Chairman's Message

The more than 40,000 Lilly employees are energized by our mission to provide breakthrough medicines and medical expertise that enable people to live
longer, healthier, and more active lives. But concerns over the rising cost of health care, access to medicines, drug safety, and promotional practices have eroded trust in our industry and opened a gap between how we see our company and how the public views us.

As a business that exists to serve patients, trust is essential. For 130 years, Lilly has sought to earn the public’s trust by upholding the highest standards in the way we make medicines, conduct business, and fulfill our duty as a corporate citizen. We also recognize that trust is only earned when parties engage and communicate with each other. We know that listening and responding to you – our stakeholders – are keys to enhancing our capacity to tackle the daunting challenges of delivering quality, affordable health care in the 21st Century.

In practice, corporate citizenship at Lilly has three important parts.

First, we strive to execute the fundamentals of our business to the highest standards. This includes conducting medical research and development and marketing our products in an ethical and transparent manner, and manufacturing them in a way that protects patients, the environment, and the health and safety of our workers and host communities. Second, we seek to be an employer of choice and to use our resources and influence to strengthen the local and global communities in which we operate.

Third, we look beyond our own operations to understand global health needs and what we can do to help meet them.

I believe we are making good progress in all of these areas.

In 2005, we invested more than $3 billion in research and development to meet our goal of inventing breakthrough medicines. We pioneered an online clinical trial registry, setting an industry benchmark for transparency by sharing our research results. A recent independent audit confirmed that we had posted 100 percent of the clinical trial information that we promised to provide on our website (www.lillytrials.com) and that more than 99 percent of the studies were posted on schedule. Our research and development function receives guidance from a Bioethics Committee, unique in our industry for including two highly respected external bioethics experts.

Lilly manufacturing reduced hazardous material purchases by more than a third from 2003 through 2005, demonstrating progress towards environmental goals we set for 2010.

During 2005, we donated more than $1 million per day in cash and products (U.S. net wholesale price) for patient assistance programs, international humanitarian causes, and other charitable endeavors. This included responding to the Asian tsunami, Pakistan earthquake, Hurricane Katrina and other disasters. And we continued to forge ahead on groundbreaking efforts aimed at stopping the spread of multi-drug resistant tuberculosis, a present-day global health threat.

But the challenges we face as an industry and as members of a global society go beyond what any company can address on its own. Half of the population of developing countries lacks basic sanitation, without which good health is a distant dream. Even in the U.S., where the expertise, training and technologies for healing are first-rate, 45 million Americans lack health care insurance.

The steps we are taking to improve access to medicines and respond to other needs are outlined in this report. We are also pursuing a business strategy aimed at a new vision of delivering to patients the right drug at the right dose at the right time. In addition, we have set a goal to reduce the cost of bringing a new medicine to market by a third by the end of the decade. We are determined to help answer society’s need for high-quality, affordable health care.

But much more remains to be done. Comprehensive answers to the challenges of improving health care around the world require coordinated action by the public and private sectors, aid agencies, and philanthropists. Lilly is committed to being a partner in addressing these challenges and making a difference for the millions who are counting on us.



Sidney Taurel
Chairman of the Board and Chief Executive Officer

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Chairman's Letter
Our Business
Corporate Citizenship Approach
Key Issues
Awards and Recognition