In 1876 former Union Army Colonel Eli Lilly founded a drug company peddling gelatin-coated pills and capsules. Perhaps it was his wife's premature death from malaria that drove him to pharmaceutical success- by the time Lilly died in 1898, his company had 2,005 products and annual sales topping $300,000. Since that time, Eli Lilly & Co. has racked up an impressive list of medical breakthroughs. Lilly currently grosses over $10 billion sales per year and employs over 31,000 people in the US and 160 countries. The twentieth century has been kind to Lilly, or perhaps it is the other way around; the company's most successful (and popular) invention is an anti-depressant known to the happy masses as Prozac. The Lilly Foundation also causes smiles; with assets of $15.4 billion, it is the nation's largest philanthropic foundation.

Starve a cold, treat diabetes

Over the years, Eli Lilly & Co. has built a solid reputation for the development of new drugs. In 1923, the company introduced the original version of insulin, which successfully treated diabetes for the first time. Before insulin, the most common remedy for diabetics was morbidly coined the "starvation diet," because after briefly prolonging life the patient eventually starved to death. Over seventy years later, insulin is still a big seller for Lilly, having grossed $1.5 billion in 1998. Other new drugs led Lilly's profits to rise in 1997, including the introduction of Gemzar (pancreatic cancer), Zyprexa (schizophrenia) and ReoPro (angioplasty.) Lilly ranked first among pharmaceuticals corporations in total returns from 1992 to 1997.

Side effects include?

Not all of Eli Lilly & Co.'s inventions have been such simple success stories. In the early eighties, the company ran into trouble with an anti-arthritic drug called Oraflex. After several reports of people suffering serious side effects from the drug- including death- Oraflex was removed from the market. In 1982, Eli Lilly pleaded guilty to 15 misdemeanor charges of failing to report the side effects to the United States FDA. Four years later company morale would lift- along with the nation's mood- when Eli Lilly introduced the popular anti-depressant called Prozac.

Prozac Nation

Eli Lilly could have never imagined that his name would become best known for the invention of Prozac, a drug designed to treat a disease that didn't exist in his pre-Freudian lifetime. The green and white capsule, arguably the hottest thing to hit psychiatry since the couch, revitalized the company and created popular awareness of depression. In 1998, 28 % of Eli Lilly's total revenue came from the sale of Prozac, which grossed $2.8 billion that year. A brief attempt to damper Lilly's spirits occurred in 1989 when several lawsuits alleged that Prozac caused violence, including one incident in which a man stormed a Kentucky printing press, shooting 20 people and then himself. Lilly won or settled all of the suits, aided by a logical defense that the violence resulted from the disease and not the drug. Prozac has now been prescribed to over 30 million people in more than 100 countries, and has also been approved for treatment of obsessive-compulsive disorder and bulimia nervosa. Not surprisingly, the lucrative Prozac revolution has other drug makers wanting a piece of the action, but it looks as if they may have to wait for their share of happiness.

Patenting Prozac

Eli Lilly & Co.'s two patents on Prozac will expire in 2001 and 2003. The company is racing time, doing everything possible to protect ownership of the drug. In December 1998, Eli Lilly announced a partnership with Sepracor Inc., a drug company known for improving existing drugs. Eli Lilly will pay Sepracor Inc. $90 million for their version of Prozac that has less side effects and a patent through the year 2015. In February 1999, Eli Lilly settled a lawsuit with generic drug maker Barr Laboratories, only to find themselves investigated by the FTC for their monopoly on the anti-depressant market. Good news came one month later when the FDA approved a new tablet form for Prozac that will help Lilly maintain control over the product. In May 1999, Eli Lilly began a controversial marketing campaign for Prozac, designed to target depressed people through infomercials. It is the first time infomercials have been used to sell prescription drugs for mental illness, and has raised eyebrows- and objections- from organizations like the American Medical Association. Other sales efforts to push Prozac include the hiring of 300 representatives from an outside firm in December 1998 (in addition to the existing 1,020). This new sales force will be employed until the dark day Prozac loses patent protection- when Lilly executives may start popping some of their competitors' pills. In July 2000 Lilly received the nod from the FDA to market Sarafem, a form of Prozac, as a prescription drug for premenstrual syndrome.

Don't cry for Lilly

If the future looks uncertain for Prozac, Eli Lilly can concentrate on another drug whose star is on the rise. In 1998, Lilly introduced Evista, an osteoporosis pill designed to prevent bone thinning in older women. Sales were slow to start, since Evista was designed for prevention instead of treatment. However, Eli Lilly was pleasantly surprised to stumble upon the drug's accidental breast cancer benefits. In February 1999, the British company Zeneca, makers of breast cancer drug Nolvadex, filed a lawsuit against Eli Lilly for pushing Evista as a breast cancer remedy. Lilly announced they will make no claims until research has been completed, and donated $36 million to two hospitals in Indianapolis that began testing both drugs in May 1999. Wall Street is paying close attention to the research, since Evista could prove to be an important new treatment for breast cancer. When the FDA announced in June 1999 that their review of Evista will be expedited, Eli Lilly's stock prices soared from $3.31 to close at $75.25. Happy days- unmedicated by Prozac- may be here again.