Note ~~10:~~9: Contingencies

We are ~~a party to~~involved in various lawsuits, claims, government investigations and other legal ~~actions~~proceedings that arise in the ordinary course of business. These claims or proceedings can involve various types of parties, including governments, competitors, customers, suppliers, service providers, licensees, employees, or shareholders, among others. These matters may involve patent infringement, antitrust, securities, pricing, sales and ~~government investigations.~~marketing practices, environmental, commercial, contractual rights, licensing obligations, health and safety matters, consumer fraud, employment matters, product liability and insurance coverage, among others. The ~~most significant~~resolution of these matters often develops over a long period of time and expectations can change as a result of new findings, rulings, appeals or settlement arrangements. Legal proceedings that are significant or that we believe could become significant or material are described below.

We believe the legal proceedings in which we are named as defendants are without merit and we are defending against them vigorously. It is not possible to determine the outcome of these matters, and we cannot reasonably estimate the maximum potential exposure or the range of possible loss in excess of amounts accrued for any of these matters; however, we believe that ~~except as noted below with respect to the U.S. Alimta patent litigation,~~ the resolution of all such matters will not have a material adverse effect on our consolidated financial position or liquidity, but could possibly be material to our consolidated results of operations in any one accounting period.

Litigation accruals, environmental liabilities, and the related estimated insurance recoverables are reflected on a gross basis as liabilities and assets, respectively, on our consolidated condensed balance sheets. With respect to the product liability claims currently asserted against us, we have accrued for our estimated exposures to the extent they are both probable and reasonably estimable based on the information available to us. We accrue for certain product liability claims incurred but not filed to the extent we can formulate a reasonable estimate of their costs. We estimate these expenses based primarily on historical claims experience and data regarding product usage. Legal defense costs expected to be incurred in connection with significant product liability loss contingencies are accrued when both probable and reasonably estimable.

Because of the nature of pharmaceutical products, it is possible that we could become subject to large numbers of additional product liability and related claims in the future. Due to a very restrictive market for product liability insurance, we are self-insured for product liability losses for all our currently and previously marketed products.

Patent Litigation

Alimta Patent Litigation ~~and Administrative Proceedings~~

A number of manufacturers are seeking approvals in the U.S., and a number of countries in Europe ~~and Japan~~ to market generic forms of Alimta prior to the expiration of our vitamin regimen patents, alleging that those patents are invalid, not infringed, or both. We believe our Alimta vitamin regimen patents are valid and enforceable against these generic manufacturers. However, it is not possible to determine the ultimate outcome of the proceedings, and accordingly, we can provide no assurance that we will prevail. ~~An unfavorable outcome~~The loss of exclusivity in the U.S. could have a material adverse impact on our future consolidated results of operations ~~liquidity,~~ and ~~financial position. We expect that a loss of exclusivity for Alimta in any of the below jurisdictions~~cash flows and would result in a rapid and severe decline in future revenue for the ~~product in the relevant market.~~product.

U.S. Patent Litigation

Alimta (pemetrexed) is protected by a vitamin regimen patent until 2021, plus pediatric exclusivity through May 2022.

In ~~June 2018,~~August 2017, we filed a lawsuit in the U.S. District Court for the Southern District of Indiana ruled in our favor in 2 cases, finding Dr. Reddy's Laboratories, Ltd. and Dr. Reddy's Laboratories, Inc.'s (collectively, Dr. Reddy) and Hospira, Inc.'s (Hospira) proposed products using an alternative form of pemetrexed (the active ingredient in Alimta) would infringe our method of use patent under the doctrine of equivalents. In August 2019, the U.S. Court of Appeals for the Federal Circuit affirmed that ruling, and in November 2019, the appeals court denied Dr. Reddy and Hospira’s petition for a rehearing. In June 2020, the U.S. Supreme Court denied Dr. Reddy and Hospira’s petitions to review the case and this litigation has ended.

~~We have 1 additional lawsuit pending in federal court in which we allege infringement~~ against Apotex Inc. (Apotex) ~~in response to~~alleging infringement of Alimta's vitamin regimen patent for its application to market ~~products using alternative forms of pemetrexed.~~a pemetrexed product. In December 2019, the U.S. District Court for the Southern District of Indiana granted our motion for summary judgment of infringement, ~~under the doctrine of equivalents against Apotex. Apotex has appealed that ruling to~~and in December 2020, the U.S. Court of Appeals for the Federal Circuit ~~with argument scheduled in November 2020. We had filed~~affirmed that ruling. Apotex did not request reconsideration or a ~~similar lawsuit against Actavis LLC in~~rehearing of that ruling. However, Apotex could petition the U.S. ~~District~~Supreme Court ~~for~~to review the ~~Southern District of Indiana, which has been administratively closed.~~case.

In December 2019, we settled a lawsuit we filed against Eagle Pharmaceuticals, Inc. (Eagle) in response to its application to market a product using an alternative form of pemetrexed. Per the settlement agreement, Eagle has a limited initial entry into the market with its product starting February 2022 (up to an approximate three-week supply) and subsequent unlimited entry starting April 2022.

European Patent Litigation

In Europe, Alimta (pemetrexed) is protected by the vitamin regimen patent through June of 2021. Notwithstanding the existence of our vitamin regimen patent, several companies launched generic pemetrexed products at risk in France, Germany, and the Netherlands but those products were subsequently removed from those markets as a consequence of patent infringement actions brought by us. In many cases, those patent infringement actions are subject to appeals filed by the generic manufacturer. In March 2021, we entered into a settlement agreement with Fresenius Kabi Aktienngesellschaft that discontinued all pending European patent litigation involving the Fresenius Kabi group of companies including that between us and Fresenius Kabi France and Fresenius Kabi Groupe France.

Legal proceedings are ongoing regarding our Alimta patents in various national courts throughout Europe. We are aware that several companies have received approval to market generic versions of pemetrexed in major European markets (including generics currently on the market at risk in France and the Netherlands) and that additional generic competitors may choose to launch at risk. Following a final decision in the Supreme Court of Germany in July 2020 overturning the lower court and upholding the validity of our Alimta patent, several generics that were on the market at risk left. We have removed the remaining generics from the market by obtaining preliminary injunctions in our favor. In September 2020, the Paris Court of First Instance in France issued a final decision upholding the validity of our Alimta patent and found infringement by Fresenius Kabi’s (Kabi) pemetrexed product. The court issued an injunction against Kabi and provisionally awarded us damages. We will continue to pursue injunctions to remove remaining generics from the market in France. In late October 2020, the Court of Appeal of the Netherlands ruled in Lilly's favor and reinstated an order against Kabi prohibiting it from continuing to market its generic pemetrexed product in the Netherlands. Kabi's generic pemetrexed product was the only at risk generic on the market in the Netherlands.

~~Our vitamin regimen patents have also been challenged in other smaller European jurisdictions.~~ We will continue to seek to remove any generic pemetrexed products launched at risk in other European markets, seek damages with respect to such launches, and defend our patents against validity challenges.

2927

~~Japanese Administrative Proceedings~~

~~NaN~~ separate sets of demands for invalidation of our 2 Japanese vitamin regimen patents, involving several companies, have been filed with the Japanese Patent Office (JPO). The JPO has rejected demands for invalidation by Sawai Pharmaceutical Co., Ltd. and Nipro Corporation, and both rejections have been affirmed on appeal. In October 2020, the JPO issued notices closing the last remaining set of demands brought by Hospira, and Hospira has requested withdrawal of its demands for invalidation. These patents provide intellectual property protection for Alimta until June 2021. Notwithstanding our patents, generic versions of Alimta received regulatory approval in Japan starting in February 2016. We do not currently anticipate that generic versions of Alimta will proceed to pricing approval prior to our patent’s expiration.

~~Jardiance Patent Litigation~~

Boehringer Ingelheim, our partner in marketing and development of Jardiance, initiated U.S. patent litigation in the U.S. District Court of Delaware involving Jardiance, Glyxambi, and Synjardy in accordance with the procedures set out in the Drug Price Competition and Patent Term Restoration Act of 1984 (the Hatch-Waxman Act). Several companies submitted Abbreviated New Drug Applications seeking approval to market generic versions of Jardiance prior to the expiration of the relevant patents, alleging certain patents, including in some allegations the compound patent, are invalid or would not be infringed. Trial is scheduled for April 2021.

