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May 24, 2007

Mr. James Rosenberg

Senior Assistant Chief Accountant

United States Securities and Exchange Commission

Division of Corporation Finance

Mail Stop 6010

100 F Street NE

Washington, D.C. 20549

Re:          File Number 001-02189

Dear Mr. Rosenberg:

In reply to your letter
of May 10, 2007, we have enclosed our response on the attachment to this
letter.

As per your request,
Abbott acknowledges that we are responsible for the adequacy and accuracy of
the disclosure in the filing; staff comments or changes to disclosure in
response to staff comments do not foreclose the Commission from taking any
action with respect to the filing; and Abbott may not assert staff comments as
a defense in any proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

Very truly yours,

  /s/ Thomas C. Freyman

  Thomas C. Freyman

  Executive Vice President, Finance

  and Chief Financial Officer

Enclosure

Form
10-K for the fiscal year ended December 31, 2006

Management’s Discussion and Analysis
of Financial Condition and Results of Operations

Critical
Accounting Policies

Sales
Rebates, page 28

1.              The sensitivity
around your product sales rebate allowance should depict a reasonably likely change
in your estimate and not a hypothetical change.
If this one-percentage point change analysis depicts a reasonably likely
change, please provide us proposed disclosure that clarifies this fact.  If not, please revise your analysis to depict
a reasonably likely change in this estimate.
In addition, please provide us proposed disclosure that clarifies that
adjustments for prior years’ rebate accruals have not been material to net
income.

Response:

We confirm that a
reasonably likely change in the percentage of rebates to related gross sales is
approximately one-percentage point.  In
future filings, we will change the disclosure to read as follows.  The proposed addition to disclosure is in
bold type.

Sales Rebates — Approximately 40 percent of Abbott’s consolidated gross revenues are
subject to various forms of rebates and allowances that Abbott records as
reductions of revenues at the time of sale. Most of these rebates and
allowances are in the Pharmaceutical Products segment and the Nutritional Products
segment.  Abbott provides rebates to
pharmacy benefit management companies, to state agencies that administer the
federal Medicaid and Medicare programs and the Special Supplemental Food
Program for Women, Infants, and Children (WIC), wholesalers, group purchasing
organizations, and other government agencies and private entities.  Rebate amounts are usually based upon the
volume of purchases using contractual or statutory prices for a product.  Factors used in the rebate calculations
include the identification of which products have been sold subject to a
rebate, which customer or government agency price terms apply, and the
estimated lag time between sale and payment of a rebate.  Using historical trends, adjusted for current
changes, Abbott estimates the amount of the rebate that will be paid, and
records the liability as a reduction of gross sales when Abbott records its
sale of the product. Settlement of the rebate generally occurs from two to
24 months after sale. Abbott regularly analyzes the historical rebate
trends and makes adjustments to reserves for changes in trends and terms of
rebate programs.  Rebates and chargebacks
charged against gross sales in 2006, 2005 and 2004 amounted to approximately
$2.6 billion, $2.5 billion and $2.4 billion, respectively, or 23.2 percent,
22.9 percent, and 25.6 percent, respectively, based on gross sales of
approximately $11.0 billion, $10.9 billion and $9.3 billion, respectively,
subject to rebate.   A one-percentage point increase in the
percentage of rebates to related gross sales would decrease net sales and
operating earnings by approximately $110 million in 2006.  Abbott
considers a one-percentage point increase to be a reasonably likely increase in
the percentage of

rebates
to related gross sales.  Other
allowances charged against gross sales were approximately $247 million, $284
million and $233 million for cash discounts in 2006, 2005 and 2004,
respectively, and $209 million, $162 million and $163 million for returns in
2006, 2005 and 2004, respectively.  Cash
discounts are known within 15 to 30 days of sale, and therefore can be reliably
estimated.
Returns can be reliably estimated because Abbott’s historical
returns are low, and because sales returns terms and other sales terms have
remained relatively unchanged for several periods.

In addition, we would
include the following disclosure that clarifies that adjustments for prior
years’ rebate accruals have not been material to net income.  The proposed addition to disclosure is in
bold type.

Historically,
adjustments to prior years rebate accruals have not been material to net
income.  Abbott employs
various techniques to verify the accuracy of claims submitted to it, and where
possible, works with the organizations submitting claims to gain insight into
changes that might affect the rebate amounts.
For Medicaid, Medicare and other government agency programs, the
calculation of a rebate involves interpretations of relevant regulations, which
are subject to challenge or change in interpretation.

