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What changed in AbbVie's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of AbbVie's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+286 added−267 removedSource: 10-K (2024-02-20) vs 10-K (2023-02-17)

Top changes in AbbVie's 2023 10-K

286 paragraphs added · 267 removed · 205 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

56 edited+12 added−9 removed147 unchanged
Biggest changeIf preclinical testing of an identified compound proves successful, the compound moves into clinical development which generally includes the following phases: • Phase 1— involves the first human tests in a small number of healthy volunteers or patients to assess safety, tolerability and doses for later phases. • Phase 2— tests different doses of the drug in a disease state in order to assess efficacy. • Phase 3— tests a drug that demonstrates favorable results in the earlier phases in a significantly larger patient population to further demonstrate efficacy and safety in order to meet requirements to enable global approval. 7 | 2022 Form 10-K Preclinical data and clinical trials from all of the development phases provide the data required to prepare and submit an NDA, a Biological License Application (BLA) or other submission for regulatory approval to the FDA or similar government agencies outside the United States.
Biggest changeIf preclinical testing of an identified compound proves successful, the compound moves into clinical development which generally includes the following phases: • Phase 1— involves the first human tests in a small number of healthy volunteers or patients to assess safety, tolerability and doses for later phases. • Phase 2— tests different doses of the drug in a disease state in order to assess efficacy. • Phase 3— tests a drug that demonstrates favorable results in the earlier phases in a significantly larger patient population to further demonstrate efficacy and safety in order to meet requirements to enable global approval.
It is a biologic therapy approved to treat the following autoimmune diseases in North America, the European Union and Japan: Condition Principal Markets Plaque psoriasis (moderate to severe) North America, European Union, Japan Psoriatic arthritis U.S., European Union Adult Crohn's disease (moderate to severe) U.S., Canada, European Union Skyrizi is also approved in Japan for the treatment of plaque psoriasis, psoriatic arthritis, erythrodermic psoriasis in patients who have an inadequate response to conventional therapies, and for induction and maintenance in moderately to severely active Crohn's disease.
It is a biologic therapy approved to treat the following autoimmune diseases in North America, the European Union and Japan: Condition Principal Markets Plaque psoriasis (moderate to severe) North America, European Union, Japan Psoriatic arthritis U.S., European Union Crohn's disease (moderate to severe) U.S., Canada, European Union Skyrizi is also approved in Japan for the treatment of plaque psoriasis, psoriatic arthritis, erythrodermic psoriasis in patients who have an inadequate response to conventional therapies, and for induction and maintenance in moderately to severely active Crohn's disease.
AbbVie’s shared values of transforming lives, acting with integrity, driving innovation, embracing diversity and inclusion and serving the community form the core of the company's culture. AbbVie articulates the behaviors associated with these values in the Ways We Work, a core set of working behaviors that emphasize how the company achieves results is equally as important as achieving them.
AbbVie’s shared principles of transforming lives, acting with integrity, driving innovation, embracing diversity and inclusion and serving the community form the core of the company's culture. AbbVie articulates the behaviors associated with these values in the Ways We Work, a core set of working behaviors that emphasize how the company achieves results is equally as important as achieving them.
It is also indicated for the treatment of adult and pediatric patients (12 years and older or weighing at least 45 kilograms) with HCV genotype 1 infection, who previously have been treated with a regimen containing an HCV NS5A inhibitor or an NS3/4A protease inhibitor, but not both.
It is also indicated for the treatment of adult and pediatric patients (12 years and older or weighing at least 45 kilograms) with HCV genotype 1 infection, who previously have been treated with a regimen containing an HCV NS5A inhibitor or an NS3/4A protease inhibitor, but not both. Creon.
It is approved to treat the following autoimmune diseases in the United States, Canada and Mexico (collectively, North America) and in the European Union: Condition Principal Markets Rheumatoid arthritis (moderate to severe) North America, European Union Psoriatic arthritis North America, European Union Ankylosing spondylitis North America, European Union Adult Crohn's disease (moderate to severe) North America, European Union Plaque psoriasis (moderate to severe chronic) North America, European Union Juvenile idiopathic arthritis (moderate to severe polyarticular) North America, European Union Ulcerative colitis (moderate to severe) North America, European Union Axial spondyloarthropathy European Union Pediatric Crohn's disease (moderate to severe) North America, European Union Hidradenitis suppurativa (moderate to severe) North America, European Union Pediatric enthesitis-related arthritis European Union Non-infectious intermediate, posterior and panuveitis North America, European Union Pediatric ulcerative colitis (moderate to severe) U.S., Canada, European Union Pediatric uveitis North America, European Union 1 | 2022 Form 10-K Humira is also approved in Japan for the treatment of intestinal Behçet's disease and pyoderma gangrenosum.
