Risk factor changes · ABBV

What changed in AbbVie's risk factors

Item 1A (Risk Factors) of AbbVie's FY2025 10-K compared with its FY2024 10-K, sentence by sentence.

Newer: 10-K filed 2026-02-20 · Older: 10-K filed 2025-02-14

New in the latest 10-K 31

• Even if AbbVie successfully develops and markets new products or enhancements to its existing products, they may be quickly rendered obsolete by changing clinical preferences, changing industry standards, or competitors' innovations.
• In January 2026, Botox was selected as one of 15 medicines subject to government-set prices in Medicare Parts B and D beginning January 1, 2028.
• In addition to the pricing mechanisms established under the IRA, governments and other payers may pursue or implement additional approaches intended to reduce pharmaceutical costs, including arrangements or frameworks that reference international prices, most-favored-nation (MFN) concepts, or other comparative pricing methodologies.
• Such approaches may be implemented through legislation, regulation, administrative action, negotiated arrangements, or other means, and their scope, structure, and application may continue to evolve.
• In January 2026, AbbVie entered into a voluntary agreement with the United States government to provide certain pricing concessions and U.S.-based research and development and capital investments in exchange for exemptions from tariffs and future pricing mandates during the three-year agreement period.
• In addition, our pricing concessions and expansion of direct-to-patient offerings may subject AbbVie to new pricing or reimbursement policies that could affect our commercial performance.
• Where pricing arrangements incorporate MFN, reference pricing, or similar concepts, AbbVie s realized pricing, revenues, or commercial flexibility could be affected by factors outside of AbbVie s control, including changes in applicable policies, methodologies, guidance, or related pricing regimes, as well as interactions with other governmental or private-sector pricing and reimbursement programs.
• Such arrangements could also influence pricing expectations or negotiations in other markets or with other payers.
• For further discussion of PBM formulary practices and their impact on pricing and patient access, see "Pharmacy benefit managers and other supply chain intermediaries exert significant influence over pricing and patient access to our products" below.
• Pharmacy benefit managers and other supply chain intermediaries exert significant influence over pricing and patient access to our products, which could adversely affect our revenues and results of operations.
• Consolidation and vertical integration among PBMs, managed care organizations and other supply chain intermediaries has increased their purchasing power and ability to influence formulary placement and reimbursement levels.
• A limited number of these entities negotiate pricing, rebates and patient access terms on behalf of health plans and government programs that cover a significant portion of insured patients in the United States. 17 | 2025 Form 10-K These entities employ formulary management and utilization tools, including formulary exclusions, step therapy requirements, prior authorization protocols and tiered placement decisions, that could limit or delay patient access to our products, potentially increase patient cost-sharing and/or shift utilization to competing therapies.
• Unfavorable formulary decisions and increased utilization management restrictions could reduce prescription volumes and adversely affect our revenues.
• Further changes in formulary placement or access restrictions implemented by these intermediaries could occur with limited advance notice and may be difficult to predict or mitigate.
• PBM business practices, rebate structures and pricing arrangements are also subject to change as a result of enforcement actions, regulatory settlements, legislation or other government actions.
• Government-mandated changes to PBM rebate methodologies, formulary design or pricing transparency practices could affect our contractual arrangements with PBMs, alter manufacturer-PBM economic relationships or shift costs to manufacturers.
• Additionally, these entities may negotiate higher or additional rebates, discounts, administrative fees or other price concessions that could adversely affect our revenues and results of operations.
• A portion of AbbVie's near-term pharmaceutical pipeline relies on collaborations with third parties, which may adversely affect the development and sale of its products.
• Trade restrictions, tariffs, and other changes in global trade policy could increase costs, disrupt supply chains, and adversely affect AbbVie s business and results of operations.
• AbbVie operates in a global environment and relies on complex international supply chains for the development, manufacture, and distribution of its products, including the sourcing of active pharmaceutical ingredients and key materials.
• Changes in global trade policy, including the potential imposition of import or export tariffs, trade restrictions, or other measures affecting pharmaceutical products or related inputs, could increase manufacturing and procurement costs, reduce margins or disrupt supply continuity.
• If AbbVie is unable to substantially mitigate or offset increased costs or disruptions resulting from such measures through pricing adjustments, operational changes, or alternative sourcing arrangements, it may have an adverse effect on AbbVie s business and results of operations.
• If problems are not discovered before the product is released to the market, recall and product liability costs may also be incurred.
• AbbVie is also the subject of other claims, legal proceedings and investigations in the ordinary course of business, which relate to intellectual property, commercial, securities and other matters.
• Any of these events could disrupt AbbVie's business and have a material adverse effect on its business and results of operations. 2025 Form 10-K | 20 Laws and regulations affecting government benefit programs could impose new obligations on AbbVie, require it to change its business practices, and restrict its operations.
• The 340B Drug Pricing Program requires participating manufacturers to offer discounts to covered entities and growth in entities claiming entitlement to 340B pricing has increased the portion of our sales subject to such discounts.
• Manufacturer policies designed to improve program integrity have been subject to enforcement actions and legal challenges under federal and state laws.
• Adverse outcomes in 340B-related litigation or significant changes to our 340B approach could adversely affect our revenues and results of operations.
• The international nature of AbbVie's business subjects it to additional business risks that may cause its revenue and profitability to decline.
• The healthcare and biopharmaceutical industries remain targets of cybersecurity threats due to the value and sensitivity of the data they hold.
• From time to time, AbbVie will issue additional options or other stock-based awards to its employees under AbbVie's employee benefits plans.

