Inquiring Minds Would Like to Know…

February 27, 2019

United Church Funds supports the Senate Finance Committee’s Drug Pricing Hearing yesterday because Americans can no longer afford to put their health at the expense of an unsustainable business model.

In particular, we celebrate Senator Wyden’s line of questioning regarding AbbVie’s executive incentive structure. United Church Funds is again filing a shareholder resolution on executive incentives and their links to drug price increases at AbbVie this year. From Senator Wyden:

“Let’s look at concrete examples, starting with AbbVie. AbbVie manufactures the top-selling prescription drug in America, the arthritis medication Humira. Over six years, the company doubled the price of a 12-month supply from $19,000 to $38,000. Can patients opt for a less expensive alternative? No, they cannot, because AbbVie protects the exclusivity of Humira like Gollum with his ring. Thick cobwebs of patents, legal tricks, and shadowy deals with other drug makers, all to keep the cash flowing.

I also want to address troubling information the committee recently uncovered. I’m holding AbbVie’s proxy statement, a document every publicly-traded company must file with the SEC. Page 37 shows that in 2017, a portion of CEO Richard Gonzalez’s multi-million dollar bonus was directly tied to sales of Humira. It appears the same incentive was in place in 2015 and 2016.

In fact, the committee’s review shows that all of AbbVie’s top executives had the same arrangement. Mr. Gonzalez is welcome to respond, but the implication of that incentive ought to be clear. From top down, AbbVie’s leadership had reason to keep pushing prices and sales upward.”

 
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