New York, Feb 12, 2026, 14:45 EST — Regular session
- AbbVie shares climbed roughly 3% following its lawsuit against U.S. health agencies over Medicare’s Botox pricing
- The drugmaker argues that Botox ought to be left out of the Inflation Reduction Act’s negotiation program
- Investors are focused on initial court actions and the Medicare schedule for 2028 pricing
AbbVie shares rose Thursday afternoon following the company’s lawsuit against the U.S. government, aiming to stop Medicare price controls on Botox. The move escalates the ongoing legal battle over the government’s efforts to curb drug prices.
This case is crucial since Botox isn’t just a sideline for AbbVie. The company relies heavily on Botox along with its newer immunology drugs as Humira faces growing biosimilar competition. Investors have reacted swiftly to any risks that could undermine pricing power.
The Medicare negotiation program is expanding to cover more drugs, sparking new legal battles despite previous lawsuits mostly failing. Investors are now trying to gauge if this challenge stands a chance or is just another long shot.
AbbVie claims Botox should qualify as a “plasma-derived product” and be exempt from Medicare’s drug price negotiation under the Inflation Reduction Act since it includes human serum albumin derived from human plasma. The company also contends the policy infringes on constitutional rights like “compelled speech” and due process. The lawsuit targets the Department of Health and Human Services, Centers for Medicare & Medicaid Services, HHS Secretary Robert F. Kennedy Jr., and CMS Administrator Mehmet Oz. It’s been assigned to U.S. District Judge Carl Nichols. 1
AbbVie climbed roughly 2.8% to $227.05, even as the S&P 500 ETF dropped nearly 1.1%. The healthcare sector ETF barely moved. Johnson & Johnson gained about 1.6%, while Pfizer edged down 0.2%.
In late January, CMS picked 15 drugs for the program’s “third cycle,” announcing that negotiations will continue through 2026. Any prices agreed upon will kick in on Jan. 1, 2028. 2
Since its inception, drugmakers have been filing lawsuits to block the negotiation program, claiming it represents an unconstitutional taking and forces them into deals labeling government-set prices as “fair.” Early plaintiffs included Merck and Novartis. In 2024, a federal judge dismissed similar lawsuits from Johnson & Johnson and Bristol Myers Squibb. 3
The lawsuit surfaces just a week after AbbVie’s quarterly report stirred fresh debate about its shift beyond Humira. Investors are zeroing in on whether Skyrizi and Rinvoq’s growth can make up for challenges in other areas, like aesthetics. 4
But this deal could flip quickly. Even if AbbVie convinces a judge that Botox qualifies for a statutory carve-out, the government can still appeal. So far, the negotiation program hasn’t been kind to manufacturers in court. A defeat would push Botox toward Medicare-set pricing, potentially tightening margins on what’s been one of the few consistently growing products.
Traders are keeping an eye on any moves to block the program as the case unfolds, along with CMS’ upcoming decisions on the 2026 negotiation timeline. Closer on some investors’ radar is AbbVie’s next dividend payout, set for Feb. 17. 5