Reworded 37

Removed words are struck through; added words are highlighted.

• In such case, the trading price of AbbVie's common stock could decline. 2025 Form 10-K | 14 Risks Related to AbbVie's Business The expiration or loss of patent protection and licenses, including the loss of exclusivity for any of our products and increased competition from generics and biosimilars, may adversely affect AbbVie's revenues and operating earnings.
• A significant portion of AbbVie's revenues and operating earnings are derived from several two major products.
• Specifically, Skyrizi, Humira Skyrizi and Rinvoq each represented greater than 10% of AbbVie's total net revenues and, in aggregate, these products accounted for approximately 47% 42% of total net revenues in 2024. 2025.
• AbbVie's principal patents and trademarks are described in greater detail in Item 1, "Business Intellectual Property Protection and Regulatory Exclusivity" and Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations," and litigation regarding these patents is described in Item 3, "Legal Proceedings." 2024 Form 10-K | 14 AbbVie's major products could lose patent protection earlier than expected, which could adversely affect AbbVie's revenues and operating earnings.
• To the extent that countries do not enforce AbbVie's intellectual property rights or require compulsory licensing of AbbVie's intellectual property, AbbVie's revenues and operating earnings will be reduced. 15 | 2025 Form 10-K A third party's intellectual property may prevent AbbVie from selling its products or have a material adverse effect on AbbVie's profitability and financial condition.
• Products that appear promising in development may fail to reach the market for numerous reasons, including including, but not limited to, failure to demonstrate effectiveness, safety concerns, superior safety or efficacy of competing therapies, failure to achieve positive clinical or pre-clinical outcomes beyond the current standards of care, inability to obtain necessary regulatory approvals or delays in the approval of new products and new indications, limited scope of approved uses, excessive costs to manufacture or the failure to obtain or maintain intellectual property rights, or infringement of the intellectual property rights of others.
• AbbVie cannot guarantee that a proper balance of speed and testing will be made with respect to each pharmaceutical product candidate or that decisions in this area would not adversely affect AbbVie's results of operations. 15 | 2024 Form 10-K Even if AbbVie successfully develops and markets new products or enhancements to its existing products, they may be quickly rendered obsolete by changing clinical preferences, changing industry standards, or competitors' innovations.
• In the United States, practices of managed care groups, organizations, and institutional and governmental purchasers, as well as federal laws and regulations related to Medicare and Medicaid, contribute to pricing pressures.
• Under the IRA, the U.S Department of Health and Human Services HHS can effectively set prices for certain single-source drugs and biologics reimbursed under Medicare Part B and Part D.
• In August 2023, HHS, through the CMS, 2025 Form 10-K | 16 selected Imbruvica as one of the first 10 medicines subject to government-set prices in Medicare Part D beginning January 1, 2026, and in 2026. January 2025, selected Vraylar and Linzess as two of 15 medicines subject to government-set prices in Medicare Part D beginning January 1, 2027.
• AbbVie continues to evaluate the impact that the IRA pricing and cost-containment related policy developments may have on the company.
• The potential for continuing changes to the health care system in the United States and the increased purchasing power of entities that negotiate on behalf of Medicare, Medicaid and private sector beneficiaries beneficiaries, including pharmacy benefit managers (PBMs) and managed care organizations may result in additional pricing pressures. pressures and formulary restrictions that limit patient access to our products.
• AbbVie cannot predict with certainty if whether additional government initiatives to contain health care costs or other factors could lead to new or modified regulatory or contractual requirements that include higher or incremental rebates rebates, discounts or discounts. other price concessions.
• Other rebate and discount programs arise from contractual agreements with private payers. payers , including PBMs and managed care organizations .
• Various factors, including market factors factors, consolidation among PBMs and the ability of private payers to control patient access to products, including through formulary management and utilization controls, may provide payers the leverage to negotiate higher or additional rebates or discounts that could have a material adverse effect on AbbVie's operations. 2024 Form 10-K | 16 A portion of AbbVie's near-term pharmaceutical pipeline relies on collaborations with third parties, which may adversely affect the development and sale of its products.
