ABBOTT Board Should Be Forced To Publicly Apologize, Write Ethics Essay


Failure of Leadership at Abbott Breaks Its Promise

Yesterday’s announcement that the global pharmaceutical giant Abbott Laboratories had agreed to pay $1.6 billion to state and federal agencies in criminal and civil fines made me furious. This is not the first time that a large drug manufacturer has been caught illegally promoting unapproved uses for one of its medicines.  But the Abbott case is especially egregious because it executives  exploited two vulnerable groups: persons with mental illnesses and the elderly.

The settlement ends a four-year investigation into a wide number of calculated moves by the Illinois-based company to push sales of its neurological drug Depakote into so called “off label” markets where it didn’t belong.  One of the more scandalous admissions was that executives created a special sales force to promote Depakote in nursing homes.  The sales force was told to push Depakote as a substitute for proper staffing since one of its side effects was turning grandma and grandpa into compliant zombies thus reducing the need to hire employees and provide decent care.  “Abbott essentially preyed on…the most helpless patient populations,” one attorney noted.

Not only did Abbott prey on the elderly, it took advantage of persons with mental illnesses between 2001 and 2006 to increase Depakote sales. Two studies  funded by the company failed to prove the drug’s effectiveness as a booster for antipsychotic drugs, yet the company waited two years after the conclusion of the second study to notify its sales force and another two years to publish its findings.

Depakote was prescribed to my son during this time frame and, like hundreds of other concerned parents, I urged him to take it because I believed it was helping him.

Forcing Abbott to pay $1.6 billion is not enough. Not only did the company harm countless individuals, but it violated a public trust. Nearly all of us with loved ones who have a mental disorder depend on medications. Compliance with medications is a major issue.  Incidents such as this undermine confidence, causing ripple effects.

Abbott’s pharmaceutical sales last year were $20 billion, about fifty percent of the company’s sales.  Depakote sales dropped to $331 million from $1.3 billion between 2008-2009. That was because Depakote went off patent and is now available as a generic. Overall, Abbott generated revenues in 2010 of 35 billion and net earnings of 4.6 billion.

Abbott is not the first to be caught pushing off label uses.  Pfizer paid $2.3 billion for marketing drugs, including its painkiller Bextra.  Knowing there is limited time under patent laws to maximize profits, unscrupulous companies encourage their sales forces to push medications into areas where the drugs do little good and sometimes can cause harm.

Fining Abbott hurts its stock holders, but does little to punish those responsible. The executives who pushed the off-label sales should be fired. And the board of directors who were asleep at the wheel should be forced to publicly apologize. One way to embarrass them would be for the government to require each board member to write a letter of apology and essay about ethics that would be published in Abbott’s annual report.

Here’s who’s on the board of directors of Abbott. They are not individuals who you would think of as snake oil salesmen. But in this instance, that is exactly what they are.

They should be ashamed — especially Board Member Robert J Alpern, M.D., Ensign Professor of Medicine, Professor of Internal Medicine and Dean of the Yale School of Medicine.

Others include:

Roxanne S. Austin, President Austin Investment Advisors, Newport Coast, Calif.;

 Sally Glount, Dean, J.L. Kellogg Graduate School of Management, Northwestern University;

W. James Farrell, retired chairman and CEO of Illinois Tool Works Inc., Glenview, Ill.;

 Edward M. Liddy, Partner, Clayton, Dublilier & Rice LLC, New York, New York;

 Phebe N. Novakovic, Executive VP – Marine Systems, General Dynamics Corporation, Falls Church Va;

 William A Osborn, retired chairman and CEO, Northern Trust Corporation and the Northern Trust Company, Chicago, Ill.;

 Samuel C. Scott III, retired chairman, president and CEO, Corn Products Internaitonal Inc., Westchester, Illinois;

 Glenn F. Tilton, Chairman of the Midwest, JP Morgan Chase and Company, Chicago, Ill.;

 Miles D. White, Chairman of the Board and CEO Abbott, Abbott Park, Ill.;

Nancy McKinstry, CEO and Chairman of the Executive Board, Netherlands.





About the author:

Pete Earley is the bestselling author of such books as The Hot House and Crazy. When he is not spending time with his family, he tours the globe advocating for mental health reform.

Learn more about Pete.