Eli Lilly and Company

The company moved its Indianapolis headquarters from Pearl Street to larger quarters at 36 South Meridian Street. In 1881, the company moved to its current headquarters in Indianapolis's south-side industrial area, and the company later purchased additional facilities for research and production. The same year, Lilly incorporated the business as Eli Lilly and Company, elected a board of directors, and issued stock to family members and close associates.

Lilly's first innovative product was gelatin-coating for pills and capsules. The company's other early innovations included fruit flavorings and sugarcoated pills, which made the medicines easier to swallow.

In 1882, Colonel Lilly's only son, Josiah K. Lilly Sr. (J. K.), a pharmaceutical chemist, graduated from the Philadelphia College of Pharmacy in Philadelphia, and returned to Indianapolis to join the family business as a superintendent of its laboratory.

In 1883, the company contracted to mix and sell Succus Alteran, its first widely successful product and one its best sellers. The product was marketed as a "blood purifier" and as a treatment for syphilis, some types of rheumatism, and skin diseases such as eczema and psoriasis.

By the late 1880s, Colonel Lilly was one of the Indianapolis area's leading businessmen, and the company had over 100 employees and $200,000 in annual sales.

In 1890, Colonel Lilly fully turned over the day-to-day management of the business to J. K., who ran the company for 34 years. The 1890s were a tumultuous decade economically, but the company flourished. In 1894, Lilly purchased a manufacturing plant to be used solely for creating capsules. The company also made several technological advances in the manufacturing process, including automating its capsule production. Over the next few years the company annually created tens of millions of capsules and pills.

In 1898, Lilly's son, J. K. Lilly, inherited the company and became its president following Colonel Lilly's death. At the time of Colonel Lilly's death, the company had a product line of 2,005 items and annual sales of more than $300,000. Colonel Lilly was a pioneer in the modern pharmaceutical industry, with many of his early innovations later becoming standard practice. His ethical reforms in a trade that was marked by outlandish claims of miracle medicines began a period of rapid advancement in the development of medicinal drugs. J. K. Lilly continued to advocate for federal regulation on medicines.

As the Lilly company grew, other businesses set up operations near the plant on Indianapolis's near south side. The area developed into one of the city's major business and industrial hubs. Lilly's production, manufacturing, research, and administrative operations in Indianapolis eventually occupied a complex of more than two dozen buildings, which covered 15-block area, in addition to its production plants along Kentucky Avenue.

In addition to Colonel Lilly, his brother, James, and son, Josiah (J. K.), the company employed other Lilly family. Colonel Lilly's cousin, Evan Lilly, was hired as a bookkeeper. Lilly's grandsons, Eli and Josiah Jr. (Joe) joined the company from a young age. Under J. K.'s leadership, the company introduced scientific management concepts, organized the company's research department, increased its sales force, and began international distribution of its products. For the rest of the late 19th century, Lilly operated in Indianapolis and the surrounding area as many other pharmaceutical businesses did, manufacturing and selling "sugar-coated pills, fluid extracts, elixirs, and syrups". The company used plants for its raw materials and produced its products by hand. One historian noted, "Although the Indianapolis firm was more careful in making and promoting drugs than the patent medicine men of the era, the company remained ambivalent about scientific research."

1900s

In 1905, J. K. Lilly oversaw a large expansion of the company, and it reached annual sales of $1 million.

Following the 1906 San Francisco earthquake, the company sent much-needed medicine to support recovery efforts.

Before and after World War I, the company experienced rapid growth, including expanded manufacturing facilities at its McCarty Street plant, which improved production capacity with a new Science Building (Building 14), opened in 1911, and a new capsule plant (Building 15) in 1913. In 1913, the company began construction of Lilly Biological Laboratories, a research and manufacturing plant on 150 acres near Greenfield, Indiana.

After World War I, the company's expanded production facilities and introduction of new management methods set the stage for Lilly's next crucial phase—its "aggressive entry into scientific research and development." The first big step came in 1919 when Josiah Lilly hired biochemist George Henry Alexander Clowes as director of biochemical research. Clowes had extensive medical research expertise and links to the scientific research community, which led to the company's collaborations with researchers in the US and elsewhere. Clowes's first major collaboration with researchers who developed insulin at the University of Toronto significantly impacted the company's future. Lilly's success with insulin production secured the company's position as a leading research-based pharmaceutical manufacturer, allowing it to attract and hire more research scientists and to collaborate with other universities in additional medical research.

