamous NSCLC] in [added: combination with two other agents; for the first-line treatment of hepatocellular carcinoma in combination with another agent; 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 treatment 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 [removed: 20%,] [added: 20 percent,] as determined by a U.S. Food and Drug Administration (FDA) approved test.

- *Olumiant*®, in collaboration with Incyte Corporation, for the treatment of adults with moderately-to-severely active rheumatoid [removed: arthritis and for] [added: arthritis,] moderate to severe atopic [removed: dermatitis.][added: dermatitis, and severe alopecia areata, and for the treatment of hospitalized adults with COVID-19 who require supplemental oxygen, mechanical ventilation, or extracorporeal membrane oxygenation.]

Other [added: products and] therapies, including:

- *Bamlanivimab* and *etesevimab*, administered together, for 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 [removed: (EUA] [added: (Emergency Use Authorization (EUA)] granted in 2021).

[removed: *•Bebtelovimab*,] [added: - *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 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, and for whom alternative COVID-19 treatment options approved or authorized by the FDA are not accessible or clinically appropriate (EUA granted in 2022).

We promote our major products in the U.S. through sales representatives who engage with physicians and other [removed: health care] [added: healthcare] professionals.

We also educate healthcare providers about our products in various other ways, including promoting in online [removed: health care] channels, distributing literature and samples of certain products to physicians, and exhibiting at medical meetings.

In the U.S., most of our products are distributed through wholesalers that serve pharmacies, physicians and other [removed: health care] [added: healthcare] professionals, and hospitals.

In [added: 2022,] 2021, [removed: 2020,] and [removed: 2019,] [added: 2020,] three wholesale distributors in the U.S.—McKesson Corporation, AmerisourceBergen Corporation, and Cardinal Health, Inc.—each accounted for [removed: between 15 percent and 20 percent] [added: a significant percentage] of our consolidated revenue.

Outside the U.S., we promote our products to healthcare providers [removed: primarily] through sales representatives and other [removed: health care] channels.

[removed: Distribution patterns for] [added: The products we market and distribution of] our products [removed: also] vary from country to country.

In most countries in which we operate, we maintain our own sales organizations, but in some [removed: smaller] countries we market our products through [removed: third-party distributors,] [added: third parties,] some of which we have engaged through distribution and promotion arrangements.

For example, we and Boehringer Ingelheim have a global agreement to develop and commercialize a portfolio of diabetes products, including [removed: Trajenta,] [added: Trajenta®,] Jentadueto®, Jardiance, Glyxambi®, Synjardy®, Trijardy® XR, and Basaglar.

For additional information, see Item 8, "Financial Statements and Supplementary [removed: Data - Note 4,] [added: Data—Note 4:] Collaborations and Other Arrangements."

Important competitive factors include effectiveness, safety, and ease of use; formulary placement, price, [added: payer coverage] and [added: reimbursement rates, and] demonstrated cost-effectiveness; [added: regulatory approvals;] marketing effectiveness; and research and development of new products, processes, modalities, and uses.

Most new products [added: 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 competitors introduce new [removed: products] [added: products, uses,] or delivery systems with therapeutic or cost advantages, including by developing new modalities, our products become subject to decreased [removed: sales,] [added: sales volumes,] progressive price reductions, or both.

There can be no assurance that our efforts 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 [added: or uses] developed by our competitors.

In the [removed: U.S. and] [added: U.S.,] Europe, [added: 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 on the safety and efficacy of the innovator product.

As a result, generic manufacturers generally invest far fewer resources than we do [added: for our branded products] in research and development and can price their products significantly lower than our branded products.

Accordingly, when a branded non-biologic pharmaceutical loses its market exclusivity, it normally faces intense price competition from generic forms of the product, which can [removed: cause us to lose] [added: result in the loss of] a significant portion of the product's revenue in a very short period of time.

In [removed: many] [added: certain] countries outside the U.S., intellectual property protection is weak, and we must compete with generic or counterfeit versions of our products relatively shortly after launch.

Globally, most governments have developed abbreviated regulatory pathways to approve biosimilars as follow-ons to innovator-developed biologics, including the Biologics Price Competition and Innovation Act of 2009 (the BPCIA) in the U.S. A number of biosimilars have been licensed under the [removed: BPCIA and] [added: BPCIA, as well as] in [removed: Europe.][added: Europe and Japan.]

[removed: See "- Patents, Trademarks, and Other Intellectual Property Rights."] In addition, 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 developing.

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 [removed: health care] [added: healthcare] provider who prescribed the original biologic product.

[removed: The FDA's] [added: Regulatory] interpretation of important aspects of the laws regulating biosimilars continues to evolve and, therefore, the impact of these laws on our business remains subject to substantial uncertainty.

In the U.S. private sector, consolidation and integration among healthcare [removed: providers] [added: organizations] significantly affects the competitive marketplace for pharmaceuticals.

Health plans, managed care organizations, pharmacy benefit managers, wholesalers, and other supply chain stakeholders have been consolidating into fewer, larger entities, thus enhancing their [removed: purchasing strength] [added: 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 plan's formulary) and reimbursement (the associated out-of-pocket cost to the consumer) to control costs by negotiating [removed: discounted prices] [added: discounts or rebates] in exchange for formulary [removed: inclusion.][added: inclusion and placement.]

Consequently, pharmaceutical companies face increased pressure in [removed: pricing and usage negotiation,] [added: negotiations,] and compete fiercely 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 [removed: rebates.][added: rebates or other concessions.]

As payers and pharmaceutical companies continue to negotiate formulary placement and [removed: pricing,] [added: rebates,] value-based agreements, where [removed: pricing is] [added: rebates may be] based on achievement (or not) of specified outcomes, are another tool that [removed: may] [added: has] become increasingly prevalent.

[removed: Price] [added: 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 therapeutically comparable.

[removed: We expect these downward pricing] [added: These] pressures [removed: will] [added: have negatively affected, and could] continue to negatively [removed: affect] [added: affect,] our consolidated results of operations.

For additional information on pricing and reimbursement for our pharmaceutical products, see [removed: "- Regulations] [added: "—Regulations] and Private Payer Actions Affecting Pharmaceutical Pricing, Reimbursement, and [removed: Access - U.S."][added: Access—U.S."]

- *Mounjaro*®, 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 glycemic control.

- *Jaypirca*TM, for the treatment of adult patients with relapsed or refractory mantle cell lymphoma (MCL) after at least two lines of systemic therapy, including a BTK inhibitor.

In May 2022, the FDA announced that bamlanivimab and etesevimab are not currently authorized for emergency use for any U.S. region.

In November 2022, the FDA announced that bebtelovimab is not currently authorized for emergency use for any U.S. region.

Moreover, governments in some countries leverage generic entrants to drive price concessions through the utilization of volume-based procurement bidding and other measures.

The FDA requirements for interchangeability 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.

While competitors have developed biosimilars that compete with our products, we have developed, and may continue to develop, our own biosimilars.

- 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).

- Mounjaro is protected by a compound patent in major European countries (2037) and Japan (2040).

In January 2023, the FDA issued a complete response letter for our accelerated approval submission.

Phase III trials are ongoing.

- Lebrikizumab has been submitted for regulatory review in the U.S. and Europe for the treatment of atopic dermatitis.

- Mirikizumab has been submitted for regulatory review in the U.S., Europe, and Japan for the treatment of ulcerative colitis.

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.

There continues to be considerable public and government scrutiny of pharmaceutical pricing.

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 certain 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 ceiling 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 may 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 restrictions 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 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 starting 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 molecule innovation.

The implications to us of a competitor’s 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.

Additional policies, regulations, legislation, or enforcement, including those proposed or pursued by the U.S. Congress, the current U.S. presidential administration, and regulatory authorities worldwide, could intensify these efforts and adversely impact our business and consolidated results of operations.

Beginning in October 2024, under the IRA the 70 percent discount will be replaced 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.

For a discussion of risks related to how we price our products, see Item 1A, "Risk Factors—Risks Related to Our Business—We 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, which could adversely affect our business, and we are self-insured for such matters."

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 changes 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 unrest (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.

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 product sales in one or more markets.

From 2020 through 2022, we have made progress in these efforts, including nearly tripling our spending with Black-owned businesses, committing over $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.

In late 2022, we introduced a new version of Make it Safe to Thrive for leaders that continues to focus on psychological safety and creating an inclusive environment.

Leaders are provided the opportunity to work through challenging conversations and situations currently being navigated in the workplace.

- *Trajenta*®, in collaboration with Boehringer Ingelheim, for the treatment of type 2 diabetes.