~~Taltz Patent Litigation~~

~~We were~~ named as a defendant in litigation filed by Genentech, Inc. (Genentech) in Germany seeking a ruling that Genentech’s patent would be infringed by our continued sales of Taltz in Germany. After it sold its patent rights to Novartis Pharma AG (Novartis) in June 2020, Genentech withdrew its infringement litigation and Novartis subsequently filed litigation against us in Germany asserting infringement based on sales of Taltz. We expect a trial to assess Novartis’ German infringement claims to take place ~~in May 2021.~~ ~~We are also named in litigation in the U.K. in which Genentech asserted similar claims regarding its corresponding U.K. patent. We believe these lawsuits~~ ~~are without merit and are defending against them vigorously.~~

Emgality Patent Litigation

~~We have~~In September 2018, we were ~~been~~ named as a defendant in litigation filed by Teva Pharmaceuticals International GMBH and Teva Pharmaceuticals USA, Inc. (collectively, Teva) in the U.S. District Court for the District of Massachusetts seeking a ruling that various claims in 9 ~~different~~different Teva patents would be infringed by our launch and continued sales of Emgality for the prevention of migraine in adults. ~~We believe this lawsuit~~Trial is ~~without merit and are defending against it vigorously.~~expected in February 2022. Separately, the U.S. Patent and Trademark Office (USPTO) granted our request to initiate an inter partes review (IPR) to reexamine the validity of the 9 Teva patents asserted against us in the litigation. In February 2020, the USPTO ruled in our favor and found that the claims asserted against us in 6 of Teva's 9 patents were invalid. In March 2020, the USPTO ruled against us on the remaining 3 Teva patents, finding that we failed to show that the remaining 3 patents were unpatentable based on the subset of invalidity arguments available in an IPR proceeding. ~~We have~~In April 2020, we appealed the USPTO’s March 2020 ruling, and Teva ~~has~~ appealed the USPTO’s February 2020 ~~ruling. We believe these claims are without merit and are defending against them vigorously.~~ruling to the U.S. Court of Appeals for the Federal Circuit. The district court litigation will proceed in parallel with the IPR appeals.

Jardiance Patent Litigation

In November 2018, Boehringer Ingelheim (BI), our partner in marketing and development of Jardiance, initiated U.S. patent litigation in the U.S. District Court of Delaware alleging infringement arising from Alkem Laboratories Ltd.'s (Alkem) and Ascend Laboratories, LLC's (Ascend) submissions of Abbreviated New Drug Applications (ANDA) seeking approval to market generic versions of Jardiance, Glyxambi, and Synjardy in accordance with the procedures set out in the Drug Price Competition and Patent Term Restoration Act of 1984 (the Hatch-Waxman Act). Particularly with respect to Jardiance, Alkem's and Ascend's ANDAs seek approval to market generic versions of Jardiance prior to the expiration of the relevant patents, and allege that certain patents, including in some allegations the compound patent, are invalid or would not be infringed. We are not a party to this litigation. Trial is scheduled for September 2021.

Taltz Patent Litigation

In April 2021, we petitioned the High Court of Ireland to declare invalid the patent that Novartis Pharma AG (Novartis) purchased from Genentech, Inc. in 2020. Novartis responded by filing a claim against us alleging patent infringement related to our commercialization of Taltz and seeking damages for past infringement and an injunction against future infringement. This matter is ongoing.

Zyprexa Canada Patent Litigation

Beginning in the mid-2000’s, several generic companies in Canada challenged the validity of our Zyprexa compound patent. In 2012, the Canadian Federal Court of Appeals denied our appeal of a lower court's decision that certain patent claims were invalid for lack of utility. In 2013, Apotex Inc. and Apotex Pharmachem Inc. (collectively, Apotex) brought claims against us in the Ontario Superior Court of Justice at Toronto for damages related to our enforcement of the Zyprexa compound patent under Canadian regulations governing patented drugs. Apotex seeks compensation based on novel legal theories under the Statute of Monopolies, Trade-Mark Act, and common law. In March 2021, the Ontario Superior Court granted our motion for summary judgement, thereby dismissing Apotex’s case. Apotex appealed that ruling to the Court of Appeal for Ontario in April 2021.

Product Liability Litigation

Actos® Product Liability

We are named along with Takeda Chemical Industries, Ltd. and Takeda affiliates (collectively, Takeda) as a defendant in 4 purported product liability class actions in Canada related to Actos, which we commercialized with Takeda in Canada until 2009, including 1 in Ontario filed December 2011 (Casseres et al. v. Takeda Pharmaceutical North America, Inc., et al.), 1 in Quebec filed July 2012 (Whyte et al. v. Eli Lilly et al.), 1 in Saskatchewan filed November 2017 (Weiler v. Takeda Canada Inc. et al.), and 1 in Alberta filed January 2013 (Epp v. Takeda Canada Inc. et al.). In general, plaintiffs in these actions alleged that Actos caused or contributed to their bladder cancer.

Byetta® Product Liability

First initiated in March 2009, we are named as a defendant in approximately 570 Byetta product liability lawsuits in the U.S. involving approximately 810 plaintiffs. Approximately 55 of these lawsuits, covering about 285 plaintiffs, are filed in California state court and coordinated in a Los Angeles Superior Court. Approximately 515 of the lawsuits, covering about 515 plaintiffs, are filed in federal court, the majority of which are coordinated in a multi-district litigation (MDL) in the U.S. District Court for the Southern District of California. NaN lawsuits, representing approximately 4 plaintiffs, have also been filed in various state courts. Approximately 565 of the lawsuits, involving approximately 800 plaintiffs, contain allegations that Byetta caused or contributed to the plaintiffs' cancer (primarily pancreatic cancer or thyroid cancer); while 6 plaintiffs allege Byetta caused or contributed to pancreatitis. In addition, 1 case alleges that Byetta caused or contributed to ampullary cancer. The federal and state trial courts granted summary judgment in favor of us and our co-defendants on the claims alleging pancreatic cancer. The plaintiffs appealed those rulings.

In November 2017, the U.S. Court of Appeals for the Ninth Circuit reversed the U.S. District Court for the Southern District of California's grant of summary judgment in the MDL based on that court's discovery rulings and remanded the cases back to the U.S. District Court for further proceedings. In March 2021, the U.S. District Court granted summary judgment for the defendants and in April 2021, the plaintiffs filed a notice of appeal to the U.S. Court of Appeals for the Ninth Circuit. In the state court actions, in November 2018, the California Court of Appeal reversed the Los Angeles County Superior Court of California’s grant of summary judgment based on that court's discovery rulings and remanded for further proceedings. In April 2021, the Los Angeles County Superior Court of California granted summary judgment for the defendants.

We are aware of approximately 20 additional claimants who have not yet filed suit. These additional claims allege damages for pancreatic cancer or thyroid cancer.

Cialis Product Liability

First initiated in August 2015, we are named as a defendant in approximately 350 Cialis product liability lawsuits in the U.S. These cases, many of which were originally filed in various federal courts, contain allegations that Cialis caused or contributed to the plaintiffs' cancer (melanoma). In December 2016, the Judicial Panel on Multidistrict Litigation (JPML) granted the plaintiffs' petition to have filed cases and an unspecified number of future cases coordinated into a federal multidistrict litigation (MDL) in the U.S. District Court for the Northern District of California, alongside an existing coordinated proceeding involving Viagra®. The JPML ordered the transfer of the existing cases to the now-renamed MDL In re: Viagra (Sildenafil Citrate) and Cialis (Tadalafil) Products Liability Litigation. In April 2020, the MDL court granted summary judgment to the defendants on all of the claims brought against them by the plaintiffs. In May 2020, plaintiffs filed an appeal in the U.S. Court of Appeals for the Ninth Circuit. The plaintiffs’ appeal has been administratively closed until August 2021 pending completion of a procedure to resolve the claims in this litigation.

Jardiance Product Liability

First initiated in January 2019, we and Boehringer Ingelheim Pharmaceuticals, Inc., a subsidiary of BI, have been named as a defendant in approximately 95 product liability lawsuits in the U.S., mostly in Stamford Superior Court in Connecticut, alleging that Jardiance caused or contributed to plaintiffs’ Fournier’s gangrene. Our agreement with BI calls for BI to defend and indemnify us against any damages, costs, expenses, and certain other losses with respect to product liability claims in accordance with the terms of the agreement.

Environmental Proceedings

Under the Comprehensive Environmental Response, Compensation, and Liability Act, commonly known as "Superfund," we have been designated as one of several potentially responsible parties with respect to the cleanup of fewer than 10 sites. Under Superfund, each responsible party may be jointly and severally liable for the entire amount of the cleanup.

Other Matters

340B Litigation and Investigations

We are the plaintiff in a lawsuit filed in January 2021 in the U.S. District Court for the Southern District of Indiana against the U.S. Department of Health and Human Services (HHS), the Secretary of HHS, the Health Resources and Services Administration (HRSA), and the Administrator of HRSA. The lawsuit challenges the HHS's December 30, 2020 advisory opinion stating that drug manufacturers are required to deliver discounts under the 340B program to all contract pharmacies. We seek a declaratory judgment that the defendants violated the Administrative Procedures Act and the U.S. Constitution, a preliminary injunction enjoining implementation of the administrative dispute resolution process created by defendants and, with it, their application of the advisory opinion, and other related relief. In March 2021, the court entered an order preliminarily enjoining the government’s enforcement of the administrative dispute resolution process against Lilly. The matter is ongoing.

