Elli

07-043

March 13, 2008

Eli Lilly: Recreating Drug Discovery for the 21st Century

Rebecca Henderson and Cate Reavis

The rise of personalized medicine is one of the most important developments in health care today.

Personalized medicine will change health care almost across the board…but nowhere, I would argue,

are the cross-currents of change more powerful or the stakes higher than in the development,

manufacture, and sale of prescription medicines. In my industry, we would be powerless to resist

personalized medicine, not to say foolish.

— John Lechleiter, President & Chief Operating Officer, Eli Lilly & Co. 1

Alone in this office on the last working day of 2007, Peter Johnson sighed as he finished reading the

rest of the recent talk given by John Lechleiter. It reflected more than five years of deep discussion

within Eli Lilly as to how to respond to the strategic challenges facing the industry – a discussion in

which Johnson, as Executive Director of Corporate Strategy, had been deeply involved. Johnson was

sure that a move to personalized medicine made sense for Lilly and for the patients Lilly aspired to

serve, but he was very much aware that implementing the strategy within Lilly was an ongoing

challenge with which he wrestled daily. With the move to “tailored therapeutics” now publicly

embraced by the senior team and with major investments in place what else, he wondered, could be

done to ensure that Lilly’s bold move proved to be successful?

Personalized Medicine

2008 found the pharmaceutical industry under increasing pressure. For more than 20 years the

industry had been dominated by the discovery of “blockbuster” drugs – drugs that embodied

1

John C. Lechleiter, “Markets of One: The Pharmaceutical Industry and The Pursuit of Personalized Medicine,” speech given at the Conference on

Personalized Medicine: A Call to Action, Boston, Massachusetts, November 29, 2007.

This case was prepared by Cate Reavis under the...