10-K 0000059478-26-000013 (2026-02-12) vs 10-K 0000059478-25-000067 (2025-02-19)
| Section | Compared text | Words now | Changed |
|---|
| Risk Factors | Item 1A | 10,873 |
27.5% |
| MD&A | Item 7 | 6,691 |
27.7% |
| Legal Proceedings | Item 3, via Note 16 – Contingencies | 2,277 |
24.8% |
| Accounting Policies | Item 8, Note 1 – Summary of Significant Accounting Policies and Implementation of New Financial Accounting Standards | 748 |
10.9% |
The redline: what was cut and what was added
In each section, the paragraph that changed most, marked against last year's 10-K:
cut words struck through, new words highlighted and underlined.
Risk Factors 325 words changed in this paragraph; it is 40% similar to last year's version.
In addition, significant Significant portions of our business are conducted in Europe, Asia, and other international geographies. Our global operations and complex supply chain expose us to legislation and regulatory action in or regarding foreign jurisdictions as well as geopolitical and other cross-border risks. Trade and other global disputes disputes, interruptions, and interruptions, developments, including those related to tariffs, trade protection measures, import or export licensing requirements, requirements or disagreements with authorities regarding tariff classifications, transfer pricing, or valuations, the imposition of trade sanctions or similar restrictions by the U.S. or other governments, international tension and conflicts, as well as economic stagnation, cost inflation, strains on global transportation, manufacturing, and labor markets, and public health outbreaks, epidemics, or pandemics affect our ability to do business. business and, in some cases, result in financial, operational, legal, business, or reputational harm. Among other risks, the use of tariffs and other trade restrictions may increase costs and may costs, impact clinical trials or sales of our products, result in supply disruptions or delays, or otherwise complicate aspects of our business. In particular, tensions between 2025, the U.S. and China, which other countries imposed or reached alignment on new tariffs. In some cases, imposed tariffs have already led been paused but may come into effect quickly and unpredictably. While pharmaceuticals are exempt from certain of these tariffs, such exemptions may be terminated or may not apply to a series of tariffs and sanctions, as well as other business restrictions, could further escalate based on additional trade restrictions or retaliation thereto. In February 2025, the U.S. presidential administration imposed new tariffs on Chinese goods and China responded with tariffs on select U.S. goods. Additionally, tariffs were proposed or threatened with respect to other jurisdictions, including Mexico, Canada and Europe. If geopolitical tensions were to increase and disrupt our operations in, or related to, China or other major international geographies, such disruption would significantly impact our business. See Item 1A, "Risk Factors—Risks Related to Our Operations—Reliance on third-party relationships and outsourcing arrangements could adversely affect our business," for additional information. As a further example, the financial impact of higher energy prices, defense spending, and geopolitical and economic disruptions, has further exacerbated financial pressures on governments with single-payer or government funded healthcare systems, leading to increased impetus for increases in rebates, clawbacks, and other reforms to reimbursement systems, particularly in Europe. These and similar events have adversely affected, and may continue to adversely affect, us, our business partners, and our customers. For more details, see Item 1, "Business—Regulations and Private Payer Actions Affecting Pharmaceutical Pricing, Reimbursement, and Access." any future tariffs.
Source: Item 1A, 10-K 0000059478-26-000013 vs Item 1A, 10-K 0000059478-25-000067
MD&A 253 words changed in this paragraph; it is 48% similar to last year's version.
Global concern over access to, and affordability of, pharmaceutical products continues to drive regulatory and legislative debate and action, as well as cost containment efforts by governmental authorities. Such measures include the use of mandated discounts, price reporting requirements, mandated reference prices, restrictive formularies, changes to available intellectual property protections, as well as other efforts. In 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (IRA). Among other measures, the The IRA requires the U.S. Department of Health and Human Services (HHS) HHS to effectively set prices for certain single-source drugs and biologics reimbursed under Medicare Part B and Part D. Generally, Currently, these government prices generally apply beginning at nine years (for medicines approved under a New Drug Application) or thirteen years (for medicines approved under a Biologics License Application) following FDA approval or licensure for the molecule and are set at a price that generally represents a significant discount from existing prices to wholesalers and direct purchasers. While the law specifies a maximum price that HHS can set, it does not set a minimum price. The Medicare price HHS determines may impact the product's best price determination under the Medicaid Drug Rebate Program and the 340B Drug Pricing Program, potentially leading to a negative impact on both Medicaid and 340B prices. molecule. In August 2023, HHS selected Jardiance, which is part of our collaboration with Boehringer Ingelheim, as one of the first ten medicines subject to government-set prices effective in 2026. In August 2024, January 2026, HHS announced the selected Trulicity and Verzenio as additional medicines subject to government-set prices for these medicines with Jardiance subject to a 66% discount compared to the 2023 U.S. calendar year list price for a 30-day supply and discounts for the other nine medicines ranging from approximately 38% to 79% below list price. be effective in 2028. Given our product portfolio, we expect additional other significant products will be selected in future years, which would have the effect of accelerating revenue erosion prior to expiry of exclusivities. years. The effect of reducing prices IRA has, and reimbursement for certain will continue to, meaningfully influence our business strategies and those of our products competitors and could significantly impact our business and consolidated results of operations.
