AbbVie Sues HHS Over Medicare Price Controls on Botox Under Inflation Reduction Act

AbbVie has filed a lawsuit against the U.S. Department of Health and Human Services (HHS), challenging a decision by the Centers for Medicare & Medicaid Services (CMS) to impose Medicare price controls on Botox. The complaint, submitted in federal court in Washington, D.C., argues that Botox should be exempt from drug pricing negotiations under the Inflation Reduction Act (IRA) of 2022.

According to AbbVie, Congress specifically excluded “plasma-derived products” from Medicare drug price controls when it passed the IRA. The North Chicago-based pharmaceutical company claims Botox qualifies for this exemption because it contains human serum albumin (HSA), a protein derived from human blood plasma. AbbVie states that approximately one-third of Botox is made up of HSA, which is essential for the drug’s safety and effectiveness. Since HSA is sourced from donated human plasma, the company argues that Botox meets the legal definition of a plasma-derived product and should not be subject to CMS price negotiations.

The lawsuit names HHS, Health Secretary Robert F. Kennedy Jr., CMS, and CMS Administrator Mehmet Oz as defendants. AbbVie describes the case as the first legal challenge alleging that CMS violated a statutory exclusion under the IRA’s Medicare drug pricing provisions.

AbbVie contends that the government’s pricing requirements force the company to sell Botox to Medicare beneficiaries at what it calls “confiscatory prices.” The drugmaker also argues that failing to comply could result in significant tax penalties and potential exclusion from federal healthcare programs. In addition, AbbVie claims the policy violates its First Amendment rights by compelling it to characterize the negotiated price as “fair.” The lawsuit further alleges violations of the Fifth Amendment, citing due process concerns and an unlawful government “taking.”

Botox is widely known for cosmetic wrinkle reduction but is also approved to treat medical conditions such as chronic migraines, muscle spasms, eye and neck movement disorders, and incontinence. In 2023, Botox generated just over 10% of AbbVie’s $61.16 billion in total revenue, with therapeutic uses accounting for about 6%.