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Discovering a medicine and securing regulatory approval is only the beginning of patient access. Whether and how patients can obtain the medicines we discover depends on a number of decisions from different stakeholders in the health system including: how medicines are priced, how payers and health systems assess their value and structure coverage, the channels through which patients fill prescriptions, and the policies that shape how the broader health system functions. Our approach begins with understanding where patients need our medicines — then extends to the pricing, payer engagement, and policy work required to enable access.

What Medicine Pricing Reflects

Developing new medicines is expensive, slow, and inherently risky. Industry estimates place the average cost to discover and develop a new medication at approximately $2.7 billion¹. Development timelines average 10 years or more from discovery to regulatory approval². Approximately 90% of drug candidates that enter clinical development do not result in a medicine³, including some that fail in late-stage trials after years of sustained investment. No single medicine can be priced solely on its own cost of development or manufacturing, because doing so would ignore the cumulative investment required to sustain an industry built on decades-long research cycles.

The revenue from successful medicines funds the broader effort — the failures alongside the successes. Importantly, the period over which a medicine generates returns on the R&D investment is finite. When patent protection expires, it opens the door for generic and biosimilar manufacturers — companies that do not bear the risk or cost of the original research — to offer the same medicines at a fraction of their prior price, often pennies per dose. We recognize that patents are limited in scope and duration, and we support healthy markets for generics and biosimilars when those patents expire. While lower prices for generics and biosimilars benefit patients and the broader healthcare system, a medicine's returns can only be reinvested into research for future medicines for a finite time period that principally ends at patent expiry, even as the underlying innovation continues to benefit patients indefinitely.

The price of a medicine should reflect the value it delivers to patients and to the healthcare system — fewer hospitalizations, reduced disease progression, and better long-term outcomes — and the broader investment cycle that makes future medicines possible.

Lilly Approach to Pricing

We use a value-based approach to pricing, considering the following:

• Customer perspective — The unmet needs that medicines can fulfill for patients and caregivers and how people can affordably access the treatment.

• Company considerations — The costs of research, development, manufacturing, distribution and support services for customers; business trends and other economic factors; and the medicine’s potential market size and patent life.

• Competitive landscape — The benefits of the medicine compared to alternative medicines and where our medicine is appropriate for treating conditions.

• Contributing factors — The implications of health system changes and policy guidelines.

We adjust prices over a product’s lifecycle based on these factors and on post-approval clinical and real-world outcome data. Even as we receive approval of new indications that can expand a medicine's ability to reach additional patients and add value to the healthcare system. Typically, our realized price declines over time, even prior to patent expiry.

To discover and develop new medicines, we consistently invest in research and development. In 2025, that investment totaled more than $13 billion — comparable to the total public research spending of some mid-sized national economies, concentrated entirely on bringing a pipeline of new medicines forward.

We also seek to link the price of our medicines more directly to the health outcomes they deliver. Value-based arrangements (VBAs) link payment to predefined patient health outcomes and performance metrics — such as improved adherence to prescribed treatment regimens, reduced re-hospitalization rates, or reduction in overall disease management costs. Since 2014, we have expanded VBAs in the U.S. and globally, using real-world data to refine the terms of these arrangements over time. We also advocate for legislative and regulatory changes that support broader adoption of value-based contracting.

As we bring new medicines to patients worldwide, we are working to narrow the range of patient costs across developed countries. Tirzepatide (marketed for chronic weight management as Mounjaro or Zepbound, depending on the market), is an early example of what more consistent global pricing looks like in practice, as evidenced by data shared below in the Progress section. We expect to continue moving in this direction with future launches.

Our Role and the Broader System

Our role in access is to invest in the science to discover and develop new treatments, secure regulatory approval in individual markets, manufacture them at scale, and offer them at prices that reflect their value.

