AbbVie 2014 Annual Report Download - page 25

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compliance measures, certifications of AbbVie’s CEO and board of directors, and other conditions. If AbbVie
violates the terms of its probation, it may face additional monetary sanctions and other such remedies as
the court deems appropriate. On October 2, 2012, the court accepted the guilty plea and imposed the
agreed-upon sentence.
In addition, Abbott entered into a five-year CIA with the Office of Inspector General for the United
States Department of Health and Human Services (OIG). The effective date of the CIA is October 11, 2012.
The obligations of the CIA have transferred to and become fully binding on AbbVie. The CIA requires
enhancements to AbbVie’s compliance program, fulfillment of reporting and monitoring obligations,
management certifications, and resolutions from AbbVie’s board of directors, among other requirements.
Compliance with the requirements of the settlement will impose additional costs and burdens on AbbVie,
including in the form of employee training, third party reviews, compliance monitoring, reporting
obligations, and management attention. If AbbVie fails to comply with the CIA, the OIG may impose
monetary penalties or exclude AbbVie from federal health care programs, including Medicare and Medicaid.
AbbVie and Abbott may be subject to third party claims and shareholder lawsuits in connection with the
settlement, and AbbVie may be required to indemnify all or a portion of Abbott’s costs.
The international nature of AbbVie’s business subjects it to additional business risks that may cause
its revenue and profitability to decline.
AbbVie’s business is subject to risks associated with doing business internationally, including in
emerging markets. Sales outside of the United States make up approximately 46 percent of AbbVie’s total
net sales in 2014. The risks associated with AbbVie’s operations outside the United States include:
• fluctuations in currency exchange rates;
• changes in medical reimbursement policies and programs;
• multiple legal and regulatory requirements that are subject to change and that could restrict
AbbVie’s ability to manufacture, market, and sell its products;
• differing local product preferences and product requirements;
• trade protection measures and import or export licensing requirements;
• difficulty in establishing, staffing, and managing operations;
• differing labor regulations;
• potentially negative consequences from changes in or interpretations of tax laws;
• political and economic instability, including sovereign debt issues;
• price and currency exchange controls, limitations on participation in local enterprises, expropriation,
nationalization, and other governmental action;
• inflation, recession and fluctuations in interest rates;
• potential deterioration in the economic position and credit quality of certain non-U.S. countries,
including in Europe and Latin America; and
• potential penalties or other adverse consequences for violations of anti-corruption, anti-bribery and
other similar laws and regulations, including the United States Foreign Corrupt Practices Act and the
United Kingdom Bribery Act.
Events contemplated by these risks may, individually or in the aggregate, have a material adverse effect
on AbbVie’s revenues and profitability.
2014 Form 10-K 19