It is approved to treat the following autoimmune diseases in the United States, Canada and Mexico (collectively, North America) and in the European Union: Condition Principal Markets Rheumatoid arthritis (moderate to severe) North America, European Union Psoriatic arthritis North America, European Union Ankylosing spondylitis North America, European Union Adult Crohn's disease (moderate to severe) North America, European Union Plaque psoriasis (moderate to severe chronic) North America, European Union Juvenile idiopathic arthritis (moderate to severe polyarticular) North America, European Union Ulcerative colitis (moderate to severe) North America, European Union Axial spondyloarthropathy European Union Pediatric Crohn's disease (moderate to severe) North America, European Union Hidradenitis suppurativa (moderate to severe) North America, European Union Pediatric enthesitis-related arthritis European Union Non-infectious intermediate, posterior and panuveitis North America, European Union Pediatric ulcerative colitis (moderate to severe) U.S., Canada, European Union Pediatric uveitis North America, European Union 1 | 2023 Form 10-K Humira is also approved in Japan for the treatment of intestinal Behçet's disease and pyoderma gangrenosum.
Restasis is approved in the United States and a number of other markets in South America, the Middle East and Asia. Other eye care. Other eye care products include Ozurdex, Refresh/Optive, Xen and Durysta. Other key products.
Restasis is approved in the United States and a number of other markets in South America, the Middle East and Asia. Other eye care. Other eye care products include Refresh/Optive, Xen and Durysta. Other key products.
Similar reporting requirements have also been enacted on the state level in the United States, and an increasing number of countries worldwide either have adopted or are considering similar laws requiring disclosure of interactions with health care professionals. Failure to report appropriate data may result in civil or criminal fines and/or penalties. European Union.
Similar reporting requirements have also been enacted on the state level in the United States, and an increasing number of countries worldwide either have adopted or are considering similar laws requiring disclosure of interactions with health care professionals. Failure to report appropriate data may result in civil or criminal fines and/or penalties.
Rinvoq (upadacitinib) is an oral, once-daily selective and reversible JAK inhibitor that is approved to treat the following inflammatory diseases in North America, the European Union and Japan: Condition Principal Markets Rheumatoid arthritis (moderate to severe) North America, European Union, Japan Psoriatic arthritis U.S., Canada, European Union, Japan Ankylosing spondylitis U.S., European Union Atopic dermatitis (moderate to severe) U.S., Canada, European Union, Japan Axial spondyloarthropathy U.S., European Union Ulcerative colitis U.S., European Union In the United States, Rinvoq is indicated for both the treatment of moderate to severe active rheumatoid arthritis, for active psoriatic arthritis, for moderately to severely active ulcerative colitis, for active ankylosing spondylitis and for active non-radiographic axial spondyloarthritis in adult patients who have an inadequate response or intolerance to one or more TNF blockers.
Rinvoq (upadacitinib) is an oral, once-daily selective and reversible JAK inhibitor that is approved to treat the following inflammatory diseases in North America, the European Union and Japan: Condition Principal Markets Rheumatoid arthritis (moderate to severe) North America, European Union, Japan Psoriatic arthritis U.S., Canada, European Union, Japan Ankylosing spondylitis U.S., European Union Atopic dermatitis (moderate to severe) U.S., Canada, European Union, Japan Axial spondyloarthropathy U.S., European Union Ulcerative colitis (moderate to severe) U.S., European Union Crohn's disease (moderate to severe) U.S., European Union In the United States, Rinvoq is indicated for both the treatment of moderate to severe active rheumatoid arthritis, for active psoriatic arthritis, for moderate to severe active ulcerative colitis, for active ankylosing spondylitis and for active non-radiographic axial spondyloarthritis in adult patients who have an inadequate response or intolerance to one or more TNF blockers.
In 2022, three wholesale distributors (McKesson Corporation, Cardinal Health, Inc. and AmerisourceBergen Corporation) accounted for substantially all of AbbVie's pharmaceutical product sales in the United States. No individual wholesaler accounted for greater than 39% of AbbVie's 2022 gross revenues in the United States.
In 2023, three wholesale distributors (McKesson Corporation, Cardinal Health, Inc. and AmerisourceBergen Corporation) accounted for substantially all of AbbVie's pharmaceutical product sales in the United States. No individual wholesaler accounted for greater than 39% of AbbVie's 2023 gross revenues in the United States.
For example, AbbVie's immunology products compete with anti-TNF products, JAK inhibitors and other competitive products intended to treat a number of disease states, and AbbVie's oncology products compete with BTK inhibitors.