5

- *Baricitinib* was granted Emergency Use Authorization (EUA) in 2021 for the treatment of COVID-19 in hospitalized adults and pediatric patients 2 years of age or older requiring supplemental oxygen, non-invasive or invasive mechanical ventilation, or extracorporeal membrane oxygenation.

In January 2022, the FDA revised the EUA for bamlanivimab and etesevimab administered together to limit their use to only when the patient is likely to have been infected with or exposed to a variant that is susceptible to this combination treatment.

6

While the products we market vary from country to country, diabetes products constitute the largest single group of our consolidated revenue.

7

However, in the U.S., the product exclusivity period under the BPCIA could be affected by recent government proposals and litigation.

To prove that a biosimilar product is interchangeable, the applicant must demonstrate that the product can be expected to produce the same clinical results as the original biologic product in any given patient, and if the product is administered more than once in a patient, that safety risks and potential for diminished efficacy of alternating or switching between the use of the interchangeable biosimilar biologic product and the original biologic product is no greater than the risk of using the original biologic product without switching.

The FDA has begun to issue "interchangeable" designations for biosimilar products.

For example, a competitor company has developed a version of insulin lispro that competes with our product Humalog.

On the other hand, in collaboration with Boehringer Ingelheim, we developed Basaglar, an insulin glargine product, which has the same amino acid sequence as a product currently marketed by a competitor and has launched as a follow-on biologic in the U.S., and as a biosimilar in Europe and Japan.

However, in March 2020, the FDA began regulating all of our insulin products as "biologics" rather than "drugs." Based on FDA draft guidance, this change may lessen the amount of data required for competitor biosimilar products to enter the market, some of which could be designated as interchangeable and therefore substituted for our insulin products at U.S. pharmacies.

For example, in June 2020, the FDA approved a New Drug Application (NDA) for Semglee, a follow-on insulin glargine product that competes with Basaglar in the U.S., and, in July 2021, Semglee received additional FDA approval as a biosimilar that is interchangeable to its reference insulin glargine product.

8

9

10

- Alimta is protected by pediatric exclusivity (2022).

- Baqsimi is protected by data protection in Japan (2026).

- We have commenced a rolling submission in the U.S. for pirtobrutinib (LOXO-305) for the treatment of mantle cell lymphoma.

- Reyvow has been submitted for regulatory review in certain major European countries for the acute treatment of migraine.

- Tirzepatide has been submitted for regulatory review in the U.S., in Japan, and in certain major European countries as an adjunct to diet and exercise to improve glycemic control in adults with type 2 diabetes.

11

12

13

After an emergency has been announced, the Secretary of Health and Human Services may authorize EUAs for the use of specific products based on criteria established by statute, including that the product at issue may be effective in diagnosing, treating, or preventing serious or life-threatening diseases when there are no adequate, approved, and available alternatives.

An EUA is subject to additional conditions and restrictions, such as the obligation to provide fact sheets for healthcare providers administering the product and those to whom it is administered, adverse event monitoring and reporting, and recordkeeping and reporting requirements by product manufacturers.

The FDA may also establish additional discretionary conditions of authorization that the FDA deems necessary or appropriate to protect the public health, including conditions related to product distribution, product administration and data collection and analysis concerning the safety and effectiveness of the product.

In issuing an EUA, the FDA considers the totality of available scientific evidence regarding quality, safety and efficacy, including the known and potential risks of such products and the adequacy and availability of approved alternatives, among other factors.

An EUA is not a substitute for obtaining FDA approval, licensure, or clearance for use of a product.

The COVID-19 pandemic has been designated as a national emergency in the U.S. On the basis of such determination, the Secretary of Health and Human Services declared that circumstances exist justifying the authorization of emergency use of drugs and biologics during the COVID-19 pandemic.

For example, in January 2022, the FDA revised the EUA for bamlanivimab and etesevimab administered together to limit their use to only when the patient is likely to have been infected with or exposed to a variant that is susceptible to this combination treatment.

In December 2020, the Office of Inspector General of the U.S. Department of Health and Human Services and the Centers for Medicare & Medicaid Services (CMS) issued final rules expanding and modifying existing, and adding new, regulatory "safe harbors" and exceptions, respectively, under the anti-kickback statute and the Ethics in Patient Referrals Act.

We are currently evaluating the impact, if any, these regulatory amendments will have upon becoming effective on our consolidated results of operations, liquidity, and financial position, which is uncertain at this time.

As noted above, outside the U.S., our business is heavily regulated and therefore involves significant interaction with foreign officials.

14

There continues to be considerable public and government scrutiny of pharmaceutical pricing, and measures to address the perceived high cost of pharmaceuticals are being considered at various levels of state and federal government.

The regulatory priorities of the current U.S. presidential administration could further intensify these efforts, which could have a material adverse impact on our business.

No rebates are required at this time in the Medicare Part B (physician and hospital outpatient) program where reimbursement is set on an "average sales price plus 4.3 percent" formula.

Pending legislation could repeal the amendments to the discount safe harbor.

for the fiscal year ended December 31, [removed: 2021][added: 2022]

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): [added: 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 Registrant's most recently completed second fiscal quarter: approximately [removed: $193,649,000,000.][added: $274,342,000,000.]

Number of shares of common stock outstanding as of February [removed: 18, 2022: 952,347,126][added: 17, 2023: 950,296,118]

Portions of the Registrant's Proxy Statement for the [removed: 2022] [added: 2023] Annual Meeting of Shareholders have been incorporated by reference into Part III of this report.

For the Year Ended December 31, [removed: 2021][added: 2022]

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- issues with product supply and regulatory approvals stemming from manufacturing difficulties, disruptions, or shortages, including as a result of [added: unpredictability and variability in] demand, labor shortages, third-party performance, [added: quality,] or regulatory actions [removed: relating] [added: related] to our facilities;

- regulatory actions regarding [removed: currently marketed] [added: operations and] products;

- devaluations in foreign currency exchange [removed: rates,] [added: rates or] changes in interest [removed: rates,] [added: rates] and inflation;

- the impact of global macroeconomic conditions, trade disruptions, [removed: global] disputes, unrest, war, [added: regional dependencies,] or other costs, uncertainties and risks related to engaging in business [removed: in foreign jurisdictions;][added: globally;]

- changes in accounting and reporting standards promulgated by the Financial Accounting Standards Board and the Securities and Exchange Commission (SEC); [removed: and]

- regulatory compliance problems or government [removed: investigations.][added: investigations; and]

If securities 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 restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b).

| [Part I](#i909b702f7db044078a8e3e150503788d_13) | | | | | | | | | | | | | | |

| [Part II](#i909b702f7db044078a8e3e150503788d_34) | | | | | | | | | | | | | | |

| [Part III](#i909b702f7db044078a8e3e150503788d_169) | | | | | | | | | | | | | | |

- dependence on certain products for a significant percentage of our total revenue and an increasingly consolidated supply chain;

- the impact of public health outbreaks, epidemics, or pandemics, such as the COVID-19 pandemic;

- actual or perceived deviation from environmental-, social-, or governance-related requirements or expectations.

| 1.000% Notes due 2022 | | | LLY22 | | | New York Stock Exchange | | |

Yes ☐ No ☒

1

| [Part I](#i1a85401413cf428bb86d28ee6b337a59_16) | | | | | | | | | | | | | | |

| [Part II](#i1a85401413cf428bb86d28ee6b337a59_37) | | | | | | | | | | | | | | |

| [Part III](#i1a85401413cf428bb86d28ee6b337a59_190) | | | | | | | | | | | | | | |

2

- the impact of the evolving COVID-19 pandemic or any future pandemic, epidemic, or similar public health threat and the global response thereto;

- uncertainties related to our efforts to develop, manufacture, and distribute potential treatments for COVID-19;

3

4

At December 31, [removed: 2021,] [added: 2022,] we owned [removed: 9 production] [added: nine production, distribution,] and [removed: distribution] [added: corporate administrative] sites in the United States (U.S.), including Puerto Rico.

[removed: Together with the corporate administrative offices, these] [added: These] facilities contain an aggregate of approximately 8.1 million square feet of floor area dedicated to production, distribution, and administration.

We own production and distribution sites in [removed: 7] [added: seven] countries outside the U.S., containing an aggregate of approximately [removed: 4.7] [added: 4.6] million square feet of floor area.

In the U.S., our research and development facilities contain an aggregate of approximately [removed: 4.4] [added: 4.5] million square feet of floor area, primarily consisting of owned facilities located in Indianapolis and smaller leased sites primarily in San Diego, California; San Francisco, California; and New York, New York.

In 2023, we expect production to commence at an additional approximately 0.4 million square foot facility in Durham, North Carolina, with other production facilities and expansions of production facilities expected to come online in future periods.

