Eli Lilly and Company was founded on May 10, 1876, by Civil War veteran . Lilly began the company out of frustration with the ineffective medications of the time and wanted to create a pharmaceutical company that would provide high-quality, effective medications backed by science. He built his laboratory to manufacture pharmaceutical drugs in a small building at 15 West Pearl Street and ran it with just himself, his 14-year-old son , and two other employees.
Lilly’s business grew quickly, tripling sales by the end of 1877. In 1880, Eli Lilly and Co. officially became a corporation and relocated to larger facilities on McCarty Street. Within three years, the company developed its first successful product, Succus Alterans. The sales from this product allowed Lilly to initiate a research program in 1886, becoming one of the first companies to initiate such a program. Ernest Eberhardt was hired as the first pharmaceutical chemist.
In 1890, Col. Eli turned over much of the management of the company to his son, Josiah K. Lilly, Sr., who took over completely after his father died in 1898. Under the leadership of J. K. Sr., Eli Lilly and Co. began using uniform standards of manufacture, increased both sales and research staff, and opened branches all over the country. He also began the company’s tradition of philanthropy.
Lilly quickly became one of the nation’s leading pharmaceutical manufacturers, hitting $1 million in sales by 1905. The company’s success came by making fundamental transformations in production and scientific research during the 1910s and 1920s, much of which was spurred by the two grandsons of Colonel Lilly, and The company began an aggressive plant expansion in 1909 and later pioneered the introduction of modern, systematic management methods that increased output and lowered unit costs.
In 1919, the company hired biochemical expert . Clowes partnered with Frederick Banting and Charles Best at the University of Toronto in 1921 to develop animal-sourced insulin. After two years and over $100,000 invested in research, Iletin became the world’s first commercially produced . Prior to this, there was no effective treatment for diabetes. Banting, along with Scottish physiologist John J. R. Macleod, won the Nobel Prize for the discovery of insulin in 1923. As Best had been Banting’s assistant, he was overlooked for the prestigious award. The development of this product also brought with it the construction of straight-line production to allow for mass production at a lower cost and higher efficiency.
Leadership in insulin production during the 1920s gained Lilly respect in the scientific community, which enabled the company to attract first-rate scientists. Through a collaboration with Harvard, the company initiated a research program to develop a treatment for pernicious anemia. By 1928, Lilly introduced a liver extract product to treat the condition. This discovery earned its academic collaborators a Nobel Prize—the second time that Lilly had been connected to the coveted prize for medicine in less than a decade.
Profits from insulin and other new products enabled the company to survive the Great Depression of the 1930s without laying off a single employee. By 1934, the first overseas subsidiary was established in England. It was during this decade that Eli Lilly, who succeeded his father as president in 1932, instituted a variety of policies designed to increase the well-being of employees—policies that solidified Lilly’s reputation as one of the best places to work in central Indiana.
The 1940s brought large profits and continued growth, due in part to the company’s development of a method to mass-produce penicillin. Lilly expanded physically during this time through the purchase of a new plant on South Kentucky Avenue in 1945 and growth in overseas markets. By 1948, when J. K. Jr. took over as president of the company, sales exceeded $115 million, and the company employed nearly 7,000 workers to which they began providing pension plans.
The 1950s began with a major plant expansion in Indiana. The new Tippecanoe Laboratories opened near Lafayette in 1950 to increase antibiotic production. Another major change for Lilly during this time was in its leadership. The first non-family president of Lilly was appointed in 1953 when J. K. Jr. stepped down and shifted the presidency to , a long-time employee. Beesley and his successors sought to maintain much of the spirit of the Lilly family even as the company continued to grow.
A new division devoted to agricultural products, the Agricultural and Industrial Sales Division, opened in 1954 after Lilly introduced its first antibiotic for veterinary use the year before. The division expanded with the opening of the Agricultural and Veterinary Medicine Research Center in 1959. By the next year, the division had a new name, Products Company. After three decades of growth in veterinary pharmaceuticals, Elanco added agri-chemicals to its offerings through a partnership with Dow Chemical, creating DowElanco. In 1997, Lilly sold its share of DowElanco, focusing once again on medicines and vaccinations for pets and livestock.
Lilly continued its interest in research by playing an important role in the development of the Salk polio vaccine in the middle of the 1950s. Due to the company’s partnerships with universities, Lilly was chosen to be the first to produce and distribute the vaccine. Other big products for the company during this decade were Darvon (a non-addictive pain medication) in 1957 and Vancocin (an antibiotic for resistant bacteria) in 1958.
During the late 1950s and early 1960s, public concern about the high costs of drugs led to new regulatory legislation. Despite this, Lilly continued increasing its sales, innovations, and expansions. Sales went from around $200 million at the start of the 1960s to over $500 million by the end of the 1960s. The company spent $325 million in research, introducing its first oncology drug, Velban in 1961 and maintaining its lead in antibiotics with the introduction of Keflin in 1964. A new plant opened in Clinton in 1969.
Between the 1970s and 1980s, Lilly had both highs and lows. By this time, the company had become one of the largest pharmaceutical companies in the United States. By the mid-1970s, Lilly reached $1 billion in sales, employed 23,000 people, and had 39 affiliate companies across the world. It also debuted several new drugs including antibiotics and a multiple sclerosis deterrent.