For example, AbbVie's immunology products compete with anti-TNF products, JAK inhibitors and other competitive products intended to treat a number of disease states, and AbbVie's oncology products compete with BTK inhibitors and other competitive products intended to treat certain cancers.
In Japan, applications for approval of a new product are made through the Pharmaceutical and Medical Devices Agency (PMDA). Japan-specific trials and/or bridging studies to demonstrate that the non-Japanese clinical data applies to Japanese patients may be required.
In Japan, applications for approval of a new product are made through the Pharmaceutical and Medical Devices Agency (PMDA). Japan-specific trials and/or bridging studies to demonstrate that the non-Japanese clinical data applies to Japanese patients are usually required.
Finally, AbbVie empowers managers and their teams with tools, tips and guidelines on effectively managing workloads, managing teams from a distance and supporting flexible work practices. In 2022, we implemented "Where We Work", AbbVie's hybrid work model, offering eligible employees predictable flexibility. New AbbVie employees are given a tailored onboarding experience for faster integration and to support performance.
Finally, AbbVie empowers managers and their teams with tools, tips and guidelines on effectively managing workloads, managing teams from a distance and supporting flexible work practices, including "Where We Work", AbbVie's hybrid work model, offering eligible employees predictable flexibility. New AbbVie employees are given a tailored onboarding experience for faster integration and to support performance.
Certain additional risks are inherent in conducting business outside the United States, including price and currency exchange controls, changes in currency exchange rates, limitations on participation in local enterprises, expropriation, nationalization and other governmental action. 2022 Form 10-K | 10 Regulation – Medical Devices Medical devices are subject to regulation by the FDA, state agencies and foreign government health authorities.
Certain additional risks are inherent in conducting business outside the United States, including price and currency exchange controls, changes in currency exchange rates, limitations on participation in local enterprises, expropriation, nationalization and other governmental action. Regulation – Medical Devices Medical devices are subject to regulation by the FDA, state agencies and foreign government health authorities.
Humira is sold in numerous other markets worldwide, including Japan, China, Brazil and Australia, and accounted for approximately 37% of AbbVie's total net revenues in 2022. Skyrizi. Skyrizi (risankizumab) is an interleukin-23 (IL-23) inhibitor that selectively blocks IL-23 by binding to its p19 subunit.
Humira is sold in numerous other markets worldwide, including Japan, China, Brazil and Australia, and accounted for approximately 27% of AbbVie's total net revenues in 2023. Skyrizi. Skyrizi (risankizumab) is an interleukin-23 (IL-23) inhibitor that selectively blocks IL-23 by binding to its p19 subunit.
In addition, recent legislative changes would require similarly discounted prices to be offered to TRICARE program beneficiaries. The Veterans Health Care 9 | 2022 Form 10-K Act of 1992 also established the 340B drug discount program, which requires pharmaceutical manufacturers to provide products at reduced prices to various designated health care entities and facilities.
In addition, recent legislative changes would require similarly discounted prices to be offered to TRICARE program beneficiaries. The Veterans Health Care Act of 1992 also established the 340B drug discount program, which requires pharmaceutical manufacturers to provide products at reduced prices to various designated health care entities and facilities.
And the United States composition of matter patent covering upadacitinib is expected to expire in 2033. AbbVie may rely, in some circumstances, on trade secrets to protect its technology. AbbVie seeks to protect its technology and product candidates, in part, by confidentiality agreements with its employees, consultants, advisors, 2022 Form 10-K | 6 contractors and collaborators.
And the United States composition of matter patent covering upadacitinib is expected to expire in 2033. AbbVie may rely, in some circumstances, on trade secrets to protect its technology. AbbVie seeks to protect its technology and product candidates, in part, by confidentiality agreements with its employees, consultants, advisors, contractors and collaborators.
After completing a comprehensive review, the PMDA reports to the Ministry of Health, Labour and Welfare, which then approves or denies the application. 2022 Form 10-K | 8 Similarly, applications for a new product in China are submitted to the Center for Drug Evaluation of the National Medical Products Administration for technical review and approval of a product for marketing in China.
After completing a comprehensive review, the PMDA reports to the Ministry of Health, Labour and Welfare, which then approves or denies the application. Similarly, applications for a new product in China are submitted to the Center for Drug Evaluation of the National Medical Products Administration for technical review and approval of a product for marketing in China.
AbbVie's levodopa-carbidopa intestinal gel for the treatment of advanced Parkinson's disease is marketed as Duopa in the United States and as Duodopa outside of the United States. Ubrelvy. Ubrelvy (ubrogepant) is a calcitonin gene-related peptide receptor antagonist indicated for the acute treatment of migraine with or without aura in adults.
