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Revenue | 12 Months Ended
--- | ---
Dec. 31, 2023
Revenue from Contract with Customer [Abstract] |
Revenue | Revenue The following table summarizes our revenue recognized in our consolidated statements of operations:
| 2023 |  | 2022 |  | 2021
Net product revenue | $ | 28,813.9 |  |  | $ | 25,462.8 |  |  | $ | 25,957.9 |
Collaboration and other revenue(1) | 5,310.2 |  |  | 3,078.6 |  |  | 2,360.5 |
Revenue | $ | 34,124.1 |  |  | $ | 28,541.4 |  |  | $ | 28,318.4 |
(1) Collaboration and other revenue associated with prior period transfers of intellectual property was $191.6 million, $163.4 million, and $175.0 million during the years ended December 31, 2023, 2022, and 2021, respectively. We recognize revenue primarily from two different types of contracts, product sales to customers (net product revenue) and collaborations and other arrangements. Revenue recognized from collaborations and other arrangements includes our share of profits from the collaborations, as well as royalties, upfront and milestone payments we receive under these types of contracts. See Note 4 for additional information related to our collaborations and other arrangements. Collaboration and other revenue disclosed above includes the revenue from the Jardiance® and Trajenta® families of products resulting from our collaboration with Boehringer Ingelheim, as well as from the sales of rights for the olanzapine portfolio, including Zyprexa®, and for Baqsimi®, all of which are discussed in Note 4. Substantially all of the remainder of collaboration and other revenue is related to contracts accounted for as contracts with customers. Net Product Revenue Revenue from sales of products is recognized at the point where the customer obtains control of the goods and we satisfy our performance obligation, which generally is at the time we ship the product to the customer. Payment terms differ by jurisdiction and customer, but payment terms in most of our major jurisdictions typically range from 30 to 70 days from date of shipment. Revenue for our product sales has not been adjusted for the effects of a financing component as we expect, at contract inception, that the period between when we transfer control of the product and when we receive payment will be one year or less. Any exceptions are either not material or we collect interest for payments made after the due date. Provisions for rebates, discounts, and returns are established in the same period the related product sales are recognized. We generally ship product shortly after orders are received; therefore, we generally only have a few days of orders received but not yet shipped at the end of any reporting period. Shipping and handling activities are considered to be fulfillment activities and are not considered to be a separate performance obligation. We exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are imposed on our sales of product and collected from a customer. Most of our products are sold to wholesalers that serve pharmacies, physicians and other healthcare professionals, and hospitals. For the years ended December 31, 2023, 2022, and 2021, our three largest wholesalers each accounted for between 16 percent and 21 percent of consolidated revenue. Further, they each accounted for between 18 percent and 29 percent of accounts receivable as of December 31, 2023 and 2022. Significant judgments must be made in determining the transaction price for our sales of products related to anticipated rebates, discounts, and returns. The following describe the most significant of these judgments: Sales Rebates and Discounts - Background and Uncertainties •We initially invoice our customers at contractual list prices. Contracts with direct and indirect customers may provide for various rebates and discounts that may differ in each contract. As a consequence, to determine the appropriate transaction price for our product sales at the time we recognize a sale to a direct customer, we estimate any rebates or discounts that ultimately will be due to the direct customer and other customers in the distribution chain under the terms of our contracts. Significant judgments are required in making these estimates. •The rebate and discount amounts are recorded as a deduction to arrive at our net product revenue. Sales rebates and discounts that require the use of judgment in the establishment of the accrual include managed care, Medicare, Medicaid, chargebacks, long-term care, hospital, patient