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
• delivering prompt remediation

Our Code of Business Conduct, which is available in 35 languages, helps ensure that all Abbott employees have a clear understanding of legal and regulatory requirements, Abbott's policies and procedures, and the company's shared ethical principles. Annually, all employees are required to certify to Abbott's Code of Business Conduct.

Two-way communication is key to a successful ethics and compliance program. Our Ethics and Compliance Disclosure Program, which includes a telephone and Web-based hotline available around the clock, received approximately 700 questions and allegations in 2007. 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.

Employee training and education programs increase awareness of the legal and ethical implications of business decisions. We added a training module on Supplier Diversity Awareness and 99.81% of the 18,000 employees completed the training.

"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 OEC 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. We also customized the U.S. awareness program and will introduce it in 2008 at our U.S. sales meetings and plant events. In 2007, we engaged more than 8,000 employees worldwide in this unique awareness and learning effort.

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.

Operating Globally, Acting Locally

Understanding and adhering to local laws, regulations and other requirements is vital for our employees no matter where they work. The Affiliate Compliance Program was designed to formalize compliance programs, including distinct policies and procedures in each of the countries where Abbott operates. In 2007, we improved local implementation of the ethics program through better information sharing, training, and awareness across the business. The International Compliance Web site provides direction and guidance to help employees understand and operate in compliance with local policies and procedures.

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.

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 non-negotiable.

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.

California Comprehensive Ethics & Compliance Program and Declaration