In January 2021, we, along with other pharmaceutical manufacturers, were named as a defendant in a petition currently pending before the HHS Administration Dispute Resolution Panel. Petitioner seeks declaratory and other injunctive relief related to the 340B program. As described above, the U.S. District Court for the Southern District of Indiana has entered a preliminary injunction enjoining the government’s enforcement of this administrative dispute resolution process against us.

In February 2021, we received a civil investigative subpoena from the Office of the Attorney General for the State of Vermont relating to the sale of pharmaceutical products to Vermont covered entities under the 340B program. We are cooperating with this subpoena.

Brazil Litigation – Cosmopolis Facility

Labor Attorney Litigation

~~Our~~First initiated in 2008, our subsidiary in Brazil, Eli Lilly do Brasil Limitada (Lilly Brasil), is named in a lawsuit brought by the Labor Attorney for the 15th Region in the Labor Court of Paulinia, State of Sao Paulo, Brazil, alleging possible harm to employees and former employees caused by exposure to heavy metals at a former Lilly Brasil manufacturing facility in Cosmopolis, Brazil, operated by the company between 1977 and 2003. In May 2014, the labor court judge ruled against Lilly Brasil, ordering it to undertake several actions of unspecified financial impact, including paying lifetime health coverage for the employees and contractors who worked at the Cosmopolis facility more than six months during the affected years and their children born during and after this period. We appealed this decision. In July 2018, the appeals court affirmed the labor court's ruling with a liquidated award of 300 million Brazilian real (for moral damages, donation of equipment, and creation of a foundation) which, adjusted for inflation and interest using the ~~total financial impact~~current Central Bank of ~~the ruling estimated to be~~Brazil's special system of clearance and custody rate (SELIC), is approximately ~~500~~950 million Brazilian real (approximately ~~$90~~$165 million as of ~~September 30, 2020)~~March 31, 2021). The appeals court restricted the broad health coverage awarded by the labor court to health problems that claimants could show arose from exposure to the alleged contamination. In August 2019, Lilly Brasil filed an appeal to the superior labor court. In September 2019, the appeals court stayed a number of elements of its prior decision, including the obligation to

provide health coverage for contractors, their children, and children of employees who worked at the Cosmopolis facility, pending the determination of Lilly Brasil’s appeal to the superior labor court. The cost of any such health coverage has not been determined.

In June 2019, the Labor Attorney filed an application in the labor court for enforcement of the healthcare coverage granted by the appeals court in its July 2018 ruling and requested restrictions on Lilly Brasil’s assets in Brazil. In July 2019, the labor court issued a ruling requiring either a freeze of Lilly Brasil’s immovable property or, alternatively, a security deposit of 500 million Brazilian real. Lilly Brasil filed a writ of mandamus challenging this ruling, but the court has stayed its decision on this writ and instead directed the parties to attend conciliation hearings, a process that concluded unsuccessfully in September 2020. ~~The labor court also stayed~~Consequently, the partial stay of the proceedings relating to Lilly Brasil's application to appeal in the main proceedings has been lifted. In addition, the Labor ~~Attorney’s~~Attorney's application ~~to enforce~~for preliminary enforcement of the ~~previous~~July 2018 healthcare coverage ruling ~~until after the appeals court ruled on the various motions pending before it.~~was granted. As the conciliation hearings have been unsuccessful, we have filed a brief to strike the Labor Attorney’s application to enforce the previous healthcare coverage. Lilly Brasil is currently awaiting a determination as to whether its application seeking leave to appeal to the superior labor court has been successful.

~~We believe all of these lawsuits are without merit and are defending against them vigorously.~~

Individual Former Employee Litigation

We are also named in approximately 30 lawsuits filed in the same labor court by individual former employees making similar claims. These lawsuits are each at various stages in the litigation process, with judgments being handed down in approximately half of the lawsuits, nearly all of which are on appeal in the labor courts.

China NDRC Antitrust Matter

The competition authority in China has investigated our distributor pricing practices in China in connection with a broader inquiry into pharmaceutical industry pricing. We ~~believe all~~have cooperated with this investigation.

Eastern District of ~~these~~Pennsylvania Pricing (Average Manufacturer Price) Inquiry

In November 2014, we, along with another pharmaceutical manufacturer, are named as co-defendants in United States et al. ex rel. Streck v. Takeda Pharm. Am., Inc., et al., which was filed in November 2014 and unsealed in the U.S. District Court for the Northern District of Illinois. The complaint alleges that the defendants should have treated certain credits from distributors as retroactive price increases and included such increases in calculating average manufacturer prices. Trial is scheduled for February 2022.

Health Choice Alliance

We are named as a defendant in a lawsuit filed in June 2017 in the U.S. District Court for the Eastern District of Texas seeking damages under the federal anti-kickback statute and state and federal false claims acts for certain patient support programs related to our products Humalog, Humulin, and Forteo. In September 2019, the U.S. District Court granted the U.S. Department of Justice’s motion to dismiss the relator’s second amended complaint. In January 2020, the relator appealed the District Court’s dismissal to the U.S. Court of Appeals for the Fifth Circuit. We are also named as a defendant in 2 similar lawsuits ~~are without merit~~filed in Texas and ~~are defending against them vigorously.~~New Jersey state courts in October 2019 seeking damages under the Texas Medicaid Fraud Prevention Act and New Jersey Medicaid False Claims Act, respectively. In November 2020, the Texas state court action was stayed pending a decision by the U.S. Court of Appeals for the Fifth Circuit on the aforementioned District Court appeal. In April 2021, the New Jersey state court action was dismissed with prejudice.

Pricing Litigation, Investigations, and Inquiries

Litigation

~~We,~~In December 2017, we, along with Sanofi-Aventis U.S. LLC (Sanofi) and Novo Nordisk, Inc. (Novo Nordisk) ~~are~~were named as defendants in a consolidated purported class action lawsuit, In re. Insulin Pricing Litigation, in the U.S. District Court for the District of New Jersey relating to insulin pricing seeking damages under various state consumer protection laws and the Federal Racketeer Influenced and Corrupt Organization Act (federal RICO Act). Separately, in February 2018, we, along with Sanofi and Novo Nordisk, ~~are~~were named as defendants in MSP Recovery Claims, Series, LLC et al. v. Sanofi Aventis U.S. LLC et al., in the same court, seeking damages under various state consumer protection laws, common law fraud, unjust enrichment, and the federal RICO Act. In both In re. Insulin Pricing Litigation and the MSP Recovery Claims litigation, the court dismissed claims under the federal RICO Act and certain state laws. Also, filed in the same court in November 2020, we, along with Sanofi, Novo Nordisk, CVS, Express Scripts, and Optum, have been sued in a purported class action, FWK Holdings, LLC v. Novo Nordisk Inc., et al., for alleged violations of the federal RICO Act as well as the New Jersey RICO Act and anti-trust law. That same group of defendants, along with Medco Health and United Health Group, also have been sued in other purported class actions in the same court, Rochester Drug Co-Operative Inc. v. Eli Lilly & Co. et al. and Value Drug Co. v. Eli Lilly & Co. et al.,both initiated in March 2020, for alleged violations of the federal RICO Act. In September 2020, the U.S. District Court for the District of New Jersey granted plaintiffs’ motion to consolidate FWK Holdings, LLC v. Novo Nordisk Inc., et al., Rochester Drug Co-Operative Inc. v. Eli Lilly & Co. et al., and Value Drug Co. v. Eli Lilly & Co. et al.

~~The~~In October 2018, the Minnesota Attorney General’s Office ~~has~~ initiated litigation against us, Sanofi, and Novo Nordisk, State of Minnesota v. Sanofi-Aventis U.S. LLC et al., in the U.S. District Court for the District of New Jersey, alleging unjust enrichment, violations of various Minnesota state consumer protection laws, and the federal RICO Act. In March 2021, the U.S. District Court for the District of New Jersey dismissed with prejudice the Minnesota Attorney General’s federal RICO claims and false advertising claims under state law; the consumer fraud and other related state law claims remain ongoing. Additionally, in May 2019, the Kentucky Attorney General’s Office filed a complaint against us, Sanofi, and Novo Nordisk, Commonwealth of Kentucky v. Novo Nordisk, Inc. et al., in Kentucky state court, alleging violations of the Kentucky consumer protection law, false advertising, and unjust enrichment. In November 2019, Harris County in Texas initiated litigation against us, Sanofi, Novo Nordisk, Express Scripts, CVS, Optum, and Aetna, County of Harris Texas v. Eli Lilly & Co., et al., in federal court in the Southern District of Texas alleging violations of the federal RICO Act, federal and state ~~anti-trust~~antitrust law, and the state deceptive trade practices-consumer protection act. Harris County also alleges common law claims such as fraud, unjust enrichment, and civil conspiracy. This lawsuit relates to our insulin products as well as Trulicity.