Once a medicine is registered and available for sale, the question of whether and how it is covered becomes a decision for payers, governments, and health systems — each operating within its own priorities, budgets, and policy frameworks. We engage actively with these stakeholders. Our pricing and contract structures may reflect patient utilization, agreements covering defined patient populations, and the economic and health system conditions of each market. Access is shaped by many factors and stakeholders, and we are focused on doing our part well while working with others to expand coverage and reduce barriers for patients.

In the U.S., a list price is set for each of our medicines. We pay rebates, discounts, and fees to payers, pharmacy benefit managers (PBMs), the U.S. government, and other supply chain entities such as wholesalers and distributors. After paying these rebates, discounts, copay assistance and channel costs, the final dollar amount we ultimately receive is called the net price.

Pathways to Access

Globally, patients access our medicines through a range of pathways that vary by market and patient situation, including commercial insurance and employer-sponsored coverage, government programs, direct-to-patient self-pay channels, patient support programs, national health systems and reimbursement pathways, and regional distribution partnerships. Each pathway addresses different needs, and no single pathway is right for every patient or every market.

U.S. Commercial Insurance and Employer Sponsored Coverage

We estimate 175 million Americans are covered through commercial insurance — whether through employer-sponsored plans, healthcare exchanges, or other private coverage — and we work to secure formulary placement and negotiate coverage terms with employers, health plans, and pharmacy benefit managers. We recognize that payers have varying priorities and challenges, which can meaningfully shape a patient's coverage and treatment experience. We deliver flexible solutions that further patient access and affordability regardless of coverage environment.

For example, despite the scale of the obesity epidemic — affecting more than 100 million American adults and costing the U.S. economy an estimated $1.7 trillion⁴ annually — approximately 50% of employer-covered lives have obesity coverage today, and coverage design varies meaningfully across employer-sponsored plans. To address this gap, we developed Lilly Employer Connect — a direct-to-employer model that gives employers a new pathway to offer obesity care coverage with transparent, predictable pricing.

U.S. Government Programs

In the U.S., we participate in federal and state healthcare programs that provide coverage for specific populations, including Medicare, Medicaid, and the Veterans Health Administration. These programs represent some of the largest and most consequential access pathways for U.S. patients, and our engagement with them takes several forms.

We participate in the Medicare Part D benefit and partnered with the Centers for Medicare & Medicaid Services in establishing the Senior Savings Model, which helped pave the way for the $35 monthly out-of-pocket insulin cap that is now permanent under federal law. We engage with state Medicaid programs on access for the populations they cover. As implementation of the Inflation Reduction Act continues, we participate in the Medicare drug price negotiation process while also advocating for reforms we believe would more effectively improve patient affordability.

Medicaid and dual-eligible patients face some of the greatest affordability challenges in the U.S. healthcare system. We participate in the Medicaid Drug Rebate Program, and under our November 2025 agreement with the U.S. government, states can expand Medicaid access to our obesity medicines at the same price points as Medicare, with reduced prices available beginning in May 2026. Medicaid coverage for obesity treatment varies by state, and we continue to work with CMS and state programs to expand access for these populations.

Direct-to-Patient: LillyDirect

In the U.S. healthcare system, coverage, cost, and administrative complexity can stand between patients and the treatments they need. Whether someone starts or stays on a medicine is too often determined by system design rather than clinical need. LillyDirect is a part of our response to that gap.

Launched in January 2024, the platform offers select Lilly medicines at transparent self-pay prices and gives patients flexibility in how they receive their prescribed medications — through home delivery or pickup at retail partners, plus an expanding network of consumer-facing digital health and telehealth partners. LillyDirect also serves as a primary launch channel for certain new medicines, enabling patients to access newly approved treatments at transparent prices from day one.

U.S. Patient Support Programs

Depending on their prescription drug coverage, some patients in the U.S. still face high out-of-pocket costs. We offer patient support and copay assistance programs across products in our portfolio to help close these remaining gaps.

For many of our medicines, copay assistance programs bring eligible, commercially insured patients’ monthly out-of-pocket costs to $25 or lower. Each brand website provides the latest information regarding savings and support resources and eligibility criteria.

