Ethics & Compliance

Our integrity is based on decisions – large and small – that our employees at every level of the company make each day. Our decisions are guided by our values, a sense of ethics and respect for the law. To support our commitment to ethical conduct and compliance with the law, we have a long-standing ethics and compliance program. It is led by the Vice President and Chief Ethics and Compliance Officer and supported by a global staff of 61. Next steps include adding compliance directors in the fast-growing markets of Russia and India.

Our program is built on seven key tenets:

• Providing strong ethics and compliance leadership;
• Clearly articulating our standards;
• Encouraging communication;
• Increasing awareness through training;
• Delivering accountability;
• Providing timely assessment; and
• Delivering prompt remediation.

Code of Business Conduct

The basic guidelines of our program are set forth in the Abbott Code of Business Conduct, which is available in 35 languages. All employees are required to read, understand and certify their adherence to this Code annually.

The Code makes it clear that we do not tolerate illegal or unethical behavior in any of our business dealings. It stresses the importance of ethical and honest conduct, appropriate treatment of confidential information, avoiding conflicts of interest, and the accuracy and integrity of Abbott';s books and records. In addition, the Code requires timely and accurate public disclosure and compliance with relevant laws, including food and drug laws, laws relating to government health care programs and antitrust laws.

The policies and procedures supporting the principles outlined in the Code are updated to reflect changes in our industry's codes, including rules regarding gifts, meals and education.

Disclosure Program

Two-way communication is key to a successful ethics and compliance program. Our Ethics and Compliance Disclosure Program includes a telephone and Web-based hotline available around the clock. We analyze each allegation, take corrective action where warranted, and generate metrics that allow us to spot trends and respond to them as need be.

"When it comes to ethics and compliance, you must set the tone at the top and in the middle, and you also need to get far down in the organization. The further down in the organization you can get – both globally and locally – the more likely you are to be successful. That's what the people in Abbott's Ethics and Compliance program are really trying to do. You need to make sure the people producing, researching and marketing really identify with the company, really care about what they're doing. Abbott has the advantage of doing health care, something that really matters in people's lives."
—Patricia Werhane, who holds joint appointments in business ethics at DePaul University and the University of Virginia's Darden Graduate School of Business

We use a number of approaches to engage employees in our ethics program. One successful approach has been the use of interactive ethics challenge games in conjunction with a help desk or booth activity. These face-to-face interactions allow for informal discussions with Office of Ethics and Compliance personnel and provide opportunities to learn more about the company's guidelines, regulations and the importance of individual actions.

For example, "Score with Ethics," an interactive question and answer assessment based on the core values of our company, was developed to help international employees learn more about the Code and the resources available to them. This learning tool was made available to our affiliates worldwide to test and enhance their ethics and compliance knowledge.

Policies and Procedures

A key part of Abbott's ethics and compliance programs are the policies and procedures that the OEC has created to guide employees as they conduct their day-to-day activities within the global health care community. To ensure that all Abbott employees are always working within the standards set by federal, state and industry regulations, Abbott has made it a point to use PhRMA, AdvaMed, OIG guidance and various laws (Federal and State) as the foundation of Abbott's policies and procedures.

As the healthcare industry continues to grow, more and more laws are being created to monitor health care manufacturer's activities. Some of the new laws that have emerged recently include state reporting laws, which require health care manufacturers to report marketing costs for a particular state on an annual basis. Currently California, Nevada, West Virginia, Minnesota, Vermont, Washington, D.C., and Maine all have laws or regulations that require this type of reporting. Abbott continues to review new laws as they are passed and is in compliance with all required state reporting at this time.

Ethical conduct and compliance with the law are central to fulfilling our responsibility to our stakeholders. Honesty, fairness and integrity represent the necessary conditions of an ethical workplace and are nonnegotiable.

Our approach to ethics and compliance is multifaceted and covers seven key areas:

Leadership: Abbott's Office of Ethics and Compliance (OEC) is led by our Vice President and Chief Ethics and Compliance Officer. The OEC has appointed dedicated ethics and compliance staff to support each of our businesses. The Chief Ethics and Compliance Officer makes periodic reports to the public policy committee of Abbott's board of directors and gives an annual report to the full board. This officer also chairs our Business Conduct Committee, which oversees implementation of the ethics and compliance program.

Standards: Abbott's Code of Business Conduct provides guidance on business conduct and practices to all employees and agents. Our code includes contacts for asking questions, requesting further information or reporting suspected violations. The code requires that complaints or concerns regarding accounting, internal accounting controls or auditing matters be promptly communicated to Corporate Internal Audit or the OEC. We continually monitor the nature of employee inquiries and make appropriate adjustments to our training and communications.

Communications: We offer a number of resources to employees, such as Abbott's Ethics and Compliance Helpline, a telephone and Web-based hotline available 24 hours a day, seven days a week. In addition, the OEC creates opportunities to engage in face-to-face interactions with employees by participating in national and regional sales meetings and local site meetings. Issues also are highlighted on our OEC intranet site and through other targeted communications vehicles.

Training: Employee training and education programs increase awareness of the legal and ethical implications of business decisions.

Accountability: Abbott does not tolerate retaliation against anyone who makes a good-faith report regarding a violation or potential violation of Abbott's Code. This guideline is well publicized and enforced.

Assessment: Results of program monitoring and compliance audits are shared with each Abbott business. Specified time frames are given to implement recommendations.

Remediation: OEC responds promptly to detected problems with corrective action.

The OEC continually partners with our businesses to promote the highest standards of ethical business conduct, and develop and implement programs for employees worldwide.

Monitoring Performance

A successful ethics and compliance program depends upon two-way communication. In 2008, we received approximately 1,000 inquiries and allegations. We analyze each allegation, take corrective actions where warranted, and generate metrics that allow us to spot and respond to trends as needed.

We collect information on breaches of the Code and report as appropriate to senior management. We take each incident seriously and engage in appropriate legal or disciplinary action – if necessary, terminating employees or supplier relationships as a result.

Abbott's Office of Ethics & Compliance