Source: Item 7, 10-K 0000059478-26-000013 vs Item 7, 10-K 0000059478-25-000067
Legal Proceedings 169 words changed in this paragraph; it is 43% similar to last year's version.
We are and may become involved in various lawsuits, claims, government investigations and other legal proceedings that arise from time to time in the ordinary course of business. These claims our business, including patent, environmental, commercial, contractual, licensing, employment, health and safety, consumer protection, pricing, access, consumer, sales and marketing, product liability, insurance, antitrust, securities, and regulatory compliance matters, among others. Such matters may involve inquiries from or proceedings can involve disputes with various types of parties, including governments, regulatory agencies, competitors, customers, suppliers, service providers, licensees, employees, or shareholders, among others. These matters may involve patent infringement, antitrust, securities, pricing, access, sales and marketing practices, environmental, commercial, contractual rights, licensing obligations, health and safety matters, consumer fraud, employment matters, product liability, insurance coverage, and regulatory compliance, among others. The resolution We cannot predict the final outcome of these matters proceedings, and while we intend to vigorously prosecute or defend our position as appropriate, there can be no assurance that we will be successful or obtain any requested relief. Matters often develops develop over a long period of time time, and expectations can change as a result of new findings, rulings, appeals appeals, settlements, legal or settlement arrangements. Legal proceedings that are significant regulatory changes, or that other factors. From time to time we believe could become significant may discontinue or material are described below. settle and compromise matters as appropriate in our best interest.
Source: Item 3, via Note 16 – Contingencies, 10-K 0000059478-26-000013 vs Item 3, via Note 16 – Contingencies, 10-K 0000059478-25-000067
Accounting Policies 50 words changed in this paragraph; it is 58% similar to last year's version.
Effective January 1, 2024, 2025, we prospectively adopted Accounting Standards Update (ASU) 2023-07, Segment Reporting 2023-09, Income Taxes (Topic 280): 740): Improvements to Reportable Segment Income Tax Disclosures, which requires disclosures about significant segment expenses incremental disaggregation pertaining to the effective tax rate reconciliation and additional interim disclosure requirements. This standard also requires a single reportable segment company to provide all disclosures required by Topic 280. income taxes paid. See Note 19 14 for the segment income tax disclosures as required by Topic 280, 740, as amended by ASU 2023-07. 2023-09.
Source: Item 8, Note 1 – Summary of Significant Accounting Policies and Implementation of New Financial Accounting Standards, 10-K 0000059478-26-000013 vs Item 8, Note 1 – Summary of Significant Accounting Policies and Implementation of New Financial Accounting Standards, 10-K 0000059478-25-000067
Every change, by type
Sentences and paragraphs of LLY's Risk Factors and MD&A, 10-K 2026-02-12 against 10-K 2025-02-19.
Each links to the text at sec.gov.
Quiet changes are sentences kept from last year with one to four words changed, at least one of them a hedge, a modal or a qualifier
(may, could, will, not, significant, material…). A year or date rolling forward is not counted.
