What changed in this filing

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Item 1A. Risk Factors

2025-02-21 compared with 2024-02-16 · 48 added, 51 removed, 155 unchanged (39% of the section changed)

6 unchanged sentences

While Abbott has taken and will continue to take actions to mitigate the risks of disruptions to its global supply chain, disruptions to it could negatively affect Abbott's results of operations.

For example, the COVID-19 pandemic and macroeconomic conditions such as inflationary pressures and labor shortages contributed to global supply chain challenges over the last few years, which adversely impacted the cost and availability of certain raw materials, supplies, and services.

A discussion on the global supply chain challenges and its resulting impact on Abbott’s business is contained in the “Financial Review” section in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this report.

For example, the COVID-19 pandemic and macroeconomic conditions such as inflationary pressures and labor shortages contributed to global supply chain challenges in the early part of the decade, which adversely impacted the cost and availability of certain raw materials, supplies, and services.

Abbott may acquire other businesses, license rights to technologies or products, form alliances, or dispose of or spin-off businesses, which could cause it to incur significant expenses and could negatively affect profitability.

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Abbott may not be able to integrate acquisitions successfully into its existing business or transition disposed businesses efficiently, and could incur or assume significant debt and unknown or contingent liabilities.

Abbott could also experience negative effects on its reported results of operations from acquisition or disposition-related charges, amortization of expenses related to intangibles and charges for impairment of long-term assets.

These effects could cause a deterioration of Abbott’s credit rating, result in increased borrowing costs and interest expense, and decrease liquidity.

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Abbott also collects, manages and processes protected personal data, including protected health information, in connection with certain medical products and service offerings.

Abbott is subject to certain regional and local data protection laws that prohibit or restrict the transfer of protected data across country borders.

For additional information concerning data privacy and security regulation, see the discussion in “Regulation” under Item 1, “Business.” A breach of protected personal information could result in adverse consequences, including regulatory inquiries or litigation, increased costs and expenses, reputational damage, lost revenue, and fines or penalties.

Abbott is subject to numerous data privacy and data protection laws and regulations globally, including data protection laws that prohibit or restrict the transfer of protected data across country borders.

For additional information concerning data privacy and security regulation, see the discussion in “Regulation” under Item 1, “Business.” A breach or unauthorized disclosure of protected personal information could result in adverse consequences, including regulatory inquiries or litigation, increased costs and expenses, reputational damage, lost revenue, and fines or penalties.

Abbott invests in its information systems and technology and in the protection of its products and data to reduce the risk of a cybersecurity incident or other significant disruption, and monitors its information systems on an ongoing basis for any current or potential cybersecurity threats or vulnerabilities and for changes in technology and the regulatory environment.

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Any significant cybersecurity incident or other disruption affecting Abbott’s information systems or products could have a material adverse effect on Abbott’s business, financial condition and results of operations.

Abbott’s research and development efforts may not succeed in developing commercially successful products and technologies, which may cause Abbott’s revenue and profitability to decline.

Abbott’s research and development efforts to develop commercially successful products and technologies and its efforts to develop and maintain new business and operating models necessary to support data-driven healthcare solutions may not succeed, either of which may cause Abbott’s revenue and profitability to decline.

To remain competitive, Abbott must continue to launch new products and technologies.

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Failure to launch successful new products or technologies, or new indications or uses for existing products, may cause Abbott’s products or technologies to become obsolete, causing Abbott’s revenues and operating results to suffer.

In addition, Abbott is developing new business and operating models necessary to support the creation of data-driven healthcare solutions such as data-centric prevention and treatment strategies, new products and technologies that incorporate data insights, and product technology strategies that focus on connectivity and data creation management.

Even if Abbott successfully develops such new data-driven healthcare solutions, they may be rendered obsolete by competitors' innovations, the nature of the data and insights generated, or changing customer preferences.

Failure to develop and maintain business and operating models necessary to support data-driven healthcare solutions may negatively impact the demand for Abbott products and technologies, causing Abbott's revenues and profitability to decline.