~~We believe all of these claims are without merit and are defending against them vigorously.~~

Investigations, Subpoenas, and Inquiries

We ~~have~~ received a subpoena from the New York and Vermont Attorney ~~General’s Office~~General Offices and civil investigative demands from the Washington, New Mexico, and Colorado Attorney General Offices relating to the pricing and sale of our insulin products. The Offices of the Attorney General in Mississippi, Washington D.C., California, Florida, Hawaii, and Nevada have requested information relating to the pricing and sale of our insulin products. We also received interrogatories and a subpoena from the California Attorney General's Office regarding our competition in the ~~long-~~

~~acting~~long-acting insulin market. We received ~~two~~2 requests from the House of Representatives’ Committee on Energy and Commerce and a request from the Senate’s Committee on Health, Education, Labor, and Pensions seeking certain information related to the pricing of insulin products, among other issues. We also received requests from the House of Representatives’ Committee on Oversight and Reform and the Senate’s Committee on Finance, which seek detailed commercial information and business records. In January 2021, the Senate’s Committee on Finance released a report summarizing the findings of its investigation. We are cooperating with all of these aforementioned investigations, subpoenas, and inquiries.

~~Product Liability Insurance~~Research Corporation Technologies, Inc.

~~Because of the nature of pharmaceutical products, it is possible that~~In April 2016, we ~~could become subject to large numbers of additional product liability and related claims~~were named as a defendant in litigation filed by Research Corporation Technologies, Inc. (RCT) in the ~~future. Due~~U.S. District Court for the District of Arizona. RCT is seeking damages for breach of contract, unjust enrichment, and conversion related to ~~a very restrictive market for product liability insurance, we are self-insured for product liability losses for all our currently~~processes used to manufacture certain products, including Humalog and ~~previously marketed products.~~Humulin. A trial date has not been set.

Note ~~11:~~10: Other Comprehensive Income (Loss)

The following tables summarize the activity related to each component of other comprehensive income (loss) during the three months ended ~~September 30, 2020~~March 31, 2021 and ~~2019:~~2020:


(Amounts presented net of taxes)	(Amounts presented net of taxes)	Foreign Currency Translation Gains (Losses)		Unrealized Net Gains (Losses) on Securities		Defined Benefit Pension and Retiree Health Benefit Plans		Effective Portion of Cash Flow Hedges		Accumulated Other Comprehensive Loss		(Amounts presented net of taxes)	Foreign Currency Translation Gains (Losses)		Unrealized Net Gains (Losses) on Securities		Defined Benefit Pension and Retiree Health Benefit Plans		Effective Portion of Cash Flow Hedges		Accumulated Other Comprehensive Loss
Balance at July 1, 2020		$	(1,722.5)	$	15.1	$	(4,454.9)	$	(520.6)	$	(6,682.9)
Balance at January 1, 2021												Balance at January 1, 2021	$	(1,427.5)	$	14.8	$	(4,751.0)	$	(332.7)	$	(6,496.4)

Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications	30.3		0.8		(19.6)		82.9		94.4		Other comprehensive income (loss) before reclassifications	(249.7)		(10.8)		18.8		252.8		11.1
Net amount reclassified from accumulated other comprehensive loss	Net amount reclassified from accumulated other comprehensive loss	0		(0.2)		30.3		3.3		33.4		Net amount reclassified from accumulated other comprehensive loss	0		0.5		85.9		3.3		89.7
Net other comprehensive income (loss)	Net other comprehensive income (loss)	30.3		0.6		10.7		86.2		127.8		Net other comprehensive income (loss)	(249.7)		(10.3)		104.7		256.1		100.8

Balance at September 30, 2020		$	(1,692.2)	$	15.7	$	(4,444.2)	$	(434.4)	$	(6,555.1)
Balance at March 31, 2021												Balance at March 31, 2021	$	(1,677.2)	$	4.5	$	(4,646.3)	$	(76.6)	$	(6,395.6)


Indiana						35-0470950
(State or other jurisdiction of						(I.R.S. Employer
incorporation or organization)						Identification No.)


Title of Each Class	Trading ~~Symbol~~Symbols	Name of Each Exchange On Which Registered
Common Stock (no par value)	LLY	New York Stock Exchange
1.000% Notes due 2022	LLY22	New York Stock Exchange
7 1/8% Notes due 2025	LLY25	New York Stock Exchange
1.625% Notes due 2026	LLY26	New York Stock Exchange
2.125% Notes due 2030	LLY30	New York Stock Exchange
0.625% Notes due 2031	LLY31	New York Stock Exchange
6.77% Notes due 2036	LLY36	New York Stock Exchange
1.700% Notes due 2049	LLY49A	New York Stock Exchange


Class						Number of Shares Outstanding
Common						~~956,581,598~~959,025,446


		Page
PART I. Financial Information		45

Item 1.	Financial Statements	45
	Consolidated Condensed Statements of Operations	45
	Consolidated Condensed Statements of Comprehensive Income (Loss)	56
	Consolidated Condensed Balance Sheets	67
	Consolidated Condensed Statements of Equity	78
	Consolidated Condensed Statements of Cash Flows	9
	Notes to Consolidated Condensed Financial Statements	10
Item 2.	Management's Discussion and Analysis of Results of Operations and Financial Condition	3534
	Executive Overview	3534
	Revenue	44
	Gross Margin, Costs, and Expenses	4947
	Financial Condition and Liquidity	5048
	Financial Expectations	5149
	Available Information on our Website	5149
Item 4.	Controls and Procedures	5250

PART II. Other Information		5351

Item 1.	Legal Proceedings	5351
Item 1A.	Risk Factors	5351
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5451
Item 6.	Exhibits	5452

~~Index to Exhibits~~		55
Signatures		5552


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
Revenue (Note 2)	Revenue (Note 2)	$	5,740.6	$	5,476.6	$	17,099.8	$	16,205.5	Revenue (Note 2)	$	6,805.6	$	5,859.8
Costs, expenses, and other:	Costs, expenses, and other:									Costs, expenses, and other:
Cost of sales	Cost of sales	1,326.4		1,175.0		3,763.5		3,438.6		Cost of sales	1,878.6		1,215.1
Research and development	Research and development	1,465.4		1,380.9		4,247.7		4,013.6		Research and development	1,684.8		1,392.1
Marketing, selling, and administrative	Marketing, selling, and administrative	1,569.1		1,412.3		4,567.3		4,515.7		Marketing, selling, and administrative	1,576.0		1,549.6
Acquired in-process research and development (Note 3)	Acquired in-process research and development (Note 3)	0		77.7		294.1		239.6		Acquired in-process research and development (Note 3)	299.3		52.3
Asset impairment, restructuring, and other special charges (Note 6)		101.4		0		161.3		423.9
Other–net, (income) expense (Note 12)		(158.9)		24.9		(694.9)		(28.7)
Asset impairment, restructuring, and other special charges (Note 5)										Asset impairment, restructuring, and other special charges (Note 5)	211.6		59.9
Other–net, (income) expense (Note 11)										Other–net, (income) expense (Note 11)	(321.1)		(89.1)
		4,303.4		4,070.8		12,339.0		12,602.7			5,329.2		4,179.9
Income before income taxes	Income before income taxes	1,437.2		1,405.8		4,760.8		3,602.8		Income before income taxes	1,476.4		1,679.9
Income taxes (Note 8)		228.8		151.9		683.9		460.6
Net income from continuing operations		1,208.4		1,253.9		4,076.9		3,142.2
Net income from discontinued operations (Note 5)		0		0		0		3,680.5
Income taxes (Note 7)										Income taxes (Note 7)	121.1		223.4
Net income	Net income	$	1,208.4	$	1,253.9	$	4,076.9	$	6,822.7	Net income	$	1,355.3	$	1,456.5

Earnings per share:	Earnings per share:									Earnings per share:
Earnings from continuing operations - basic		$	1.33	$	1.37	$	4.49	$	3.35
Earnings from discontinued operations - basic		0		0		0		3.92
Earnings per share - basic		$	1.33	$	1.37	$	4.49	$	7.27
Basic										Basic	$	1.49	$	1.60

Earnings from continuing operations - diluted		$	1.33	$	1.37	$	4.47	$	3.33
Earnings from discontinued operations - diluted		0		0		0		3.91
Earnings per share - diluted		$	1.33	$	1.37	$	4.47	$	7.24
Diluted										Diluted	$	1.49	$	1.60

Shares used in calculation of earnings per share:	Shares used in calculation of earnings per share:									Shares used in calculation of earnings per share:
Basic	Basic	907.2		913.9		907.5		938.2		Basic	908.8		908.2
Diluted	Diluted	911.4		918.5		911.9		942.4		Diluted	912.4		911.7