31

Information relating to the principal market for our common [removed: stock] [added: stock, dividends,] and related stockholder matters is described in Item 7, "Management's Discussion and Analysis of Results of Operations and Financial Condition" and Item 12, "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters." This information is incorporated herein by reference.

As of February [removed: 18, 2022,] [added: 17, 2023,] there were approximately [removed: 20,641] [added: 19,868] holders of record of our common stock based on information provided by EQ Shareowner Services, our transfer agent.

The following table summarizes the activity related to repurchases of our equity securities during the fourth quarter ended December 31, [removed: 2021:][added: 2022:]

During the three months ended December 31, [removed: 2021,] [added: 2022,] we [removed: repurchased the remaining $500.0 million of shares available under the $8.00 billion share] [added: did not] repurchase [removed: program authorized in June 2018 and $250.0 million of] [added: any] shares [removed: available] under [removed: the] [added: our] $5.00 billion share repurchase program authorized in May 2021.

The following graph compares the return on Lilly stock with that of the Standard & Poor's (S&P) 500 Stock Index and our peer group for the years [removed: 2017] [added: 2018] through [removed: 2021.][added: 2022.]

The graph assumes that, on the last business day of [removed: 2016,] [added: 2017,] a person invested $100 each in Lilly stock, the S&P 500 Stock Index, and the peer group's collective common stock.

Value of $100 Invested on Last Business Day of [removed: 2016] [added: 2017] Comparison of Five-Year Cumulative Total Shareholder Return Among Lilly, S&P 500 Stock Index, and Peer Group(1)

[removed: ][added: ]

| [removed: Dec-16] [added: Dec-17] | | | | | | $ | 100.00 | | | | | $ | 100.00 | | | | | | | | | | | $ | 100.00 | |

It is comprised of the following companies in the pharmaceutical and biotechnology industries: AbbVie Inc.; Amgen Inc.; AstraZeneca PLC; Biogen Inc.; Bristol-Myers Squibb Company; Gilead Sciences Inc.; GlaxoSmithKline plc; Johnson & Johnson; Merck & Co., Inc.; Novartis [removed: AG.;] [added: AG;] Novo Nordisk A/S; Pfizer Inc.; Roche Holding AG; Sanofi S.A.; and Takeda Pharmaceutical Company Limited.

The peer group used for performance benchmarking aligns with the peer group used for executive compensation purposes for [removed: 2021 other than our peer group for performance benchmarking excludes Allergan plc, Celgene Corporation, and Shire plc as they were acquired in 2020, 2019 and 2019, respectively.][added: 2022.]

| October 2022 | | | — | | | $ | — | | — | | | $ | 3,250.0 | |

| November 2022 | | | — | | | — | | | — | | | 3,250.0 | | |

| December 2022 | | | — | | | — | | | — | | | 3,250.0 | | |

| Total | | | — | | | — | | | — | | | | | |

| Dec-18 | | | | | | 140.45 | | | | | | 104.95 | | | | | | | | | | | | 95.62 | | |

| Dec-19 | | | | | | 163.13 | | | | | | 124.15 | | | | | | | | | | | | 125.72 | | |

| Dec-20 | | | | | | 213.80 | | | | | | 126.98 | | | | | | | | | | | | 148.85 | | |

| Dec-21 | | | | | | 355.08 | | | | | | 152.56 | | | | | | | | | | | | 191.58 | | |

| Dec-22 | | | | | | 476.65 | | | | | | 167.09 | | | | | | | | | | | | 156.88 | | |

| October 2021 | | | 2,398 | | | $ | 254.70 | | 2,398 | | | $ | 4,889.1 | |

| November 2021 | | | — | | | — | | | — | | | 4,889.1 | | |

| December 2021 | | | 546 | | | 254.70 | | | 546 | | | 4,750.0 | | |

| Total | | | 2,944 | | | 254.70 | | | 2,944 | | | | | |

32

| Dec-17 | | | | | | 117.83 | | | | | | 117.86 | | | | | | | | | | | | 121.83 | | |

| Dec-18 | | | | | | 165.50 | | | | | | 123.85 | | | | | | | | | | | | 116.49 | | |

| Dec-19 | | | | | | 192.23 | | | | | | 146.23 | | | | | | | | | | | | 153.17 | | |

| Dec-20 | | | | | | 251.93 | | | | | | 149.47 | | | | | | | | | | | | 181.35 | | |

| Dec-21 | | | | | | 418.40 | | | | | | 179.16 | | | | | | | | | | | | 233.41 | | |

33

| ELI LILLY AND COMPANY AND SUBSIDIARIES (Dollars in millions and shares in thousands, except per-share data) | | | | | | Year Ended December 31 | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Revenue (Note 2) | | | | | | | | | | | | $ | [removed: 28,318.4] [added: 28,541.4] | | | | | $ | [removed: 24,539.8] [added: 28,318.4] | | | | | $ | [removed: 22,319.5] [added: 24,539.8] | |

| Cost of sales | | | | | | | | | | | | [removed: 7,312.8] [added: 6,629.8] | | | | | | [removed: 5,483.3] [added: 7,312.8] | | | | | | [removed: 4,721.2] [added: 5,483.3] | | |

| Marketing, selling, and administrative | | | | | | | | | | | | [removed: 6,431.6] [added: 6,440.4] | | | | | | [removed: 6,121.2] [added: 6,431.6] | | | | | | [removed: 6,213.8] [added: 6,121.2] | | |

| Acquired in-process research and development (Note 3) | | | | | | | | | | | | [removed: 874.9] [added: 420.9] | | | | | | [removed: 660.4] [added: 874.9] | | | | | | [removed: 239.6] [added: 660.4] | | |

| Asset impairment, restructuring, and other special charges (Note 5) | | | | | | | | | | | | [removed: 316.1] [added: 244.6] | | | | | | [removed: 131.2] [added: 316.1] | | | | | | [removed: 575.6] [added: 131.2] | | |

| Other—net, (income) expense (Note 18) | | | | | | | | | | | | [removed: 201.6] [added: 320.9] | | | | | | [removed: (1,171.9)] [added: 201.6] | | | | | | [removed: (291.6)] [added: (1,171.9)] | | |

| | | | | | | | | | | | | [removed: 22,162.9] [added: 21,735.0] | | | | | | [removed: 17,309.9] [added: 22,162.9] | | | | | | [removed: 17,053.6] [added: 17,309.9] | | |

| Income before income taxes | | | | | | | | | | | | [removed: 6,155.5] [added: 6,806.4] | | | | | | [removed: 7,229.9] [added: 6,155.5] | | | | | | [removed: 5,265.9] [added: 7,229.9] | | |

| Income taxes (Note 14) | | | | | | | | | | | | [removed: 573.8] [added: 561.6] | | | | | | [removed: 1,036.2] [added: 573.8] | | | | | | [removed: 628.0] [added: 1,036.2] | | |

| Net income [removed: from continuing operations] | | | | | | | | | | | | [removed: 5,581.7] [added: $] | [added: 6,244.8] | | | | | [removed: 6,193.7] [added: $] | [added: 5,581.7] | | | | | [removed: 4,637.9] [added: $] | [added: 6,193.7] | |

| Net income | | | | | | | | | | | | $ | [removed: 5,581.7] [added: 6,244.8] | | | | | $ | [removed: 6,193.7] [added: 5,581.7] | | | | | $ | [removed: 8,318.4] [added: 6,193.7] | |

| Basic | | | | | | | | | | | | [removed: 906,963] [added: 901,736] | | | | | | [removed: 907,634] [added: 906,963] | | | | | | [removed: 931,059] [added: 907,634] | | |

| Diluted | | | | | | | | | | | | [removed: 911,681] [added: 904,619] | | | | | | [removed: 912,505] [added: 911,681] | | | | | | [removed: 935,684] [added: 912,505] | | |

| ELI LILLY AND COMPANY AND SUBSIDIARIES (Dollars in millions) | | | | | | Year Ended December 31 | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Other comprehensive income [removed: (loss) from continuing operations:] [added: (loss):] | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Change in foreign currency translation gains (losses) | | | | | | | | | | | | [removed: 13.5] [added: (248.1)] | | | | | | [removed: 122.1] [added: 13.5] | | | | | | [removed: (89.9)] [added: 122.1] | | |

| Change in net unrealized gains (losses) on securities | | | | | | | | | | | | [removed: (15.9)] [added: (53.2)] | | | | | | [removed: 14.2] [added: (15.9)] | | | | | | [removed: 34.4] [added: 14.2] | | |