The manufacture of many of Abbott's products is a highly exacting and complex process, and if Abbott or one of its suppliers or manufacturers encounters problems manufacturing products, Abbott’s business could suffer.

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To the extent Abbott or one of its suppliers or manufacturers experiences significant manufacturing problems, this could have a material adverse effect on Abbott’s revenues and profitability.

Abbott has significant indebtedness, which could adversely affect its business, including decreasing its business flexibility.

Abbott has indebtedness, which could adversely affect its business, including decreasing its business flexibility.

As of December 31, 2024, Abbott's consolidated indebtedness was approximately $14.1 billion.

This consolidated indebtedness could have the effect, among other things, of reducing Abbott's flexibility to respond to changing business and economic conditions, and reducing funds available for working capital, capital expenditures, acquisitions, and other general corporate purposes.

This consolidated indebtedness could have the effect, among other things, of reducing Abbott's flexibility to respond to changing business

and economic conditions, and reducing funds available for working capital, capital expenditures, acquisitions, and other general corporate purposes.

Further, Abbott may be required to raise additional financing for working capital, capital expenditures, future acquisitions or other general corporate purposes.

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Delays in the receipt of, or failure to obtain, approvals for future products, or new indications and uses, could result in delayed realization of product revenues, reduction in revenues, and substantial additional costs.

In addition, no assurance can be given that Abbott will remain in compliance with applicable FDA and other regulatory requirements once approval or marketing authorization has been obtained for a product.

These requirements include, among other things, regulations regarding manufacturing practices, product labeling, and advertising and postmarketing reporting, including adverse event reports and field alerts.

In addition, no assurance can be given that Abbott will remain in compliance with applicable FDA and other regulatory requirements once approval, clearance, or marketing authorization has been obtained for a product.

These requirements include, among other things, regulations regarding manufacturing practices, product labeling, postmarket changes to products, advertising, and postmarketing reporting, including adverse event reports and field alerts.

Many of Abbott’s facilities and procedures and those of Abbott’s suppliers are subject to ongoing regulation, including periodic inspection by the FDA and other regulatory authorities.

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a total or partial shutdown of production in one or more facilities while Abbott or Abbott’s suppliers remedy any actual or potential issues;

the inability to obtain future pre-market approvals or marketing authorizations;

the inability to obtain future product approvals, clearances, or marketing authorizations;

and withdrawals or suspensions of current products from the market.

Any of these events could disrupt Abbott’s business and have a material adverse effect on Abbott’s revenues, profitability, cash flows, and financial condition.

For information on Abbott’s voluntary recall in February 2022 of certain powder infant formula products manufactured at its facility in Sturgis, Michigan, the manufacturing stoppage at such facility, and the consent decree that Abbott entered into with the FDA on May 16, 2022, see the discussion in the “Financial Review” section in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this report.

For example, in February 2022, Abbott initiated a voluntary recall of certain powder infant formula products manufactured at its facility in Sturgis, Michigan at which time it temporarily stopped manufacturing at the facility.

In May 2022, Abbott entered into a consent decree with the FDA.

For information on the impact of Abbott's voluntary recall and manufacturing stoppage, see the discussion in the “Financial Review” section in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this report.

Laws and regulations affecting government benefit programs could impose new obligations on Abbott, require Abbott to change its business practices, and restrict its operations, which could result in a material adverse effect on Abbott's revenues, profitability, and financial condition.

Abbott’s industry is subject to various international, supranational, federal, and state laws and regulations pertaining to government benefit program reimbursement, price reporting and regulation, and health care fraud and abuse, including anti-kickback and false claims laws, and international and individual state laws relating to pricing and sales and marketing practices.

Violations of these laws may be punishable by criminal and/or civil sanctions, including, in some instances, substantial fines, imprisonment, and exclusion from participation in government health care programs, including Medicare, Medicaid, and Veterans Administration health programs in the U.S.