Note 11 —
Business, Combinations, Technology Acquisitions and Related Transactions, page
69

2.              We note that you
recorded significant amounts of In-Process Research and Development costs for
the acquisition of KOS Pharmaceuticals Inc. and Guidant’s vascular intervention
and endovascular solutions businesses.
Please provide us, in disclosure-type format, the following:

a.               The specific nature
and fair value of each significant in-process research and development project
acquired for each acquisition.

b.               The completeness, complexity
and uniqueness of the projects at the acquisition date.

c.               The nature, timing
and estimated costs of the efforts necessary to complete the projects, and the
anticipated completion dates.

d.               The valuation
method that was used to fair value the in-process research and development
projects acquired.

e.               Disclose the
significant valuation assumptions, such as:

i.                             the
period in which material net cash inflows from significant projects are
expected to commence;

ii.                         material
anticipated changes from historical pricing, margins and expense levels; and

iii.                     the risk
adjusted discount rate applied to the project’s cash flows.

f.                 In periods after
the acquisition, discuss the status of efforts to complete the projects, and
the impact of any delays on your expected investment return, results of
operations and financial condition.

Response:

Approximately $1.0
billion of the acquired in-process research and development charge relating to
the Kos Pharmaceuticals Inc. acquisition relates to cholesterol treatment drugs.  The research efforts ranged from 70 percent
to 80 percent complete at the date of acquisition.  The valuation method used to fair value the
projects was the Multi-period Excess Earnings Method (Income Approach) and the risk-adjusted
discount rate used was 16 percent.  In
developing our assumptions for the valuation model, we used comparable Abbott
products or products marketed by competitors to estimate pricing, margins and
expense levels.  As of December 31, 2006,
the research efforts were primarily on schedule.  The estimated projected costs to complete the
projects totaled approximately $80 million as of December 31, 2006, with
anticipated product launch dates in 2007 and 2008.  There have been no significant changes in the
development plans for the acquired incomplete projects.  Significant net cash inflows would commence
with the launches of the products.

Approximately $500
million of the acquired in-process research and development charge relating to
the Guidant acquisition relates to drug eluting and bioabsorbable stents.  The research efforts ranged from 35 percent
to 85 percent complete at the date of acquisition.  The valuation method used to fair value the
projects was the Multi-period Excess Earnings Method (Income Approach) and the risk-adjusted
discount rates used ranged from 16 percent to 25 percent.  In developing our assumptions for the
valuation model, we used comparable Abbott products or products marketed by
competitors to estimate pricing, margins and expense levels.  As of December 31, 2006, the research efforts
were primarily on schedule.  The
estimated projected costs to complete totaled approximately $600 million as of
December 31, 2006, with anticipated product launch dates from 2008 through
2012.  There have been no significant changes
in the development plans for the acquired incomplete projects.  Significant net cash inflows would commence
within one to two years after product launch.

3.              Please tell us why
it is appropriate under GAAP to record the additional payments made to Boston
Scientific upon government approval as goodwill versus as an asset to be
evaluated under FAS 2 that may or may not be capitalized.

Response:

The contingent payments
to Boston Scientific would be made if the Xience
V drug eluting stent were to be approved in the U.S. and in
Japan.  At the time of the acquisition,
these

intangible assets are In
Process Research and Development.  We
believe the applicable GAAP is as follows, emphasis added:

FAS 141, paragraph 27, states:  “The
contingent consideration usually should be recorded when the contingency is
resolved and consideration is issued or becomes issuable.”

FIN 4, which interprets the application of FAS 2 in a purchase
combination accounted for under APB 16, states: “However, Statement 141
(paragraph 42) does not change the requirement in paragraph 5 of this
Interpretation that the amounts assigned to acquired tangible and intangible
assets to be used in a particular research and development project that have no
alternative future use be charged to expense at the date of acquisition.”

