Code of Business Conduct

V. Compliance with Laws

Principle 8: Compliance with Laws

We are required to familiarize ourselves with all the laws, rules and regulations that apply in the areas within the scope of our work responsibilities, including, as applicable, the following areas. Contact the Legal Division for advice in any area where you have questions.

 

Food and Drug Laws

We will comply with all laws, rules and regulations applicable to our work responsibilities in every country in which Abbott does business.

We must comply with all applicable laws, rules, regulations, consent decrees and other orders of the United States Food and Drug Administration and any other similar governmental authorities in other countries where Abbott does business governing research, development, manufacture, distribution and promotion of foods, drugs, medical devices, diagnostic products, nutritional products or biological products.

We must comply with all applicable requirements regarding the proper uses and tracking of drug samples, including the United States Prescription Drug Marketing Act and similar applicable laws, rules and regulations in other countries where Abbott does business.

 

Laws Relating to Government Health Care Programs

We must comply with the laws relating to government health care programs in each country where Abbott does business.

In the United States, its territories and possessions, and Puerto Rico, many Abbott products are reimbursed or purchased by Federal Health Care Programs – programs that include Medicare, Medicaid, Department of Defense and Department of Veterans Affairs health care programs, and many other Federal or Federally–funded programs that pay for health care items and services. These programs are regulated through a variety of laws affecting the coverage and reimbursement of Abbott products, as well as the sale and marketing of those products.

Abbott is committed to full compliance with all Federal Health Care Program requirements, including the following:

Federal Anti–kickback Statute

The laws that regulate these programs include the Federal anti–kickback statute, which applies both to our sales and marketing activities and to a broad range of other activities, including grants, research contracts, and consulting agreements. It generally prohibits offering or paying (or soliciting or receiving) cash or other benefits to induce the purchase, order, or recommendation of products eligible for payment by a Federal Health Care Program.

The statute is aimed at fraudulent or abusive practices that could encourage over utilization, otherwise increase Federal Health Care Program costs, or bias treatment decisions by health care providers. But even normal business practices (discounts, for example) can sometimes violate the statute if they fall outside its “safe harbors”, particularly if they lack appropriate safeguards. To ensure Abbott’s compliance with the anti–kickback statute, we must carefully evaluate and properly structure any arrangements with parties in a position to prescribe, purchase or recommend Government–reimbursed products (for example, physicians, hospitals, nursing facilities, HMOs, PBMs, GPOs, or pharmacies), and must always avoid any arrangements that could inappropriately influence treatment or purchasing decisions.

 

False Claims Laws

The civil False Claims Act and other statutes prohibit knowingly or recklessly submitting false claims to the Government, or causing others to submit false claims. Accordingly, we must exercise care to ensure that we do not submit any inaccurate or otherwise improper claims for payment to the Government, or cause others to do so. Abbott contracts with Government customers and must avoid submitting any claims for payments not properly due. While Abbott does not itself submit claims to insurance programs like Medicare and Medicaid, many of our customers do. We must avoid any conduct that could lead customers to submit false claims by following procedures carefully designed to ensure that any information we provide to customers about Medicare or Medicaid reimbursement for our products is accurate and otherwise proper.

 

Price Reporting Obligations

Further, Abbott must fulfill certain price reporting obligations in connection with Federal Health Care Programs. These price reporting obligations include reporting Medicaid drug rebate figures (the “Average Manufacturer Price” and “Best Price”) to the Centers for Medicare and Medicaid Services; reporting “Federal Ceiling Price” figures for drugs to the Department of Veterans Affairs; and reporting specified pricing data to Federal customers when negotiating and performing Federal Supply Schedule contracts. In all such cases, we must calculate and report the relevant pricing information in accordance with the rules governing the particular program – starting from accurate net prices that are not distorted by any “hidden” or “off–invoice” discounts. All price concessions to purchasers must be identified as such and appropriately reflected in reported prices.

 

Civil Monetary Penalties Law

This law authorizes the imposition of civil monetary penalties for a variety of conduct. For example, it prohibits employing or contracting with parties excluded from participation in Federal Health Care Programs.

 

Failure to adhere to Federal Health Care Program requirements, or to related Abbott standards, policies and procedures, can have a number of serious consequences, both for Abbott and for the individuals involved. The violation of legal requirements governing Federal Health Care Programs can potentially result in civil suits or criminal prosecutions under a number of Federal and State statutes. Any violation of these laws can subject both Abbott and individuals to administrative, civil, or even criminal fines and penalties. Of course, such violations may also result in employee disciplinary action, which may, when appropriate, include dismissal. In addition, violation of these laws may result in exclusion of Abbott or individual employees from participation in Federal Health Care Programs.

Abbott expects each of us to be familiar with, and to comply with, the relevant Federal Health Care Program requirements applicable to your job, and to be familiar with, and to comply with, all Abbott standards, policies and procedures – both Corporate and Divisional – implemented to promote compliance with the Federal Health Care Program requirements. At the Corporate level, see Corporate Policy No. CP–01, and related Office of Ethics and Compliance Policies.

 

Antitrust and Competition Laws

When we are dealing with competitors, the following policies shall apply:

1. We must not enter into any agreement or understanding that has the purpose or effect of improperly restraining competition. Illegal agreements or understandings among competitors include price fixing, market allocation, and bid rigging. 
2. We must not exchange, discuss, or benchmark with any competitor information relating to Abbott prices or pricing policies, distribution policies, supplier pricing or selection, customer selection or classification, credit policies, advertising policies or any other similar competitive information. 
3. We must not participate in any formal or informal trade association or other meetings with competitors at which agreements or understandings of the type described in paragraph (1) are being made or at which competitive information of the type described in paragraph (2) is being exchanged or discussed.

