3 2019 INTEGRATED SUMMARY REPORT dividend increase for the second consecutive year. And over LOOKING AHEAD the past five years, our annualized total shareholder return has 2020 is shaping up to be another exciting year at Lilly. We expect averaged 16.7%, compared to 11.7% for the S&P benchmark. to achieve high single-digit revenue growth, exceeding our five-year goals, with more than half of our sales driven by volume of our SUSTAINING PROGRESS newer products. We remain committed to further margin expansion From our company’s earliest days, we have actively engaged with while we continue to invest in our innovation-based strategy. our partners in health systems around the world to ensure that our In addition to Reyvow for the acute treatment of migraine, we medicines can reach the people who need them. One way we do expect to launch two more new medicines this year: URLi, a that is through value-based contracts, in which the price we receive fast-acting mealtime insulin for diabetes, and selpercatinib for depends on how much our medicines help patients. In the U.S., non-small cell lung cancer and thyroid cancers. Selpercatinib, part 20% of revenue flowing through access-based contracts has a of our 2019 acquisition of Loxo Oncology, shrank tumors in the value-based component, and we have more than 300 alternative vast majority of study participants, like Tanner Noble, whom you access contracts in other global markets, many of which are can read more about on the next page. value-based. In the U.S., our success in working with payers and government We’re closely tracking the potential breakthroughs represented entities to expand access to insulin and other therapies has been by other late-phase assets, including tirzepatide, which has tempered by the realization that the widening difference between generated encouraging data for blood glucose control and list and net prices is not sustainable. Of particular concern are weight loss in people with diabetes, and mirikizumab, which high-deductible insurance plans, which can financially burden we’re studying in ulcerative colitis, Crohn’s disease and psoriasis. patients with chronic diseases. For people who use insulin, we’ve Our early phase pipeline provides a good foundation for future launched lower-priced versions of Humalog, complementing our growth, highlighted by new cancer medicines such as our comprehensive patient assistance programs that seek to lower BTK inhibitor (LOXO-305) and our KRAS G12C inhibitor. out-of-pocket cost for people with diabetes like Doug Liebman. Given the life-changing potential of medicines, we consider You can read his story on page 20. breakthroughs that lead to greater access just as critical as those While these programs are helping, it’s clear that broader, that lead to innovative treatments. We bring a strong sense of system-wide changes are needed to shift costs away from patients. urgency to ensuring that our medicines are available and A potential first step in resetting the financial incentives for each affordable for patients who need them. entity in the pharmaceutical supply chain would be to increase the As we enter the next decade, we see an exceptional opportunity transparency of net pricing and explore its use as the basis for all to create new standards of care and accessibility in some of the transactions, including patient cost sharing. The Transparency world’s most serious diseases, advance the boundaries of possibility section of this report contains further insight into how we’re in biopharmaceuticals, and deliver extraordinary value to patients, addressing this issue, especially for people with diabetes. other health care customers, shareholders, employees and In Europe and Japan, we’re partnering with governments to gather communities. We will do all we can to realize that potential. evidence of our medicines’ value to support appropriate use and With sincere appreciation for your ongoing interest and support, a fair price. We’re accelerating availability, cutting months to reimbursement in major European markets by more than 50% since 2017. In developing countries, we’re actively enhancing existing health systems while supplying our most essential products in ways that ensure affordable access. You can read more about our important initiatives to improve global health, including Lilly 30x30 and our health worker training program, in the Corporate Responsibility section on page 26. David A. Ricks, Chairman and CEO