The valuation of the U.S.
and Japanese Xience V stents was
done without regard to the payment of additional contingent consideration.  In other words, the IPR & D charge was
the value that two unrelated parties would exchange consideration for the
assets without regard to a possible further contingent payment.  If the contingent consideration were to be
charged to IPR & D upon payment, it would result in an excess valuation for
those assets.  The payment of contingent
consideration will not result in additional product rights, and does not
represent a reimbursement for research and development.  The amounts were determined as an element of
the total consideration for the business acquired, and not by reference to the
value of achieving product approval in the U.S. and Japan.  Accordingly, these contingent amounts
represent additional purchase price in the form of goodwill.

4.              Please provide us
additional information regarding your accounting treatment for the shares of
Boston Scientific acquired.  In this
respect, please address the following:

·                  Clarify in disclosure-type format how you classify in
the financial statements the change in fair value for the derivatives recorded.

Response:

The
following sentence clarifies how changes in the fair value of derivative
financial instruments are classified in the financial statements.  “Changes
in the fair value of the derivative financial instruments, net are recorded in
Other (income) expense, net in the accompanying Consolidated Statement of
Earnings.”

·                  Note 2 states that the fair value of the Boston
Scientific shares declined by $303 million.
Please tell us why you believe the decline should not be recorded in
income as an impairment given you are required to sell the shares by October
2008 and thus do not have the ability to hold the shares until recovery.

Response:

As background, Boston
Scientific is an established, widely followed medical technology company with a
significant portfolio of patents and on-market products.  The industry that Boston Scientific operates
in is subject to overall industry swings in investor sentiment as the prospects
of new technologies are incorporated into stock prices, as well as issuer
specific swings as various competitors obtain differentiating technologies and
attempt to move market share to their products.
This is particularly true for the cardiac rhythm management and
implantable drug coated stents markets, two of Boston Scientific’s largest
business segments.  The industry is
attractive to investors because its growth prospects are strong, product
innovation is constant, and cash flows support strong internal and external
growth opportunities.  The industry is
widely covered by analysts, with a wide range of investment opportunities.  Nevertheless, stock prices are often
volatile, and it is not uncommon for stock prices to change rapidly over a
short period of time.

Based upon analysis as of
December 31, 2006, Abbott management expected that the Boston Scientific stock
would recover to at least Abbott’s carrying value in the first half of 2007,
well before the date of October 2008 by which Abbott is required to dispose of
these shares.  27 analysts cover the
Boston Scientific stock.  Abbott reviewed
several of the analysts’ reports for insight into their expectations for the
stock.  The analysts’ average
twelve-month target price was approximately $20 (versus Abbott’s basis of
$20.52), with 13 of the analysts rating the stock a buy.  As of December 31, 2006, six and half months
had elapsed since the stock last traded above Abbott’s carrying value.  The catalysts for the decline were several,
but all were considered temporary.  The
three major catalysts, overall market growth for their ICD business, DES late
stage thrombosis concerns, and Boston Scientific’s near term earnings
prospects, were viewed by Abbott management and most of the analysts who follow
the stock as near term, rather than long term issues.  These issues pressured the stock
significantly in the third calendar quarter of 2006.  In the fourth quarter, expectations for
resolution began to rise, and the stock returned over 16%, reflecting the
ability of the market to quickly reflect improved prospects for this
stock.  Accordingly, at December 31, 2006,
the trend for the stock’s recovery to Abbott’s carrying basis in the first half
of 2007 was very favorable.

Schedule
II — Valuation and Qualifying Accounts, page 100

5.              Your Schedule II
should separately depict your allowance for doubtful accounts and sales
deductions.  Please provide us, in
disclosure-type format, a revised schedule.

Response:

The balances at
the beginning of the year and the end of the year in Schedule II are comprised
solely of valuation accounts for allowances for doubtful accounts.  For accounting purposes, certain sales
adjustments are debited and credited to these accounts during the year.  However, the beginning and ending balance
sheet positions of these

adjustments are
reclassified to a direct reduction of trade accounts receivable.  These adjustments to the gross balances of
the trade accounts receivable are not valuation accounts and are appropriately
excluded from this Schedule II.
Therefore, the presentation in the Schedule II reflects only the
activity for the valuation accounts for allowances for doubtful accounts.  In future filings, the caption “Allowances
for Doubtful Accounts and Sales Deductions” will be revised to read “Allowances
for Doubtful Accounts.”  In addition,
since the activity for the sales adjustments net to zero in the “Amounts
Charged Off Net of Recoveries” column, footnote (a) will be eliminated to
better reflect the contents of thi