Abbott Laboratories - Abbott's Greed

Abbott Laboratories

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Abbott Laboratories is among the top drug companies in the world, with $22.3 billion in sales in 2005, $3.4 billion in profits, and a profit margin of over 50%.

Abbott, founded in 1888, is one of the top health-care product manufacturers in the United States. Located in suburban Chicago, the company focuses on diabetes, pain management, respiratory infections, HIV/AIDS, men and women's health, pediatrics, and animal health. In addition to researching, developing and manufacturing pharmaceuticals, the company produces diagnostic systems as well as nutritional products like Ensure.

The company's key pharmaceutical products include the HIV/AIDS drugs Kaletra and Norvir, the anti-infective Biaxin, the cholesterol management drug TriCor, and the rheumatoid arthritis treatment Humira. Abbott is also the maker of the obesity drug Meridia, which is the subject of at least one class-action lawsuit and is under review by the FDA due to concerns about the drug's safety and effectiveness.

In 2005, Marketing and administrative costs accounted for nearly $5.5 billion of Abbott’s operating expenses while research and development accounted for just $1.8 billion. The company spent $27.6 million on lobbying over the past seven years. Abbott’s CEO, Miles White, is paid over $5 million a year.

Abbott caused controversy in 2003 over a sharp rise in price of Norvir treatment from $1.71 per day to $8.57 per day, spurring claims of price gouging by people living with HIV and AIDS and some members of the US Congress. The group Essential Inventions asked the US Department of Health and Human Services to issue a compulsory license for generic production of the drug, based on the fact that it was developed with substantial government funding. (Abbott received $3,500,000 in grants from the United States government to develop Norvir.) Currently the House Oversight and Government Reform Committee is considering an investigation into price gouging by Abbott.



SOURCES: Abbott Proxy Statement 2005; Center for Public Integrity, Pushing Prescriptions, 2005, ; Abbott Laboratories, Press Release, 13 Aug. 2006, CPTech page on Norvir