assistance programs, and various other programs. We estimate these accruals using an expected value approach. •The largest of our sales rebate and discount amounts include rebates associated with sales covered by managed care, Medicare, Medicaid, and chargeback programs, as well as reductions in revenue related to our patient assistance programs, in the U.S. In determining the appropriate accrual amount, we consider our historical rebate payments for these programs, as well as patient assistance program costs, by product as a percentage of our historical sales as well as any significant changes in sales trends (e.g., patent expiries and product launches), an evaluation of the current contracts for these programs, the percentage of our products that are sold via these programs, and our product pricing. Although we accrue a liability for revenue reductions related to these programs at the time we record the sale, the reduction related to that sale is typically paid up to six months later. Because of this time lag, in any particular period our net product revenue may incorporate revisions of accruals for several periods. •Most of our rebates outside the U.S. are contractual or legislatively mandated and are estimated and recognized in the same period as the related sales. In some large European countries, government rebates are based on the anticipated budget for pharmaceutical payments in the country. An estimate of these rebates, updated as governmental authorities revise budgeted deficits, is recognized in the same period as the related sale. Sales Returns - Background and Uncertainties •When product sales occur, to determine the appropriate transaction price for our sales, we estimate a reserve for future product returns related to those sales using an expected value approach. This estimate is based on several factors, including: historical return rates, expiration date by product (on average, approximately 24 months after the initial sale of a product to our customer), and estimated levels of inventory in the wholesale and retail channels, as well as any other specifically identified anticipated returns due to known factors such as the loss of patent exclusivity, product recalls and discontinuations, or a changing competitive environment. We maintain a returns policy that allows most U.S. customers to return most of our products for dating issues within a specified period prior to and subsequent to the product's expiration date. Following the loss of exclusivity for a patent-dependent product, we expect to experience an elevated level of product returns as product inventory remaining in the wholesale and retail channels expires. Adjustments to the returns reserve have been and may in the future be required based on revised estimates to our assumptions. We record the return amounts as a deduction to arrive at our net product revenue. Once the product is returned, it is destroyed; we do not record a right of return asset. Our returns policies outside the U.S. are generally more restrictive than in the U.S. as returns are not allowed for reasons other than failure to meet product specifications in many countries. Our reserve for future product returns for product sales outside the U.S. is not material. •As a part of our process to estimate a reserve for product returns, we regularly review the supply levels of our significant products at the major wholesalers in the U.S. and in major markets outside the U.S., primarily by reviewing periodic inventory reports supplied by our major wholesalers and available prescription volume information for our products, or alternative approaches. We attempt to maintain U.S. wholesaler inventory levels at an average of approximately one month or less. Causes of unusual wholesaler buying patterns include actual or anticipated product-supply issues, weather patterns, anticipated changes in the transportation network, redundant holiday stocking, and changes in wholesaler business operations. In the U.S., the current structure of our arrangements provides us with data on inventory levels at our wholesalers; however, our data on inventory levels in the retail channel is more limited. Wholesaler stocking and destocking activity historically has not caused any material changes in the rate of actual product returns. •Actual U.S. product returns have been less than 2 percent of our U.S. revenue during each of the past three years and have not fluctuated significantly as a percentage of revenue, although fluctuations are more likely in