• Failure to successfully discover, develop, manufacture and sell biologics including Humira, Skyrizi, Botox Botox, Humira and Creon could have a negative impact on AbbVie's business and results of operations.
• All of these competitors may introduce new products or develop technological advances that compete with AbbVie s products in therapeutic areas such as immunology, oncology, aesthetics, neuroscience neuroscience, oncology and eye care. aesthetics.
• Furthermore, consolidation 2025 Form 10-K | 18 among certain pharmaceutical and biotechnology companies can enhance such advantages.
• If problems arise during the production of a batch of product, such batch of product may have to be discarded discarded, and AbbVie may experience product shortages or incur added expenses.
• If problems are not discovered before the product is released to the market, recall and product liability costs may also be incurred. 17 | 2024 Form 10-K AbbVie uses raw materials and components in its pharmaceutical and biologic manufacturing processes, including those sourced from single suppliers around the world, and an interruption in the supply of those raw materials and components could adversely affect AbbVie's business and results of operations.
• For example, AbbVie may voluntarily provide or be required to provide updated 19 | 2025 Form 10-K information on a product's label or narrow its approved indication, either of which could reduce the product's market acceptance.
• AbbVie evaluates its risks and has determined that the cost of obtaining product liability insurance outweighs the likely benefits of the coverage that is available and, as such, AbbVie's product liability losses are self-insured. 2024 Form 10-K | 18 AbbVie is also the subject of other claims, legal proceedings and investigations in the ordinary course of business, which relate to intellectual property, commercial, securities and other matters.
• Laws In addition, violations of these laws and regulations affecting government benefit programs regulations, or allegations of such violations, could impose new obligations on AbbVie, require it to change its business practices, practices and restrict its operations.
• Net revenues outside of the United States made up approximately 24% of AbbVie's total net revenues in 2024. 2025.
• The risks associated with AbbVie's operations outside the United States include: fluctuations in currency exchange rates; changes in medical reimbursement policies and programs and pricing restrictions; multiple legal and regulatory requirements that are subject to change and that could restrict AbbVie's ability to manufacture, market and sell its products; differing local product preferences and product requirements; trade protection measures and import or export licensing requirements; international trade disruptions or disputes; difficulty in establishing, staffing and managing operations; differing labor regulations; potentially negative consequences from changes in or interpretations of tax laws; political and economic instability; conflicts or crises in individual countries or regions, including terrorist activities or wars; sovereign debt issues; price and currency exchange controls, limitations on participation in local enterprises, expropriation, nationalization and other governmental action and regulation; inflation, recession and fluctuations in interest rates; restrictions on transfers of funds; potential deterioration in the economic position and credit quality of certain non-U.S. countries; and 21 | 2025 Form 10-K potential penalties or other adverse consequences for violations of anti-corruption, anti-bribery and other similar laws and regulations, including the United States Foreign Corrupt Practices Act and the United Kingdom Bribery Act.
• AbbVie could also 2024 Form 10-K | 20 experience negative effects on its reported results of operations from acquisition or disposition-related charges, amortization of expenses related to intangibles and charges for impairment of long-term assets.
• In 2024, 2025, three wholesale distributors (McKesson Corporation, Cardinal Health, Inc. and Cencora, Inc.) accounted for substantially all of AbbVie's pharmaceutical product sales in the United States.
• If AbbVie 2025 Form 10-K | 22 loses its investment grade credit rating or adequate funds are not available on acceptable terms, AbbVie may be unable to fund its expansion, successfully develop or enhance products, or respond to competitive pressures, any of which could negatively affect AbbVie's business.
• In addition, AbbVie s cyber insurance may not be sufficient to 21 | 2024 Form 10-K cover the financial, legal, business or reputational losses that may result from an interruption or breach of AbbVie systems or those of our third-party vendors.
• Additionally, AbbVie utilizes artificial intelligence (AI) AI and other emerging technologies in select applications to support its operations.