| Change in defined benefit pension and retiree health benefit plans (Note 15) | | | | | | | | | | | | [removed: 2,699.4] [added: 616.9] | | | | | | [removed: (157.1)] [added: 2,699.4] | | | | | | [removed: (970.0)] [added: (157.1)] | | |

| Change in effective portion of cash flow hedges | | | | | | | | | | | | [removed: 151.6] [added: 432.9] | | | | | | [removed: (152.9)] [added: 151.6] | | | | | | [removed: 34.3] [added: (152.9)] | | |

| Other comprehensive income (loss) [removed: from continuing operations] before income taxes | | | | | | | | | | | | [removed: 2,848.6] [added: 748.5] | | | | | | [removed: (173.7)] [added: 2,848.6] | | | | | | [removed: (991.2)] [added: (173.7)] | | |

| Benefit (provision) for income taxes related to other comprehensive income (loss) [removed: from continuing operations] | | | | | | | | | | | | [removed: (695.3)] [added: (250.0)] | | | | | | [removed: 200.9] [added: (695.3)] | | | | | | [removed: 151.0] [added: 200.9] | | |

| Other comprehensive [removed: income (loss) from continuing operations,] [added: income,] net of tax (Note 17) | | | | | | | | | | | | [removed: 2,153.3] [added: 498.5] | | | | | | [removed: 27.2] [added: 2,153.3] | | | | | | [removed: (840.2)] [added: 27.2] | | |

| Other comprehensive [removed: income from discontinued operations,] [added: income,] net of tax [removed: (Note 17)] | | | | | | | | | | | | [removed: —] | | | | | | [removed: —] | | | | | | [removed: 56.8] | | | [added: | | | | | | 2,153.3 | | | | | | | | | | | | | | | | | | | | |]

| Other comprehensive [removed: income (loss),] [added: income,] net of tax [removed: (Note 17)] | | | | | | | | | | | | [removed: 2,153.3] | | | | | | [removed: 27.2] | | | | | | [removed: (783.4)] | | | [added: | | | | | | 498.5 | | | | | | | | | | | | | | | | | | | | |]

| Comprehensive income | | | | | | | | | | | | $ | [removed: 7,735.0] [added: 6,743.3] | | | | | $ | [removed: 6,220.9] [added: 7,735.0] | | | | | $ | [removed: 7,535.0] [added: 6,220.9] | |

| ELI LILLY AND COMPANY AND SUBSIDIARIES (Dollars in millions, shares in thousands) | | | | | | December 31 | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | |

| Cash and cash equivalents (Note 7) | | | | | | | | | | | | $ | [removed: 3,818.5] [added: 2,067.0] | | | | | $ | [removed: 3,657.1] [added: 3,818.5] | |

| Short-term investments (Note 7) | | | | | | | | | | | | [removed: 90.1] [added: 144.8] | | | | | | [removed: 24.2] [added: 90.1] | | |

| Accounts receivable, net of allowances of [removed: $22.5 (2021)] [added: $16.0 (2022)] and [removed: $25.9 (2020)] [added: $22.5 (2021)] | | | | | | | | | | | | [removed: 6,672.8] [added: 6,896.0] | | | | | | [removed: 5,875.3] [added: 6,672.8] | | |

| Other receivables | | | | | | | | | | | | [removed: 1,454.4] [added: 1,662.9] | | | | | | [removed: 1,053.7] [added: 1,454.4] | | |

| Inventories (Note 6) | | | | | | | | | | | | [removed: 3,886.0] [added: 4,309.7] | | | | | | [removed: 3,980.3] [added: 3,886.0] | | |

| Prepaid expenses and other [added: current assets] | | | | | | | | | | | | [removed: 2,530.6] [added: 2,954.1] | | | | | | [removed: 2,871.5] [added: 2,530.6] | | |

| Total current assets | | | | | | | | | | | | [removed: 18,452.4] [added: 18,034.5] | | | | | | [removed: 17,462.1] [added: 18,452.4] | | |

| Investments (Note 7) | | | | | | | | | | | | [removed: 3,212.6] [added: 2,901.8] | | | | | | [removed: 2,966.8] [added: 3,212.6] | | |

| Goodwill (Note 8) | | | | | | | | | | | | [removed: 3,892.0] [added: 4,073.0] | | | | | | [removed: 3,766.5] [added: 3,892.0] | | |

| Other intangibles, net (Note 8) | | | | | | | | | | | | [removed: 7,691.9] [added: 7,206.6] | | | | | | [removed: 7,450.0] [added: 7,691.9] | | |

| Deferred tax assets (Note 14) | | | | | | | | | | | | [removed: 2,489.3] [added: 2,792.9] | | | | | | [removed: 2,830.4] [added: 2,489.3] | | |

| Property and equipment, net (Note 9) | | | | | | | | | | | | [removed: 8,985.1] [added: 10,144.0] | | | | | | [removed: 8,681.9] [added: 8,985.1] | | |

| Other noncurrent assets | | | | | | | | | | | | [removed: 4,082.7] [added: 4,337.0] | | | | | | [removed: 3,475.4] [added: 4,082.7] | | |

| Research and development | | | | | | | | | | | | 7,190.8 | | | | | | 6,930.7 | | | | | | 5,976.3 | | |

| Acquired in-process research and development and development milestones (Note 3) | | | | | | | | | | | | 908.5 | | | | | | 970.1 | | | | | | 769.8 | | |

| Basic | | | | | | | | | | | | $ | 6.93 | | | | | $ | 6.15 | | | | | $ | 6.82 | |

| Diluted | | | | | | | | | | | | $ | 6.90 | | | | | $ | 6.12 | | | | | $ | 6.79 | |

| Net income (loss) | | | | | | | | | | | | | | | | | | | | | 6,244.8 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (20.9) | | |

| Retirement of treasury shares | | | (5,607) | | | | | | (3.5) | | | | | | | | | | | | (1,496.5) | | | | | | | | | | | | | | | | | | (5,607) | | | | | | 1,500.0 | | | | | | | | |

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| Other | | | | | | | | | | | | | | | | | | | | | 3.3 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (29.1) | | |

| Balance at December 31, 2022 | | | 950,632 | | | | | | $ | 594.1 | | | | | $ | 6,921.4 | | | | | $ | 10,042.6 | | | | | $ | (3,013.2) | | | | | $ | (3,844.6) | | | | | 450 | | | | | | $ | (50.5) | | | | | $ | 125.6 | |

| ELI LILLY AND COMPANY AND SUBSIDIARIES (Dollars in millions) | | | | | | Year Ended December 31 | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

| Net income | | | | | | | | | | | | $ | 6,244.8 | | | | | $ | 5,581.7 | | | | | $ | 6,193.7 | |

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Research and development costs consist of expenses incurred in performing research and development activities, including but not limited to, compensation and benefits, facilities and overhead expense, clinical trial expense and fees paid to contract research organizations.

Additionally, milestone payment obligations related to these transactions that are incurred prior to regulatory approval of the compound are expensed when the event triggering an obligation to pay the milestone occurs.

Accounting Standards Update (ASU) 2021-10, *Government Assistance*, establishes annual disclosure requirements for companies that analogize to a grant or contribution accounting model for government assistance transactions.

We adopted the standard as of January 1, 2022.

The adoption did not impact our financial statement disclosures.

We adopted the standard in the first quarter of 2022.

The adoption did not have a material impact on our consolidated financial statements.

| | | | 2022 | | | | | | 2021 | | |

| *Mounjaro®* | | | | | | | | | 366.6 | | | | | | — | | | | | | — | | | | | | 115.9 | | | | | | — | | | | | | — | | |

| *Other diabetes* | | | | | | | | | 268.4 | | | | | | 255.7 | | | | | | 258.1 | | | | | | 367.8 | | | | | | 401.6 | | | | | | 344.5 | | |

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We engage in various forms of business development activities to enhance our product pipeline, including acquisitions, collaborations, investments, and licensing arrangements.

*Akouos Acquisition*

In December 2022, we acquired all shares of Akouos for a purchase price that included $12.50 per share in cash (or an aggregate of $327.2 million, net of cash acquired) plus one non-tradable contingent value right (CVR) per share.

The CVR entitles the Akouos shareholders up to an additional $3.00 per share in cash (or an aggregate of approximately $122 million) payable, subject to certain terms and conditions, upon the achievement of certain specified milestones.

Under the terms of the agreement, we acquired potential gene therapy treatments for hearing loss and other inner ear conditions.

The lead gene therapies in clinical development that we acquired included GJB2 (which encodes connexin 26) for a common form of monogenic deafness and hearing loss; AK-OTOF for hearing loss due to mutations in the otoferlin gene; AK-CLRN1 for Usher Type 3A, an autosomal recessive disorder characterized by progressive loss of both hearing and vision; and AK-antiVEGF for vestibular schwannoma.