One of Lilly’s biggest breakthroughs in insulin came in 1982 with the introduction of Humulin, an insulin identical to human insulin that was synthesized through a new type of rDNA technology. Outside of insulin, the company introduced in 1986 what would soon be one of its most popular and successful medications, Prozac (fluoxetine). Developed by company researchers Ray Fuller, David Wong, and Bryan Molloy, the drug was a new type of antidepressant that was safer and more effective than anything produced earlier. With Prozac, Lilly jumped to the forefront of pharmaceutical psychiatric therapy.
While the 1980s were marked with two successful products, it was also marked by two lawsuits. In 1982, Lilly released Oraflex, a new arthritis medication. Oraflex had already been released in Europe where a British medical journal linked its use to several deaths. Because of this, the company was pressured to pull it from the market and faced lawsuits for having released the drug in the United States knowing it had been linked to deaths in Europe. The federal court found Lilly not guilty of willfully withholding information or purposefully endangering patients, though the company was fined $25,000. Then in the late 1980s, the U.S. Food and Drug Administration charged Lilly for dishonest reporting and manufacturing irregularities. Once again, the company was found innocent, though this time fined $75,000.
By the early 1990s, increased competition, the changing health care market, and proposed health care reform challenged the industry and reduced its profitability. In response, Lilly’s new leadership began making moves to streamline operations. The early retirement of 2,600 employees and other changes were aimed at maintaining the company’s international position. In 1994, the company acquired PCS Health Systems Inc., a manager of prescription drug benefits, in a move to protect profits and sales. New drugs were also introduced in the 1990s, like Zyprexa for schizophrenia and Gemzar for cancer in 1996, and Actos for diabetes in 1999.
A financial blow came to Lilly in 2001 with the expiration of the patent for Prozac. By this point, Prozac made up around 25 percent of the company’s sales, a number that dropped once generic versions came to market. Going into the mid-2000s, Lilly was forced to reduce budgets and make cuts. In 2004, it closed 43 field sales offices and instituted a hiring freeze. Mass layoffs began in 2009 and continued into 2011, trimming 13 percent of its workforce. The company also sold its Tippecanoe Laboratories to Evonik Industry to save money while keeping the 700 people that worked there employed.
Despite reducing budgets to stay afloat, Lilly continued to increase its drug research capacity. It received FDA approval for two new drugs in 2002, Forteo and Strattera. In 2003, the company acquired Applied Molecular Evolution Inc. to use its technology to speed up the discovery of biological drugs. Cymbalta, a new treatment for major depressive disorder was approved in 2004 and would go on to be a successful product. That same year, Symbyax and Alimta were both approved as well.
Moving further into cancer drug development, Lilly introduced Evista in 2007, a drug that helps reduce the risk of invasive breast cancer. The company also acquired the cancer-drug maker ImClone Systems in 2008. Non-cancer drugs introduced at the end of the 2000s included Cialis (used to treat male sexual function problems) in 2008 and Effient (a drug used to prevent blood clots in heart disease patients) in 2009.
Outside of their pharmaceutical work, Lilly continued its tradition of philanthropy. During the 2000s, the company donated over $25 million in insulin and supplies through the Lilly Camp Care Package program. In 2008, Lilly’s Global Day of Service was launched. This annual event provides a day off from work for thousands of Lilly employees to perform volunteer activities within their communities. The program ranks among the largest single-day volunteer initiatives of any company in the United States.
As in the previous decade, the 2010s began with the expiration of an important patent, Zyprexa in 2011, which led to another large loss in sales. The financial strain increased when the patents of two more top-selling drugs expired, Cymbalta in 2013 and Evista in 2014.
The first of several new diabetes-related drugs was introduced in 2011. Lilly partnered with Boehringer Ingelheim to develop and market Tradjenta which lowers blood sugar in adults with type 2 diabetes. Two more drugs aimed at the treatment of type 2 diabetes launched in 2014, Jardiance and Trulicity. In 2015, Lilly grew its interest in drug delivery devices through the expansion of its drug delivery and device center in Cambridge, Massachusetts. This resulted in the development of more drugs that require such devices, like Lilly’s Nasal Glucagon to treat severe hypoglycemia (approved in 2019).
By the late 2010s, Lilly began receiving criticism for cost increases of insulin—the average price for one vial of insulin was between $200 to $300. In an effort to respond to this criticism, the company opened the Lilly Diabetes Solution Center in 2018 to help people in need pay for their insulin. Then in 2019, it debuted a generic version of Humalog to provide a lower-cost option.
The COVID-19 global pandemic of 2020 resulted in a rapidly increasing number of cases but limited treatment options. Lilly responded by developing a COVID-19 single antibody treatment called bamlanivimab. In November 2020, the FDA approved the treatment through an emergency-use authorization. While this treatment was for early cases only, Lilly continued working on a two antibodies treatment that could be used for severe cases.
As of September 2020, Lilly had 10,845 employees in Indianapolis and a total of 35,074 employees worldwide. The company performed clinical research in 55 countries. In 2023, Eli Lilly and Co. became the world’s most valuable drugmaker when its market capitalization, the total value of a company’s outstanding shares of stock, reached $412.2 billion, surpassing the larger drugmakers Johnson & Johnson and Pfizer. Lilly’s downtown campus and facilities along Kentucky Avenue represent the city’s largest company, a major force in the Indianapolis economy, and a strong connection to global trade.
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