In response to last month’s list of the 15 drugs chosen by the Centers for Medicare & Medicaid Services (CMS) for upcoming price cuts under the Inflation Reduction Act (IRA), AbbVie is the latest to join the flood of industry litigation over the law.
While AbbVie’s lawsuit contends that the CMS pricing negotiations mandated for Botox step on the company’s constitutional rights—a common thread woven into much of the industry’s legal complaints about the program—the Illinois-based drugmaker also takes a unique position that specifically relates to the formulation of its offering.
When the IRA was signed into law by former President Joseph Biden in 2022, the law made clear that only certain products are eligible to make the list of drugs that will go through negotiations to determine maximum fair prices paid under Medicare. The IRA specifically excludes “low-spend drugs,” or those with Medicare spending of less than $200 million, certain orphan rare disease drugs and plasma-derived products.
AbbVie is hedging its argument around the IRA’s “express statutory exclusions” for plasma-derived products, it said in its complaint, which was filed in a Washington D.C. District Court on Feb. 11 and names the Department of Health and Human Services (HHS), CMS and their respective leaders, Robert F. Kennedy Jr. and Mehmet Oz, M.D.
Botox is used commonly for cosmetic purposes but also holds therapeutic indications for chronic migraines, urinary incontinence and eye disorders such as blepharospasm (or uncontrolled eye blinking) and strabismus (crossed eyes). The drug is an injection that selectively blocks nerve activity to targeted muscles and is made from onabotulinumtoxinA (onabotA), human serum albumin (HSA), and sodium chloride.
HSA is sourced from donated human blood plasma and is therefore vulnerable to supply-chain interruptions based on donor supply, according to the lawsuit. This factor, AbbVie says, was “implicitly acknowledged” by Congress when it specifically excluded plasma-derived products from IRA pricing controls.
AbbVie further points to the stated purpose of the IRA’s drug pricing reform, which is to “lower prices for certain high-priced single source drugs,” the bill states. CMS clarified in a memorandum that it will "exclude plasma-derived products when identifying qualifying single source drugs,” defining a plasma-derived product as derived from human whole blood or plasma, as defined on its product labeling.
The label for AbbVie’s Botox notes that it contains “a derivative of human blood.”
As AbbVie puts it, the plasma aspect of its product is a central ingredient to the drug’s formulation and “directly contributes” to its therapeutic effects. Botox contains “approximately 100,000 more HSA than onabotA,” or, to put it another way, the equivalent of “onabotA occupying a single seat in the University of Michigan’s football stadium” while HSA takes up every other seat in the stadium, the company explained.
The company was aware in 2025 that CMS may select Botox for its next list of drug price negotiations and sent “multiple emails and letters” explaining that the IRA’s plasma-derived exclusion prohibited the agency from including Botox on its list. However, CMS offered the company “no feedback” to this end and ultimately selected it for 2028 price cuts last month, with “no explanation for its failure to apply the statute’s plasma-derived exception to Botox,” AbbVie said in its suit.
AbbVie’s complaint also claims violations of the Fifth and First Amendments, arguing that the negotiation program prohibits fair speech and takes private property for public use. These arguments have been levied by several other drugmakers in their own IRA lawsuits, most of which have fallen flat in the courts.
During AbbVie’s Feb. 4 earnings conference call, CEO Robert Michael alluded to the plasma-derived exception, expressing that the company is “obviously disappointed that [Botox] was selected given that it’s a plasma-derived product and should have been excluded.” However, the executive emphasized that Botox’s potential pricing negotiation does not have an impact on the company’s long-term growth guidance as it “did plan conservatively” in preparation for the selection.
AbbVie picked up Botox through its 2019 acquisition of Allergan for $63 billion. In 2025, the company collected $3.76 billion in global sales for Botox’s therapeutic indications, while cosmetic Botox garnered $2.6 billion as the largest contributor to its aesthetics portfolio.
Botox and the 14 other drugs selected for Medicare price negotiations together accounted for about $27 billion in prescription drug spending on Medicare between November 2024 and October 2025, CMS said when it announced the list on Jan. 27. The pricing negotiations for this round will take place this year, with the negotiated prices to take effect in 2028.