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As disclosed in our Form 10-K, we offer a diverse portfolio of approximately 200 brands to veterinarians, farm animal producers, and pet owners.

Phases 1-3 are not applicable for animal health; however, our R&D pipeline consists of over 170 active projects across species and platforms.

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Key features of our approach to research animal welfare include:

• Ethical oversight: Our animal welfare program – including all animal research – is governed by Elanco’s global animal welfare experts, including our Institutional Animal Care and Use Committee (IACUC). The IACUC is a global committee of experts that reviews and approves protocols to assess best practices and compliance. It includes volunteer members not affiliated with Elanco, as well as Elanco veterinarians, scientists and other research professionals. The program receives additional oversight from our Vice President of Global Clinical Development and our Executive Vice President of Innovation and Regulatory Affairs, who provide regular updates to our managerial executive committee and quarterly updates to the Board Innovation, Science and Technology Committee – as part of enterprise risk management updates.
• Best practices: We are dedicated to balancing research objectives with sound science while ensuring the humane and responsible use of the animals to maximize welfare by applying the 3Rs principles. Therefore, Elanco has a dedicated 3R’s committee to assist our scientists in implementation, training and study design refinements that incorporate the principles below:
  • Replacement: The replacement of animals with alternative non-animal methods including the application of in-vitro (test tube) systems or in silico (computer-based) systems as well as the use of a species lower in the phylogenetic scale, such as using the nematode instead of sheep
  • Reduction: The reduction in the number of animals used by the application of good experimental design, applicable regulations, and/or the proper statistical methods
  • Refinement: The modification of experimental techniques to eliminate or minimize pain or distress and to enhancements in animal husbandry to improve overall wellbeing in their colony environment (e.g., environmental enrichment, social housing/ contact, etc.
• Independent accreditation: The Association for Assessment and Accreditation of Laboratory Animal Care (AAALAC) provides accreditation for animal welfare in research facilities. As of year-end 2022, two of our three Elanco-owned research facilities had AAALAC accreditation. In 2023, we are seeking AAALAC accreditation for the third facility.
• CRO Oversight: Contract Research Organizations (CROs) and studies are audited by trained and qualified personnel to ensure they meet strict regulatory requirements which include pre-, in-life, and post-facility audits to ensure operational and study compliance.

All clinical research is appropriately monitored by scientific staff at Elanco. Prior to contracting and as a part of due diligence, CROs are vetted by our animal welfare, quality assurance organizations, and legal teams, and undergo a third-party risk assessment, as appropriate.

Monetary Incentives Used by CROs

Compensation for each study is allocated on an individual basis aligned with milestones reached or work executed.

Clinical Trials Terminated due to Failure to Follow Good Clinical

Practice Standards

In 2022, no studies were terminated due to inadequate clinical practices. Multiple studies were terminated due to project-specific reasons. In the event a trial is terminated, a final study report is always issued and archived.

We conduct annual internal audits for all Elanco sites and audit partner research facilities at least once every three years. We are also subject to external audits by accreditation organizations and government regulators at prescribed intervals.

More information can be found in the Elanco Animal Welfare Issue Brief.

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Description of actions and initiatives to promote access to health care products for priority diseases and in priority countries as defined by the Access to Medicine Index

The Access to Medicines Index applies to human healthcare companies and is not relevant to Elanco as an animal health company.

Elanco’s East Africa Growth Accelerator (EAGA) initiative was active between 2017 and early 2022 and helped improve the productivity of small-scale livestock producers in Tanzania, Kenya and Uganda. Through the initiative, Elanco registered and distributed high-quality, affordable veterinary products in adjusted small pack sizes and facilitated access to feed additives and education to help prevent and combat livestock disease. In 2022, we compiled the final outcomes from this initiative. Post-project research indicates more than 60% of the farmers demonstrated behavioral change, implementing recommended practices for better livestock management. We continue to extend the impact of EAGA by supporting small-scale producers in the region through our commercial sales channels.

Additionally, the Managing Animal Health and Acaricides for a Better Africa (MAHABA) initiative is a collaboration between Elanco and GALVmed (the Global Alliance for Livestock Veterinary Medicine), with support from the Bill & Melinda Gates Foundation – to aid small-scale beef and dairy producers in Uganda and small-scale cattle and poultry producers in Nigeria. Livestock farming is a significant source of food and income in these countries. At the same time, ticks and tick-borne diseases represent a significant economic burden to cattle farming and, overall, the development of the livestock sector in sub-Saharan Africa. Direct and indirect effects of tick infestations negatively impact animal health and output, farmer productivity and the economic stability of small-scale livestock producers. Treatment failures and tick resistance are prevalent in the region, due to a lack of education and resources that lead to inappropriate selection of chemical classes and application of acaricides. 

Through the MAHABA initiative, we seek to equip small-scale producers in Uganda and Nigeria with quality acaricides and education, to help them realize significant livestock productivity gains by better managing ticks and the impact of tick-borne-disease. MAHABA expands the geographic reach of products made available through EAGA, to enhance the productivity of Nigerian cattle and poultry producers with quality acaricides, vaccines, medicines and feed additives. 