Our access to Akouos information was limited prior to the acquisition.

As a consequence, we are in the process of determining fair values and tax bases of a significant portion of the assets acquired and liabilities assumed, including the identification and valuation of intangible assets and tax exposures.

The final determination of these amounts will be completed as soon as possible but no later than one year from the acquisition date.

The final determination may result in asset and liability fair values and tax bases that differ from the preliminary estimates and require changes to the preliminary amounts recognized.

| Cash | | | $ | 153.2 | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Research and development | | | | | | | | | | | | 7,025.9 | | | | | | 6,085.7 | | | | | | 5,595.0 | | |

| Net income from discontinued operations (Note 19) | | | | | | | | | | | | — | | | | | | — | | | | | | 3,680.5 | | |

| Earnings from continuing operations - basic | | | | | | | | | | | | $ | 6.15 | | | | | $ | 6.82 | | | | | $ | 4.98 | |

| Earnings from discontinued operations - basic | | | | | | | | | | | | — | | | | | | — | | | | | | 3.95 | | |

| Earnings per share - basic | | | | | | | | | | | | $ | 6.15 | | | | | $ | 6.82 | | | | | $ | 8.93 | |

| Earnings from continuing operations - diluted | | | | | | | | | | | | $ | 6.12 | | | | | $ | 6.79 | | | | | $ | 4.96 | |

| Earnings from discontinued operations - diluted | | | | | | | | | | | | — | | | | | | — | | | | | | 3.93 | | |

| Earnings per share - diluted | | | | | | | | | | | | $ | 6.12 | | | | | $ | 6.79 | | | | | $ | 8.89 | |

55

56

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| Balance at January 1, 2019 | | | 1,057,639 | | | | | | $ | 661.0 | | | | | $ | 6,583.6 | | | | | $ | 11,395.9 | | | | | $ | (3,013.2) | | | | | $ | (5,729.2) | | | | | 604 | | | | | | $ | (69.4) | | | | | $ | 1,080.4 | |

| Net income | | | | | | | | | | | | | | | | | | | | | 8,318.4 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 37.7 | | |

| Other comprehensive income (loss), net of tax | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (794.4) | | | | | | | | | | | | | | | | | | 11.0 | | |

| Retirement of treasury shares | | | (102,640) | | | | | | (64.1) | | | | | | | | | | | | (12,363.4) | | | | | | | | | | | | | | | | | | (102,640) | | | | | | 12,427.5 | | | | | | | | |

| Acquisition of common stock in exchange offer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 65,001 | | | | | | (8,027.5) | | | | | | | | |

| Deconsolidation of Elanco | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (1,028.9) | | |

| Other | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (8.0) | | |

58

| Gain related to disposition of Elanco (Note 19) | | | | | | | | | | | | — | | | | | | — | | | | | | (3,680.5) | | |

| Gain on sale of antibiotic business in China (Note 3) | | | | | | | | | | | | — | | | | | | — | | | | | | (309.8) | | |

| Cash distributed to Elanco upon disposition | | | | | | | | | | | | — | | | | | | — | | | | | | (374.0) | | |

| Cash received for sale of antibiotic business in China | | | | | | | | | | | | — | | | | | | — | | | | | | 354.8 | | |

59

On March 11, 2019, we completed the disposition of our remaining 80.2 percent ownership of Elanco Animal Health Incorporated (Elanco) common stock through a tax-free exchange offer.

As a result, Elanco has been presented as discontinued operations in our consolidated financial statements for all periods presented.

Research and development expenses include the following:

60

We do not expect the transition from the use of LIBOR to an alternative reference rate to have a material impact to our consolidated statements of operations or balance sheets at the initial transition.

61

62

Such adjustments for products shipped in previous periods resulted in approximately 2 percent or less increase to U.S revenue during each of the years ended December 31, 2021, 2020, and 2019.

- Initial fees and developmental milestones we receive in collaborative and other similar arrangements from the partnering of our compounds under development are generally deferred and amortized into income through the expected product approval date.

63

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64

| *Trajenta* *(3)* | | | | | | | | | 82.1 | | | | | | 95.6 | | | | | | 224.8 | | | | | | 290.4 | | | | | | 263.0 | | | | | | 365.8 | | |

| *Other Diabetes* | | | | | | | | | 173.6 | | | | | | 162.5 | | | | | | 158.0 | | | | | | 111.2 | | | | | | 81.5 | | | | | | 88.1 | | |

[added: Our management, with the participation of David] Ricks, president and chief executive officer, and Anat Ashkenazi, [removed: senior] [added: executive] vice president and chief financial officer, evaluated our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of December 31, [removed: 2021,] [added: 2022,] and concluded that they were effective.

Mr. Ricks and Ms. Ashkenazi provided a report on behalf of management on our internal control over financial reporting, in which management concluded that the company's internal control over financial reporting is effective at December 31, [removed: 2021] [added: 2022] based on the framework in "Internal Control—Integrated Framework" (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In addition, Ernst & Young LLP, the company's independent registered public accounting firm, issued an attestation report on the company's internal control over financial reporting as of December 31, [removed: 2021.][added: 2022.]

During the fourth quarter of [removed: 2021,] [added: 2022,] there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Our management, with the participation of David A.

118

Information relating to our board of directors is found in our Definitive Proxy Statement, to be dated on or about March [removed: 18, 2022] [added: 17, 2023] (Proxy Statement), under "Governance - [removed: Board Operations and Governance"] [added: How We Build an Effective Board"] and is incorporated in this Annual Report on Form 10-K by reference.

Information relating to our code of ethics is found in our Proxy Statement under "Governance - [added: How We Operate an Effective] Board [added: - Governance Practices - Board] Oversight [added: - Key Areas] of [removed: Strategy, Compliance,] [added: Oversight by the Board] and [removed: Risk Management] [added: Its Committees] - [added: Governance -] Code of Ethics" and is incorporated in this Annual Report on Form 10-K by reference.

Information about the procedures by which shareholders can recommend nominees to our board of directors is found in our Proxy Statement under [removed: "Shareholder Engagement on Governance Issues] [added: "Governance] - [removed: Shareholder Recommendations and] [added: How We Build an Effective Board - Director] Nominations [removed: for] [added: - Shareholder] Director Candidates" and is incorporated in this Annual Report on Form 10-K by reference.

Information about our audit committee is found in our Proxy Statement under "Governance - [removed: Membership and] [added: How We Operate an Effective Board - Board Structure -] Meetings of the Board and Its Committees - [added: Committees of the Board -] Audit Committee" and is incorporated in this Annual Report on Form 10-K by reference.

Section 16(a) Reporting Compliance

Information about our compliance with Section 16(a) is found in our Proxy Statement under "Ownership of Common Stock - Delinquent Section 16(a) Reports" and is incorporated in this Annual Report on Form 10-K by reference.

Information on director compensation, executive compensation, and [added: talent and] compensation committee matters can be found in the Proxy Statement under "Governance - [added: How We Operate an Effective Board - Board Alignment -] Director Compensation," "- [removed: Membership and] [added: How We Operate an Effective Board - Board Structure -] Meetings of the Board and Its Committees - [added: Committees of the Board - Talent and] Compensation Committee," "Compensation - Compensation Discussion and Analysis," [added: "- Talent] and [added: Compensation Committee Matters," and] "- Executive Compensation." Such information is incorporated in this Annual Report on Form 10-K by reference.

119

The following table presents information as of December 31, [removed: 2021] [added: 2022] regarding the company's compensation plans under which shares of the company's common stock have been authorized for issuance.

| Equity compensation plans approved by security holders | | | — | | | $ | — | | [removed: 50,646,706] [added: 49,953,648] | | |

(1) [removed: 5,605,694] [added: 4,175,980] shares are underlying outstanding equity awards other than options.

| Total | | | — | | | — | | | 49,953,648 | | |

| Total | | | — | | | — | | | 50,646,706 | | |

Information relating to the policies and procedures for approval of related person transactions by our board of directors can be found in the Proxy Statement under "Governance - [removed: Highlights of the Company's Corporate Governance] [added: How We Operate an Effective Board] - [added: Board Alignment -] Conflicts of Interest and Transactions with Related Persons." Such information is incorporated in this Annual Report on Form 10-K by reference.

Information relating to director independence can be found in the Proxy Statement under "Governance - [added: How We Build an Effective Board -] Director [added: Qualifications -] Independence" and is incorporated in this Annual Report on Form 10-K by reference.

Information related to the fees and services of our principal independent accountants, Ernst & Young LLP, can be found in the Proxy Statement under "Audit Matters - Item [removed: 3.][added: 4.]