The full word list
adverse, adversely, all, although, anticipate, anticipates, any, approximately, believe, believes, can, cannot, certain, could, expect, expects, generally, however, if, intend, intends, largely, likely, many, material, materially, may, might, most, must, never, no, not, possible, primarily, probable, should, significant, significantly, some, substantial, substantially, unlikely, will, would
AddedRisk Factors
In November 2025, we announced preliminary voluntary agreements with the U.S. government in which, among other arrangements, we agreed to implement measures to lower Medicaid and certain other drug prices for U.S. patients and to launch new medicines with a more balanced pricing approach across developed nations. We face risks and uncertainty associated with these arrangements and negotiating the definitive agreements, including potential delays and the possibility of unfavorable terms related to pricing, access, and other key objectives. Among other risks, we may fail to adequately capitalize on the additional U.S. access to our obesity medicines resulting from these agreements, particularly if the revenues generated from such expanded access are insufficient to offset pricing concessions. Moreover, the outcome of these arrangements and broader U.S. policy efforts to align domestic pharmaceutical pricing with international benchmarks from countries with competing healthcare cost containment priorities is uncertain and could negatively impact our pricing strategies, product demand or access, or competitive positioning across global markets, and may result in reduced revenue in certain markets.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedRisk Factors
In general, securing and growing access for our obesity medicines is an important factor in the success of our business. Among other considerations, payers in various international markets do not currently provide coverage for obesity medicines for weight loss indications, requiring patient self-pay. In addition, patient self-pay sales through LillyDirect represented a growing portion of our business in 2025, and we have launched, and continue to explore, new partnerships and tools, including through LillyDirect, to further expand access to our medicines. Our financial results and prospects are subject to risks related to the level and pace of patient participation in cash-pay markets, which may be influenced by pricing, economic conditions, and competitive offerings, as well as regulatory or other actions that could restrict our ability to benefit from such markets, and uncertainty regarding our ability to secure reimbursement coverage in such markets over time.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedRisk Factors
Cyber-attacks are growing in their frequency, sophistication, and intensity, and are becoming increasingly difficult to detect, mitigate, or prevent. Cyber-attacks come in many forms, including the deployment of harmful malware, exploitation of vulnerabilities (including those of third-party software or systems), denial-of-service attacks, the use of social engineering (including phishing), and other means to compromise the confidentiality, integrity, and availability of IT systems, confidential information, and other data. Breaches
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedRisk Factors
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 products. Pharmaceutical manufacturing is complex and highly regulated. Supply chain difficulties, disruptions or shortages may arise from our or contracted supply chain activity as well as from external environmental factors. Variability in demand and supply for our products can also challenge supply capacity and resiliency. Supply and channel dynamics in some cases contribute to variability in financial results for our products from period to period.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedRisk Factors
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 manufacturing capacity, procurement activity, and supplier or contract manufacturer arrangements. Relevant external environmental factors include (i) tariffs, (ii) cost inflation and global transportation and logistics challenges; (iii) labor market dynamics; (iv) natural disasters (including increased instances or severity of natural disasters or other events that may be due to climate change); (v) public health outbreaks, epidemics, or pandemics; (vi) periods of uneven economic growth or downturns; and (vii) the emergence or escalation of, or responses to international tension and conflicts.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedRisk Factors
Significant portions of our business are conducted in Europe, Asia, and other international geographies. Our global operations and complex supply chain expose us to legislation and regulatory action in or regarding foreign jurisdictions as well as geopolitical and other cross-border risks. Trade and other global disputes, interruptions, and developments, including those related to tariffs, trade protection measures, import or export licensing requirements or disagreements with authorities regarding tariff classifications, transfer pricing, or valuations, the imposition of trade sanctions or similar restrictions by the U.S. or other governments, international tension and conflicts, as well as economic stagnation, cost inflation, strains on global transportation, manufacturing, and labor markets, and public health outbreaks, epidemics, or pandemics affect our ability to do business and, in some cases, result in financial, operational, legal, business, or reputational harm. Among other risks, the use of tariffs and other trade restrictions may increase costs, impact clinical trials or sales of our products, result in supply disruptions or delays, or otherwise complicate aspects of our business. In 2025, the U.S. and other countries imposed or reached alignment on new tariffs. In some cases, imposed tariffs have been paused but may come into effect quickly and unpredictably. While pharmaceuticals are exempt from certain of these tariffs, such exemptions may be terminated or may not apply to any future tariffs.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedRisk Factors