		September 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020
Assets	Assets	(Unaudited)				Assets	(Unaudited)
Current Assets	Current Assets					Current Assets
Cash and cash equivalents (Note 7)		$	3,595.3	$	2,337.5
Short-term investments (Note 7)		35.0		101.0
Accounts receivable, net of allowances of $26.4 (2020) and $22.4 (2019)		4,886.7		4,547.3
Cash and cash equivalents (Note 6)						Cash and cash equivalents (Note 6)	$	3,002.4	$	3,657.1
Short-term investments (Note 6)						Short-term investments (Note 6)	49.0		24.2
Accounts receivable, net of allowances of $23.9 (2021) and $25.9 (2020)						Accounts receivable, net of allowances of $23.9 (2021) and $25.9 (2020)	5,592.8		5,875.3
Other receivables	Other receivables	958.1		994.2		Other receivables	1,065.8		1,053.7
Inventories	Inventories	3,555.4		3,190.7		Inventories	3,660.8		3,980.3
Prepaid expenses and other	Prepaid expenses and other	3,209.4		2,538.9		Prepaid expenses and other	3,233.7		2,871.5
Total current assets	Total current assets	16,239.9		13,709.6		Total current assets	16,604.5		17,462.1
Investments (Note 7)		2,476.2		1,962.4
Investments (Note 6)						Investments (Note 6)	3,232.4		2,966.8
Goodwill	Goodwill	3,726.4		3,679.4		Goodwill	3,877.4		3,766.5
Other intangibles, net	Other intangibles, net	7,588.6		6,618.0		Other intangibles, net	8,087.8		7,450.0
Deferred tax assets	Deferred tax assets	2,555.3		2,572.6		Deferred tax assets	2,649.9		2,830.4
Property and equipment, net of accumulated depreciation of $9,600.5 (2020) and $9,161.6 (2019)		8,281.1		7,872.9
Property and equipment, net of accumulated depreciation of $9,643.4 (2021) and $9,570.7 (2020)						Property and equipment, net of accumulated depreciation of $9,643.4 (2021) and $9,570.7 (2020)	8,630.1		8,681.9
Other noncurrent assets	Other noncurrent assets	3,078.5		2,871.2		Other noncurrent assets	3,756.2		3,475.4
Total assets	Total assets	$	43,946.0	$	39,286.1	Total assets	$	46,838.3	$	46,633.1
Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Current Liabilities	Current Liabilities					Current Liabilities
Short-term borrowings and current maturities of long-term debt	Short-term borrowings and current maturities of long-term debt	$	587.5	$	1,499.3	Short-term borrowings and current maturities of long-term debt	$	4.9	$	8.7
Accounts payable	Accounts payable	1,430.1		1,405.3		Accounts payable	1,639.6		1,606.7
Employee compensation	Employee compensation	795.6		915.5		Employee compensation	649.9		997.2
Sales rebates and discounts	Sales rebates and discounts	5,745.2		4,933.6		Sales rebates and discounts	5,821.4		5,853.0
Dividends payable	Dividends payable	0		671.5		Dividends payable	0		770.6
Income taxes payable	Income taxes payable	1,173.5		160.6		Income taxes payable	791.6		495.1
Other current liabilities	Other current liabilities	2,245.0		2,189.4		Other current liabilities	2,806.8		2,750.3
Total current liabilities	Total current liabilities	11,976.9		11,775.2		Total current liabilities	11,714.2		12,481.6
Other Liabilities	Other Liabilities					Other Liabilities
Long-term debt	Long-term debt	16,334.6		13,817.9		Long-term debt	16,199.6		16,586.6
Accrued retirement benefits (Note 9)		3,435.5		3,698.2
Accrued retirement benefits (Note 8)						Accrued retirement benefits (Note 8)	3,969.8		4,094.5
Long-term income taxes payable	Long-term income taxes payable	3,392.7		3,607.2		Long-term income taxes payable	3,917.5		3,837.8
Deferred tax liabilities	Deferred tax liabilities	2,107.7		2,187.5		Deferred tax liabilities	2,200.6		2,099.9
Other noncurrent liabilities	Other noncurrent liabilities	1,702.6		1,501.0		Other noncurrent liabilities	1,737.3		1,707.5
Total other liabilities	Total other liabilities	26,973.1		24,811.8		Total other liabilities	28,024.8		28,326.3
Commitments and Contingencies (Note 10)
Commitments and Contingencies (Note 9)						Commitments and Contingencies (Note 9)	0		0
Eli Lilly and Company Shareholders’ Equity	Eli Lilly and Company Shareholders’ Equity					Eli Lilly and Company Shareholders’ Equity
Common stock	Common stock	598.1		598.8		Common stock	599.7		598.2
Additional paid-in capital	Additional paid-in capital	6,698.8		6,685.3		Additional paid-in capital	6,579.2		6,778.5
Retained earnings	Retained earnings	7,154.0		4,920.4		Retained earnings	9,181.3		7,830.2
Employee benefit trust	Employee benefit trust	(3,013.2)		(3,013.2)		Employee benefit trust	(3,013.2)		(3,013.2)
Accumulated other comprehensive loss (Note 11)		(6,555.1)		(6,523.6)
Accumulated other comprehensive loss (Note 10)						Accumulated other comprehensive loss (Note 10)	(6,395.6)		(6,496.4)
Cost of common stock in treasury	Cost of common stock in treasury	(55.7)		(60.8)		Cost of common stock in treasury	(52.7)		(55.7)
Total Eli Lilly and Company shareholders’ equity	Total Eli Lilly and Company shareholders’ equity	4,826.9		2,606.9		Total Eli Lilly and Company shareholders’ equity	6,898.7		5,641.6
Noncontrolling interests	Noncontrolling interests	169.1		92.2		Noncontrolling interests	200.6		183.6
Total equity	Total equity	4,996.0		2,699.1		Total equity	7,099.3		5,825.2
Total liabilities and equity	Total liabilities and equity	$	43,946.0	$	39,286.1	Total liabilities and equity	$	46,838.3	$	46,633.1


		Equity of Eli Lilly and Company Shareholders																	Equity of Eli Lilly and Company Shareholders
(Dollars in millions, except per-share data, and shares in thousands)		Common Stock			Additional Paid-in Capital		Retained Earnings		Employee Benefit Trust		Accumulated Other Comprehensive Loss		Common Stock in Treasury			Noncontrolling Interests
		Shares	Amount										Shares	Amount
Balance at July 1, 2019		965,957	$	603.7	$	6,534.5	$	4,318.1	$	(3,013.2)	$	(5,600.5)	541	$	(62.1)	$	76.8
(Dollars in millions and shares in thousands)																		(Dollars in millions and shares in thousands)	Common Stock			Additional Paid-in Capital		Retained Earnings		Employee Benefit Trust		Accumulated Other Comprehensive Loss		Common Stock in Treasury(1)			Noncontrolling Interests
																			Shares	Amount										Shares	Amount
Balance at January 1, 2020																		Balance at January 1, 2020	958,056	$	598.8	$	6,685.3	$	4,920.4	$	(3,013.2)	$	(6,523.6)	530	$	(60.8)	$	92.2
Net income	Net income						1,253.9									4.6		Net income						1,456.5									26.2
Other comprehensive loss, net of tax	Other comprehensive loss, net of tax										(134.0)							Other comprehensive loss, net of tax										(362.3)

Retirement of treasury shares	Retirement of treasury shares	(5,391)	(3.3)				(596.6)						(5,391)	600.0				Retirement of treasury shares	(3,627)	(2.3)				(497.7)						(3,627)	500.0
Purchase of treasury shares	Purchase of treasury shares												5,391	(600.0)				Purchase of treasury shares												3,627	(500.0)
Issuance of stock under employee stock plans, net	Issuance of stock under employee stock plans, net	10	—		(1.3)								(11)	1.3				Issuance of stock under employee stock plans, net	2,500	1.6		(201.0)								(43)	5.1
Stock-based compensation	Stock-based compensation				75.5													Stock-based compensation				71.8

Other	Other						6.5									(1.6)		Other						0.2									0
Balance at September 30, 2019		960,576	$	600.4	$	6,608.7	$	4,981.9	$	(3,013.2)	$	(5,734.5)	530	$	(60.8)	$	79.8
Balance at March 31, 2020																		Balance at March 31, 2020	956,929	$	598.1	$	6,556.1	$	5,879.4	$	(3,013.2)	$	(6,885.9)	487	$	(55.7)	$	118.4

Balance at July 1, 2020		956,953	$	598.1	$	6,629.4	$	6,617.2	$	(3,013.2)	$	(6,682.9)	487	$	(55.7)	$	179.1
Net income (loss)							1,208.4									(4.8)
Balance at January 1, 2021																		Balance at January 1, 2021	957,077	$	598.2	$	6,778.5	$	7,830.2	$	(3,013.2)	$	(6,496.4)	487	$	(55.7)	$	183.6
Net income																		Net income						1,355.3									16.4
Other comprehensive income, net of tax	Other comprehensive income, net of tax										127.8							Other comprehensive income, net of tax										100.8
Cash dividends declared per share: $0.74							(671.6)