Ratification of the Appointment of the Independent Auditor - [removed: Audit Committee Report -] Services Performed by the Independent Auditor" and "- Independent Auditor Fees." Such information is incorporated in this Annual Report on Form 10-K by reference.

120

- Consolidated Statements of Operations—Years Ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019][added: 2020]

- Consolidated Statements of Comprehensive Income (Loss)—Years Ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019][added: 2020]

- Consolidated Balance Sheets—December 31, [removed: 2021] [added: 2022] and [removed: 2020][added: 2021]

- Consolidated Statements of Shareholders' Equity—Years Ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019][added: 2020]

- Consolidated Statements of Cash Flows—Years Ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019][added: 2020]

| [removed: [3.1](http://www.sec.gov/Archives/edgar/data/59478/000005947814000078/lly-20131231x10kexhibit31.htm) | | | | | | [Amended Articles of Incorporation](http://www.sec.gov/Archives/edgar/data/59478/000005947814000078/lly-20131231x10kexhibit31.htm)] [added: 10.6] | | | | | | [removed: [Incorporated] [added: [The Lilly Deferred Compensation Plan, as amended](https://www.sec.gov/Archives/edgar/data/59478/000005947814000078/lly-20131231x10kexhibit105.htm)[(1)](https://www.sec.gov/Archives/edgar/data/59478/000005947814000078/lly-20131231x10kexhibit105.htm)[, incorporated] by reference to Exhibit [removed: 3.1] [added: 10.5] to the Company's [removed: Annual Report] [added: annual report] on Form 10-K for the year ended December 31, [removed: 2013](http://www.sec.gov/Archives/edgar/data/59478/000005947814000078/lly-20131231x10kexhibit31.htm)] [added: 2013](https://www.sec.gov/Archives/edgar/data/59478/000005947814000078/lly-20131231x10kexhibit105.htm)] | | |

| [removed: [3.2](https://www.sec.gov/Archives/edgar/data/0000059478/000119312521359144/d246572dex31.htm)] [added: 3.2] | | | | | | [Bylaws, as [removed: amended](https://www.sec.gov/Archives/edgar/data/0000059478/000119312521359144/d246572dex31.htm) | | | | | | [Incorporated] [added: amended, incorporated] by reference to Exhibit [removed: 3.1] [added: 3.2] to the Company's Current Report on Form 8-K filed on [removed: December 16, 2021](https://www.sec.gov/Archives/edgar/data/0000059478/000119312521359144/d246572dex31.htm)] [added: May 4, 2022](https://www.sec.gov/Archives/edgar/data/59478/000005947822000138/bylaws.htm)] | | |

| [removed: [4.1](http://www.sec.gov/Archives/edgar/data/59478/000005947813000010/exhibit41-indenturedatedfe.htm)] [added: 4.1] | | | | | | [Indenture, dated February 1, 1991, between the Company and Deutsche Bank Trust Company Americas, as successor trustee to Citibank, N.A., as [removed: Trustee](http://www.sec.gov/Archives/edgar/data/59478/000005947813000010/exhibit41-indenturedatedfe.htm) | | | | | | [Incorporated] [added: Trustee, incorporated] by reference to Exhibit 4.1 to the [removed: Company](http://www.sec.gov/Archives/edgar/data/59478/000005947813000010/exhibit41-indenturedatedfe.htm)['](http://www.sec.gov/Archives/edgar/data/59478/000005947813000010/exhibit41-indenturedatedfe.htm)[s] [added: Company's] Registration Statement on Form S-3, Registration No. 333-186979](http://www.sec.gov/Archives/edgar/data/59478/000005947813000010/exhibit41-indenturedatedfe.htm) | | |

| [removed: [4.2](http://www.sec.gov/Archives/edgar/data/59478/000095015209001897/c49534exv4w2.htm)] [added: 4.2] | | | | | | [Tripartite Agreement, dated September 13, 2007, appointing Deutsche Bank Trust Company Americas as Successor Trustee under the Indenture listed in Exhibit [removed: 4.1](http://www.sec.gov/Archives/edgar/data/59478/000095015209001897/c49534exv4w2.htm) | | | | | | [Incorporated] [added: 4.1, incorporated] by reference to Exhibit 4.2 to the [removed: Company](http://www.sec.gov/Archives/edgar/data/59478/000095015209001897/c49534exv4w2.htm)['](http://www.sec.gov/Archives/edgar/data/59478/000095015209001897/c49534exv4w2.htm)[s] [added: Company's] Annual Report on Form 10-K for the year ended December 31, 2008](http://www.sec.gov/Archives/edgar/data/59478/000095015209001897/c49534exv4w2.htm) | | |

| [removed: [4.3](https://www.sec.gov/Archives/edgar/data/59478/000005947820000057/lly-20191231x10kexhibit43.htm)] [added: 4.3] | | | | | | [Description of the Company's Common [removed: Stock](https://www.sec.gov/Archives/edgar/data/59478/000005947820000057/lly-20191231x10kexhibit43.htm) | | | | | | [Incorporated] [added: Stock, incorporated] by reference to Exhibit 4.3 to the Company's Annual Report on Form 10-K for the year ended December 31, 2019](https://www.sec.gov/Archives/edgar/data/59478/000005947820000057/lly-20191231x10kexhibit43.htm) | | |

| [removed: [4.4](https://www.sec.gov/Archives/edgar/data/59478/000005947820000057/lly-20191231x10kexhibit44.htm)] [added: 4.4] | | | | | | [Description of the Company's [removed: 1.000% Notes due 2022,] 1.625% Notes due [removed: 2026, and] [added: 2026](https://www.sec.gov/Archives/edgar/data/59478/000005947820000057/lly-20191231x10kexhibit44.htm) [and] 2.125% Notes due [removed: 2030](https://www.sec.gov/Archives/edgar/data/59478/000005947820000057/lly-20191231x10kexhibit44.htm) | | | | | | [Incorporated] [added: 2030, incorporated] by reference to Exhibit 4.4 to the Company's Annual Report on Form 10-K for the year ended December 31, 2019](https://www.sec.gov/Archives/edgar/data/59478/000005947820000057/lly-20191231x10kexhibit44.htm) | | |

| [removed: [4.5](https://www.sec.gov/Archives/edgar/data/59478/000005947820000057/lly-20191231x10kexhibit45.htm)] [added: 4.5] | | | | | | [Description of the Company's 6.77% Notes due [removed: 2036](https://www.sec.gov/Archives/edgar/data/59478/000005947820000057/lly-20191231x10kexhibit45.htm) | | | | | | [Incorporated] [added: 2036, incorporated] by reference to Exhibit 4.5 to the Company's Annual Report on Form 10-K for the year ended December 31, 2019](https://www.sec.gov/Archives/edgar/data/59478/000005947820000057/lly-20191231x10kexhibit45.htm) | | |

| [removed: [4.6](https://www.sec.gov/Archives/edgar/data/59478/000005947820000057/lly-20191231x10kexhibit46.htm)] [added: 4.6] | | | | | | [Description of the Company's 7 1/8% Notes due [removed: 2025](https://www.sec.gov/Archives/edgar/data/59478/000005947820000057/lly-20191231x10kexhibit46.htm) | | | | | | [Incorporated] [added: 2025, incorporated] by reference to Exhibit 4.6 to the Company's Annual Report on Form 10-K for the year ended December 31, 2019](https://www.sec.gov/Archives/edgar/data/59478/000005947820000057/lly-20191231x10kexhibit46.htm) | | |

| [removed: [4.7](https://www.sec.gov/Archives/edgar/data/59478/000005947820000057/lly-20191231x10kexhibit47.htm)] [added: 4.7] | | | | | | [Description of the Company's 0.625% Notes due 2031 and 1.700% Notes due [removed: 2049](https://www.sec.gov/Archives/edgar/data/59478/000005947820000057/lly-20191231x10kexhibit47.htm) | | | | | | [Incorporated] [added: 2049, incorporated] by reference to Exhibit 4.7 to the Company's Annual Report on Form 10-K for the year ended December 31, 2019](https://www.sec.gov/Archives/edgar/data/59478/000005947820000057/lly-20191231x10kexhibit47.htm) | | |

| [removed: [4.8](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit48.htm)] [added: 4.8] | | | | | | [Description of the Company's 0.500% Notes due 2033, 1.125% Notes due 2051, and 1.375% Notes due [removed: 2061](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit48.htm) | | | | | | [Attached](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit48.htm)] [added: 2061, incorporated by reference to Exhibit 4.8 to the Company's Annual Report on Form 10-K for the year ended December 31, 2021](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit48.htm)] | | |