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We do not publicly disclose changes in average list price, as that information is competitively sensitive.

On a global basis, the effect of price on changes in revenue as compared to the prior year was as follows:

2022 – 2%

2021 – 2%

2020 - 3% *

2019 – 2% *

2018 – 3% * 

^{*Data for 2018-2020 reflects legacy Elanco operations, prior to the integration of Bayer Animal Health.}

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The total amount of product accepted for takeback, reuse or disposal is competitively sensitive. However, our operational processes for product returns are described below:

Customers in the U.S.

In the U.S., our commercial policies allow for the return of products if certain criteria are met, as outlined in the Elanco Terms and Conditions of Sale and in our commercial contracts. We investigate reasons for returns and distinguish three types of returns: Unusable, Return to Stock, or Destroyed in Field. When a product is returned at designated facilities, SOPs describe how Elanco products returned to an Elanco warehouse or third-party partners such as logistics service providers should be handled. The SOPs also outline the rules for further disposition of returned products. Our Health, Safety and Environment (HSE) organization maintains additional SOPs detailing appropriate processes for the management and disposal of both waste and hazardous waste material.

In rare instances, we evaluate a product for reintegration into the supply chain. In such circumstances, our U.S. Affiliate Quality (USAQ) team applies a standard process for assessing the product’s suitability. This is necessary to ensure that only product fit for use is considered for re-integration into saleable stock. For products destroyed in the field, we advise our customers to comply with guidelines for appropriate disposal, per the product information documents. When product is returned at a designated facility, approved procedures define how Elanco product returns are handled.

Customers Outside the U.S.

For markets outside of the U.S., our regional affiliates have local commercial policies which are based on our Commercial Policy Blueprint for Elanco International. This blueprint identifies applicable global SOPs and return procedures. The return processes defined in affiliates’ commercial policies include a local business review, approval process and requirements for the creation and retention of appropriate supporting documentation aligned with applicable local regulations and global procedures.

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(1) Voluntary and (2) involuntary turnover rate for: (a) executives/senior managers, (b) midlevel managers, (c) professionals, and (d) all others

Executives/Senior Mgr.

2022 Voluntary 15.8%

2022 Involuntary 14.0%

Mid-level Mgr.

2022 Voluntary 8.1%

2022 Involuntary 6.2%

Professionals

2022 Voluntary 9.0%

2022 Involuntary 10.4%

Other

2022 Voluntary 11.7%

2022 Involuntary 7.5%

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Elanco proactively identifies, attacks and frustrates the sellers and manufacturers of counterfeit products to protect our customers. Engaging with external business partners, Elanco can proactively monitor counterfeit activity for five key products in the U.S. Counterfeits are identified through a combination of internal and external resources. Evaluated through an internal assessment process conducted by technical experts. Analytical testing may be performed if further information is needed.

Notification regarding counterfeits to legal or regulatory authorities depends on local requirements and specific circumstances. To support law enforcement, Elanco has held global education training programs with more than 1,300 in attendance since 2021. The field guide is under continuous review for relevant updates.

Elanco reinforces the importance of acquiring products through authorized distributors as a mechanism to ensure product safety and quality. In the U.S., consumers may use our “Where to Buy” tool to purchase authentic Elanco products from approved veterinary clinics, e-commerce sites and pet retailers. Purchases from sites other than those listed in the Where to Buy tool may originate from a source unknown to Elanco.

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Manufacturing & Supply Chain Quality Management

Elanco is a member of the Pharmaceutical Supply Chain Initiative (PSCI) organization. We maintain a targeted risk-based external supplier auditing program. This includes the potential completion of periodic surveys and the potential for on-site assessments to verify adherence to the PSCI principles. In 2022, we more than doubled the number of suppliers that participated in the on-site HSE PSCI assessments.

In 2023, we are establishing a formal human rights program, including a global human rights policy, an executive oversight committee and a core program team including representatives from ESG and sustainability, legal and compliance, HSE, procurement, supply chain and other departments.

This new policy reaffirms our commitment to leading human rights practices as specified in the OECD Guidelines for Multinational Enterprises, the U.N. Guiding Principles on Business and Human Rights (including the International Labour Organization Declaration of Fundamental Principles and Rights at Work) and the Pharmaceutical Supply Chain Initiative Principles for Responsible Supply Chain Management.

The policy outlines our commitments and procedures, including due diligence specifications that apply to our own operations, supply chain and other business partners. The policy also provides a global framework for regional human rights activities, including the management of modern slavery risks.

In 2023, we also expect to implement an enhanced Supplier Code of Conduct and third-party due diligence platform to ensure we receive comprehensive information from current and prospective suppliers and business partners on their practices related to more than 20 leading ESG topics. We will use this information to monitor expected practice, identify deficiencies related to Elanco policies or business norms, and to inform targeted engagement on issues such as human rights, employee health and safety, modern slavery, information security, data privacy and operational sustainability.

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