Abbott’s industry is subject to various international, supranational, federal, and state laws and regulations pertaining to government benefit program reimbursement, price reporting and regulation, and healthcare fraud and abuse, including anti-kickback and false claims laws, and international and individual state laws relating to pricing and sales and marketing practices.

Violations of these laws may be punishable by criminal and/or civil sanctions, including, in some instances, substantial fines, imprisonment, and exclusion from participation in government healthcare programs, including Medicare, Medicaid, and Veterans Administration health programs in the U.S.

These laws and regulations are broad in scope and they are subject to evolving interpretations, which could require Abbott to incur substantial costs associated with compliance or to alter one or more of its sales or marketing practices.

In addition, violations of these laws, or allegations of such violations, could disrupt Abbott’s business and result in a material adverse effect on Abbott’s revenues, profitability, and financial condition.

Changes in the health care regulatory environment may adversely impact the demand for and price of Abbott’s products.

In addition, violations of these laws, or allegations of such

violations, could disrupt Abbott’s business and result in a material adverse effect on Abbott’s revenues, profitability, and financial condition.

Changes in the healthcare regulatory environment may adversely impact the demand for and price of Abbott’s products.

Both in the U.S.

and internationally, government authorities may enact changes in regulatory requirements, make legislative or administrative reforms to existing reimbursement programs, make adverse decisions relating to Abbott’s products’ coverage or reimbursement, or make changes to patient access to health care, all of which could adversely impact the demand for and usage of Abbott’s products or the prices that Abbott’s customers are willing to pay for them.

Further, in the U.S., a number of the provisions of the Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 address access to health care products and services.

and internationally, government authorities may enact changes in regulatory requirements, make legislative or administrative reforms to existing reimbursement programs, make adverse decisions relating to Abbott’s products’ coverage or reimbursement, or make changes to patient access to healthcare, all of which could adversely impact the demand for and usage of Abbott’s products or the prices that Abbott’s customers are willing to pay for them.

Further, in the U.S., a number of the provisions of the Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 address access to healthcare products and services.

These provisions may be modified, expanded, repealed, or otherwise invalidated, in whole or in part.

Future rulemaking could affect rebates, prices or the rate of price increases for health care products and services, or required reporting and disclosure.

Future rulemaking could affect rebates, prices or the rate of price increases for healthcare products and services, or required reporting and disclosure.

Abbott cannot predict the timing or impact of any future rulemaking or changes in the law.

For additional information concerning health care regulation, see the discussion in “Regulation” under Item 1, “Business.”

For additional information concerning healthcare regulation, see the discussion in “Regulation” under Item 1, “Business.”

The expiration or loss of intellectual property protection and licenses may affect Abbott’s future revenues and operating income.

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Significant safety concerns could arise for Abbott’s products, which could have a material adverse effect on Abbott’s revenues and financial condition.

Health care products typically receive regulatory approval based on data obtained in controlled clinical trials of limited duration.

Healthcare products typically 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.

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In the United States and other countries, Abbott’s businesses have experienced downward pressure on certain product pricing.

Cost containment efforts by governments and private organizations are described in greater detail in the section captioned “Regulation.” To the extent these cost containment efforts are not offset by greater patient access to health care or other factors, Abbott’s future revenues and operating income will be reduced.

Cost containment efforts by governments and private organizations are described in greater detail in the section captioned “Regulation.” To the extent these cost containment efforts are not offset by greater patient access to healthcare or other factors, Abbott’s future revenues and operating income will be reduced.

Competitors’ intellectual property may prevent Abbott from selling its products or have a material adverse effect on Abbott’s future profitability and financial condition.

In the ordinary course of business, Abbott is the subject of patent litigation, such as competitor claims that an Abbott product infringes their intellectual property.

Resolving an intellectual property infringement claim can be costly and time consuming and may require Abbott to enter into license agreements.

Resolving an intellectual property infringement claim can be costly and time

consuming and may require Abbott to enter into license agreements.

Abbott cannot guarantee that it would be able to obtain license agreements on commercially reasonable terms.