| [removed: [4.9](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit49.htm)] [added: 4.9] | | | | | | [Description of the Company's 1.625% Notes due [removed: 2043](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit49.htm) | | | | | | [Attached](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit49.htm)] [added: 2043, incorporated by reference to Exhibit 4.9 to the Company's Annual Report on Form 10-K for the year ended December 31, 2021](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit49.htm)] | | |

| [removed: [10.1](http://www.sec.gov/Archives/edgar/data/59478/000005947818000188/lly-6302018x10qxexhibit101.htm)] [added: 10.1] | | | | | | [Amended and Restated 2002 Lilly Stock [removed: Plan](http://www.sec.gov/Archives/edgar/data/59478/000005947818000188/lly-6302018x10qxexhibit101.htm)(1) | | | | | | [Incorporated] [added: Plan](http://www.sec.gov/Archives/edgar/data/59478/000005947818000188/lly-6302018x10qxexhibit101.htm)[(1)](http://www.sec.gov/Archives/edgar/data/59478/000005947818000188/lly-6302018x10qxexhibit101.htm)[, incorporated] by reference to Exhibit 10.1 to the [removed: Company](http://www.sec.gov/Archives/edgar/data/59478/000005947818000188/lly-6302018x10qxexhibit101.htm)['](http://www.sec.gov/Archives/edgar/data/59478/000005947818000188/lly-6302018x10qxexhibit101.htm)[s] [added: Company's] Quarterly Report on Form 10-Q for the quarter ended June 30, 2018](http://www.sec.gov/Archives/edgar/data/59478/000005947818000188/lly-6302018x10qxexhibit101.htm) | | |

| [removed: [10.2](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit102.htm)] [added: 10.2] | | | | | | [Form of Performance Award under the 2002 Lilly Stock [removed: Plan](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit102.htm)(1) | | | | | | [Attached](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit102.htm)] [added: Plan](https://www.sec.gov/Archives/edgar/data/59478/000005947823000082/lly-20221231x10kexhibit102.htm)[(1)](https://www.sec.gov/Archives/edgar/data/59478/000005947823000082/lly-20221231x10kexhibit102.htm)[*](https://www.sec.gov/Archives/edgar/data/59478/000005947823000082/lly-20221231x10kexhibit102.htm)] | | |

| [removed: [10.3](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit103.htm)] [added: 10.3] | | | | | | [Form of [removed: Performance] [added: Shareholder Value] Award under the 2002 Lilly Stock [removed: Plan (with non-compete)](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit103.htm)(1) | | | | | | [Attached](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit103.htm)] [added: Plan](https://www.sec.gov/Archives/edgar/data/59478/000005947823000082/lly-20221231x10kexhibit103.htm)[(1)](https://www.sec.gov/Archives/edgar/data/59478/000005947823000082/lly-20221231x10kexhibit103.htm)[*](https://www.sec.gov/Archives/edgar/data/59478/000005947823000082/lly-20221231x10kexhibit103.htm)] | | |

| [removed: [10.4](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit104.htm)] [added: 10.4] | | | | | | [Form of [removed: Performance] [added: Relative Value] Award under the 2002 Lilly Stock [removed: Plan (non-executive officer)](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit104.htm)(1) | | | | | | [Attached](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit104.htm)] [added: Plan](https://www.sec.gov/Archives/edgar/data/59478/000005947823000082/lly-20221231x10kexhibit104.htm)[(1)](https://www.sec.gov/Archives/edgar/data/59478/000005947823000082/lly-20221231x10kexhibit104.htm)[*](https://www.sec.gov/Archives/edgar/data/59478/000005947823000082/lly-20221231x10kexhibit104.htm)] | | |

| [removed: [10.12](https://www.sec.gov/Archives/edgar/data/0000059478/000005947821000122/lly-3312021x10qxexhibit101.htm)] [added: 10.7] | | | | | | [removed: [Form of Restricted Stock Unit Award under the 2002] [added: [The] Lilly [removed: Stock Plan (with non-compete)](https://www.sec.gov/Archives/edgar/data/0000059478/000005947821000122/lly-3312021x10qxexhibit101.htm)(1) | | | | | | [Incorporated] [added: Directors' Deferral Plan, as amended](https://www.sec.gov/Archives/edgar/data/59478/000005947817000183/lly-6302017x10qxexhibit10.htm)[(1)](https://www.sec.gov/Archives/edgar/data/59478/000005947817000183/lly-6302017x10qxexhibit10.htm)[, incorporated] by reference to Exhibit [removed: 10.1] [added: 10] to the [removed: Company](https://www.sec.gov/Archives/edgar/data/0000059478/000005947821000122/lly-3312021x10qxexhibit101.htm)['](https://www.sec.gov/Archives/edgar/data/0000059478/000005947821000122/lly-3312021x10qxexhibit101.htm)[s] [added: Company's] Quarterly Report on Form 10-Q for the quarter ended [removed: March 31, 2021](https://www.sec.gov/Archives/edgar/data/0000059478/000005947821000122/lly-3312021x10qxexhibit101.htm)] [added: June 30, 2017](https://www.sec.gov/Archives/edgar/data/59478/000005947817000183/lly-6302017x10qxexhibit10.htm)] | | |

| [removed: [10.13](https://www.sec.gov/Archives/edgar/data/0000059478/000005947821000122/lly-3312021x10qxexhibit102.htm)] [added: 10.8] | | | | | | [removed: [Release Agreement, effective as of February 9, 2021, by and between] [added: [The] Eli Lilly and Company [removed: and Joshua L. Smiley](https://www.sec.gov/Archives/edgar/data/0000059478/000005947821000122/lly-3312021x10qxexhibit102.htm)(1) | | | | | | [Incorporated] [added: Bonus Plan, as amended](https://www.sec.gov/Archives/edgar/data/0000059478/000005947821000083/lly-20201231x10kexhibit1014.htm)[(1)](https://www.sec.gov/Archives/edgar/data/0000059478/000005947821000083/lly-20201231x10kexhibit1014.htm)[, incorporated] by reference to Exhibit [removed: 10.2] [added: 10.14] to the [removed: Company](https://www.sec.gov/Archives/edgar/data/0000059478/000005947821000122/lly-3312021x10qxexhibit102.htm)['](https://www.sec.gov/Archives/edgar/data/0000059478/000005947821000122/lly-3312021x10qxexhibit102.htm)[s Quarterly] [added: Company's Annual] Report on Form [removed: 10-Q] [added: 10-K] for the [removed: quarter] [added: year] ended [removed: March] [added: December] 31, [removed: 2021](https://www.sec.gov/Archives/edgar/data/0000059478/000005947821000122/lly-3312021x10qxexhibit102.htm)] [added: 2020](https://www.sec.gov/Archives/edgar/data/0000059478/000005947821000083/lly-20201231x10kexhibit1014.htm)] | | |

| [removed: [10.14](https://www.sec.gov/Archives/edgar/data/59478/000005947814000078/lly-20131231x10kexhibit105.htm)] [added: 10.9] | | | | | | [The [removed: Lilly Deferred Compensation Plan, as amended](https://www.sec.gov/Archives/edgar/data/59478/000005947814000078/lly-20131231x10kexhibit105.htm)(1) | | | | | | [Incorporated] [added: Loxo Oncology, Inc. Bonus Plan](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit1017.htm)[(1)](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit1017.htm)[, incorporated] by reference to Exhibit [removed: 10.5] [added: 10.17] to the Company's [removed: annual report] [added: Annual Report] on Form 10-K for the year ended December 31, [removed: 2013](https://www.sec.gov/Archives/edgar/data/59478/000005947814000078/lly-20131231x10kexhibit105.htm)] [added: 2021](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit1017.htm)] | | |

| [removed: [10.15](https://www.sec.gov/Archives/edgar/data/59478/000005947817000183/lly-6302017x10qxexhibit10.htm)] [added: 10.10] | | | | | | [removed: [The Lilly Directors' Deferral Plan,] [added: [2007 Change in Control Severance Pay Plan for Select Employees,] as [removed: amended](https://www.sec.gov/Archives/edgar/data/59478/000005947817000183/lly-6302017x10qxexhibit10.htm)(1) | | | | | | [Incorporated] [added: amended](https://www.sec.gov/Archives/edgar/data/0000059478/000005947821000083/lly-20201231x10kexhibit1015.htm)[(1)](https://www.sec.gov/Archives/edgar/data/0000059478/000005947821000083/lly-20201231x10kexhibit1015.htm)[, incorporated] by reference to Exhibit [removed: 10] [added: 10.15] to the Company's [removed: Quarterly] [added: Annual] Report on Form [removed: 10-Q] [added: 10-K] for the [removed: quarter] [added: year] ended [removed: June 30, 2017](https://www.sec.gov/Archives/edgar/data/59478/000005947817000183/lly-6302017x10qxexhibit10.htm)] [added: December 31, 2020](https://www.sec.gov/Archives/edgar/data/0000059478/000005947821000083/lly-20201231x10kexhibit1015.htm)] | | |