In addition to developing new medicines, the company achieved several technological advances, including the automation of its production facilities. Lilly was also an innovator in pill capsule manufacturing. It was among the first manufacturers to insert medications into empty gelatin capsules, which provided a more exact dosage. Lilly manufactured capsules for its own needs and sold its excess capacity to others.

In 1917, Scientific American described Lilly as "the largest capsule factory in the world" and reported that the company was "capable of producing 2.5 million capsules a day". One of Lilly's early innovations was fruit flavoring for medicines and sugar-coated pills to make their medicines easier to swallow. Over the next few years, the company created tens of millions of capsules and pills annually.

Other advances improved plant efficiency and eliminated production errors. In 1909, Eli Lilly, grandson of the company's founder, introduced a method for blueprinting manufacturing tickets, which created multiples copies of a drug formula and helped eliminate manufacturing and transcription errors.

In 1920, Josiah hired biochemist George Henry Alexander Clowes as a research chemist; Clowes was promoted to director of biochemical research the following year.

In the 1920s, Eli introduced the new concept of straight-line production to the pharmaceutical industry, where raw materials entered at one end of the facility and the finished product came out the other end, in the company's manufacturing process. This new process led to an increase in output and profit for the company. Under Eli's supervision, the design for Building 22, a new five-floor plant that opened in Indianapolis in 1926, implemented the straight-line concept to improve production efficiency and lower production costs. One historian noted, "It was probably the most sophisticated production system in the American pharmaceutical industry." This more efficient manufacturing process also allowed the company to hire a regular workforce. Instead of recalling workers at peak times and laying them off when production demand fell, Lilly's regular workforce produced less-costly medicines in off-peak times using the same manufacturing facilities.

During the 1920s, the introduction of new products brought the company financial success. In 1921, three University of Toronto scientists, John Macleod, Frederick Banting, and Charles Best, were working on the development of insulin for treatment of diabetes. Clowes proposed a collaboration with the researchers in December 1921, and then again March and May 1922. The researchers were hesitant to work with a commercial drug firm, particularly since they had the Connaught Laboratories' non-commercial facilities at hand. But as limits were reached at the scale to which Connaught could produce insulin, Clowes and Eli Lilly met with the researchers in 1922 to negotiate an agreement with the University of Toronto scientists to mass-produce insulin. The collaboration greatly accelerated the large-scale production of the extract.

In 1923, the company began selling Iletin, the company's tradename for the first commercially available insulin product in the US for the treatment of diabetes. Numerous objections were registered by the Insulin Committee of the University of Toronto in regard to Lilly's use of the term "Iletin", although production continued under this name and the objection was later dropped "as a concession".

Also in 1923, Banting and Macleod were awarded the Nobel Prize for their research, which they subsequently shared with co-discoverers Charles Best and James Collip. Insulin, "the most important drug" in the company's history, did "more than any other" to make Lilly "one of the major pharmaceutical manufacturers in the world." Eli Lilly and Company enjoyed an effective monopoly on the sale of insulin in the US for almost two years, until the first of the new American licensees, Frederick Stearns & Co., entered the market in June 1924.

The success of insulin enabled the company to attract scientists and, with them, make more medical advances. By the company's 50th anniversary in 1926, its sales had reached $9 million and it was producing over 2,800 products.

In 1928, Lilly introduced Liver Extract 343 for the treatment of pernicious anemia, a blood disorder, in a joint venture with two Harvard University scientists, George Minot and William P. Murphy. In 1930, Lilly introduced Liver Extract No. 55 in collaboration with George Whipple, a University of Rochester scientist. Four years later, in 1934, Minot, Murphy, and Whipple were awarded the Nobel Prize in Physiology or Medicine for their research.

In the 1930s, the company also continued its expansion overseas. In 1934, Eli Lilly and Company Limited, the company's first overseas subsidiary, was established in London, and a manufacturing plant was opened in Basingstoke. In 1932, despite the economic challenges of the Great Depression, Lilly's sales rose to $13 million. The same year, Eli Lilly, eldest grandson of Col. Lilly who had joined the company in 1909, was named as the company's president, succeeding his father, who remained as chairman of the board until 1948. In his early years at the company, Eli was especially interested in improving production efficiency and introduced a number of labor-saving devices. He also introduced scientific management principles, implemented cost-savings measures that modernized the company, and expanded the company's research efforts and collaborations with university researchers.

Thimerosal, developed by chemist Morris Kharasch at the University of Maryland in the late 1920s, was subsequently marketed by Lilly under the trade name Merthiolate as an antiseptic and preservative.