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Competitors’ products may be safer, more effective, more effectively marketed or sold, or have lower prices or superior performance features than Abbott’s products.

Further, the development of new technology, health care products and medicines, and the development of new treatments for disease could significantly change the competitive landscape of the health care industry and negatively impact the demand for certain Abbott products.

Further, the development of new technology, healthcare products and medicines, and the development of new treatments for disease could significantly change the competitive landscape of the healthcare industry and negatively impact the demand for certain Abbott products.

Abbott cannot predict with certainty the timing or impact of the introduction of competitors’ products and technological advances.

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dollars, a significant portion of Abbott’s revenues and costs are realized in other currencies.

Sales outside of the United States in 2023 made up approximately 61 percent of Abbott’s net sales.

Sales outside of the U.S.

in 2024 made up approximately 61 percent of Abbott’s net sales.

Abbott’s profitability is affected by movement of the U.S.

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Information on Abbott’s hedging arrangements is contained in Note 12 to the consolidated financial statements in this report.

Adverse changes in tax laws, regulations and interpretations, both in the U.S.

Adverse changes in tax laws, regulations or interpretations, both in the U.S.

and internationally, could have a material adverse effect on Abbott’s effective tax rate, financial condition and results of operations.

Abbott is a large, global corporation, and changes in tax laws, regulations or interpretations could adversely affect Abbott’s overall tax liabilities.

Changes in tax laws, regulations or interpretations, both in the U.S.

and internationally, such as the two-pillared plan proposed by the Organization for Economic Cooperation & Development (OECD), could materially adversely affect Abbott’s effective tax rate, financial condition and results of operations.

Abbott is a large, global corporation and is subject to complex and evolving tax rules, both in the U.S.

and internationally.

Changes in tax laws, regulations or interpretations, such as the two-pillared plan proposed by the Organization for Economic Cooperation & Development (OECD), or adverse decisions regarding Abbott's tax positions could materially adversely affect Abbott’s effective tax rate, financial condition and results of operations.

A discussion on the OECD proposals and their potential impact on Abbott’s business in the future is contained in the “Financial Review” section in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this report.

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Unfavorable economic conditions in certain countries may increase the time it takes to collect outstanding trade receivables or inhibit Abbott's ability to best utilize its cash.

Financial instability and fiscal deficits in these countries may result in additional austerity measures to reduce costs, including health care.

Deterioration in the quality of sovereign debt, including credit downgrades, could increase Abbott’s collection risk where a significant amount of Abbott’s receivables in these countries are with governmental health care systems or where Abbott’s customers depend on payment by government health care systems.

Abbott is subject to risks related to public health crises, such as widespread outbreaks of infectious diseases like the COVID-19 pandemic, which had a material effect on Abbott’s business, financial condition and results of operations.

As a global healthcare company, public health crises, such as the widespread outbreaks of infectious diseases like the COVID-19 pandemic, may negatively impact certain Abbott's operations.

Financial instability and fiscal deficits in these countries may result in additional austerity measures to reduce costs, including healthcare.

Deterioration in the quality of sovereign debt, including credit downgrades, could increase Abbott’s collection risk where a significant amount of Abbott’s receivables in these countries are with governmental healthcare systems or where Abbott’s customers depend on payment by government healthcare systems.

Abbott is subject to risks related to public health crises, such as widespread outbreaks of infectious diseases, which could have a material effect on Abbott’s business, financial condition and results of operations.

As a global healthcare company, public health crises, such as the widespread outbreaks of infectious diseases, may negatively impact certain Abbott's operations.

Health concerns and significant changes in political or economic conditions caused by such outbreaks can cause, and during the COVID-19 pandemic caused, significant reductions in demand for certain products, increased difficulty in serving customers, disruptions to manufacturing and supply chains, and negative effects on certain of Abbott’s operations as well as the operations of its suppliers, distributors and other third-party partners.