• As of December 31, 2024, 2025, the carrying value of AbbVie s developed product rights and other intangible assets was $60.1 $52.6 billion and the carrying value of AbbVie s goodwill was $35.0 $35.6 billion.
• A goodwill or IPR&D impairment, if any, would be recorded in operating income and could have a material adverse effect on AbbVie s results of operations and financial condition. 23 | 2025 Form 10-K Failure to attract, develop and retain highly qualified personnel could affect AbbVie s ability to successfully develop and commercialize products.
• This can expose patients to greater risks as the internet is a preferred vehicle for dangerous counterfeit/diverted product offers and scams because of the anonymity it 2024 Form 10-K | 22 affords.
• Many other factors can affect AbbVie's results of operations, cash flows and financial condition, including: changes in or interpretations of laws and regulations, including changes in accounting standards, taxation requirements, product marketing application standards, data privacy laws, particularly in the European Union and the United States and environmental laws; differences between the fair value measurement of assets and liabilities and their actual value, particularly for pension and post-employment benefits, stock-based compensation, intangibles and goodwill; and for contingent liabilities such as litigation and contingent consideration, the absence of a recorded amount, or an amount recorded at the minimum, compared to the actual amount; changes in the rate of inflation (including the cost of raw materials, commodities and supplies), interest rates, market value of AbbVie's equity investments and the performance of investments held by it or its employee benefit trusts; changes in the creditworthiness of counterparties that transact business with or provide services to AbbVie or its employee benefit trusts; environmental liabilities in connection with AbbVie s manufacturing processes and distribution logistics, including the handling of hazardous materials; changes in the ability of third parties that provide information technology, accounting, human resources, payroll and other outsourced services to AbbVie to meet their contractual obligations to AbbVie; the failure, perceived failure, or pursuit of achieving environmental, social and governance objectives; information loss or damage to AbbVie's reputation, brand, image or goodwill due to increased use of social media platforms; business interruptions stemming from natural disasters, such as climate change, earthquakes, hurricanes, flooding, fires, or efforts taken by third parties to prevent or mitigate such disasters; and changes in business, economic and political conditions, including: war, political instability, terrorist attacks, the threat of future terrorist activity and related military action; natural disasters; pandemics and epidemics, the cost and availability of insurance due to any of the foregoing events; labor disputes, strikes, slow-downs, or other forms of labor or union activity; and pressure from third-party interest groups. 2025 Form 10-K | 24 Risks Related to AbbVie's Common Stock AbbVie cannot guarantee the timing, amount, or payment of dividends on its common stock or the repurchase of its common stock.
• From time to time, AbbVie will issue additional options or other stock-based awards to its employees under AbbVie's employee benefits plans. 23 | 2024 Form 10-K In addition, AbbVie's amended and restated certificate of incorporation authorizes AbbVie to issue, without the approval of AbbVie's stockholders, one or more classes or series of preferred stock having such designation, powers, preferences and relative, participating, optional and other special rights, including preferences over AbbVie's common stock respecting dividends and distributions, as AbbVie's board of directors generally may determine.
• In addition, Section 203 of the Delaware General Corporation Law provides that, subject to limited exceptions, persons that acquire, or are affiliated with a person that acquires, more than 15% of the outstanding voting stock of a Delaware corporation shall not engage in any business combination with that corporation, including by merger, consolidation or acquisitions of additional shares, for a three-year period following the date on which that person or its affiliates becomes the holder of more than 15% of the corporation's outstanding voting stock. 25 | 2025 Form 10-K AbbVie believes these provisions protect its stockholders from coercive or otherwise unfair takeover tactics by requiring potential acquirors to negotiate with AbbVie's board of directors and by providing AbbVie's board of directors with more time to assess any acquisition proposal.
• These provisions may also prevent or discourage attempts to remove and replace incumbent directors. 2024 2025 Form 10-K | 24 26 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains certain forward-looking statements regarding business strategies, market potential, future financial performance and other matters.

