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For the exclusive use of d. feng, 2019. 9-696-077 REV: APRIL 15, 2004 CLAYTON M. CHRISTENSEN Eli Lilly and Company: Innovation in Diabetes Care “Look at these. Aren’t they beautiful?” asked Larry Ellingson, executive director of Eli Lilly and Company’s Diabetes Care Business Unit, as he showed his visitor a briefcase full of odd looking plastic devices. “They’re pens—insulin pens. All you do, “ he explained as he screwed one apart, “is put a little cartridge of insulin in here; close it up like this; turn this dial to the amount of insulin you need; poke the needle just under your skin (which he didn’t demonstrate); and squeeze this trigger. That’s all there is to it. Then you just put this cap over the needle and put it back in your briefcase, purse, or pocket until your next meal, when you take a shot again. The patients will just love it.” If history was any guide, Ellingson was right: they would love it. Lilly’s principal competitor in the worldwide insulin business, Denmark-based Novo Nordisk, had introduced insulin pens to the European market several years earlier with great success. Pens were a more convenient way for patients to take insulin. Conventionally, patients carried a separate syringe, inserted its needle into an insulin vial, pulled its plunger out to draw slightly more than the desired amount of insulin into the syringe, flicked the syringe while holding its needle up to dislodge any air bubbles that clung to the walls of the syringe’s cylinder, and then squeezed the plunger slightly to force those bubbles— and some insulin—out of the syringe. Only then could they inject themselves with insulin. This process typically took more than a minute, whereas patients could prepare and administer a pen injection in as little as 10 seconds. It was early in 1995, and Novo was building a new plant in the United States to produce insulin cartridges for its pens. Ellingson hoped that Lilly’s new line of pens (see Exhibit 1), the result of a multimillion dollar investment, would blunt the advantage Novo had enjoyed with convenienceconscious customers and stabilize Lilly’s share of the worldwide insulin market. Insulin was an important product for Lilly, one of the world’s largest pharmaceutical manufacturers with sales of over $5 billion (see Exhibit 2). Insulin in fact was Lilly’s second-largest revenue producer after its widely prescribed drug for depression, Prozac. Diabetes and Insulin Diabetes is actually two fundamentally different diseases that share a similar set of symptoms: Type I patients produce no insulin, the hormone necessary for cells to utilize glucose, while Type II patients cannot efficiently use the insulin their bodies produce. Type I, also known as juvenile diabetes, usually begins during childhood or puberty. Type II, known as adult-onset diabetes, is manifest later in life (usually after the age of 40) and usually is associated with—and possibly caused ________________________________________________________________________________________________________________ Professor Clayton M. Christensen prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 1996 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School. This document is authorized for use only by di feng in SPRING 2019 (UNGER) THE INNOVATION PROCESS-1-1 taught by BARRY UNGER, Boston University from Jan 2019 to May 2019. For the exclusive use of d. feng, 2019. 696-077 Eli Lilly and Company: Innovation in Diabetes Care by—obesity.