Company news
After six years of unsuccessfully recommending measures that could have made it easier for a suitor to acquire Eli Lilly and Co., the drugmaker’s board has given up this year. The board decided not to place two measures before shareholders again during Lilly’s May 6 annual meeting—one to require annual election of directors and another to remove an 80-percent super-majority requirement to approve a takeover of the company. In a proxy statement filed in March, the board said it opted against another vote because “we have concluded that the proposals would not be successful in 2013.”
Indiana University Health set a goal this year to cut expenses 20 percent to 25 percent over the next four years. That’s $1 billion to $1.2 billion annually, based on IU Health’s expenses last year. Even though President Obama’s 2010 health reform law likely will expand health insurance coverage to an extra 500,000 Hoosiers over the next few years, IU Health officials expect the amount the hospital system receives per patient to fall as the federal government, employers and patients all push back on sky-high health care costs. Most other hospitals are in the same boat. Community Health Network—whose Indianapolis market share is second only to IU Health’s—started trying to cut its expenses back in 2009, even before the health reform law passed. It set a goal to trim $300 million—about 20 percent of expenses—by 2015. Community is more than one-third of the way toward its goal, progress it achieved by streamlining its supply chain and leaving many vacant positions unfilled. It is now focusing on cutting waste out of its internal processes.
The city of Indianapolis is poised to pay Citizens Energy Group $6.5 million to buy a 19-acre parcel of real estate it’s targeting as the centerpiece of a life sciences corridor called 16 Tech. The site at 1220 Waterway Blvd. would accommodate about 1 million square feet of space for a single tenant or multiple users, said Deron Kintner, executive director of the Indianapolis Bond Bank. He is promoting the property as an ideal location for the proposed life-sciences-focused research institute supported by Gov. Mike Pence and Eli Lilly and Co. CEO John Lechleiter. Real estate developers and brokers say the city’s purchase of the Citizens property could help cement 16 Tech as an attractive option for life sciences and research firms looking to locate or expand in Indianapolis.
WellPoint Inc.’s top brass all enjoyed double-digit bumps in 2012 compensation, according to a proxy released April 2, even though the company’s stock price fell and it admittedly did not meet its financial goals. The Indianapolis-based health insurer’s board approved higher salaries and larger potential stock awards heading into 2012 after most of its top executives saw their pay hold steady or decline in 2011. The company’s performance merited its executives' receiving only 83 percent of their target stock awards. But because the board had already established larger pools of stock to award to executives, the value of those awards still rose over previous years. Bonus amounts fell in 2012 compared with the previous year. Former CEO Angela Braly received compensation of $20.6 million last year after she was allowed to stay on as an employee until year's end so that additional stock awards kicked in. WellPoint spokeswoman Kristin Binns said WellPoint achieved important goals in 2012.
Indiana University’s Kelley School of Business will launch a new MBA program for midcareer physicians in an attempt to help doctors figure out how to curb the health care industry’s soaring costs. According to Bloomberg News, about 30 students will join the program in its first year. Their first course will discuss the policy changes coming to health care as a result of President Obama’s 2010 health reform law, the Patient Protection and Affordable Care Act. Unlike most MD-MBA programs, which target medical students, the Business of Medicine MBA is only for currently practicing doctors who are around 40 to 55 years old and are taking on greater accountability for patient outcomes and costs.
Eli Lilly and Co. plans to double the size of a manufacturing plant already under construction southwest of downtown, investing another $180 million on insulin production and related products. The Indianapolis-based pharmaceutical giant announced in November that it would spend $140 million to construct an 80,000-square-foot plant for filling cartridges for insulin-injecting pens. The plant, on South Harding Street, adjoins the existing manufacturing complex known as Lilly Technology Center. The new $180 million investment would add 84,000 square feet to the project, allowing Lilly to add another cartridge-filling line, the firm announced Tuesday. The space also would be used to increase Lilly’s manufacturing capacity for the active ingredient in insulin. About 175 workers will staff the plant once it’s in full operation. The jobs will be filled by existing and new employees, according to Lilly spokesman Ed Sagebiel. In addition, Lilly is planning several other projects for its Indianapolis operations totaling $80 million, including a $40 million product-inspection center. The firm has submitted a request to city officials for a tax abatement on the full $400 million investment, between the two phases of the new plant and ancillary projects, Sagebiel said. Lilly’s request calls for a 10-year abatement that would save the firm $30 million. Construction of the production area for insulin’s active ingredient could be complete by December and in operation by March 2014, according to the company. Work on the additional cartridge filling line could be finished by 2016.