Indiana at 200 (49): Eli Lilly Built State’s Iconic Business

April 20, 2015

by Andrea Neal

From the time he was a youngster, Eli Lilly was fascinated by pharmaceuticals.

At 16, he served as an apprentice at the Good Samaritan Drugstore in Lafayette. During the day, he stocked shelves, washed bottles and ran errands. At night, he pored over the United States Pharmacopoeia to learn everything he could about mixing drugs.

By age 20, Lilly had earned a certificate of proficiency in the field. Next, he opened a drug store on the Greencastle town square. It was the first of several career moves that prepared him to launch Eli Lilly and Company, today a multinational corporation with 39,000 employees and $20 billion in annual sales.

Lilly could not have foreseen the life-saving medicines his firm would pioneer for diabetes, cancer, cardiovascular disease and depression. But he understood the recipe for success: develop products based on solid research; apply strict quality control to production; and limit distribution to doctors rather than door-to-door salesmen.

“He would be pleased the company still bears his name and is still very viable,” says company archivist Michael C. Jarrell. “I think he’d be proud of his legacy and the work we have done.”

Born in Maryland in 1838, Lilly moved as an infant with his family to Kentucky and as a teenager to Greencastle, where his father enrolled him in Indiana Asbury College, now DePauw University.

His career had barely begun when the Civil War erupted in 1861. Lilly served with distinction in the Union Army. In 1862, he organized the 18th Indiana artillery battery that played critical roles in the Chattanooga-Chickamauga campaign. As captain, Lilly received commendation for the capture of the Confederate depot at Tullahoma. His battery “expended 350 rounds, disabled at least two Confederate cannons and suffered no loss of men or guns,” according to one account.

After a brief stint with the 9th Indiana Cavalry that led to his detention as a prisoner of war, Lilly served out the war in the South. In June 1865, he was promoted to colonel, a title that became permanently attached to his surname.

Post-war, Lilly pursued entrepreneurial ventures with different partners and varying success. His personal life also had ups and downs. In 1866, wife Emily died from a brain condition, leaving him the single father of a 5-year-old boy, Josiah K. Lilly. He remarried in 1869 and the couple had a daughter, Eleanor. (She died of diphtheria at age 13.)

Encouragement from an Indianapolis businessman convinced Lilly to go into business for himself in 1876. At age 38, he opened a small manufacturing plant in downtown Indianapolis. The company outgrew the space and moved twice, settling in the southside industrial district, where it remains today.

In its first year, Lilly offered a ground-breaking product: gelatin-coated pills. “This was a huge advancement considering that the standard forms of medication of the day were foul-smelling putrid liquids and bitter powders eaten off squares of paper,” says Robert L. Shook in the book Miracle Medicines.

Within five years, sales exceeded $80,000. In 1881, the company incorporated and issued stock. In 1886, it hired a pharmaceutical chemist and a botanist to work on product quality.

Lilly died in 1898 at age 60, but the company thrived under the leadership of his son and grandsons, Eli and Josiah Jr. Within 25 years of its namesake’s death, Lilly began mass production of insulin to treat diabetes. This development, more than any other, made the company globally famous —a life-saving endeavor Colonel Lilly would have deemed the pinnacle of success.

Note to readers: This is one in a series of essays that lead to the celebration of the Indiana Bicentennial in December 2016. The essays will focus on the top 100 events, ideas and historical figures of Indiana, beginning with the impact of the Ice Age and ending with the legacy of the Bicentennial itself. Neal is a teacher at St. Richard’s Episcopal School in Indianapolis and adjunct scholar with the Indiana Policy Review Foundation. Contact her at aneal@inpolicy.org.

Directions/caption: This historic photo shows Eli Lilly and Company’s original red brick building at 15 W. Pearl Street, Indianapolis. Today a plaque marks the spot where “Colonel Eli Lilly founded the Lilly Laboratories in 1876.” (Historic photo courtesy of Eli Lilly and Company Archives.)

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