stockrowWhat it does
Eli Lilly discovers, develops, manufactures and markets medicines for people. Founded in 1875 and headquartered in Indianapolis, it is led by Chair, President and Chief Executive Officer David Ricks. Lilly operates as one business segment: human pharmaceutical products.
Its cardiometabolic medicines include Mounjaro for type 2 diabetes and Zepbound for obesity or overweight with a weight-related condition. Zepbound is also used to treat moderate to severe obstructive sleep apnea in adults with obesity. Lilly sells insulin products and collaborates with Boehringer Ingelheim on Jardiance, which has diabetes, heart failure and chronic kidney disease indications.
Lilly also sells cancer medicines, including Verzenio and Inluriyo for certain breast cancers. Its immunology portfolio includes treatments for conditions such as psoriasis, ulcerative colitis and Crohn’s disease. In neuroscience, Emgality is used for migraine prevention and Kisunla treats adults with early symptomatic Alzheimer’s disease who meet specified conditions.
The company sells through wholesalers and other healthcare channels, while physicians and other healthcare professionals prescribe or administer its products. LillyDirect offers delivery of selected medicines through third-party pharmacies in certain jurisdictions. Lilly’s products are sold in approximately 90 countries.
How it makes money
Lilly earns revenue by selling medicines and through collaboration arrangements. Its single pharmaceutical segment spans cardiometabolic health, oncology, immunology and neuroscience. Some products are marketed with partners: for example, Lilly collaborates with Boehringer Ingelheim on Jardiance and with Incyte on Olumiant.
Mounjaro and Zepbound accounted for 56 percent of total revenue in 2025. The company also derived more than $3 billion in direct product and/or collaboration and other revenues from each of Verzenio, Trulicity, Taltz and Jardiance in 2025. Lilly sells medicines for ongoing conditions, including diabetes and obesity, although prescription volumes depend on access, demand and competition.
It was reported on 29 October 2026 that Q3 2026 revenue was $24.4 billion; Lilly’s 2025 revenue increased, and Q3 2026 revenue grew 39% compared with Q3 2025.
Prices realized by Lilly can differ from list prices. Arrangements with wholesalers, insurers, pharmacy benefit managers and other organizations often include discounts or rebates. Governments also require rebates or set prices for certain medicines. Jardiance became subject to government-set Medicare prices effective in 2026; Trulicity and Verzenio were selected for prices effective in 2028.
Lilly said Q3 2026 revenue included approximately $900 million from items including milestone payments and changes in estimates for rebates and discounts. It expects net realized price to be a headwind in 2027, more than offset by volume growth.
Customers and how it sells
Lilly serves patients through a network that includes wholesalers, pharmacies, physicians, hospitals, insurers and pharmacy benefit managers. Its account managers also work with employers, plan sponsors, government and long-term care institutions, and group purchasing organizations. Lilly promotes its medicines to healthcare professionals and advertises certain products directly to U.S. consumers.
In the U.S., most products move through wholesalers that serve pharmacies, healthcare professionals and hospitals. McKesson, Cencora and Cardinal Health each accounted for a significant percentage of consolidated revenue in 2025. LillyDirect provides another route for selected medicines: third-party pharmacies dispense and deliver them to patients using the platform.
Lilly manufactures and distributes products through facilities in the U.S., including Puerto Rico, and in Europe and Asia. Its products are sold in approximately 90 countries. Outside the U.S., the company maintains its own sales organizations in many countries and also uses third parties for some commercial operations.
Lilly said it launched Foundayo for obesity in the U.K., Mexico and Saudi Arabia, and for type 2 diabetes in Mexico. In the U.S., it said the Medicare GLP-1 bridge program expanded access to its obesity medicines for approximately 20 million seniors, with more than half a million people filling a Lilly prescription through the program since its July 1st launch.
Suppliers and costs
Lilly operates its own manufacturing facilities and uses third parties to manufacture certain products, devices and components. As it expands capacity, it has entered into contract manufacturing and material-supply agreements. Agreements for medicines in development could require payments if Lilly does not purchase specified quantities of goods or services.
Capital expenditures were $7.8 billion during 2025. Lilly is investing in facilities for existing and future products and expects meaningfully higher capital expenditures in the near term. It said it broke ground on a $6.5 billion facility in Houston and a $5 billion facility in Richmond, Virginia.
Research and development, manufacturing, marketing and administration are recurring costs. Lilly also uses acquisitions and licensing to add potential medicines, and some development arrangements require milestone or royalty payments if specified events occur. In Q3 2026, research and development expenses increased 23%, while marketing, selling and administrative expenses increased 14%.