In 1934, the firm opened two new facilities in Indianapolis on the McCarty Street complex: a replica of Lilly's 1876 laboratory and the new Lilly Research Laboratories, "one of the most fully equipped facilities in the world." As part of its research and product development process, Lilly also conducted clinical studies at Indianapolis City Hospital.

Lilly patented secobarbital in 1934 and marketed the barbiturate under the brand name Seconal. Seconal was used primarily as a sedative and hypnotic, but barbiturates were later largely supplanted by benzodiazepines. Lilly continued to manufacture and sell secobarbital until the early 2000s, when its marketing and manufacturing rights were transferred to Ranbaxy Pharmaceuticals.

During World War II, the company expanded production to a new high, manufacturing merthiolate, an organomercury compound, and penicillin, a beta-lactam antibiotic. Lilly also cooperated with the American Red Cross to process blood plasma. By the end of World War II, the company had dried over two million pints of blood, "about 20 percent of the United States' total". Merthiolate, first introduced in 1930, was an "antiseptic and germicide" that became a U.S. Army standard issue during World War II. During World War II, Lilly manufactured products for military use, including aviator survival kits and seasickness medications for the D-Day invasion as well as penicillin. During World War II, Lilly produced penicillin and other antibiotics, "antimalarials," blood plasma, encephalitis vaccine, typhus and influenza vaccine, gas gangrene antitoxin, Merthiolate, and Iletin (Insulin, Lilly). The company was a partner of the U.S. government on large-scale production of penicillin.

International operations expanded even further during World War II. In 1943, Eli Lilly International Corp. was formed as a subsidiary to encourage business trade abroad. By 1948, Lilly employees worked in 35 countries, most of them as sales representatives in Latin America, Asia, and Africa.

After three generations of Lilly family leadership under company founder, Col. Eli Lilly, his son, Josiah K. Lilly Sr., and two grandsons, Eli Lilly Jr. and Josiah K. Lilly Jr., the company announced a reorganization in 1944 that prepared the way for future expansion and the eventual separation of company management from its ownership.

In 1945, Lilly began a major expansion effort that included two manufacturing operations in Indianapolis. The company purchased the massive Curtiss-Wright propeller plant on Kentucky Avenue, west of the company's McCarty Street operation. When renovation was completed in mid-1947, the Kentucky Avenue location manufactured antibiotics and capsules and housed the company's shipping department. By 1948, Lilly employed nearly 7,000 people.

After World War II, patents and research records belonging to IG Farben, which included Farbwerke Hoechst, were confiscated by the Allies. The U.S. Department of Commerce made the expropriated patent rights available to American pharmaceutical companies for $1; Lilly acquired the rights to methadone. In 1947, Lilly became the first distributor of methadone in the United States and marketed it under the trade name Dolophine. Methadone is an analgesic that is also widely used in the treatment of opioid use disorder.

In 1948, Eli Lilly, who had served as the company's president since 1932, retired from active management, became chairman of the board, and relinquished the presidency to his brother, Josiah K. Lilly Jr. (Joe). During Eli's 16-year presidency, sales rose from $13 million in 1932 to $117 million in 1948. Joe joined the company in 1914 and concentrated on the company's personnel and marketing efforts. He served as company president from 1948 to 1953, then became chairman of the board, and remained in that capacity until his death in 1966.

Throughout the 20th century, Lilly continued to expand its production facilities outside of Indianapolis. In 1950, Lilly launched Tippecanoe Laboratories in Lafayette, Indiana, Indiana, and increased antibiotic production with its patent on erythromycin.

In 1949, Eli Lilly went into partnership with the United States Army Reserve, setting up a local Strategic Intelligence Research and Analysis (SIRA) Unit to allow employees to research company data for the scientific logistics and Eurasian fields of study.

In the 1950s, Lilly introduced two new antibiotics: vancomycin, a glycopeptide antibiotic, and erythromycin, a macrolide antibiotic. Lilly also began diversifying beyond human pharmaceuticals into agricultural and veterinary products. In 1954, the company organized its plant and animal science operations into the Agricultural and Industrial Sales Division, which later became Elanco.

In 1952, the company offered its first public shares of stock, which are traded on the New York Stock Exchange. In 1953, Eugene N. Beesley was named the first non-family member to become the company's president, beginning the transition to non-family management.

In 1954, the National Foundation for Infantile Paralysis, now the March of Dimes, contracted with five pharmaceutical companies, Lilly, Cutter Laboratories, Parke-Davis, Pitman-Moore Company, and Wyeth to produce Salk's polio vaccine for clinical trials. Lilly's selection to produce the vaccine was, in part, due to its previous experience in collaborations with university researchers. In 1955, Lilly manufactured 60% of Salk's polio vaccine.