Moreover, tensions between the U.S. and China, which have already led to a series of tariffs and sanctions, as well as other business restrictions, could further escalate based on additional trade restrictions, retaliation thereto, or otherwise, which could significantly impact our business, including by increasing scrutiny of, or restrictions on, market access, operations, and business development transactions. See Item 1A, "Risk Factors—Risks Related to Our Operations—Reliance on third-party relationships and outsourcing arrangements could adversely affect our business," for additional information. The precise impact of tariffs, trade protection measures, and other restrictions may depend on their ultimate scope, timing, and other factors. If enacted, additional restrictions could result in supply disruptions or delays, further increase costs, or otherwise have a negative impact on our business. Given the nature of pharmaceutical regulation and commercialization, we may not be able to offset the burden of increased costs from tariffs and related impacts to any meaningful degree.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedRisk Factors
In most international markets, we operate in an environment of government-mandated cost-containment programs. In some markets, including the EU, Japan, and China, governments have significant power as large single payors to regulate prices and access criteria or impose other means of cost control. Geopolitical and economic factors have in various cases exacerbated financial pressures on governments with single-payer or government funded healthcare systems, leading to increases in rebates, clawbacks, and other reforms to reimbursement systems, policies and programs. These and similar events have adversely affected, and may continue to adversely affect, us, our business partners, and our customers. For more details, see Item 1, "Business—Regulations and Private Payer Actions Affecting Pharmaceutical Pricing, Reimbursement, and Access." Our arrangements with the U.S. government and broader U.S. policy efforts to align domestic pharmaceutical pricing with international benchmarks may further pressure international payers, and the outcome of competing U.S. and international pricing objectives is uncertain. See Item 1A, "Risk Factors—Risks Related to Our Business and Industry—Our business is subject to government price controls and other public and private restrictions on pricing, reimbursement, and access for our drugs, which could have a material adverse effect on our results of operations, reputation, or business."
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedRisk Factors
uncertainty. See Item 1, "Business—Government Regulation of Our Operations and Products," for more details. For example, U.S. government authorities have taken and may continue to take actions intended to restrict direct-to-patient advertising and promotion of prescription drugs and biologics. These or other initiatives may influence the ways in which we can market our products, which could negatively affect our business. Moreover, novel regulatory or policy programs such as the FDA Commissioner's National Priority Voucher Pilot Program may attract scrutiny and criticism from various stakeholders. Our participation in such programs, notwithstanding the review processes involved and our adherence to applicable requirements and procedures, may expose us to legal, regulatory, political, and reputational risks.
Read it in 10-K 2026-02-12 at sec.gov ↗
RemovedRisk Factors
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
Read it in 10-K 2025-02-19 at sec.gov ↗
RemovedRisk Factors
commerce may increase the prevalence of dangerous counterfeit or diverted products and scams, potentially exposing patients to significant risks. Our reputation and business could suffer harm as a result of counterfeit or diverted drugs sold under our brand name, which may also impact our business and financial results.
Read it in 10-K 2025-02-19 at sec.gov ↗
RemovedRisk Factors
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 access to, disclosure or use of, confidential information, or the unauthorized access to, disruption of, or interference with our products and services that rely on IT systems or business processes, could impair
Read it in 10-K 2025-02-19 at sec.gov ↗
RemovedRisk Factors
In addition, significant portions of our business are conducted in Europe, Asia, and other international geographies. Trade and other global disputes and interruptions, including related to tariffs, trade protection measures, import or export licensing requirements, the imposition of trade sanctions or similar restrictions by the U.S. or other governments, international tension and conflicts, as well as economic stagnation, cost inflation, strains on global transportation, manufacturing, and labor markets, and public health outbreaks, epidemics, or pandemics affect our ability to do business. Among other risks, the use of tariffs and other trade restrictions increase costs and may impact clinical trials or sales of our products, or otherwise complicate aspects of our business. In particular, tensions between the U.S. and China, which have already led to a series of tariffs and sanctions, as well as other business restrictions, could further escalate based on additional trade restrictions or retaliation thereto. In February 2025, the U.S. presidential administration imposed new tariffs on Chinese goods and China responded with tariffs on select U.S. goods. Additionally, tariffs were proposed or threatened with respect to other jurisdictions, including Mexico, Canada and Europe. If geopolitical tensions were to increase and disrupt our operations in, or related to, China or other major international geographies, such disruption would significantly impact our business. See Item 1A, "Risk Factors—Risks Related to Our Operations—Reliance on third-party relationships and outsourcing arrangements could adversely affect our business," for additional information. As a further example, the financial impact of higher energy prices, defense spending, and geopolitical and economic disruptions, has further exacerbated financial pressures on governments with single-payer or government funded healthcare systems, leading to increased impetus for increases in rebates, clawbacks, and other reforms to reimbursement systems, particularly in Europe. These and similar events have adversely affected, and may continue to adversely affect, us, our business partners, and our customers. For more details, see Item 1, "Business—Regulations and Private Payer Actions Affecting Pharmaceutical Pricing, Reimbursement, and Access."