Manufacturing must meet quality regulations. A failure by Lilly or a third-party manufacturer to comply can cause production interruptions, shortages, recalls or delays to product approvals.
- Revenue$65.2B
- Cost of revenue−$11.1B
- Research and development−$13.3B
- Selling, general and administrative−$11.1B
- Other operating costs−$3.4B
- Operating income$26.3B
Competitive position
Lilly competes with branded medicines, generics and biosimilars across its therapeutic areas. It was reported on 28 October 2026 that Lilly’s experimental retatrutide outperformed Novo Nordisk’s Ozempic in Phase 3 data for type 2 diabetes. Novo Nordisk is the named competitor for which the available evidence identifies a competing product.
Effectiveness, safety, availability, ease of use and patient preference influence competition. Price, insurance coverage, reimbursement and formulary placement also affect whether patients can obtain a medicine. Lilly said its portfolio held more than 60% of the U.S. type 2 diabetes incretin prescription market in Q3 2026 and approximately 58% of international incretin gross sales.
Patents and regulatory data protection can limit direct copies of Lilly’s medicines. The estimated U.S. compound-patent expiry for Mounjaro and Zepbound is 2036, although Lilly cannot guarantee how long exclusivity will last. Our reading: intellectual property is a material source of protection, but it is time-limited and does not prevent competition from different medicines.
Lilly also invests in research, manufacturing and distribution and has relationships with prescribers and payers. Our reading: these capabilities support its ability to develop and supply medicines, but payer restrictions and rival products can still limit access. Generic and biosimilar entrants can cause rapid revenue declines after exclusivity is lost.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| Novo Nordisk | Diabetes medicines | High |
Growth opportunities
Lilly’s growth plans include expanding access to its diabetes and obesity medicines, introducing products and uses, and adding manufacturing capacity. In 2025, revenue increased primarily because of higher volume, partly offset by lower realized prices; Mounjaro and Zepbound were the primary drivers of both changes.
Lilly said its Q3 2026 U.S. revenue increased 34%, primarily from volume growth for those medicines. It also said Mounjaro drove revenue growth in Europe, Japan, China and the rest of the world. Foundayo has launched in several markets, and Lilly expects a rollout in all major markets in 2027. The company said Foundayo is under review for type 2 diabetes in the U.S.
The Medicare GLP-1 bridge program gives Lilly another channel for obesity medicines. Lilly said more than half a million people had filled a prescription for one of its medicines through the program since launch. It expects continued incretin volume growth and the full-year impact of bridge access to contribute to its U.S. business in 2027.
Beyond cardiometabolic health, Lilly said Q3 revenue from its oncology, immunology and neuroscience key products increased compared with the prior year. It received U.S. approval for a weekly insulin and new indications for Inluriyo, Jaypirca and Mounjaro. The company is also expanding facilities and adding potential medicines through business development.
- $28.3BFY2021
- $28.5BFY2022
- $34.1BFY2023
- $45.0BFY2024
- $65.2BFY2025
- $91.0BFY2026 guidance
Structural risks
- Product concentration: Mounjaro and Zepbound accounted for 56 percent of total revenue in 2025. Changes in demand, access, safety, supply or competition for these medicines could materially affect results.
- Pricing and access: Governments and private payers restrict prices and reimbursement. Some payers do not cover obesity medicines for weight loss, and expanded access can require pricing concessions. Jardiance, Trulicity and Verzenio have been selected for government-set Medicare prices.
- Research and development: Drug development is costly and has a high failure rate. Candidates may fail in trials, face delayed or denied approvals, or reach the market without sufficient reimbursement or commercial success. Lilly must replace revenue lost to competition and expiring protections.
- Exclusivity and competition: Patents can expire, be challenged or fail to prevent competing products. Generic and biosimilar entry can cause rapid revenue declines. Counterfeit and mass-compounded incretins also present patient-safety, reputation and market risks.
- Manufacturing and distribution: Quality or regulatory problems can interrupt production, cause shortages or delay approvals. Lilly relies on third parties for some products and components and distributes most U.S. products through a limited number of wholesalers.
- Safety: New information can emerge after approval as medicines are used for longer periods and by more patients. Safety or efficacy concerns can lead to label changes, reduced acceptance, recalls, withdrawals or product-liability claims.
Bottom line
Our reading
Our reading: Lilly is a pharmaceutical business whose current revenue is concentrated in diabetes and obesity medicines, supported by products in cancer, immunology and neuroscience. Its research, intellectual property and manufacturing investments provide ways to sustain the portfolio, but their returns depend on successful development and patient access. Pricing pressure, payer coverage, competition and eventual loss of exclusivity can reduce the revenue generated by its medicines.