In 2013 the drugmaker AbbVie Inc. spun off from Abbott Laboratories. The company AbbVie and Abbott manufactures the testosterone replacement therapy drug called AndroGel that treats Low T. Studies have shown that the drug is linked to men taking the product getting heart attacks and has led to lawsuits.
AbbVie Inc. is a specialty research-based bio-pharmaceutical company. On January 1, 2013 it spun off from its parent company Abbott Laboratories. During its first year the company had $18.8 billion in net sales, and in 2014 it grew to $20 billion. It currently markets over 30 products and is planning to seek FDA approval for selling 15 more products at least over the next couple of years.
The firm is based in Illinois and generates most of its revenue from Humira, an anti-inflammatory drug that is used for treating arthritis, along with AndroGel, which is a TRT (topical testosterone replacement therapy) drug for treating low testosterone (or “Low T”)in men that have a medical condition.
AbbVie stands to gain a substantial amount of revenue from AndroGel. Companies that make and market prescription medications and supplements for treating Low T are experiencing a lot of business growth due to the increased demand from men seeking to regain their strength and sex drive, among other youthful signs.
In recent years, testosterone drug sales have increased by over 90 percent. In 2012 they reached $2 billion. In 2013, AndroGel generated over $1.4 billion, and in 2012 AbbVie spent approximately $80 million to advertise it. AndroGel, in fact has a 60 percent share of the overall TRT market. In 2016 those numbers will most likely go down, when Par Pharmaceuticals introduces a generic testosterone gel.
The company’s strong commitment for its testosterone product may also end up costing them money. AbbVie has to fight accusations that the company failed to warn consumers about the heart risks AndroGel has for men, which has resulted in legal action being taken against the drugmaker.
AbbVie continues marketing AndroGel in the United States, while it is marketed overseas by Abbott.
Founded: Abbott Laboratories Spinoff
2014 Revenue: $20 billion
Size: 25,000 worldwide employees
In October 2011 Abbot announced it would be spinning off part of the company as a publicly traded, independent company for the purpose of producing and marketing proprietary drugs. The companies were officially split a little over one year later.
For Abbott, it was the second time they had spun off one of the company’s businesses. In 2004, the hospital products business called Hospira became an offshoot. Hospira offers infusion technologies and injectable drugs. In 2013 it had sales of over $4 billion.
AbbVie took control in its spinoff over the family’s top-name proprietary drugs- Tricor, Niaspan, Vicodin, AndroGel, Kaletra and Humira. It also became in charge of the research, development and testing processes of new drugs.
The company name was retained by Abbott and its mission developed into focusing on the profitable health care products market, including nutritional products, medical devices and diagnostics. Sales of generic drugs also stayed under the control of Abbott.
Abbott’s history in pharmaceutical dates back 125 years. It all began in 1888 when Dr. Wallace C. Abbott, founder of the company, started to produce small pills from medical plants called “dosimetric granules” which he sold from his drugstore in Chicago.
By 1910, Abbott’s catalog included over 700 products. Branches were launched in Seattle, New York and San Francisco, in addition to India, London and Toronto. Abbott made its way into the Japanese market during the 1960’s, and ten years later it entered into a joint venture with Japan’s Takeda Chemical Industries.
Marketing Problems And Recalls
One of the major recalls of Abbott’s involved the company’s intravenous bags. Reports of almost 400 injuries and 50 blood poisoning (speticemia) deaths that stemmed from the company’s contaminated IV bags resulted in them recalling over 200 products from 1969 through 1971, as noted in a 1976 report from the Centers for Disease Control and the FDA. According to FDA regulators the screw cap closures on the bags had become contaminated with bacteria.
An FDA inspection in 1971 found objectionable equipment and building condition at a company plant in North Carolina that was manufacturing the IV bags. Abbott along with five of the company’s officials was indicted by a federal ground jury for the interstate shipping of contaminated IV bags. However, in 1975 all of the charges ended up being dismissed.
In 2012, Abbott had to pay $1.6 billion on charges of illegally marketing Depakote, its anti-seizure drug. One year later, the company agreed to pay a fine of $524 million for paying doctors kickbacks for them using their circulatory disorder treatment products. In February 2014, the company had to recall its blood glucose meters.
AndroGel is a type of topical treatment designed to help men who have low testosterone that is associated with having a medical condition. It is estimated, however, that testosterone products are used by millions of men whose testosterone levels haven’t been checked.
AndroGel can increase risk of prostate cancer, stroke and heart attack in addition to causing problems with the liver and kidney. In addition the drug can easily be transferred from the body of a man over to others through body contact. When children come into contact accidentally with AndroGel they may show unexpected or early signs of puberty.
Other potential side effects include increased risk for breast development, lower sperm counts and sleep apnea worsening.
The FDA approved the treatment. However, the agency announced it would be going back to study, testosterone replacement therapy products once again due to recent cases that have involved heart attacks and strokes.
In 2015, the FDA warned that these drugs may increase risks for strokes and heart attacks. Doctors were warned not to prescribe the drugs and reiterated that these drugs had only been approved for men to use who had low testosterone that was associated with a disease or injury.
A suited was filed against AbbVie and Abbott Laboratories, the parent company, by hundreds of men who had taken AndroGel. They claimed that information had been withheld by the companies regarding the dangers that the drug poses.
Five complaints were fielded in Chicago in February 2013 claiming that the drug caused three men to have heart attacks, one to have a stroke, and another man to have a mini stroke.
In the lawsuits it was alleged that AbbVie and Abbott deceived prospective AndrolGel users through relying position information to the press about the drug, including testimonials by retired professional athletes, and at the same time downplayed known serious and adverse health risks.
There are thousands of pending testosterone lawsuits in U.S. District court in Northern Illinois. It is expected that trials will start in 2016.
A majority of AbbVie’s product line focuses on the world’s most prevalent diseases such as HIV, Hepatitis C and rheumatoid arthritis.
Currently Humira is the most profitable and popular drug in for AbbVie. This drug treats ulcerative colitis, Crohn’s disease, psoriasis, rheumatoid arthritis and other types of autoimmune diseases. In 2013 it was the top-selling drug in the world, and brought in $10.7 billion in revenue. In 2014 it was expected to be the top-selling drug once again. IN 2016 Humira’s patent will run out, and sales are expected to quickly drop.
The other top sellers for AbbVie are Tricor (cholesterol), Niaspan (cholesterol) and Vicodin (pain killer).
Future of AbbVie And Abbott
AbbVie has a pipeline of drugs awaiting approval. In summer 2015, the FDA approved its new hepatitis C treatment. In a clinical trial it cured 99 percent of all patients. According to market analysts, annual sales could be as high as $2.8 billion. New drugs are also being developed by the company for blood cancers as well as other disease.