Read it in 10-K 2025-02-19 at sec.gov ↗
RewordedRisk Factors
Manufacturing or quality assurance difficulties at our facilities or those of our contractors and suppliers, the failure or refusal of a supplier or contract manufacturer Difficulties related to supply contracted quantities in a timely manner or at all, or increases in demand on a supplier with constrained capacity 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 lost revenue, increased costs, reduced market opportunities, and the possibility of additional market entrants.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
Due The ability to insure against such exposures is limited, and due to a very restrictive market for liability insurance, insurance we are predominately self-insured for litigation liability losses for all of our products, as well as for litigation or investigations related to our pricing practices or other similar matters. currently and previously marketed products.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
See, See Item 1A, "Risk Factors—Risks Related to Doing Business Internationally—Uneven Internationally—Our global operations subject us to risks, including as related to uneven economic growth or downturns or downturns, international trade trade, and other global disruptions, geopolitical tensions, or disputes could adversely affect our business and operating results" disputes" for additional information.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
For example, regulatory uncertainty In addition, developing laws and regulations related to AI or other emerging technologies create uncertainty, may require significant resources to adjust business practices for compliance, and in some cases, may limit our ability to comply with developing laws. use AI-based software.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
See, Item 1A, "Risk Factors—Risks Related to Our Operations—Reliance on third-party relationships and outsourcing arrangements could adversely affect our business," and "Risk Factors—Risks Related to Doing Business Internationally—Uneven Internationally—Our global operations subject us to risks, including as related to uneven economic growth or downturns or downturns, international trade trade, and other global disruptions, geopolitical tensions, or disputes could adversely affect our business and operating results" disputes" for more details.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
Failure or results that misalign with expectations can occur at any point in the process, including in later stages after substantial investment and investment, following meaningful cost for manufacturing capabilities and inventory to prepare for launch. launch, and after we and others may have attributed significant value for these potential products.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
Despite our ongoing efforts to meet projected future worldwide demand for our products by obtaining additional internal and contracted manufacturing capacity, there can be no assurances that such capacity increases that we expect will be needed to meet future demand will be realized as expected or that we will meet demand in launched markets in the future.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
For example, a proposal by an agreement-in-principle announced in December 2025 between the European Commission Commission, Council and Parliament to revise the EU's general pharmaceutical legislation threatens would make conditional the predictability and length of certain pharmaceutical intellectual property incentives, including by proposed reductions in maximum data protection periods.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
Our failure, A failure in the protection or the failure maintenance of our third-party service providers, to protect and maintain the security, confidentiality, integrity, and availability of our (or their) our third-party service providers') IT systems and confidential information and other data could significantly harm our reputation as well as result in significant costs, including those related to fines, penalties, litigation, and obligations to comply with applicable data breach laws.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
As these These practices expand, including due to potential further consolidation of U.S. private third-party payers, we may face in some cases create difficulty in obtaining or maintaining timely or adequate pricing or formulary placement of our products.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
For biologics, loss of exclusivity may or may not also result in the near-term entry of competitor versions (i.e., biosimilars) due to many factors, including development timelines, manufacturing challenges, and/or uncertainties regarding the regulatory approval pathways. biosimilars).
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
In addition, Furthermore, intellectual property protection in certain jurisdictions is weak and we face heightened risks to our intellectual property rights in these jurisdictions, including competition with generic or counterfeit versions of our products at or relatively shortly after launch. launch as well as the risk of diversion of generic or counterfeit products from these jurisdictions into others.
Read it in 10-K 2026-02-12 at sec.gov ↗
Quiet changesRisk Factors
The effect of reducing prices and reimbursement for certain of our products could significantly impact impacts our business and consolidated results of operations.
Read it in 10-K 2026-02-12 at sec.gov ↗
Quiet changesRisk Factors
Challenges to U.S. retail pharmacies due to pharmacy benefit manager reimbursement pressures, among other things, have resulted and may result in financial difficulties for some pharmacies that may impact patient experiences, lead to determinations by certain pharmacies to not carry one or more of our significant products or threaten the viability of these pharmacies, which could negatively impact our business and results of operations.