periods following loss of patent exclusivity for major products in the U.S. market. Adjustments to Revenue Adjustments to revenue recognized as a result of changes in estimates for our most significant U.S. sales returns, rebates, and discounts liability balances for products shipped in previous periods were less than 1 percent of U.S. revenue during each of the years ended December 31, 2023, 2022, and 2021. Collaboration and Other Arrangements We recognize several types of revenue from our collaborations and other arrangements, which we discuss in general terms immediately below and more specifically in Note 4 for each of our material collaborations and other arrangements. Our collaborations and other arrangements are evaluated to determine if the arrangements in their entirety, or contain aspects that, are contracts with customers. •Revenue related to products we sell pursuant to these arrangements is included in net product revenue at the earlier of when control of the asset transfers to the other party or when the product has no alternative use to us and we have right to payment. •Profit-sharing due from our collaboration partners, which is based upon gross margins reported to us by our partners, is recognized as collaboration and other revenue as earned. •Royalty revenue from licensees and certain of our collaboration partners, which is based on sales to third parties of licensed products and technology, is recorded when the third-party sale occurs and the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). This royalty revenue is included in collaboration and other revenue. •The net gain or loss related to the sale of rights of a product is included in collaboration and other revenue when control of the asset transfers to the other party. •For arrangements that involve variable consideration where we have sold intellectual property, we recognize revenue based on estimates of the amount of consideration we believe we will be entitled to receive from the other party, but only to the extent a significant reversal in the amount of revenue recognized is not probable of occurring when the uncertainties associated with the variable consideration are subsequently resolved. These estimates are adjusted to reflect the actual amounts to be collected when those facts and circumstances become known. Significant judgments must be made in determining the transaction price for our sales of intellectual property. Because of the risk that products in development will not receive regulatory approval, we generally do not recognize any contingent payments that would be due to us upon or after regulatory approval. •For arrangements involving multiple goods or services (e.g., research and development, marketing and selling, manufacturing, and distribution), each required good or service is evaluated to determine whether it is distinct. If a good or service does not qualify as distinct, it is combined with the other non-distinct goods or services within the arrangement and these combined goods or services are treated as a single performance obligation for accounting purposes. The arrangement's transaction price is then allocated to each performance obligation based on the relative standalone selling price of each performance obligation. Contract Liabilities Our contract liabilities result from arrangements where we have received payment in advance of performance under the contract and do not include sales returns, rebates, and discounts. Changes in contract liabilities are generally due to either receipt of additional advance payments or our performance under the contract. The following table summarizes contract liability balances:
| 2023 |  | 2022
Contract liabilities | $ | 193.6 |  |  | $ | 219.2 |
The contract liabilities balances disclosed above as of December 31, 2023 and 2022 were primarily related to the remaining license period of symbolic intellectual property and obligations to supply product for a defined period of time. During the years ended December 31, 2023, 2022, and 2021, revenue recognized from contract liabilities as of the beginning of the respective year was not material. Revenue expected to be recognized in the future from contract liabilities as the related performance obligations are satisfied is not expected to be material in any one year. Disaggregation of Revenue The following table summarizes revenue, including net product revenue and collaboration and other revenue, by product:
|  |  | U.S. |  | Outside U.S.
|  |  | 2023 |  | 2022 |  | 2021 |  | 2023 |  | 2022 |  | 2021