Removed since the previous 10-K 12

• In such case, the trading price of AbbVie's common stock could decline.
• Humira has faced competition from biosimilar products in the United States following the loss of exclusivity in 2023.
• AbbVie anticipates such loss will continue to cause a significant decline in Humira's revenue and could adversely affect AbbVie s revenues and operating earnings.
• A third party's intellectual property may prevent AbbVie from selling its products or have a material adverse effect on AbbVie's profitability and financial condition.
• In August 2024, the CMS published Medicare Part D prices that will be applicable to these medicines, including Imbruvica, beginning January 1, 2026.
• In January 2025, HHS, through the CMS, selected Vraylar and Linzess as two of the 15 medicines subject to government-set prices in Medicare Part D beginning in 2027.
• Any of these events could disrupt AbbVie's business and have a material adverse effect on its business and results of operations.
• In addition, violations of these laws and regulations, or allegations of such violations, could impose new obligations on AbbVie, require it to change its business practices and restrict its operations. 19 | 2024 Form 10-K The international nature of AbbVie's business subjects it to additional business risks that may cause its revenue and profitability to decline.
• To date, neither AbbVie s business nor operations have been materially impacted by such incidents, however, the healthcare industry remains a target of cyber-attacks.
• Failure to attract, develop and retain highly qualified personnel could affect AbbVie s ability to successfully develop and commercialize products.
• Risks Related to AbbVie's Common Stock AbbVie cannot guarantee the timing, amount, or payment of dividends on its common stock or the repurchase of its common stock.
• AbbVie believes these provisions protect its stockholders from coercive or otherwise unfair takeover tactics by requiring potential acquirors to negotiate with AbbVie's board of directors and by providing AbbVie's board of directors with more time to assess any acquisition proposal.

Source: SEC EDGAR filings, compared sentence by sentence by EdgarStack. Sentence matching is automated and may pair or split passages imperfectly; check the linked filings before relying on any passage. A software tool, not financial advice. Not affiliated with the U.S. Securities and Exchange Commission.