Furthermore, such widespread outbreaks may impact, and during the COVID-19 pandemic impacted, the broader economies of affected countries, including negatively impacting economic growth, the proper functioning of financial and capital markets, inflation rates, foreign currency exchange rates, and interest rates.

In addition, the COVID-19 pandemic contributed to global supply chain disruptions, which adversely impacted the cost and availability of certain raw materials, supplies, and services.

With regard to COVID-19 diagnostic testing, the FDA issued Emergency Use Authorizations (EUA) for several COVID‑19 related products in 2020 and 2021, including Abbott diagnostic tests.

EUAs are authorized pursuant to an EUA Declaration under the U.S.

Food, Drug, and Cosmetic Act and remain in effect until the Secretary of the U.S.

Department of Health and Human Services terminates the EUA Declaration or unless sooner terminated or revoked.

Abbott is actively pursuing the FDA’s customary regulatory approval process for various COVID-19 diagnostic tests, which has uncertainty as discussed in “ Abbott is subject to numerous governmental regulations and it can be costly to comply with these regulations and to develop compliant products and processes.

” in “Legal and Regulatory Risks” under “Item 1A.

Risk Factors.” The U.S.

federal public health emergency (PHE) expired on May 11, 2023, which has not impacted the availability of the products authorized under the EUAs.

Abbott will continue to monitor further regulatory actions from relevant U.S.

government agencies and assess potential impacts on pandemic-related government policies and product authorizations.

Further, the COVID-19 pandemic has shifted to an endemic state, resulting in significantly lower demand for COVID-19 tests.

A more detailed discussion on the impact that the COVID-19 pandemic had on Abbott’s business is contained in the “Financial Review” section in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this report.

Furthermore, such widespread outbreaks may impact, and during the COVID-19 pandemic impacted, the broader

economies of affected countries, including negatively impacting economic growth, the proper functioning of financial and capital markets, inflation rates, foreign currency exchange rates, and interest rates.

For information on the impact that the COVID-19 pandemic had on Abbott’s business, see the discussion in the “Financial Review” section in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this report.

The international nature of Abbott’s business subjects it to additional business risks that may cause its revenue and profitability to decline.

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• diminished protection of intellectual property;

• potential penalties or other adverse consequences for violations of anti-corruption, anti-bribery, and other similar laws and regulations, including the Foreign Corrupt Practices Act and the U.K.

• potential penalties or other adverse consequences for violations of anti-corruption, anti-bribery, anti-competition, and other similar laws and regulations, including the Foreign Corrupt Practices Act and the U.K.

Events contemplated by these risks may, individually or in the aggregate, have a material adverse effect on Abbott’s revenues and profitability.

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Many other factors can affect Abbott’s profitability and its financial condition, including:

• changes in or interpretations of laws and regulations, including changes in accounting standards, taxation requirements, product approval standards, product labeling standards, source and use laws, and environmental laws;

• differences between the fair value measurement of assets and liabilities and their actual value, particularly for pensions, retiree health care, stock compensation, intangibles, goodwill, and contingent consideration;

• differences between the fair value measurement of assets and liabilities and their actual value, particularly for pensions, retiree healthcare, stock compensation, intangibles, goodwill, and contingent consideration;

and for contingent liabilities such as litigation, the absence of a recorded amount, or an amount recorded at the minimum, compared to the actual amount;

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• changes in the buying patterns of a major distributor, retailer, wholesaler, or other customer resulting from buyer purchasing decisions, pricing, seasonality, or other factors, or other problems with licensors, suppliers, distributors, and business partners;

• legal difficulties, any of which could preclude or delay commercialization of products or adversely affect profitability, including claims asserting statutory or regulatory violations, and adverse litigation decisions.

• legal challenges, any of which could preclude or delay commercialization of products or adversely affect profitability, including claims asserting statutory or regulatory violations, and adverse litigation decisions.

Many of these factors may manifest individually or collectively, such as Russia’s invasion of Ukraine which resulted in political instability, sanctions, economic and currency volatility, inflation and other operational and supply disruptions.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors