Though far from the first large drugmaker to strike a pricing deal with the Trump administration, AbbVie’s new accord is notable for the sheer size of the investment pledge that comes with it.
Late Monday, the North Chicago-based pharma announced a deal with the White House to lower the prices of certain AbbVie medicines on Medicaid and pledged $100 billion in U.S. R&D and capital investments, including manufacturing projects, over the next 10 years.
AbbVie provided no detail on the particulars of its investment plan, which follows a $10 billion U.S. commitment from the company—also focused on R&D and production—made last April. It is not entirely clear whether the previous investment will be folded into the new outlay. AbbVie did not immediately respond to a request for comment on the investment plans.
Meanwhile, as with other companies that have fallen in line behind the administration’s most-favored-nation drug pricing strategy, AbbVie has now agreed to expand its direct-to-patient offerings through the TrumpRx drug purchasing platform run by the federal government.
Alphagan, Combigan, Humira and Synthroid are a few of the company’s drugs slated for sale on the government site, AbbVie said in a Jan. 12 press release. While certainly important medications, the drugs listed—with the current exception of Humira—are not major moneymakers for AbbVie.
For all of 2024, the ocular meds Alphagan and Combigan secured combined sales of $248 million, while the decades-old thyroid drug Synthroid did not appear in the company’s 2024 report. Meanwhile, autoimmune juggernaut Humira continues to deliver respectable sales, though its trajectory is now in decline after losing patent exclusivity in 2023.
Through the accord, which the company asserts “addresses all four of the President’s drug pricing priorities,” AbbVie has won exemption from pharmaceutical import tariffs and “future price mandates,” according to its release.
"With approximately 29,000 U.S.-based employees and products treating 16 million Americans annually, we understand the complexity and access challenges in our healthcare system,” AbbVie CEO Robert Michael said in his company’s announcement. “AbbVie is following President Trump's call to action by reaching this agreement, allowing us to collectively move beyond policies that harm American innovation.”
The call to action Michael referred to came last summer, when President Donald Trump sent letters to 17 of the world’s biggest drugmakers outlining steps they needed to take to rein in the costs of their drugs in the U.S. The president’s so-called most-favored-nation pricing strategy broadly seeks to align the costs of prescription medicines in the U.S. with lower prices offered in other comparable developed nations.
Aside from AbbVie, the letters singled out Amgen, AstraZeneca, Boehringer Ingelheim, Bristol Myers Squibb, Eli Lilly, Merck KGaA’s EMD Serono, Roche’s Genentech, Gilead Sciences, GSK, Johnson & Johnson, Merck, Novartis, Novo Nordisk, Pfizer, Regeneron and Sanofi.
Following a string of similar industry-White House tie-ups in recent weeks, Regeneron is now the last pharma standing that hasn’t reached a most-favored-nation deal with Trump.
J&J was the latest company to reach a deal prior to AbbVie, announcing that it had done so Jan. 8. Under similar terms to AbbVie’s deal and those before it, J&J pledged to lower drug costs, embrace more direct-to-patient sales channels and continue to execute on the $55 billion U.S. investment it announced last year.
For its part, AbbVie had already committed last year to spend $10 billion on its U.S. operations through 2035, looking to grow into new indications like obesity and beef up its production infrastructure stateside.
As part of that prior investment, AbbVie earlier Monday revealed that it will spend more than $175 million to acquire and modernize a device manufacturing facility in Tempe, Arizona. The company noted that the deal will support production of both its current and next-generation medicines across immunology and neuroscience.