Issuance of stock under employee stock plans, net	Issuance of stock under employee stock plans, net	25	—		(2.3)													Issuance of stock under employee stock plans, net	2,405	1.5		(283.9)								(24)	3.0
Stock-based compensation	Stock-based compensation				71.7													Stock-based compensation				85.5
Other	Other															(5.2)		Other				(0.9)		(4.2)									0.6
Balance at September 30, 2020		956,978	$	598.1	$	6,698.8	$	7,154.0	$	(3,013.2)	$	(6,555.1)	487	$	(55.7)	$	169.1
Balance at March 31, 2021																		Balance at March 31, 2021	959,482	$	599.7	$	6,579.2	$	9,181.3	$	(3,013.2)	$	(6,395.6)	463	$	(52.7)	$	200.6


	September 30, 2020		December 31, 2019
Contract liabilities	$	289.5	$	264.6


Estimated Fair Value at January 22, 2021
Cash	$	90.5
Acquired IPR&D(1)	834.0
Goodwill(2)	111.0
Deferred tax liabilities	(100.2)
Other assets and liabilities, net	(31.5)
Acquisition date fair value of consideration transferred	903.8
Less:
Cash acquired	(90.5)
Fair value of CVR liability(3)	(65.9)
Cash paid, net of cash acquired	$	747.4


~~Estimated Fair Value at February 15, 2019~~
~~Acquired IPR&D~~ ~~(1)~~	$	~~4,670.0~~
~~Finite-lived intangibles~~ ~~(2)~~	~~980.0~~
~~Deferred income taxes~~	~~(1,032.8)~~
~~Other assets and liabilities - net~~	~~(26.4)~~
~~Total identifiable net assets~~	~~4,590.8~~
~~Goodwill(3)~~	~~2,326.9~~
~~Total consideration transferred - net of cash acquired~~	$	~~6,917.7~~


~~Product Family~~	~~Milestones~~ ~~(Deferred) Capitalized~~ ~~(1)~~
~~Trajenta~~ ~~(2)~~	$	~~446.4~~
~~Jardiance~~ ~~(3)~~	~~289.0~~
~~Basaglar~~	~~(250.0)~~


	Net Milestones (Deferred) Capitalized (1) as of:
Product Family	March 31, 2021		December 31, 2020
Jardiance (2)	$	151.2	$	156.2
Trajenta (3)	108.1		114.6
Basaglar	(163.3)		(168.0)


						Fair Value Measurements Using													Fair Value Measurements Using
		Carrying Amount		Cost (1)		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value			Carrying Amount		Cost (1)		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value
September 30, 2020
March 31, 2021														March 31, 2021
Cash equivalents	Cash equivalents	$	2,374.2	$	2,374.2	$	2,374.2	$	0	$	0	$	2,374.2	Cash equivalents	$	1,554.5	$	1,554.5	$	1,554.5	$	0	$	0	$	1,554.5

Short-term investments:	Short-term investments:													Short-term investments:
U.S. government and agency securities	U.S. government and agency securities	$	11.8	$	11.7	$	11.8	$	0	$	0	$	11.8	U.S. government and agency securities	$	20.9	$	20.8	$	20.9	$	0	$	0	$	20.9

Corporate debt securities	Corporate debt securities	5.5		5.5		0		5.5		0		5.5		Corporate debt securities	7.6		7.5		0		7.6		0		7.6
Asset-backed securities	Asset-backed securities	3.6		3.6		0		3.6		0		3.6		Asset-backed securities	2.3		2.2		0		2.3		0		2.3
Other securities	Other securities	14.1		14.1		0		0		14.1		14.1		Other securities	18.2		18.2		18.2		0		0		18.2

Short-term investments	Short-term investments	$	35.0											Short-term investments	$	49.0

Noncurrent investments:	Noncurrent investments:													Noncurrent investments:
U.S. government and agency securities	U.S. government and agency securities	$	73.2	$	68.5	$	73.2	$	0	$	0	$	73.2	U.S. government and agency securities	$	109.1	$	108.8	$	109.1	$	0	$	0	$	109.1

Corporate debt securities	Corporate debt securities	137.5		128.0		0		137.5		0		137.5		Corporate debt securities	177.8		175.5		0		177.8		0		177.8
Mortgage-backed securities	Mortgage-backed securities	104.3		99.2		0		104.3		0		104.3		Mortgage-backed securities	102.3		99.7		0		102.3		0		102.3
Asset-backed securities	Asset-backed securities	25.4		24.8		0		25.4		0		25.4		Asset-backed securities	23.8		23.5		0		23.8		0		23.8
Other securities	Other securities	97.8		31.4		0		0		97.8		97.8		Other securities	110.3		30.1		0		0		110.3		110.3
Marketable equity securities	Marketable equity securities	1,258.4		275.2		1,258.4		0		0		1,258.4		Marketable equity securities	1,645.5		386.1		1,645.5		0		0		1,645.5
Equity investments without readily determinable fair values (2)	Equity investments without readily determinable fair values (2)	339.5												Equity investments without readily determinable fair values (2)	384.3
Equity method investments (2)	Equity method investments (2)	440.1												Equity method investments (2)	679.3
Noncurrent investments	Noncurrent investments	$	2,476.2											Noncurrent investments	$	3,232.4

December 31, 2019
December 31, 2020														December 31, 2020
Cash equivalents	Cash equivalents	$	1,025.4	$	1,025.4	$	1,025.4	$	0	$	0	$	1,025.4	Cash equivalents	$	2,097.9	$	2,097.9	$	2,097.9	$	0	$	0	$	2,097.9

Short-term investments:	Short-term investments:													Short-term investments:
U.S. government and agency securities	U.S. government and agency securities	$	7.2	$	7.2	$	7.2	$	0	$	0	$	7.2	U.S. government and agency securities	$	9.9	$	9.9	$	9.9	$	0	$	0	$	9.9
Corporate debt securities	Corporate debt securities	81.4		81.1		0		81.4		0		81.4		Corporate debt securities	2.8		2.8		0		2.8		0		2.8
Asset-backed securities	Asset-backed securities	2.6		2.6		0		2.6		0		2.6		Asset-backed securities	1.2		1.2		0		1.2		0		1.2
Other securities	Other securities	9.8		9.8		0		0		9.8		9.8		Other securities	10.3		10.3		0		0		10.3		10.3

Short-term investments	Short-term investments	$	101.0											Short-term investments	$	24.2

Noncurrent investments:	Noncurrent investments:													Noncurrent investments:
U.S. government and agency securities	U.S. government and agency securities	$	77.2	$	76.3	$	77.2	$	0	$	0	$	77.2	U.S. government and agency securities	$	78.7	$	74.3	$	78.7	$	0	$	0	$	78.7
Corporate debt securities	Corporate debt securities	271.1		267.8		0		271.1		0		271.1		Corporate debt securities	137.0		126.8		0		137.0		0		137.0
Mortgage-backed securities	Mortgage-backed securities	101.1		99.6		0		101.1		0		101.1		Mortgage-backed securities	106.4		101.4		0		106.4		0		106.4
Asset-backed securities	Asset-backed securities	30.0		29.6		0		30.0		0		30.0		Asset-backed securities	24.3		23.7		0		24.3		0		24.3
Other securities	Other securities	60.0		27.4		0		0		60.0		60.0		Other securities	110.5		31.8		0		0		110.5		110.5
Marketable equity securities	Marketable equity securities	718.6		254.4		718.6		0		0		718.6		Marketable equity securities	1,664.2		311.6		1,664.2		0		0		1,664.2
Equity investments without readily determinable fair values (2)	Equity investments without readily determinable fair values (2)	405.0												Equity investments without readily determinable fair values (2)	373.9
Equity method investments (2)	Equity method investments (2)	299.4												Equity method investments (2)	471.8
Noncurrent investments	Noncurrent investments	$	1,962.4											Noncurrent investments	$	2,966.8


	Maturities by Period
	Total		Less Than 1 Year		1-5 Years		6-10 Years		More Than 10 Years
Fair value of debt securities	$	361.2	$	20.9	$	110.2	$	94.0	$	136.1


	September 30, 2020		December 31, 2019
Unrealized gross gains	$	20.8	$	10.3
Unrealized gross losses	0.8		4.0
Fair value of securities in an unrealized gain position	335.4		429.5
Fair value of securities in an unrealized loss position	25.7		141.1