In 1962, the company acquired The Distillers Company and established a major factory in Liverpool, England. In 1968, Lilly built its first research facility outside the United States, the Lilly Research Centre, in Surrey, England. In 1969, the company opened a new plant in Clinton, Indiana.

During the 1970s, Lilly introduced several new pharmaceutical products, including the antibiotic Keflex in 1972, dobutamine, marketed as Dobutrex, in 1977, and the oral antibiotic cefaclor, marketed as Ceclor, in 1979.

In 1971, to further diversify its product line, Lilly acquired Elizabeth Arden, Inc. for $38 million. Although Arden continued to lose money for five years after Lilly acquired it, by 1982, Arden's sales were up 90 percent from 1978, with profits doubling to nearly $30 million. In 1987, Lilly sold Arden to Fabergé for $657 million.

In October 2004, the FDA added a boxed warning to all antidepressant drugs regarding use in children. In 2006, the FDA included adults aged 25 or younger. In February 2018, the FDA ordered an update to the warnings based on statistical evidence from twenty-four trials in which the risk of such events increased from two percent to four percent relative to the placebo trials.

Illegal marketing of Zyprexa

In 2009, Lilly pleaded guilty for illegally marketing antipsychotic medication Zyprexa and agreed to pay a $1.415 billion penalty that included a criminal fine of $515 million, the largest ever in a healthcare case and the largest criminal fine for an individual corporation ever imposed in a US criminal prosecution of any kind at the time.

Eli Lilly has faced many lawsuits from people who claimed they developed diabetes or other diseases after taking olanzapine (branded Zyprexa), an antipsychotic medication, as well as by various governmental entities, insurance companies, and others. Internal documents provided to The New York Times revealed that Lilly had downplayed the risks of Zyprexa. According to the documents, 16 percent of people taking Zyprexa gained more than 66 pounds in their first year, a much larger figure than Eli Lilly had shared with doctors.

In 2006, Lilly paid $700 million to settle around 8,000 of these lawsuits, and in early 2007, Lilly settled around 18,000 suits for $500 million, which brought the total Lilly had paid to settle suits related to the drug to $1.2 billion.

In March 2008, Lilly settled a suit with the state of Alaska, and in October 2008, Lilly agreed to pay $62 million to 32 states and the District of Columbia to settle suits brought under state consumer protection laws. In 2009, four sales representatives for Eli Lilly filed separate qui tam lawsuits against the company for illegally marketing Zyprexa for uses not approved by the Food and Drug Administration.

Eli Lilly pleaded guilty to a US federal criminal misdemeanor charge of illegally marketing Zyprexa, actively promoting the drug for off-label uses, particularly for the treatment of dementia in the elderly. The $1.415 billion penalty included an $800 million civil settlement, a $515 million criminal fine, and forfeit assets of $100 million. The US Justice Department said the criminal fine of $515 million was the largest ever in a healthcare case and the largest criminal fine for an individual corporation ever imposed in a US criminal prosecution of any kind. "That was a blemish for us," John C. Lechleiter, CEO of Lilly, said. "We don't ever want that to happen again. We put measures in place to assure that not only do we have the right intentions in integrity and compliance, but we have systems in place to support that." In an internal email, Lechleiter had stated "we must seize the opportunity to expand our work with Zyprexa in this same child-adolescent population" for off-label use.

In January 2020, lawyer James Gottstein published a book titled The Zyprexa Papers, summarizing the legal activities surrounding Zyprexa and their impact on the political landscape of psychiatry and antipsychiatry in the US. The book details how he obtained the Zyprexa papers, including how Will Hall and a small group of "psychiatric survivors" spread the Zyprexa Papers on the Internet, and Gottstein's battles on behalf of Bill Bigley, the psychiatric patient whose ordeal made possible the exposure of the Zyprexa Papers.

Discrimination

In March 2021, Eli Lilly and Company was accused of sex discrimination by a former lobbyist who claimed she was forced to work in a sexually hostile work environment. The parties involved settled for an undisclosed amount in June 2021.

In September 2021, Eli Lilly and Company was accused in a federal court lawsuit of discriminating against older applicants for sales positions based on their implementation of hiring quotas for millennials.