Read it in 10-K 2026-02-12 at sec.gov ↗
Quiet changesRisk Factors
In addition, IT system security in jurisdictions outside the U.S. is in many cases weaker and may result in additional costs, uncertainties, and risks.
Read it in 10-K 2026-02-12 at sec.gov ↗
Quiet changesRisk Factors
We are a net receiver of most foreign currencies, and our results of operations are adversely impacted when the U.S. dollar is strong compared to foreign currencies.
Read it in 10-K 2026-02-12 at sec.gov ↗
Quiet changesRisk Factors
Some of these matters involve or may involve numerous plaintiffs and parties seeking large or indeterminate financial claims and may remain unresolved for several years.
Read it in 10-K 2026-02-12 at sec.gov ↗
Quiet changesRisk Factors
New or ongoing business practices or commercial capabilities may subject us to additional scrutiny over compliance with applicable regulatory schemes and compliance obligations or expose us to new regulatory schemes and compliance obligations entirely.
Read it in 10-K 2026-02-12 at sec.gov ↗
Quiet changesRisk Factors
Oversight, administrative, and enforcement changes, delays, inconsistencies, lapses, and failures could materiality materially impact our business and reputation.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedMD&A
(Tables present dollars in millions, except per-share data, and numbers may not add due to rounding)
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedMD&A
Metabolic dysfunction-associated steatotic liver disease Phase 3 Phase 3 trial was initiated.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedMD&A
Metabolic dysfunction-associated steatotic liver disease Phase 3 Phase 3 trial was initiated.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedMD&A
Pirtobrutinib Chronic lymphocytic leukemia Approved Full approval in the U.S., the EU, and Japan.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedMD&A
Sofetabart mipitecan (FRα ADC)(3) Platinum-resistant ovarian cancer Phase 3 Phase 3 trial was initiated.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedMD&A
(3) The FDA granted Breakthrough Therapy designation for olomorasib for the treatment of certain newly diagnosed metastatic KRAS G12C-mutant lung cancers and for sofetabart mipitecan for the treatment of certain patients with platinum-resistant ovarian cancer. Breakthrough Therapy designation is designed to expedite the development and review of potential medicines that are intended to treat a serious condition when preliminary clinical evidence indicates that the treatment may demonstrate substantial improvement on a clinically significant endpoint(s) over already available therapies.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedMD&A
Global concern over access to, and affordability of, pharmaceutical products continues to drive debate and action, as well as cost containment efforts by governmental authorities and scrutiny of pricing and access disparities. Cost containment measures include the use of mandated discounts, price reporting requirements, mandated reference prices, restrictive formularies, changes to available intellectual property protections, as well as other efforts.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedMD&A
In November 2025, we announced preliminary voluntary agreements with the U.S. government in which, among other arrangements, we agreed to lower Medicaid and certain other drug prices for U.S. patients and to launch new medicines with a more balanced pricing approach across developed nations. We face risks and uncertainty associated with these arrangements and negotiating the definitive agreements, including potential delays and the possibility of unfavorable terms related to pricing, access, and other key objectives. Among other risks, we may fail to adequately capitalize on the additional U.S. access to our obesity medicines resulting from these agreements, particularly if the revenues generated from such expanded access are insufficient to offset pricing concessions. Moreover, the outcome of these arrangements and broader U.S. policy efforts to align domestic pharmaceutical pricing with international benchmarks from countries with competing healthcare cost containment priorities is uncertain and could negatively impact our pricing strategies, product demand or access, or competitive positioning across global markets, and may result in reduced revenue in certain markets.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedMD&A
The U.S. and other countries have recently imposed or reached alignment on new tariffs. In some cases, imposed tariffs have been paused but may come into effect quickly and unpredictably. While pharmaceuticals are exempt from certain of these tariffs, such exemptions may be terminated or may not apply to any future tariffs. The precise impact of tariffs, trade protection measures, and other restrictions depend on their ultimate scope, timing, and other factors. If enacted, additional restrictions could result in supply disruptions or delays, further increase costs, or otherwise have a negative impact on our business. Given the nature of pharmaceutical regulation and commercialization, we may not be able to share the burden of increased costs from tariffs and related impacts to any meaningful degree.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedMD&A