 

Insider Trading Laws

If a person possesses material non–public information concerning a company that issues publicly–traded securities, it is generally illegal for the person to trade in securities of that company or to “tip” others who might trade in such securities.

All persons covered by this Code (“covered persons”) and third parties who are in a confidential relationship with Abbott (as well as such individuals’ household members and close relatives), shall not trade in or recommend the purchase or sale of Abbott’s common shares (or any other equity or debt securities of Abbott) while they are in possession of material information regarding the operations or prospects of Abbott that has not been publicly disclosed and disseminated.

Covered persons shall also similarly abstain from trading in, or recommending the purchase or sale of the securities of any other company that issues publicly–traded securities of which they have obtained material non–public information as a result of their employment by or affiliation with Abbott.

Covered persons shall not disclose any such material non–public information to third parties except when done for valid business purposes (and covered by an appropriate confidential disclosure agreement). In such cases the covered persons must have no reason to believe the information will be misused or the disclosure might otherwise violate Federal securities laws.

United States securities laws prohibit selective disclosures of material non–public information to third parties who are not bound by confidentiality agreements or certain confidential relationships to preserve the confidentiality of such information. Covered persons should consult with the Legal Division before making disclosures to third parties that might constitute selective disclosure or if they believe a selective disclosure may have already been made by inadvertence or otherwise.

“Material information” is information which, if publicly disclosed, could reasonably be expected to affect the market value of a company’s securities or to influence a reasonable investor’s decisions with respect to those securities. Specific examples of material information include generally unanticipated changes in revenues, annual and quarterly earnings or dividend rates, significant write–offs or significant increases in reserves, public offerings of any Abbott securities, significant acquisitions or dispositions, joint ventures, proposed tender offers or stock splits, and senior management changes. Information regarding major new product developments, collaborations, suppliers, customers, contract awards or terminations, expansion plans, or significant litigation or regulatory proceedings may also fall in the category of material information.

To prevent violations of these laws and avoid even the appearance of impropriety, Abbott may impose “blackout periods” during which certain covered persons should not engage in any transactions involving Abbott’s securities. Affected covered persons will be notified of any such blackout period.

The foregoing restrictions are not intended to prevent covered persons from buying or selling securities pursuant to properly established and administered “Rule 10b5–1 Plans” which may be used to permit trading pursuant to certain kinds of prearranged plans even if a person subsequently comes into possession of material non–public information. Contact the Legal Division to establish such a Plan.

 

Laws Relating to Payments to Government Officials/Employees

We must not directly or indirectly pay, give, offer, or promise any form of bribe, gratuity, or kickback to any government official or employee.

We must comply with the United States Foreign Corrupt Practices Act, and with similar laws elsewhere, that apply to payments to government officials/employees of other countries.

Under the Foreign Corrupt Practices Act, we may not directly or indirectly pay, give, offer, or promise money or anything of value to any officer, employee or representative of a government outside the United States or of a public international organization, or to any political party, party official, or candidate for political office outside the United States in order to (1) secure an improper advantage in obtaining, retaining, or directing business, (2) influence any act or decision of the recipient in an official capacity, or (3) induce the recipient to do or omit to do an act in violation of such person’s lawful duty.

An example of an impermissible indirect activity would be a payment made through an intermediary or agent where we know or should be aware that such payment would be passed along for prohibited purposes.

 

Laws Relating to Equal Employment Opportunity and Workplace Harassment

Abbott’s policy is to provide employment opportunities without regard to race, religion, color, national origin, sex, age, ancestry, citizenship, veteran status, marital status, sexual orientation, or disability or any other reason prohibited by law. Decisions as to hiring, promotion and other aspects of the employment relationship should be based solely upon job–related qualifications.

Abbott also prohibits sexual harassment, as well as harassment based on any of the other characteristics listed above, and will take appropriate action to eliminate prohibited harassment and remedy the effects of such harassment.

 

Laws Relating to Data Privacy

Abbott is committed to the protection of individuals’ privacy. We must comply with applicable privacy laws, rules and regulations wherever Abbott does business, and in all aspects of its business. Those laws, rules and regulations are complex and differ from country to country. If anyone has a question or concern about collecting, using, disclosing or storing an individual’s information, either within Abbott or in a relationship with a third party, contact the Legal Division for advice before proceeding.

 

Laws Relating to the Environment

Abbott is committed to protecting the environment by minimizing the negative environmental impact of our operations and promoting sustainable use of natural resources. We must comply with all applicable environmental laws, rules and regulations in all countries where we do business.

 

Customs, Antiboycott, Embargo, and Trade Control Laws

While importing or exporting products, services, information or technology, we will comply with all applicable customs, antiboycott, embargo, and trade control laws, rules and regulations.

The United States antiboycott law prohibits Abbott and its affiliates from participating in any international economic boycott in which the United States does not participate, such as the Arab boycott of Israel. It prohibits refusing to do business with the target of any such boycott, or any blacklisted firms; and it prohibits furnishing boycott–related information. Abbott must report boycott–related requests to the United States Government.

The United States embargo and trade control laws prohibit, restrict, or regulate transactions in goods, funds, services, or technology with certain persons, companies, and countries based on national security and policy interests.

Employees who have any responsibility for the importation or exportation of products, services, or funds or the transfer or disclosure of technology must be thoroughly familiar with and comply with these laws, rules and regulations.

 

Anti–money Laundering Laws

We will comply with all applicable anti–money laundering laws, rules and regulations of the United States and other countries having comparable laws.

The anti–money laundering laws prohibit us from engaging in a financial transaction if we know that the funds involved in the transaction were derived from illegal activities. If you believe that the other party to a business transaction is engaged in any illegal activity or is using proceeds derived from an illegal activity, you must obtain approval from the Legal Division prior to entering into the transaction.