Abbott Laboratories ($ABT) has shed the smell of a consent decree more than a decade after its imposition and just before it splits itself up for the public markets.
The FDA compliance order dates to 1999 and was issued after its diagnostics division for 6 years came up short on manufacturing practices, reports Pharmalot. The FDA relented after Abbott demonstrated its ability to practice current good manufacturing practices, the FDA tells the website.
"Many consent decrees that FDA enters with firms allow the firms, under defined circumstances, to seek court termination of the decrees following extended periods of compliance. That is the case with this one," an FDA spokeswoman explains.
The company paid a $100 million fine at the time the decree was ordered, but of course there are all of the expenses of upgrading facilities and paying consultants to help get facilities up to snuff and back in the good graces of the agency.
There also is the need to continually report in financial filings that the company is operating under a consent decree. Now that language can be erased from financial disclosures, and now is the time for that, as the company divides itself. One piece, to be called AbbVie, will focus on the portfolio of existing drugs and those in the pipeline. The other will be spun off to be a device- and diagnostics maker and will sell branded drugs outside the U.S.
- read Pharmalot's story