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AbbVie and Abbott

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AbbVie Inc. is a drugmaker that spun off of Abbott Laboratories in 2013 and manufactures AndroGel, a testosterone replacement therapy drug to treat Low T. Studies have linked the drug to heart attacks in men, leading to lawsuits.

AbbVie Inc. is a research-based specialty biopharmaceuticals company that spun off from Abbott Laboratories on Jan. 1, 2013. The fledgling company netted $18.8 billion in sales in its first year, growing to $20 billion in 2014. Now, it markets more than 30 products and plans to seek approval from the U.S. Food and Drug Administration (FDA) to sell at least 15 more in the next few years.

The Illinois-based firm generates the bulk of its revenue from its anti-inflammatory drug Humira, used to treat arthritis, and from AndroGel, a topical testosterone replacement therapy (TRT) drug designed to treat low testosterone (“Low T”) in men with a medical condition.

AndroGel stands to generate substantial revenue for AbbVie. Companies that manufacture and market supplements and prescription medications that treat Low T are seeing business grow because of increased demand by men who seek to regain sex drive and strength, among other signs of youth.

Sales of testosterone drugs grew by 90 percent in recent years — reaching $2 billion in 2012. AndroGel generated more than $1.4 billion in 2013, and AbbVie spent an estimated $80 million in 2012 advertising it. In fact, AndroGel commands 60 percent of the TRT market. Those figures will likely drop in 2016, when a generic testosterone gel by Par Pharmaceuticals enters the market.

The company’s commitment to its testosterone product also could cost it money. AbbVie is fighting accusations that it failed to warn the public about AndroGel’s heart risks for men, something that has led to legal action against the drugmaker.

Abbott will continue to market AndroGel in the U.S., while Abbott markets it overseas.

Fast Facts
Established: 2013
Founder: Spinoff from Abbott Laboratories
Headquarters: Chicago
Size: 25,000 employees worldwide
2014 Revenue: $20 billion

Corporate History

Abbott announced in October 2011 that it would spin off part of its company to be an independent, publicly traded company whose business was to market and produce proprietary drugs. A little over a year later, the companies officially split.

This was the second time Abbott spun off one of its businesses. Hospira, a hospital products business, became an offshoot of Abbott Industries in 2004. Hospira offers injectable drugs and infusion technologies and had sales of more than $4 billion in 2013.

In this spinoff, AbbVie took control of the top-name proprietary drugs in the family – Humira, Kaletra, AndroGel, Vicodin, Niaspan, Tricor – and assumed a charge of researching, developing and testing new drugs.

Abbott retained the company name and developed a mission to focus on the lucrative health care products market, which includes diagnostics, medical devices and nutritional products. Abbott also maintained control of the sale of generic drugs.

Abbott has a 125-year history in pharmaceuticals dating to 1888 when its founder, Dr. Wallace C. Abbott, began producing tiny pills, called “dosimetric granules,” from medicinal plants to sell in his Chicago drugstore.

By 1910, Abbott had more than 700 products in its catalog. It launched branches in San Francisco, New York and Seattle, as well as in Toronto, London and India. In the 1960s, the company entered the Japanese market, and a decade later, formed a joint venture with Takeda Chemical Industries of Japan.

Recalls and Marketing Problems

One of Abbott’s major recalls involved its intravenous bags. Reports of 50 septicemia (blood poisoning) deaths and nearly 400 injuries stemming from contaminated IV bags forced the company to recall more than 200 products between 1969 and 1971, according to a 1976 report from the FDA and the Centers for Disease Control. FDA regulators said the bags’ screw cap closures were contaminated with bacteria.

A 1971 FDA inspection found “objectionable” building and equipment conditions at the company’s North Carolina plant that manufactured the IV bags. Although a federal grand jury indicted Abbott and five of its officials for interstate shipment of contaminated IV bags, all charges were dismissed in 1975.

In 2012, the company agreed to pay $1.6 billion for illegal marketing of its anti-seizure drug Depakote, and a year later, agreed to a $524 million fine for paying kickbacks to doctors who used their products that treat circulatory disorders. The company also recalled its blood glucose meters in February 2014.

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    Dangerous Drugs

    AndroGel is a topical treatment for men with low testosterone associated with a medical condition. However, it’s estimated that millions of men use testosterone products without ever having their testosterone levels checked.

    The drug can increase the risk of heart attack, stroke, prostate cancer and also can cause problems with the kidneys and liver. The drug can also easily transfer from a man’s body to others by body contact. Children who come into contact with AndroGel can show unexpected signs of puberty.

    Worsening of sleep apnea, lower sperm counts and increased risk of breast development are other possible side effects.

    The treatment was approved by the FDA, but the agency announced it would go back and study testosterone replacement therapy products again in light of recent cases involving strokes and heart attacks.

    In 2015, the agency warned the drugs could increase the risks of heart attacks and strokes and warned doctors against over prescribing the drugs. It reiterated that the drugs were only approved for use in men with low testosterone associated with an injury or disease.

    Testosterone-Related Lawsuits

    Hundreds of men who used AndroGel filed suit against AbbVie and its parent company, Abbott Laboratories, claiming the companies withheld information about the drug’s dangers.

    Five complaints filed in February 2013 in Chicago claim the drug caused heart attacks in three of the men, a stroke in another, and a mini-stroke in the final claimant.

    According to the lawsuits, the man allege that AbbVie and Abbott “deceived potential AndroGel users by relaying positive information through the press, including testimonials from retired professional athletes, while downplaying known adverse and serious health risks.”

    Thousands of testosterone lawsuits are pending in U.S. District for the Northern District of Illinois multidistrict litigation court, with trials expected to begin in 2016.

    Other Products

    Most of AbbVie’s product line is focused on the most prevalent global diseases like rheumatoid arthritis, Hepatitis C and HIV.

    Humira currently is the most popular and profitable drug in AbbVie’s portfolio. The drug treats rheumatoid arthritis, psoriasis, Crohn’s disease, ulcerative colitis and other autoimmune diseases. It was the world’s top-selling drug in 2013, bringing in $10.7 billion. It is expected to be No. 1 again in 2014. The patent for Humira runs out in 2016, and its sales are expected to drop quickly.

    Vicodin (painkiller), Niaspan (cholesterol), Tricor (cholesterol)  are AbbVie’s other top sellers.

    Future of AbbVie

    A pipeline of AbbVie drugs awaits approval. A new hepatitis C treatment approved by the FDA in the summer of 2015 cured 99 percent of patients in a clinical trial, and market analysts say it could generate annual sales of $2.8 billion. The company also is developing new drugs for blood cancers and other diseases.

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