1. Payments to Physicians

    According to the Tufts Center for the Study of Drug Development at Tufts University the average cost to bring a new medicine to patients is $1.3 billion. In 2010, Lilly invested more than $4.8 billion on research and development including basic research, clinical studies, and other costs associated with regulatory and safety approvals.

    Much of that cost is associated with the large, global Phase III clinical studies, required as the last step, to determine whether a medicine is safe and effective before it reaches patients. Regulatory agencies require significant evidence for each potential new medicine, demonstrating how it helps patients and what side effects it may cause. We are able to gather that evidence only by collaborating with research institutions and physicians — called principal investigators — who enroll patients in these clinical studies and oversee their treatment.

    When an institution participates in a clinical study, it incurs not only the costs commonly associated with treating a patient, but also additional costs related to testing (for example, MRIs, scans, blood work) that must be conducted to provide the information necessary to evaluate the potential medicine. As a result, Lilly makes payments to the institutions for these expenses.

    In addition, principal investigators, as well as physicians conducting educational programs, consulting, or other services to Lilly can and should be compensated at fair market value for their time and expertise.

    To minimize taking time away from treating patients, we may meet with practicing physicians during meal times and, in doing so, as a courtesy, occasionally provide them with meals. We also reimburse physicians for reasonable expenses, such as meals, airfare or lodging, incurred while conducting business on behalf of Lilly. Additionally, we may reimburse physicians working in a research and development capacity for costs associated with conducting basic research or a clinical study.

    We believe that when people understand the nature of our relationships with physicians, we are better able to build trust and respect for how we work together. Such relationships will make our collective efforts for patients that much stronger.

    ABOUT THE REPORT

    For the period January 1 to September 30, 2011, our payments (compensation, reimbursement, and costs associated with research and development) to physicians and institutions or research organizations totaled $161.4 million.

    WHO IS INCLUDED IN THIS REPORT?

    • All licensed U.S.-based physicians
    • Institutions or research organizations conducting clinical studies sponsored by Lilly, including studies which are investigator-initiated, and are conducted by a principal investigator based in the U.S.
    • Other organizations (clinics, hospitals, academic institutions, etc.) when they receive payments on behalf of a U.S.-based physician

    WHAT IS INCLUDED IN THIS REPORT?

    This registry includes payments and other non-cash forms of value that have an item value greater than or equal to $10 or where the year-to-date aggregate value given to a physician is more than $100 in a calendar year. When there is a line that lists a physician and/or principal investigator with less than $10 in value in the total to date aggregate column, there is another line in the report under the name of an entity that lists the same physician and/or principal investigator.

    PAYMENTS:

    NON-CASH VALUE:

    Q1 2011 Payments and Value Provided to Physicians

    OTHER REPORTING NOTES:

    • This registry includes payments and other non-cash value provided by Eli Lilly and Company; Lilly USA, LLC; ImClone Systems Inc.; and Alnara Pharmaceuticals, Inc. Payments and other non-cash value made by Avid Radiopharmaceuticals, Inc. since its acquisition by Lilly on December 20, 2010 have not been fully integrated into this report. Eli Lilly and Company’s animal health business unit, Elanco, is not covered by the Corporate Integrity Agreement and is not included in this registry.
    • In the case of products developed or distributed through an alliance relationship with another company, Lilly reports in this registry the payments Lilly makes. If an alliance partner made a payment, that payment is not included in this report. For a better understanding of our products and the products made available by our alliance partners, see our Major Marketed Products.
    • The registry includes payments made by third party organizations acting on Lilly’s behalf — such as clinical research organizations, speaker bureaus, and meeting planning companies.
    • Due to differences in scope and definitions, the data included in this report may differ from data included in reports submitted by Lilly for compliance with state payment reporting laws.

    THE PROCESS OF BRINGING MEDICINES TO THE PATIENT

    It’s not surprising that the majority of our payments to physicians and institutions are research and development payments. Without these collaborations, new medicines could never reach millions of patients that are suffering with diseases such as cancer, diabetes, depression, and Alzheimer’s.

    When patients participate in clinical studies, Lilly pays physicians and/or medical institutions for services involving the care, testing, and monitoring of patients because the information gathered in this process is critical to our understanding of the safety and effectiveness of the potential medicine. Without this information, we would not be able to meet the rigorous government requirements for bringing a new medicine to the patient.

    These payments cover the costs of treating patients in clinical studies (e.g., tests, X-rays, CAT scans, MRIs, etc.), as well as the costs associated with the time required by the physicians and their staffs to care for patients. Additionally, institutions and physicians sometimes incur expenses related to advertising required for patient recruitment into the clinical study, and they pay fees to independent regulatory review boards that oversee the study process. Lilly pays for these expenses because they are required by the study.

    We pay for other research and development work including: basic research conducted before studies begin in humans, consulting related to the clinical study design, and costs associated with clinical studies that are initiated by independent investigators.

    Our clinical study payments are made to an institution, such as a hospital or university or a principal investigator (physician overseeing patients in the study), to cover all these costs associated with the clinical study. In most cases, Lilly does not know the amount of compensation, if any, that the principal investigator receives from the institution for involvement in the study.

    Clinical study costs can vary greatly, making it difficult to make meaningful comparisons across institutions and investigators. Study costs are primarily driven by three variables, which differ among various disease states:

    • Number of procedures that must be performed to obtain the necessary data to evaluate the treatment
    • Complexity/costs of those procedures
    • Number of patients that must participate in the study and the number of patient visits over the duration of the study