AbbVie might have considered breaking a drug pricing commitment, but the company has kept to its word to limit price hikes to once per year at single digits since 2017. Still, there’s another area where AbbVie's actions didn’t match up with CEO Richard Gonzalez’s statements.
Upon striking a deal to buy Shire back in 2014, Gonzalez said the deal wasn’t about tax benefits and that Shire was an “excellent strategic fit" to add to his drugmaker. But when the U.S. treasury changed rules to disincentivize tax inversions, AbbVie pulled the plug on the deal and paid a $1.64 billion breakup fee.
In its decision to abandon the deal, AbbVie said the about-face “was based upon its assessment of the September 22, 2014 notice issued by the U.S. Department of Treasury, which re-interpreted longstanding tax principles in a uniquely selective manner designed specifically to destroy the financial benefits of these types of transactions.”
So it seems clear that Gonzalez wasn’t telling the whole story when he said the deal wasn’t solely about tax benefits.
Shire would later sell to Takeda. AbbVie would later get tax advantages through President Donald Trump’s tax overhaul in December 2017. After the law passed, AbbVie posted the industry's lowest tax rate in 2018, at about 9%. The company has spent some of those savings on philanthropic causes and is now seeking to buy Allergan for $63 billion to shore up its post-Humira prospects.
Meanwhile, back in the fall of 2017, AbbVie’s management met with analysts and reportedly talked about backtracking on a drug pricing pledge from earlier in the year. As AbbVie executives saw it, drug pricing scrutiny had waned, and the company might be able to price a little more aggressively, according to a synopsis from SVB Leerink analysts. After industry press picked up on the report, AbbVie said the comments were mischaracterized. Since that episode, AbbVie and Gonzalez have kept their word on pricing.