Mounjaro and Zepbound accounted for 56 percent of our total revenues in 2025 and we expect cardiometabolic health products will continue to represent a significant and growing portion of our business, revenues, and prospects. In 2025, we reached preliminary drug pricing agreements with the U.S. government. As part of these agreements, Medicare beneficiaries will have access to discounted Lilly obesity medicines by July 1, 2026 and individual state Medicaid programs will have the option to expand access to these medicines. Also in 2025, we received a U.S. Commissioner’s National Priority Voucher for our product candidate orforglipron for the treatment of obesity, and we submitted to the FDA under that expedited review pathway. Internationally, we launched Mounjaro in all major markets. To support anticipated demand for our current and prospective products, we have undertaken significant manufacturing expansion initiatives. Additional capacity is expected to become operational over the next several years.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedMD&A
We expect our near-term financial performance will be impacted by, among other factors, the timing of potential regulatory approvals for orforglipron and U.S. Medicare access for Zepbound (and, if approved, orforglipron), as well as the demand and pace of uptake in new incretin channels and markets. More generally, incretin volume fluctuations due to channel dynamics or demand can have a disproportionate impact on our results of operations in any given period. Longer term, the durability of our cardiometabolic health product offerings and sustainability of our growth and prospects will depend on our ability to maintain or strengthen our competitive position as the therapeutic landscape evolves and to deliver further innovations that provide sufficient value to sustain our growth momentum.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedMD&A
In July 2025, the One Big Beautiful Bill Act (OBBBA), which implemented certain U.S. tax law changes, was enacted into law. The OBBBA modified and made permanent several provisions of the Tax Cuts and Jobs Act, including reductions in scheduled increases for the rate of taxation of foreign income, immediate deductibility of U.S. research and development expenses, and reinstatement of 100 percent bonus depreciation for capital assets.
Read it in 10-K 2026-02-12 at sec.gov ↗
RemovedMD&A
Tirzepatide (Mounjaro, Zepbound) Obesity Approved Approved in the U.S. and the EU in 2023 and in Japan in 2024. Phase 3 trials are ongoing.
Read it in 10-K 2025-02-19 at sec.gov ↗
RemovedMD&A
Metabolic dysfunction-associated steatohepatitis Phase 2 Announced in 2024 that a Phase 2 trial met the primary endpoint.
Read it in 10-K 2025-02-19 at sec.gov ↗
RemovedMD&A
Retatrutide Cardiovascular / renal outcomes Phase 3 Phase 3 trials initiated in 2024.
Read it in 10-K 2025-02-19 at sec.gov ↗
RemovedMD&A
Volenrelaxin Heart failure Discontinued In 2025, Phase 2 trial was discontinued based on clinical data readout.
Read it in 10-K 2025-02-19 at sec.gov ↗
RemovedMD&A
Lebrikizumab(1) AR (perennial allergens) Phase 3 Phase 3 trial initiated in 2024.
Read it in 10-K 2025-02-19 at sec.gov ↗
RemovedMD&A
Ucenprubart Atopic dermatitis Discontinued In 2024, Phase 2 trial was discontinued based on clinical data readout.
Read it in 10-K 2025-02-19 at sec.gov ↗
RemovedMD&A
Parkinson's disease Phase 2 Granted U.S. Food and Drug Administration (FDA) Fast Track designation(2). Phase 2 trial is ongoing.
Read it in 10-K 2025-02-19 at sec.gov ↗
RemovedMD&A
GRN Gene Therapy Frontotemporal dementia Phase 2 Granted FDA Fast Track designation(2). Phase 2 trial is ongoing.
Read it in 10-K 2025-02-19 at sec.gov ↗
RemovedMD&A
O-GlcNAcase Inh Alzheimer's disease Discontinued In 2024, Phase 2 trial was discontinued based on clinical data readout.
Read it in 10-K 2025-02-19 at sec.gov ↗
RemovedMD&A
Pirtobrutinib Chronic lymphocytic leukemia Approved(3) FDA granted accelerated approval(3) in the U.S. in 2023. Submitted in the EU and Japan in 2024. Phase 3 trials are ongoing.
Read it in 10-K 2025-02-19 at sec.gov ↗
RemovedMD&A
Mantle cell lymphoma Approved(3) FDA granted accelerated approval(3) in the U.S. in 2023. Approved in the EU in 2023 and in Japan in 2024. Phase 3 trial is ongoing.
Read it in 10-K 2025-02-19 at sec.gov ↗
RemovedMD&A
(2) Fast Track designation is designed to facilitate the development and expedite the review of medicines to treat serious conditions and fill an unmet medical need.
