Eli Lilly (LLY) Risk Factor Changes

We rely on the FDA and other global regulatory bodies for appropriate oversight, administration and enforcement across our industry, anyone marketing or purporting to market medicines, and public health.

U.S.

The marketing, promotional, and pricing practices of pharmaceutical manufacturers, as well as the manner in which manufacturers interact with purchasers, prescribers, and patients, are subject to extensive scrutiny an…

We are subject to income taxes in the U.S.

We are subject to evolving and complex tax laws, which may result in additional liabilities.

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

As a global company, we face foreign currency risk exposure from fluctuating currency exchange rates, interest rate risk from our exposure to floating and variable interest rates, and existing and expected rates of in…

Our global operations subject us to risks, including as related to uneven economic growth or downturns, international trade, and other global disruptions, geopolitical tensions, or disputes.

The emergence and continued expansion of AI and other technologies may exacerbate other risks, including those related to competition, regulation, litigation, compliance issues, ethical concerns, confidentiality, and…

We deploy AI and other emerging technologies in various facets of our operations and we continue to explore the development and use of AI technologies.

Our use of artificial intelligence (AI) or other emerging technologies could adversely impact us.

Outsourcing involves many risks, including the risk that third parties may not perform to our standards or legal requirements; may not produce reliable results; may not perform in a timely manner; may misuse or not ma…

We rely on third parties, including suppliers, distributors, alliances and collaborations with other pharmaceutical and biotechnology companies, and third-party service providers, for selected aspects of product and c…

future demand will be realized as expected or that we will meet demand in launched markets in the future.

Manufacturing, quality, or supply chain difficulties, disruptions, or shortages could lead to product supply problems or other negative outcomes.

To date, system inadequacies, inadequate controls or procedures, operating failures, unauthorized access, service interruptions or failures, security breaches, malicious intrusions, theft, exfiltration, ransomware, cy…

The failure, inadequacy, or breach of our IT systems or business processes or controls or procedures, the compromise, disruption, degradation, manipulation, loss, theft, exfiltration, destruction, or unauthorized acce…

resulting in the compromise, disruption, degradation, manipulation, loss, theft, exfiltration, destruction, or unauthorized disclosure or use of confidential information, or the unauthorized access to, disruption of,…

We face many generic manufacturer challenges to our patents outside the U.S.

Also in the U.S., in addition to the process for challenging patents set forth in the BPCIA, which applies to biological products, the Hatch-Waxman Act provides generic companies substantial incentives to seek to inva…

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

Our success depends in part on our ability to obtain and defend patent rights and other intellectual property rights that are important to the commercialization of our products and product candidates.

For non-biologic products, loss of exclusivity typically results in the entry of one or more generic competitors, leading to a rapid and severe decline in revenues, especially in the U.S.

In the ordinary course of their lifecycles, our products lose significant patent protection and/or data protection after a specified period of time.

Pharmacy benefit manager practices have come under increased scrutiny from U.S.

Moreover, the negotiating power of health plans, managed care organizations, pharmacy benefit managers, and other supply chain entities has increased, and they, along with governments, employ formularies and other met…

We derived direct product and/or collaboration and other revenues of more than $3 billion for each of Mounjaro, Zepbound, Verzenio, Trulicity, Taltz, and Jardiance (including Glyxambi, Synjardy, and Trijardy XR) that…

In addition, government price reporting and payment regulations are complex, and require ongoing assessment of the methods by which we calculate and report pricing.

Additional policies, regulations, legislation, or enforcement, including because of the regulatory priorities of the U.S.

Public and private actors continue to take aggressive steps to control expenditures for pharmaceuticals by placing restrictions on pricing and reimbursement for, and patient access to, our medicines.

In addition, we rely on our ability to attract and retain highly qualified and skilled scientific, technical, management, and other personnel in order to compete effectively.

Our success depends on a market that is observant of intellectual property rights and regulatory requirements.

We compete with a large number of multinational pharmaceutical companies, biotechnology companies, and generic pharmaceutical companies and face intensifying competition worldwide, including from China and other marke…

We and our products face intense competition, and such competition could have a material adverse effect on our business.

We engage in various forms of business development activities to enhance or refine our product pipeline and development capabilities, including licensing arrangements, co-development agreements, co-promotion arrangeme…

We regularly submit new product candidates and indications to regulatory agencies for approval, including highly anticipated candidates such as orforglipron.

around excipients, potential impurities such as nitrosamines, and chemicals important to pharmaceutical manufacturing, in some cases lead to regulatory and legal actions, product recalls and seizures, fines and penalt…

•We are party to litigation and investigations related to our products, how we price or commercialize our products, and other aspects of our business, which could adversely affect our business, and we are self-insured…

In addition, significant portions of our business are conducted in Europe, Asia, and other international geographies.

challenges, as well as tight labor markets, have caused, and in the future may cause, delays in, and/or increase costs related to, distribution of our medicines, the construction or other acquisition of additional man…

We are continuing the significant expansion of our manufacturing capabilities and substantial investment in long-term supply agreements to fortify supply and support anticipated demand for our products.

The failure, inadequacy, or breach of our IT systems or business processes or controls or procedures, the compromise, disruption, degradation, manipulation, loss, theft, exfiltration, destruction, or unauthorized acce…

commerce may increase the prevalence of dangerous counterfeit or diverted products and scams, potentially exposing patients to significant risks.

We engage in various forms of business development activities to enhance or refine our product pipeline, including licensing arrangements, co-development agreements, co-promotion arrangements, distribution

uncertainty.

initiated enforcement or other actions across industries to seek alignment with policy initiatives.

We are party to litigation and investigations, which could adversely affect our business.

In most international markets, we operate in an environment of government-mandated cost-containment programs.

Moreover, tensions between the U.S.

Significant portions of our business are conducted in Europe, Asia, and other international geographies.

analyses, or recommendations we utilize could be inadequate, or that our competitors may more quickly or effectively adopt AI capabilities.

Difficulties in predicting or variability in demand and supply for our products and those of our competitors and the very long lead times necessary for the expansion and regulatory qualification of pharmaceutical manu…

External environmental factors have also caused, and in the future may cause, delays in, and/or increase costs related to, distribution of our medicines, the construction or other acquisition of additional manufacturi…

Regional or single-source dependencies may in some cases accentuate risks and costs (e.g., tariffs) related to manufacturing and supply.

Difficulties related to supply chain activities have resulted and may in the future result in delays and disruptions in the manufacturing, distribution, and sale of our products and/or product shortages, leading to lo…

We are continuing the significant expansion of our manufacturing capabilities and substantial investment in long-term supply agreements to fortify our supply and support our ability to meet anticipated demand for our…

risks and to enhance the resiliency of our IT systems; however, these measures may not be successful, and we may fail to detect or remediate system inadequacies, inadequate controls or procedures, operating failures,…

Cyber-attacks are growing in their frequency, sophistication, and intensity, and are becoming increasingly difficult to detect, mitigate, or prevent.

procedures is being challenged, and it is not clear how these procedures will affect the ability of our competitors to institute IPR proceedings.

In general, securing and growing access for our obesity medicines is an important factor in the success of our business.

In November 2025, we announced preliminary voluntary agreements with the U.S.