Diabetes and obesity: |  |  |  |  |  |  |  |  |  |  |
Trulicity® | $ | 5,433.3 |  |  | $ | 5,688.8 |  |  | $ | 4,914.4 |  |  | $ | 1,699.2 |  |  | $ | 1,750.9 |  |  | $ | 1,557.6 |
Mounjaro® | 4,834.2 |  |  | 366.6 |  |  | — |  |  | 328.9 |  |  | 115.9 |  |  | — |
Jardiance(1) | 1,600.4 |  |  | 1,194.5 |  |  | 807.3 |  |  | 1,144.2 |  |  | 871.5 |  |  | 683.5 |
Humalog® (2) | 863.2 |  |  | 1,191.9 |  |  | 1,320.7 |  |  | 800.2 |  |  | 868.7 |  |  | 1,132.3 |
Humulin® | 610.1 |  |  | 730.2 |  |  | 832.9 |  |  | 242.0 |  |  | 289.2 |  |  | 389.6 |
Basaglar® (3) | 443.1 |  |  | 470.7 |  |  | 588.3 |  |  | 285.2 |  |  | 289.7 |  |  | 304.2 |
Baqsimi | 645.7 |  |  | 110.4 |  |  | 96.4 |  |  | 31.9 |  |  | 28.9 |  |  | 16.8 |
Zepbound® | 175.8 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Other diabetes and obesity | 175.0 |  |  | 158.0 |  |  | 159.3 |  |  | 355.2 |  |  | 338.9 |  |  | 384.8 |
Total diabetes and obesity | 14,780.8 |  |  | 9,911.1 |  |  | 8,719.3 |  |  | 4,886.8 |  |  | 4,553.7 |  |  | 4,468.8 |
Oncology: |  |  |  |  |  |  |  |  |  |  |
Verzenio® | 2,509.0 |  |  | 1,653.2 |  |  | 834.9 |  |  | 1,354.3 |  |  | 830.3 |  |  | 515.0 |
Cyramza® | 402.3 |  |  | 351.4 |  |  | 358.1 |  |  | 572.4 |  |  | 620.0 |  |  | 674.8 |
Erbitux® | 528.9 |  |  | 500.1 |  |  | 481.8 |  |  | 67.6 |  |  | 66.4 |  |  | 66.4 |
Tyvyt® | — |  |  | — |  |  | — |  |  | 393.4 |  |  | 293.3 |  |  | 418.1 |
Alimta® | 72.9 |  |  | 543.7 |  |  | 1,233.9 |  |  | 144.6 |  |  | 384.0 |  |  | 827.5 |
Other oncology | 283.9 |  |  | 169.7 |  |  | 120.1 |  |  | 329.0 |  |  | 254.1 |  |  | 210.7 |
Total oncology | 3,797.0 |  |  | 3,218.1 |  |  | 3,028.8 |  |  | 2,861.3 |  |  | 2,448.1 |  |  | 2,712.5 |
Immunology: |  |  |  |  |  |  |  |  |  |  |
Taltz® | 1,831.6 |  |  | 1,724.6 |  |  | 1,542.4 |  |  | 928.0 |  |  | 757.4 |  |  | 670.4 |
Olumiant® (4) | 225.5 |  |  | 148.2 |  |  | 324.1 |  |  | 697.2 |  |  | 682.3 |  |  | 791.0 |
Other immunology | 0.8 |  |  | 20.0 |  |  | 15.3 |  |  | 114.4 |  |  | 12.1 |  |  | 17.6 |
Total immunology | 2,057.9 |  |  | 1,892.8 |  |  | 1,881.8 |  |  | 1,739.6 |  |  | 1,451.8 |  |  | 1,479.0 |
Neuroscience: |  |  |  |  |  |  |  |  |  |  |
Zyprexa(5) | 79.4 |  |  | 30.4 |  |  | 39.6 |  |  | 1,615.4 |  |  | 306.5 |  |  | 390.7 |
Emgality® | 482.2 |  |  | 462.8 |  |  | 434.5 |  |  | 196.0 |  |  | 188.1 |  |  | 142.7 |
Other neuroscience | 134.4 |  |  | 119.2 |  |  | 140.7 |  |  | 371.1 |  |  | 439.2 |  |  | 750.3 |
Total neuroscience | 696.0 |  |  | 612.4 |  |  | 614.8 |  |  | 2,182.5 |  |  | 933.8 |  |  | 1,283.7 |
Other: |  |  |  |  |  |  |  |  |  |  |
Forteo® | 335.5 |  |  | 367.3 |  |  | 441.6 |  |  | 197.7 |  |  | 245.8 |  |  | 360.3 |
Cialis® | 26.1 |  |  | 35.2 |  |  | 10.6 |  |  | 355.3 |  |  | 552.1 |  |  | 707.9 |
COVID-19 antibodies(6) | — |  |  | 2,008.9 |  |  | 1,978.0 |  |  | — |  |  | 14.7 |  |  | 261.4 |
Other | 97.7 |  |  | 144.2 |  |  | 136.1 |  |  | 109.9 |  |  | 151.3 |  |  | 233.9 |
Total other | 459.3 |  |  | 2,555.7 |  |  | 2,566.4 |  |  | 662.9 |  |  | 964.0 |  |  | 1,563.5 |
Revenue | $ | 21,791.0 |  |  | $ | 18,190.0 |  |  | $ | 16,811.0 |  |  | $ | 12,333.1 |  |  | $ | 10,351.3 |  |  | $ | 11,507.4 |
Numbers may not add due to rounding. (1) Jardiance revenue includes Glyxambi®, Synjardy®, and Trijardy® XR. (2) Humalog revenue includes insulin lispro. (3) Basaglar revenue includes Rezvoglar®. (4) Olumiant revenue includes sales for baricitinib that were made pursuant to Emergency Use Authorization (EUA) or similar regulatory authorizations. (5) Zyprexa revenue includes sale of the rights for the olanzapine portfolio. (6) COVID-19 antibodies include sales for bamlanivimab administered alone, for bamlanivimab and etesevimab administered together, and for bebtelovimab and were made pursuant to EUAs or similar regulatory authorizations. The following table summarizes revenue by geographical area:
|  |  |  | 2023 |  | 2022 |  | 2021
Revenue(1): |  |  |  |  |  |
U.S. |  | $ | 21,791.0 |  |  | $ | 18,190.0 |  |  | $ | 16,811.0 |
Europe |  | 6,174.7 |  |  | 4,299.2 |  |  | 4,776.8 |
Japan |  | 1,672.6 |  |  | 1,747.3 |  |  | 2,367.0 |
China |  | 1,539.7 |  |  | 1,452.8 |  |  | 1,661.4 |
Other foreign countries |  | 2,946.2 |  |  | 2,852.0 |  |  | 2,702.2 |
Revenue |  | $ | 34,124.1 |  |  | $ | 28,541.4 |  |  | $ | 28,318.4 |
Numbers may not add due to rounding. (1) Revenue is attributed to the countries based on the location of the customer or other party.

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