AbbVie Sues HHS Over Medicare Drug Pricing Decision
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Should l Buy ABBV?
Source: seekingalpha
- Legal Challenge: AbbVie (ABBV) has filed a lawsuit against the Department of Health and Human Services (HHS), contesting the decision to include its anti-wrinkle therapy Botox in Medicare price negotiations, arguing that this exceeds CMS's authority and could impact future sales revenue.
- Sales Data: Botox generated $4.7 billion in net U.S. sales for AbbVie in 2025, and due to its human plasma-derived components, AbbVie contends that the drug should be excluded from price negotiations, thereby protecting its market share and profit margins.
- Legal Context: This lawsuit marks the first challenge against the explicit exclusion of “plasma-derived products” from price controls established by the Inflation Reduction Act, indicating AbbVie's strong opposition to Medicare pricing policies, which may influence pricing strategies across the pharmaceutical industry.
- Industry Reaction: AbbVie's lawsuit represents the latest challenge to the Medicare pricing program, following previous lawsuits from major pharmaceutical lobby group PhRMA and companies like Merck (MRK) and Bristol Myers (BMY), which have had limited success, reflecting widespread discontent within the industry regarding Medicare policies.
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Analyst Views on ABBV
Wall Street analysts forecast ABBV stock price to rise
22 Analyst Rating
15 Buy
7 Hold
0 Sell
Moderate Buy
Current: 227.500
Low
218.00
Averages
253.26
High
289.00
Current: 227.500
Low
218.00
Averages
253.26
High
289.00
About ABBV
AbbVie Inc. is a global, diversified research-based biopharmaceutical company. It is engaged in research and development, manufacturing, commercialization and sale of medicines and therapies. Its product portfolio includes Immunology, Oncology, Aesthetics, Neuroscience, Eye Care and Other Key Products. Immunology products include rheumatology, dermatology and gastroenterology. Oncology products include Imbruvica, Venclexta/Venclyxto, Elahere and Epkinly. Aesthetics portfolio consists of facial injectables, plastics and regenerative medicine, body contouring, and skincare products. Its Neuroscience products include Botox Therapeutic, Vraylar, Duopa and Duodopa, Ubrelvy, and Qulipta. Eye Care products include Ozurdex, Lumigan/Ganfort, Alphagan/Combigan, Restasis, and other eye care. Other key products include Mavyret/Maviret, Creon, and Linzess/Constella. Its investigational candidate, bretisilocin, is for the treatment of patients with moderate-to-severe major depressive disorder (MDD).
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Sales Dynamics: While sales of immunology drugs Skyrizi and Rinvoq continue to grow, Humira's sales are declining due to biosimilar competition, causing investor unease regarding its future contribution to overall revenue, which impacts the company's growth outlook.
- Growth Expectations: AbbVie anticipates a sales growth of 9.5% by 2026, projecting combined sales of over $31 billion for Skyrizi and Rinvoq, indicating potential in new products and management's confidence in future performance despite current challenges.
- Dividend Record: AbbVie has increased its dividend for 54 consecutive years, earning the title of 'Dividend King', which underscores its attractiveness to long-term income investors, even in light of recent stock price declines.
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- Declining Humira Sales: Although Humira remains the third-best-selling drug, its sales continue to decline due to biosimilar competition, which has affected market confidence in AbbVie's future overall revenue growth.
- Optimistic Outlook: AbbVie expects a sales growth of 9.5% by 2026, with combined sales for Skyrizi and Rinvoq projected to exceed $31 billion, surpassing earlier management forecasts and indicating potential in new drug development.
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- Overdone Sell-off Assessment: Despite the market pressure, the sell-off of certain stocks appears overdone, and analysts believe these stocks remain attractive for inclusion in investment portfolios, particularly Marvell Technology.
- Marvell Technology Growth Potential: As an AI-focused company, Marvell Technology has gone through significant ups and downs, yet its growth trajectory is still viewed positively, indicating potential for long-term investment.
- Video Content Recommendation: The video will delve deeper into the performance of these stocks, encouraging viewers to subscribe to the channel and check out the special offer in the link below for more investment insights.
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See More
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