Stop Runaway Drug Prices

Tell Abbvie to explain how it is promoting a solution to public concern over high drug prices. Abbvie should specifically explain how it ties a response to negative public perception to its executive compensation plans.

A key risk facing pharmaceutical companies is potential backlash against high drug prices. Societal anger over exorbitant prices and pressure over limited patients' access due to unaffordability may force price rollbacks and harm corporate reputation

Excessive dependence on drug price increases is a risky and unsustainable strategy more likely to be pursued when price hikes drive large senior executive payouts. A recent Credit Suisse analyst report identified that price increases accounted for more than 100% of Abbvie's 2016 earnings-per-share (EPS) growth, and that the company used Humira sales and EPS growth as metrics for senior executive bonuses and incentive compensation. [1]

Abbvie has been in the spotlight of the negative backlash over rising drug prices. It is estimated that Abbvie's 9.7% 2018 price increase for its immunosuppressive drug Humira added more than $1 billion to US healthcare system costs. [2] A California Department of Insurance lawsuit claimed that Abbvie used a kickback scheme to boost Humira sales. [3]

Tell Abbvie to incentivize its management team to solve the problem of rampant drug price increase, not fuel it.

[1] Global Pharma and Biotech Sector Review: Exploring Future US Pricing Pressure, Apr. 18, 2017, at 1.

[2] https://www.fiercepharma.com/pharma/drug-price-hikes-a-few-bad-actors-or-widespread-pharma

[3] https://www.law360.com/articles/1084008