We have been producing insulins for over 100 years and remain committed to helping patients access, afford and understand how to administer insulin therapies. At insulins.lilly.com, consumers can find information regarding our insulin affordability solutions including the Lilly Insulin Value Program, discount programs and other resources that can help eligible patients reduce out-of-pocket costs for insulin therapy.

National Health Systems and an Emerging Self-Pay Channel

Outside the U.S., we engage with national health systems, health technology assessment bodies, and government payers to secure coverage and reimbursement for our medicines. We participate in value demonstration and price negotiation processes, and we tailor our market access strategies to the requirements of each country.

Alongside these traditional reimbursement pathways, self-pay is emerging as a meaningful access channel in a growing number of markets. Where public coverage does not yet include newer medicines, or where reimbursement timelines extend beyond what patients are willing to wait for, self-pay options let patients fill their prescription with less friction. As self-pay continues to grow, we are exploring the expansion of our direct-to-patient pharmacy model in international markets, building on the infrastructure and learnings from LillyDirect in the U.S. This channel provides transparent pricing and a lower-friction path to fill prescriptions. It adds to the coverage and reimbursement work we do with national health systems rather than replacing it.

Regional Partnerships

In markets where traditional commercial infrastructure may not effectively reach patients, we work with regional partners to extend access to our medicines. Through long-term distribution and/or promotion partnerships, regional companies with established local expertise handle components of local registration, distribution, promotion, and market pricing, while we retain ownership of the intellectual property and supply the medicines. This model spans 19 regional partners covering approximately 65 countries across Latin America, Sub-Saharan Africa, North Africa, South Asia, and Southeast Asia — reaching approximately 30% of the world’s population.

Policy Positions That Address Access and Affordability at Scale

We actively engage with stakeholders throughout the healthcare system, including with legislative and regulatory bodies around the world, to seek policy solutions that address systemic gaps in patient and health system affordability. Sustainable, long-term reforms are necessary across markets to improve access for patients regardless of manufacturer.

In the U.S., the affordability solutions we offer today, including copay programs, self-pay pricing, and employer models, address real patient needs, but they are responses to a system that creates incentives for higher list prices. Broader reform of those incentives is needed to address affordability at scale. For example, we advocate for reforms with the potential to lower out-of-pocket costs by basing patients' co-payments on the net price after rebates and discounts, rather than the list price; reforms that delink PBM compensation from a medicine’s price, removing incentives for higher list prices; and reforms that expand first-dollar coverage for chronic disease treatments. We already voluntarily cap insulin out-of-pocket at $35 per month, and we support enacting that $35 monthly insulin copay cap into law for the commercial market, additional supply chain transparency, and ensuring that all patients can access evidence-based obesity care regardless of their insurance provider.

Outside the U.S., we engage with policymakers on the systems that determine whether patients can access newer medicines. In Europe, we are advocating for health technology assessment systems to evolve alongside therapeutic innovation, with frameworks that recognize the full value of new treatments, including their impact beyond the direct healthcare system, such as on unpaid caregivers, and that enable timely patient access to breakthrough therapies in areas like Alzheimer’s disease.

In 2025 and early 2026, we took action across multiple pathways to improve affordability and access for patients. We announced our agreement with the U.S. government for obesity medicines, launched a new commercial platform for employers, and expanded LillyDirect.

We are evaluating LillyDirect in select international markets and looking to extend our Employer Connect platform, building access pathways that complement traditional coverage. We expect to continue developing value-based arrangements globally that link medicine costs to health outcomes, and to advocate for systemic affordability reforms — including reforms to how out-of-pocket costs, PBM compensation, and chronic disease coverage are structured in the U.S., and how health technology assessment systems evaluate and enable timely access to newer medicines in Europe and other markets.

Resources

• Lilly Medicines Access and Affordability

• Lilly Direct

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