		Three Months Ended September 30,													Three Months Ended March 31,
		2020						2019							2021						2020
		United States (U.S.)(1)		Outside U.S.		Total		U.S.(1)		Outside U.S.		Total			U.S.		Outside U.S.		Total		U.S.		Outside U.S.		Total
Revenue—to unaffiliated customers:	Revenue—to unaffiliated customers:													Revenue—to unaffiliated customers:
Diabetes:	Diabetes:													Diabetes:
Trulicity®	Trulicity®	$	791.2	$	315.4	$	1,106.6	$	755.5	$	256.0	$	1,011.5	Trulicity®	$	1,116.8	$	335.7	$	1,452.4	$	929.5	$	299.9	$	1,229.4
Humalog® ~~(2)~~(1)	Humalog® ~~(2)~~(1)	390.1		266.9		656.9		356.2		292.6		648.9		Humalog® ~~(2)~~(1)	332.7		284.4		617.0		398.6		297.2		695.8
Jardiance (3)		163.3		147.5		310.8		140.6		100.1		240.7
Humulin®	Humulin®	214.0		91.9		305.9		218.2		103.6		321.8		Humulin®	219.0		102.7		321.7		214.1		101.5		315.7
Jardiance (2)														Jardiance (2)	151.2		160.8		312.0��		144.6		122.9		267.5
Basaglar®	Basaglar®	178.5		69.7		248.2		202.4		60.8		263.2		Basaglar®	175.2		71.4		246.6		230.4		73.3		303.7
Trajenta (4)		19.4		72.3		91.7		60.1		95.4		155.5
Other Diabetes	Other Diabetes	42.0		20.8		62.9		51.4		19.3		70.7		Other Diabetes	66.3		94.9		161.4		74.0		82.9		156.8
Total Diabetes	Total Diabetes	1,798.5		984.5		2,783.0		1,784.4		927.8		2,712.3		Total Diabetes	2,061.2		1,049.9		3,111.1		1,991.2		977.7		2,968.9

Oncology:	Oncology:													Oncology:
Alimta®	Alimta®	291.9		286.1		578.0		282.4		225.9		508.2		Alimta®	261.1		297.8		559.0		324.2		235.8		560.1
Verzenio®														Verzenio®	172.8		96.2		269.0		129.4		58.6		188.0
Cyramza®	Cyramza®	94.5		158.2		252.7		82.5		157.5		240.0		Cyramza®	80.2		160.3		240.5		89.1		149.9		239.0
Verzenio®		158.9		75.5		234.4		124.8		32.4		157.2
Erbitux®	Erbitux®	122.5		14.0		136.4		113.8		14.8		128.6		Erbitux®	107.9		14.4		122.4		117.8		13.0		130.8
Tyvyt®														Tyvyt®	0		109.7		109.7		0		57.4		57.4
Other Oncology	Other Oncology	14.7		117.1		131.9		36.7		76.6		113.4		Other Oncology	20.5		51.3		71.6		(2.6)		28.9		26.2
Total Oncology	Total Oncology	682.5		650.9		1,333.4		640.2		507.2		1,147.4		Total Oncology	642.5		729.7		1,372.2		657.9		543.6		1,201.5

Immunology:	Immunology:													Immunology:
Taltz®	Taltz®	326.2		128.3		454.5		250.6		89.4		340.0		Taltz®	249.6		153.6		403.2		327.5		116.0		443.5
Olumiant®	Olumiant®	14.5		147.5		162.0		12.1		102.5		114.6		Olumiant®	24.7		169.1		193.8		11.3		128.4		139.7
Other Immunology	Other Immunology	6.1		4.5		10.6		0		0		0		Other Immunology	10.5		6.4		16.9		2.6		0		2.6
Total Immunology	Total Immunology	346.8		280.3		627.1		262.8		191.8		454.6		Total Immunology	284.8		329.1		613.9		341.4		244.4		585.8

Neuroscience:	Neuroscience:													Neuroscience:
Cymbalta®	Cymbalta®	11.1		175.5		186.6		10.3		168.3		178.6		Cymbalta®	11.0		165.7		176.6		11.6		198.8		210.4
Emgality®														Emgality®	101.5		18.0		119.5		67.3		6.7		74.0
Zyprexa®	Zyprexa®	21.2		91.5		112.7		11.2		94.2		105.4		Zyprexa®	6.9		88.9		95.8		11.2		87.2		98.4

Emgality®		81.4		10.1		91.5		45.8		1.9		47.7
Other Neuroscience	Other Neuroscience	26.7		53.2		79.9		27.3		67.7		95.0		Other Neuroscience	22.3		51.1		73.5		20.2		60.5		80.7
Total Neuroscience	Total Neuroscience	140.4		330.3		470.7		94.6		332.1		426.7		Total Neuroscience	141.7		323.7		465.4		110.3		353.2		463.5


	Nine Months Ended September 30,
	2020						2019
	U.S. (1)		Outside U.S.		Total		U.S. (1)		Outside U.S.		Total
Revenue—to unaffiliated customers:
Diabetes:
Trulicity	$	2,673.2	$	892.5	$	3,565.7	$	2,213.2	$	706.5	$	2,919.7
Humalog (2)	1,070.4		837.4		1,907.8		1,201.0		856.3		2,057.3
Humulin	642.5		292.7		935.2		639.6		302.5		942.1
Basaglar	638.7		203.7		842.3		632.8		172.6		805.4
Jardiance (3)	453.0		387.3		840.3		408.4		267.9		676.2
Trajenta (4)	64.5		197.2		261.7		171.9		269.5		441.4
Other Diabetes	120.7		57.2		177.9		119.7		65.6		185.4
Total Diabetes	5,663.0		2,868.0		8,530.9		5,386.6		2,640.9		8,027.5

Oncology:
Alimta	933.4		743.8		1,677.2		905.8		679.3		1,585.1
Cyramza	277.6		470.8		748.4		247.4		432.7		680.1
Verzenio	430.0		201.1		631.1		323.5		77.0		400.6
Erbitux	356.1		40.6		396.7		364.1		42.3		406.4
Other Oncology	26.0		324.1		350.1		83.1		202.2		285.1
Total Oncology	2,023.1		1,780.4		3,803.5		1,923.9		1,433.5		3,357.3

Immunology:
Taltz	942.9		350.3		1,293.2		699.6		246.7		946.3
Olumiant	39.0		407.7		446.7		29.2		269.9		299.1
Other Immunology	13.2		8.1		21.3		0		0		0
Total Immunology	995.1		766.1		1,761.2		728.8		516.6		1,245.4

Neuroscience:
Cymbalta	30.5		546.5		576.9		38.7		491.2		529.9
Zyprexa	41.5		266.2		307.7		29.8		287.2		317.0
Emgality	229.3		23.6		252.9		91.8		4.5		96.3

Other Neuroscience	53.4		165.7		219.2		89.9		239.5		329.4
Total Neuroscience	354.7		1,002.0		1,356.7		250.2		1,022.4		1,272.6

Other:
Forteo	386.7		405.2		791.9		473.8		570.6		1,044.4
Cialis	64.6		421.6		486.2		209.3		483.4		692.7


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Fair value hedges:
Effect from hedged fixed-rate debt	$	(14.0)	$	49.5	$	110.4	$	148.1
Effect from interest rate contracts	14.0		(49.5)		(110.4)		(148.1)
Cash flow hedges:
Effective portion of losses on interest rate contracts reclassified from accumulated other comprehensive loss	4.1		2.8		12.3		10.6
Cross-currency interest rate swaps	(30.2)		47.4		(54.6)		2.9
Net (gains) losses on foreign currency exchange contracts not designated as hedging instruments	(54.2)		52.6		(82.8)		93.0
Total	$	(80.3)	$	102.8	$	(125.1)	$	106.5


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Net investment hedges:
Foreign currency-denominated notes	$	(181.1)	$	89.3	$	(186.0)	$	112.6
Cross-currency interest rate swaps	(110.4)		89.0		(55.4)		123.1

Cash flow hedges:
Forward-starting interest rate swaps	99.6		(32.7)		(231.9)		(44.4)
Cross-currency interest rate swaps	6.6		16.6		(58.3)		(20.8)


		Defined Benefit Pension Plans									Defined Benefit Pension Plans
		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
Components of net periodic benefit cost:	Components of net periodic benefit cost:									Components of net periodic benefit cost:
Service cost	Service cost	$	81.7	$	62.4	$	243.4	$	187.8	Service cost	$	92.0	$	78.7
Interest cost	Interest cost	106.6		121.0		319.0		364.4		Interest cost	84.3		105.0
Expected return on plan assets	Expected return on plan assets	(229.5)		(208.9)		(671.4)		(630.2)		Expected return on plan assets	(238.0)		(221.2)
Amortization of prior service cost	Amortization of prior service cost	1.1		1.5		3.2		4.5		Amortization of prior service cost	1.1		1.1
Recognized actuarial loss	Recognized actuarial loss	58.4		70.9		286.5		213.6		Recognized actuarial loss	121.8		111.0

Net periodic benefit cost	Net periodic benefit cost	$	18.3	$	46.9	$	180.7	$	140.1	Net periodic benefit cost	$	61.2	$	74.6


