AbbVie 2013 Annual Report Download - page 21

AbbVie uses a number of products in its pharmaceutical and biologic manufacturing processes that are
sourced from single suppliers, and an interruption in the supply of those products could adversely affect
AbbVie’s business and results of operations.
AbbVie uses a number of products in its pharmaceutical and biologic manufacturing processes that
are sourced from single suppliers. The failure of these single-source suppliers to fulfill their contractual
obligations in a timely manner or as a result of regulatory noncompliance or physical disruption at a
manufacturing site may impair AbbVie’s ability to deliver its products to customers on a timely and
competitive basis, which could adversely affect AbbVie’s business and results of operations. Finding an
alternative supplier could take a significant amount of time and involve significant expense due to the
nature of the products and the need to obtain regulatory approvals. AbbVie cannot guarantee that it
will be able to reach agreement with alternative providers or that regulatory authorities would approve
AbbVie’s use of such alternatives. AbbVie does, however, carry business interruption insurance, which
provides a degree of protection in the case of a failure by a single-source supplier.
Significant safety or efficacy issues could arise for AbbVie’s products, which could have a material adverse
effect on AbbVie’s revenues and financial condition.
Pharmaceutical products receive regulatory approval based on data obtained in controlled clinical
trials of limited duration. Following regulatory approval, these products will be used over longer
periods of time in many patients. Investigators may also conduct additional, and perhaps more
extensive, studies. If new safety or efficacy issues are reported or if new scientific information becomes
available (including results of post-marketing Phase IV trials), or if governments change standards
regarding safety, efficacy or labeling, AbbVie may be required to amend the conditions of use for a
product. For example, AbbVie may voluntarily provide or be required to provide updated information
on a product’s label or narrow its approved indication, either of which could reduce the product’s
market acceptance. If serious safety or efficacy issues with an AbbVie product arise, sales of the
product could be halted by AbbVie or by regulatory authorities. Safety or efficacy issues affecting
suppliers’ or competitors’ products also may reduce the market acceptance of AbbVie’s products.
New data about AbbVie’s products, or products similar to its products, could negatively impact
demand for AbbVie’s products due to real or perceived safety issues or uncertainty regarding efficacy
and, in some cases, could result in product withdrawal. Furthermore, new data and information,
including information about product misuse, may lead government agencies, professional societies,
practice management groups or organizations involved with various diseases to publish guidelines or
recommendations related to the use of AbbVie’s products or the use of related therapies or place
restrictions on sales. Such guidelines or recommendations may lead to lower sales of AbbVie’s
products.
AbbVie is subject to product liability claims and lawsuits that may adversely affect its business and results of
operations.
In the ordinary course of business, AbbVie is the subject of product liability claims and lawsuits
alleging that AbbVie’s products or the products of other companies that it promotes have resulted or
could result in an unsafe condition for or injury to patients. Product liability claims and lawsuits and
safety alerts or product recalls, regardless of their ultimate outcome, may have a material adverse effect
on AbbVie’s business and reputation and on its ability to attract and retain customers. Consequences
may also include additional costs, a decrease in market share for the products, lower income and
exposure to other claims. Product liability losses are self-insured. Product liability claims could have a
material adverse effect on AbbVie’s business and results of operations.
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