By Jonathan Stempel
Feb 12 (Reuters) – AbbVie sued the U.S. Department of Health and Human Services on Wednesday, challenging a decision by the Centers for Medicare & Medicaid Services to impose price controls for Botox.
In a complaint filed in the Washington, D.C., federal court, AbbVie said Botox is a “plasma-derived product,” making it among the medications that Congress specifically excluded from the Medicare Drug Price Negotiation Program created through the Inflation Reduction Act of 2022.
The North Chicago, Illinois-based drugmaker called its lawsuit the first arising from CMS’ allegedly violating an exclusion.
AbbVie also said capping the price of Botox violated its free speech rights under the U.S. Constitution’s First Amendment by forcing it to falsely admit that the price charged is “fair.”
HHS said on Thursday it does not discuss pending litigation.
The lawsuit also names Health Secretary Robert F. Kennedy Jr., CMS and CMS administrator Mehmet Oz as defendants. It was assigned on Thursday to U.S. District Judge Carl Nichols, an appointee of President Donald Trump.
Botox is known for smoothing facial wrinkles, but can also be used to treat eye- and neck-movement disorders, neck spasms, incontinence and migraines.
AbbVie said one-third of Botox is human serum albumin, a protein extracted from human blood plasma and essential to the product’s safety and efficacy.
“Because HSA is sourced from plasma collected from human donors, Botox is a ‘plasma-derived product’ that Congress excluded from the price-control program,” the complaint said.
AbbVie said it is being forced to sell Botox at “confiscatory prices” to Medicare beneficiaries, or risk “ruinous” tax liability and exclusion from federal government programs.
It also said CMS’ actions amounted to a due process violation and illegal “taking” under the Fifth Amendment. Its lawsuit seeks to end the price controls.
Botox accounted for just over 10% of AbbVie’s $61.16 billion of revenue last year, with purchases for therapeutic uses accounting for about 6%.
The drugmaker AstraZeneca has asked the U.S. Supreme Court to review the constitutionality of the drug pricing program.
AbbVie shares rose 1% to $223.10 in morning trading on Thursday.
(Reporting by Jonathan Stempel in New York; Editing by Rod Nickel, David Gregorio and Anil D’Silva)
Comments