| [removed: [21](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit21.htm)] [added: 21] | | | | | | [List of [removed: Subsidiaries](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit21.htm) | | | | | | [Attached](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit21.htm)] [added: Subsidiaries*](https://www.sec.gov/Archives/edgar/data/59478/000005947823000082/lly-20221231x10kexhibit21.htm)] | | |

| [removed: [23](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit23.htm)] [added: 23] | | | | | | [Consent of Independent Registered Public Accounting [removed: Firm](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit23.htm) | | | | | | [Attached](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit23.htm)] [added: Firm*](https://www.sec.gov/Archives/edgar/data/59478/000005947823000082/lly-20221231x10kexhibit23.htm)] | | |

| [removed: [31.1](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit311.htm)] [added: 31.1] | | | | | | [Rule 13a-14(a) Certification of David [removed: A.] Ricks, Chair, President, and Chief Executive [removed: Officer](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit311.htm) | | | | | | [Attached](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit311.htm)] [added: Officer*](https://www.sec.gov/Archives/edgar/data/59478/000005947823000082/lly-20221231x10kexhibit311.htm)] | | |

| [removed: [31.2](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit312.htm)] [added: 31.2] | | | | | | [Rule 13a-14(a) Certification of Anat Ashkenazi, [removed: Senior] [added: Executive] Vice President and Chief Financial [removed: Officer](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit312.htm) | | | | | | [Attached](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit312.htm)] [added: Officer*](https://www.sec.gov/Archives/edgar/data/59478/000005947823000082/lly-20221231x10kexhibit312.htm)] | | |

| [removed: [32](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit32.htm)] [added: 32] | | | | | | [Section 1350 [removed: Certification](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit32.htm) | | | | | | [Attached](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit32.htm)] [added: Certification*](https://www.sec.gov/Archives/edgar/data/59478/000005947823000082/lly-20221231x10kexhibit32.htm)] | | |

| 101 | | | | | | Interactive Data [removed: File | | | | | | Attached] [added: File*] | | |

| 104 | | | | | | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit [removed: 101) | | | | | | Attached] [added: 101)*] | | |

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| 3.1 | | | | | | [Amended Articles of Incorporation, incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on May 4, 2022](https://www.sec.gov/Archives/edgar/data/59478/000005947822000138/articlesofincorporationlly.htm) | | |

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| 10.5 | | | | | | [Form of Non-Compete Payment Agreement](https://www.sec.gov/Archives/edgar/data/59478/000005947823000082/lly-20221231x10kexhibit105.htm)[(1)](https://www.sec.gov/Archives/edgar/data/59478/000005947823000082/lly-20221231x10kexhibit105.htm)[*](https://www.sec.gov/Archives/edgar/data/59478/000005947823000082/lly-20221231x10kexhibit105.htm) | | |

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* Filed herewith.

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Exhibit | | | | | | | | | | | | Location | | |

121

| [10.5](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit105.htm) | | | | | | [Form of Shareholder Value Award under the 2002 Lilly Stock Plan](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit105.htm)(1) | | | | | | [Attached](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit105.htm) | | |

| [10.6](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit106.htm) | | | | | | [Form of Shareholder Value Award under the 2002 Lilly Stock Plan (with non-compete)](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit106.htm)(1) | | | | | | [Attached](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit106.htm) | | |

| [10.7](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit107.htm) | | | | | | [Form of Shareholder Value Award under the 2002 Lilly Stock Plan (non-executive officer)](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit107.htm)(1) | | | | | | [Attached](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit107.htm) | | |

| [10.8](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit108.htm) | | | | | | [Form of Relative Value Award under the 2002 Lilly Stock Plan](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit108.htm)(1) | | | | | | [Attached](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit108.htm) | | |

| [10.9](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit109.htm) | | | | | | [Form of Relative Value Award under the 2002 Lilly Stock Plan (with non-compete)](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit109.htm)(1) | | | | | | [Attached](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit109.htm) | | |

| [10.10](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit1010.htm) | | | | | | [Form of Relative Value Award under the 2002 Lilly Stock Plan (non-executive)](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit1010.htm)(1) | | | | | | [Attached](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit1010.htm) | | |

| [10.11](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit1011.htm) | | | | | | [Form of Restricted Stock Unit Award under the 2002 Lilly Stock Plan](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit1011.htm)(1) | | | | | | [Attached](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit1011.htm) | | |

| [10.16](https://www.sec.gov/Archives/edgar/data/0000059478/000005947821000083/lly-20201231x10kexhibit1014.htm) | | | | | | [The Eli Lilly and Company Bonus Plan, as amended](https://www.sec.gov/Archives/edgar/data/0000059478/000005947821000083/lly-20201231x10kexhibit1014.htm)(1) | | | | | | [Incorporated by reference to Exhibit 10.14 to the Company's Annual Report on Form 10-K for the year ended December 31, 2020](https://www.sec.gov/Archives/edgar/data/0000059478/000005947821000083/lly-20201231x10kexhibit1014.htm) | | |

| [10.17](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit1017.htm) | | | | | | [The Loxo Oncology, Inc. Bonus Plan](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit1017.htm)[(1)](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit1017.htm) | | | | | | [Attached](https://www.sec.gov/Archives/edgar/data/59478/000005947822000068/lly-20211231x10kexhibit1017.htm) | | |

122

| [10.18](https://www.sec.gov/Archives/edgar/data/0000059478/000005947821000083/lly-20201231x10kexhibit1015.htm) | | | | | | [2007 Change in Control Severance Pay Plan for Select Employees, as amended](https://www.sec.gov/Archives/edgar/data/0000059478/000005947821000083/lly-20201231x10kexhibit1015.htm)(1) | | | | | | [Incorporated by reference to Exhibit 10.15 to the Company's Annual Report on Form 10-K for the year ended December 31, 2020](https://www.sec.gov/Archives/edgar/data/0000059478/000005947821000083/lly-20201231x10kexhibit1015.htm) | | |

| *By* | | | | | | /s/ David [removed: A.] Ricks | | |

| *David [removed: A.] Ricks* | | | | | | | | |

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on February [removed: 23, 2022] [added: 22, 2023] by the following persons on behalf of the Registrant and in the capacities indicated.

| /s/ David [removed: A.] Ricks | | | | | | Chair, President, and Chief Executive Officer (principal executive officer) | | |

| DAVID [removed: A.] RICKS | | | | | | | | |

| /s/ Anat Ashkenazi | | | | | | [removed: Senior] [added: Executive] Vice President and Chief Financial Officer (principal financial officer) | | |

| /s/ Donald [removed: A.] Zakrowski | | | | | | [added: Senior] Vice President, Finance, and Chief Accounting Officer (principal accounting officer) | | |

| DONALD [removed: A.] ZAKROWSKI | | | | | | | | |

| /s/ [removed: J.] Erik Fyrwald | | | | | | Director | | |

| [removed: J.] ERIK FYRWALD | | | | | | | | |

| /s/ Kimberly [removed: H.] Johnson | | | | | | Director | | |

| KIMBERLY [removed: H.] JOHNSON | | | | | | | | |

| /s/ William [removed: G.] Kaelin, Jr., M.D. | | | | | | Director | | |

| WILLIAM [removed: G.] KAELIN, JR., M.D. | | | | | | | | |

| /s/ Juan [removed: R.] Luciano | | | | | | Director | | |

| JUAN [removed: R.] LUCIANO | | | | | | | | |

| /s/ Marschall [removed: S.] Runge, M.D., Ph.D. | | | | | | Director | | |

| MARSCHALL [removed: S.] RUNGE, M.D., Ph.D. | | | | | | | | |

| /s/ Jackson [removed: P.] Tai | | | | | | Director | | |

| JACKSON [removed: P.] TAI | | | | | | | | |

February 22, 2023

| /s/ Mary Lynne Hedley, Ph.D. | | | | | | Director | | |

| MARY LYNNE HEDLEY, Ph. D. | | | | | | | | |

123

February 23, 2022

124

| /s/ Michael L. Eskew | | | | | | Director | | |

| MICHAEL L. ESKEW | | | | | | | | |

125

Actos*®* is a trademark of Takeda Pharmaceutical Company Limited.

Viagra*®* is a trademark of G.D. Searle LLC, a Viatris Company.

126