		Retiree Health Benefit Plans									Retiree Health Benefit Plans
		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
Components of net periodic benefit income:	Components of net periodic benefit income:									Components of net periodic benefit income:
Service cost	Service cost	$	10.2	$	9.1	$	30.6	$	27.2	Service cost	$	11.7	$	9.8
Interest cost	Interest cost	10.9		14.5		32.8		43.5		Interest cost	8.1		11.0
Expected return on plan assets	Expected return on plan assets	(40.3)		(35.9)		(115.1)		(107.8)		Expected return on plan assets	(36.6)		(37.4)
Amortization of prior service benefit	Amortization of prior service benefit	(21.9)		(15.7)		(51.6)		(47.2)		Amortization of prior service benefit	(14.9)		(14.9)
Recognized actuarial loss	Recognized actuarial loss	0.7		0.4		2.1		1.3		Recognized actuarial loss	0.8		0.8

Net periodic benefit income	Net periodic benefit income	$	(40.4)	$	(27.6)	$	(101.2)	$	(83.0)	Net periodic benefit income	$	(30.9)	$	(30.7)


	Continuing Operations
(Amounts presented net of taxes)	Foreign Currency Translation Gains (Losses)		Unrealized Net Gains (Losses) on Securities		Defined Benefit Pension and Retiree Health Benefit Plans		Effective Portion of Cash Flow Hedges		Discontinued Operations		Accumulated Other Comprehensive Loss
Balance at January 1, 2020	$	(1,678.0)	$	4.9	$	(4,638.6)	$	(211.9)	$	0	$	(6,523.6)

Other comprehensive income (loss) before reclassifications	(14.2)		7.6		4.6		(232.3)		0		(234.3)
Net amount reclassified from accumulated other comprehensive loss	0		3.2		189.8		9.8		0		202.8
Net other comprehensive income (loss)	(14.2)		10.8		194.4		(222.5)		0		(31.5)

Balance at September 30, 2020	$	(1,692.2)	$	15.7	$	(4,444.2)	$	(434.4)	$	0	$	(6,555.1)


	Three Months Ended September 30,				Nine Months Ended September 30,
Tax benefit (expense)	2020		2019		2020		2019
Foreign currency translation gains/losses	$	46.0	$	(5.1)	$	34.9	$	(17.1)
Unrealized net gains/losses on securities	(0.2)		(0.5)		(3.0)		(7.4)
Defined benefit pension and retiree health benefit plans	11.8		(17.4)		(32.8)		(42.2)
Effective portion of cash flow hedges	(22.9)		2.7		59.1		11.4
Benefit (provision) for income taxes allocated to other comprehensive income (loss) items	$	34.7	$	(20.3)	$	58.2	$	(55.3)


Details about Accumulated Other Comprehensive Loss Components	Details about Accumulated Other Comprehensive Loss Components	Three Months Ended September 30,				Nine Months Ended September 30,				Affected Line Item in the Consolidated Condensed Statements of Operations	Details about Accumulated Other Comprehensive Loss Components	Three Months Ended March 31,				Affected Line Item in the Consolidated Condensed Statements of Operations
																		Details about Accumulated Other Comprehensive Loss Components	Three Months Ended March 31,	Affected Line Item in the Consolidated Condensed Statements of Operations
		2020		2019		2020		2019				2021		2020
Amortization of retirement benefit items:	Amortization of retirement benefit items:										Amortization of retirement benefit items:
Prior service benefits, net	Prior service benefits, net	$	(20.8)	$	(14.2)	$	(48.4)	$	(42.7)	Other–net, (income) expense	Prior service benefits, net	$	(13.8)	$	(13.8)		Other–net, (income) expense
Actuarial losses, net	Actuarial losses, net	59.1		71.3		288.6		214.9		Other–net, (income) expense	Actuarial losses, net	122.6		111.8			Other–net, (income) expense
Total before tax	Total before tax	38.3		57.1		240.2		172.2			Total before tax	108.8		98.0
Tax benefit	Tax benefit	(8.0)		(12.0)		(50.4)		(35.4)		Income taxes	Tax benefit	(22.9)		(20.6)			Income taxes
Net of tax	Net of tax	30.3		45.1		189.8		136.8			Net of tax	85.9		77.4

Other, net of tax	Other, net of tax	3.1		2.8		13.0		10.4		Other–net, (income) expense	Other, net of tax	3.8		3.1			Other–net, (income) expense
Reclassifications from continuing operations (net of tax)		33.4		47.9		202.8		147.2
Reclassifications from discontinued operations (net of tax)		0		0		0		84.0		Net income from discontinued operations
Total reclassifications for the period (net of tax)		$	33.4	$	47.9	$	202.8	$	231.2

Total reclassifications, net of tax											Total reclassifications, net of tax	$	89.7	$	80.5


Compound	Indication	Status	Developments
Endocrinology
Empagliflozin (Jardiance®)(1)	Heart failure with reduced ejection fraction	Submitted	Granted FDA Fast Track designation(2).
	Chronic kidney disease	Phase III	Granted FDA Fast Track designation(2). Phase III trials are ongoing.
	Heart failure with preserved ejection fraction
Immunology
Baricitinib (Olumiant®)	Atopic dermatitis	Approved	In April 2021 the FDA extended the review period for the submission in the U.S. to the third quarter of 2021.
	COVID-19	Emergency Use Authorization(3)	Announced in April 2021 that a Phase III trial evaluating baricitinib 4 mg once daily plus standard of care did not meet the primary endpoint, but did result in a significant reduction in death.
	Alopecia areata	Phase III	Granted FDA Breakthrough Therapy designation(4). Announced in the first quarter of 2021 and in April 2021 that Phase III trials met the primary endpoint. Phase III trials are ongoing.
	Systemic lupus erythematosus		Phase III trials are ongoing.
Oncology
Abemaciclib (Verzenio®)	Adjuvant breast cancer	Submitted	Announced in the first quarter of 2021 patient-reported outcomes in combination with standard adjuvant endocrine therapy. Submitted in Japan in the first quarter of 2021.
	Prostate cancer	Phase II	Phase II trials are ongoing.


Period	Total Number of Shares Purchased (in thousands)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (in thousands)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions)
~~July 2020~~January 2021	—	$	—	—	$	1,000.0
~~August 2020~~February 2021	—	—		—	1,000.0
~~Sept 2020~~March 2021	—	—		—	1,000.0
Total	—	—		—


~~EXHIBIT 3.1~~						~~Amended Articles of Incorporation~~

~~EXHIBIT 3.2~~						~~Bylaws, as amended~~

~~EXHIBIT 18.1~~						~~Preferability Letter from Independent Registered Public Accounting Firm Regarding Change in Accounting Principle~~

~~EXHIBIT 31.1~~						~~Rule 13a-14(a) Certification of David A. Ricks, Chairman, President, and Chief Executive Officer~~

~~EXHIBIT 31.2~~						~~Rule 13a-14(a) Certification of Joshua L. Smiley, Senior Vice President and Chief Financial Officer~~

~~EXHIBIT 32.~~						~~Section 1350 Certification~~

~~EXHIBIT 101.~~						~~Interactive Data Files~~

~~EXHIBIT 104.~~						~~Cover Page Interactive Data File~~


Exhibit						Description
EXHIBIT 3.1						Amended Articles of Incorporation are incorporated by reference to Exhibit 3.1 to the Company's Annual Report on Form 10-K for the year ended December 31, 2013

EXHIBIT 3.2						Bylaws, as amended, are incorporated by reference to Exhibit ~~99.1~~3.1 to the Company's Current Report on Form 8-K ~~dated~~filed on ~~December 20, 2019~~February 9, 2021

EXHIBIT ~~18.1~~10.1						~~Preferability Letter from Independent Registered Public Accounting Firm Regarding Change in Accounting Principle~~Form of Restricted Stock Unit Award under the 2002 Lilly Stock Plan (with non-compete)

EXHIBIT 10.2						Release Agreement, effective as of February 9, 2021, by and between Eli Lilly and Company and Joshua L. Smiley

EXHIBIT 31.1						Rule 13a-14(a) Certification of David A. Ricks, Chairman, President, and Chief Executive Officer

EXHIBIT 31.2						Rule 13a-14(a) Certification of ~~Joshua L. Smiley,~~Anat Ashkenazi, Senior Vice President and Chief Financial Officer

EXHIBIT 32.						Section 1350 Certification

EXHIBIT 101.						Interactive Data Files (embedded within the Inline XBRL document)

EXHIBIT 104.						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


		ELI LILLY AND COMPANY
		(Registrant)

Date:	~~October 28, 2020~~April 30, 2021	/s/~~Joshua L. Smiley~~Anat Ashkenazi
		~~Joshua L. Smiley~~Anat Ashkenazi
		Senior Vice President and Chief Financial Officer
Date:	~~October 28, 2020~~April 30, 2021	/s/Donald A. Zakrowski
		Donald A. Zakrowski
		Vice President, Finance, and Chief Accounting Officer