Effects of Potential New Healthcare Regulations in the US: Abbott Inc Case Study

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Abbot, Inc., commonly called 'Abbot Labs' or 'ABT' on the New York Stock Exchange, is engaged in pharmaceuticals and diversified medical products, with $39 billion in sales over 2011 and a market capitalization of over $102 billion (Yahoo! Finance 2012a, n.p.). Abbot claims sales grew 10.5 percent over 2010-2011, delivering cash flow of $9 billion which allowed for increasing dividends the firm claims amounted to $3 billion to shareholders (Abbot, 2012, p. 2). This growth was robust enough the firm is spinning off its pharmaceutical research and production sector while the $17.4 billion line of nutritional, diagnostic, optical, "Established Pharmaceuticals," diabetes and vascular care and "animal health" products will retain the Abbot name (Abbot, 2012, p. 3). Since both sectors were still unified in 2011, the annual report reveals how changes in fiscal policy would affect the consolidated firm although actual results will differ after the spinoff. Direct and indirect government spending would clearly affect the firm's performance as displayed throughout their 2011 Annual Report, demonstrated best in one particular section where they discuss effects of potential new health care regulations in the U.S., but also cuts to government expenditures in European markets (Abbot, 2012, p. 49). While Abbot only briefly mentions the new 2010 government health care mandate upheld June 2012 in most part by the Supreme Court, the reference explains how vulnerable all medical and
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