Canada patent lawsuit

In September 2013, Eli Lilly sued Canada for violating its obligations to foreign investors under the North American Free Trade Agreement by allowing its courts to invalidate patents for Atomoxetine (Strattera) and Olanzapine (Zyprexa). Canadian courts found the seven-week long study of 22 patients for Atomoxetine (Strattera), too short and too narrow in scope to qualify for the patent. The Olanzapine (Zyprexa) patent was invalidated because it had not achieved its promised utility. The company sought damages in the amount of $500 million for lost profits. They ultimately lost the case in 2017.

Illegal marketing of Evista

In December 2005, Eli Lilly and Company pleaded guilty and paid $36 million in connection with the illegal promotion of Raloxifene (Evista), a medication typically used to prevent and treat osteoporosis in postmenopausal women. Sales representatives were trained to promote Evista for breast cancer and cardiovascular disease, to prompt or bait questions from doctors, and to send them unsolicited letters promoting Evista for unapproved use. The company also distributed a videotape in which a sales representative declared that "Evista truly is the best drug for the prevention of all these diseases." Some sales representatives had also been instructed to conceal the disclosure page which stated that the effectiveness of the drug in reducing breast cancer risks had not yet been established.

Insulin pricing

In January 2019, lawmakers from the United States House of Representatives sent letters to Eli Lilly and other insulin manufacturers asking for explanations for rapidly raising insulin prices. The annual cost of insulin for people with type 1 diabetes in the US almost doubled from $2,900 to $5,700 over the period from 2012 to 2016.

Renewed attention was brought to Eli Lilly's pricing of insulin in November 2022, after a verified Twitter account impersonating Eli Lilly posted on Twitter that insulin would now be free. The following year, the company announced that it would be reducing the out-of-pocket price of insulin to $35 a month. The company also stated that it would lower the price of Humalog from $275 a month to $66 and that it would offer insulin glargine at a 78% discount compared to rival company Sanofi. Despite this, the reduced costs will not apply to Eli Lilly's newer brands of insulin, and the company's pricing is still significantly higher than it was several decades prior.

Weight-loss and diabetes drug litigation

In August 2023, one of the first lawsuits was filed alleging that Novo's Ozempic (semaglutide) and Eli Lilly's Mounjaro caused severe gastrointestinal side effects, including gastroparesis. The lawsuit was brought on behalf of Jaclyn Bjorklund, a Louisiana woman represented by Morgan & Morgan, who alleged that she experienced persistent vomiting and other serious injuries after using both drugs and that the manufacturers failed adequately to warn patients and physicians about the associated risks.

In February 2024, the U.S. Judicial Panel on Multidistrict Litigation ordered that more than 50 lawsuits involving Ozempic and Mounjaro be centralised in the Eastern District of Pennsylvania. Court filings showed that Morgan & Morgan had filed multiple cases and sought consolidation of the litigation. Following the consolidation, the court appointed a plaintiffs' leadership committee to coordinate the litigation, which also included attorneys from the law firms Susen Law Group, Motley Rice, Levin Papantonio, Pogust Goodhead, and Johnson Becker.

In April 2025, Eli Lilly, represented by Kirkland & Ellis and Walsh Pizzi O'Reilly Falanga, filed a series of lawsuits in federal courts in New Jersey and California against several telehealth and compounding pharmacy companies, including Willow Health Services, Henry Meds, Mochi Health, Fella Health, and Empower Clinic Services, alleging unfair competition, false advertising, and deceptive business practices related to the sale of unapproved compounded tirzepatide products marketed for weight loss. The company argued that the defendants sold compounded versions of tirzepatide without FDA approval or adequate testing and falsely claimed that their products were safe, effective, and superior to Lilly's FDA-approved drugs Mounjaro and Zepbound. The defendants disputed the claims, characterising the lawsuits as an attempt by Eli Lilly to restrict competition and limit patient and provider choice in the weight-loss drug market.

In August 2025, U.S. District Judge Karen Marston issued the first substantive rulings in that multidistrict litigation, dismissing several claims while allowing the core allegations to proceed. The court rejected portions of the plaintiffs' misrepresentation, medical monitoring, and design defect claims, but allowed claims alleging that Novo and Eli Lilly failed to adequately warn patients about gastrointestinal risks on drug labels to move forward. The litigation at that stage encompassed more than 2,600 individual lawsuits involving Ozempic, Mounjaro, and related GLP-1 receptor agonist drugs.

Bribing providers for prescriptions

In August 2025, Texas sued Lilly for allegedly "bribing" providers to prescribe Mounjaro and Zepbound. Lilly allegedly offered illegal incentives to medical providers in Texas, including "free nurses" and reimbursement support services, while the costs of the drugs were covered by Medicaid.