Read it in 10-K 2025-02-19 at sec.gov ↗
RewordedMD&A
Year Ended December 31, Percent Change 2025 2024 2023 Gross margin $ 36,624.4 54,127 $ 27,041.9 35 36,625 48 Gross margin as a percent of revenue 83.0 % 81.3 % 79.2 % Research and development $ 10,990.6 13,337 $ 9,313.4 18 10,991 21 Marketing, selling, and administrative 8,593.8 7,403.1 16 11,094 8,594 29 Acquired in-process research and development 3,280.4 3,799.8 (14) Asset impairment, restructuring, and other special charges 860.6 67.7 NM Other—net, (income) expense 218.6 (96.7) NM 2,910 3,280 (11) Income taxes 2,090.4 1,314.2 59 5,091 2,090 144 Effective tax rate 19.8 % 16.5 % 20.1 %
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedMD&A
These factors include cost and wage inflation, supply chain and labor market complexities, international tension and conflicts, uneven economic growth or growth, downturns or uncertainty, risks related to engaging in business globally, including legislation and an increase regulatory action in overall or regarding foreign jurisdictions, and fluctuations due to channel dynamics or demand in our industry for certain products and materials. products.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedMD&A
See Item 1, "Business" and Item 1A, "Risk Factors," and Notes 4, 14, and 16 to the consolidated financial statements for additional information on risk factors and risks and uncertainties that could impact our business and operations. operations, including the matters described within this Executive Overview.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedMD&A
Due The ability to insure against such exposures is limited, and due to a very restrictive market for liability insurance, insurance we are predominantly self-insured for liability losses for all our currently and previously marketed products, as well as for litigation or investigations related to our pricing practices or other similar matters. products.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedMD&A
Our effective tax rate was 16.5 19.8 percent in 2024, 2025 compared with an effective tax rate of 20.1 16.5 percent in 2023. 2024, primarily driven by unfavorable impacts related to the jurisdictional mix of earnings and U.S. tax law changes in 2025 relative to 2024.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedMD&A
Reforms, initiatives, and other actions, including those that may stem from political initiatives, periods of uneven economic growth or downturns, or as a result of inflation or deflation, trade and other global disputes and interruptions including related to tariffs, trade protection measures, and similar restrictions, the emergence or escalation of, and responses to, international tension and conflicts, or government budgeting priorities, are expected to continue to result in added pressure on pricing cost, pricing, reimbursement, and reimbursement access for our products.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedMD&A
Because Since there is a timing lag between the product sale and the settlement of this time lag, in any particular period accruals related to these programs, our net product revenue may incorporate revisions of accruals for several periods.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedMD&A
Generally, Currently, these government prices generally apply beginning at nine years (for medicines approved under a New Drug Application) or thirteen years (for medicines approved under a Biologics License Application) following FDA approval or licensure for the molecule and are set at a price that generally represents a significant discount from existing prices to wholesalers and direct purchasers. molecule.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedMD&A
In determining the appropriate accrual amount, we consider our historical rebate payments for these programs, as well as patient assistance program costs, programs by product as a percentage of our historical sales as well as sales, any significant changes in sales trends (e.g., patent expiries and product launches), trends, an evaluation of the current contracts for these programs, the percentage of our products that are sold via these programs, and our product pricing.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedMD&A
The effect of reducing prices IRA has, and reimbursement for certain will continue to, meaningfully influence our business strategies and those of our products competitors and could significantly impact our business and consolidated results of operations.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedMD&A
Consolidation and integration of private Private payers and pharmacy benefit managers in the U.S. has also continue to significantly impacted impact the market for pharmaceuticals by increasing payer leverage in negotiating through negotiation of access, manufacturer price or rebate concessions and pharmacy reimbursement rates.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedMD&A
The executed Executed agreements related to our medicines in development could, under certain circumstances, require us to pay up to approximately $14 $10 billion if we do not purchase specified amounts of goods or services primarily related to our incretin medicines, including medicines in development, over the durations of the agreements, which are generally up to 8 years.
Read it in 10-K 2026-02-12 at sec.gov ↗
Quiet changesMD&A
The table reflects the status of these NMEs and NILEX products, including certain other developments, up to the time of the filing of this Annual Report on Form 10-K:
Read it in 10-K 2026-02-12 at sec.gov ↗