AbbVie's levodopa-carbidopa intestinal gel for the treatment of advanced Parkinson's disease is marketed as Duopa in the United States and as Duodopa outside of the United States. 3 | 2023 Form 10-K Ubrelvy. Ubrelvy (ubrogepant) is a calcitonin gene-related peptide receptor antagonist indicated for the acute treatment of migraine with or without aura in adults.
Both Alphagan and Combigan are available for sale in the United States and numerous markets around the world. 3 | 2022 Form 10-K Restasis. Restasis is a calcineurin inhibitor immunosuppressant indicated to increase tear production in patients whose tear production is presumed to be suppressed due to ocular inflammation associated with keratoconjunctivitis sicca.
Both Alphagan and Combigan are available for sale in the United States and numerous markets around the world. Restasis. Restasis is a calcineurin inhibitor immunosuppressant indicated to increase tear production in patients whose tear production is presumed to be suppressed due to ocular inflammation associated with keratoconjunctivitis sicca.
In addition, as a condition of approval, the FDA may require post-marketing testing and surveillance to further assess and monitor the product's safety or efficacy after commercialization, which may require additional clinical trials, patient registries, observational data or additional work on chemistry, manufacturing and controls.
In addition, as a condition of approval, the FDA may require post-marketing testing and surveillance to further 2023 Form 10-K | 8 assess and monitor the product's safety or efficacy after commercialization, which may require additional clinical trials, patient registries, observational data or additional work on chemistry, manufacturing and controls.
The majority of AbbVie’s medical device products, including AbbVie’s breast implants, are regulated as Class III medical devices. A Class III device may have significant additional obligations imposed in its conditions of approval, and the time in which it takes to obtain approval can be long.
The majority of AbbVie’s medical device products, including AbbVie’s breast implants, are regulated as Class III medical devices. A Class III device may have significant additional obligations imposed in its conditions of approval, and the time in which it takes 11 | 2023 Form 10-K to obtain approval can be long.
Approval by the FDA is dependent upon many factors, including a showing that the biosimilar is "highly similar" to the original product and has no clinically meaningful differences from the original product in terms of safety, purity and potency.
Approval by the FDA is dependent upon many factors, including a showing that the biosimilar is "highly similar" to the original product and has no clinically meaningful differences from the original product in 5 | 2023 Form 10-K terms of safety, purity and potency.
The law also includes an extensive process for the innovator biologic and biosimilar manufacturer to litigate patent infringement, validity and enforceability. The European Union has also created a pathway for approval of biosimilars and has published guidelines for approval of certain biosimilar products.
The law also includes an extensive process for the innovator biologic and biosimilar manufacturer to litigate patent 2023 Form 10-K | 6 infringement, validity and enforceability. The European Union has also created a pathway for approval of biosimilars and has published guidelines for approval of certain biosimilar products.
AbbVie has the rights to sell Creon and Synthroid only in the United States. Marketing, Sales and Distribution Capabilities AbbVie utilizes a combination of dedicated commercial resources, regional commercial resources and distributorships to market, sell and distribute its products worldwide.
AbbVie has the rights to sell Creon and Synthroid only in the United States. 2023 Form 10-K | 4 Marketing, Sales and Distribution Capabilities AbbVie utilizes a combination of dedicated commercial resources, regional commercial resources and distributorships to market, sell and distribute its products worldwide.
The length of the patent extension is roughly based on 50 percent of the period of time from the filing of an Investigational New Drug Application (NDA) for a 5 | 2022 Form 10-K compound to the submission of the NDA for such compound, plus 100 percent of the time period from NDA submission to regulatory approval.
The length of the patent extension is roughly based on 50 percent of the period of time from the filing of an Investigational New Drug Application (NDA) for a compound to the submission of the NDA for such compound, plus 100 percent of the time period from NDA submission to regulatory approval.
Venclexta (venetoclax) is a B-cell lymphoma 2 (BCL-2) inhibitor used to treat hematological malignancies. Venclexta is approved by the FDA for adults with CLL or small lymphocytic lymphoma.
Venclexta (venetoclax) is a B-cell lymphoma 2 (BCL-2) inhibitor used to treat blood cancers. Venclexta is approved by the FDA for adults with CLL or small lymphocytic lymphoma.
In 2022, AbbVie launched on-site health care clinics at certain locations, offering convenient and affordable access to quality healthcare, flu shots and vaccines.
AbbVie has on-site health care clinics at certain locations, offering convenient and affordable access to quality healthcare, flu shots and vaccines.
Through December 2022, women represented 52 percent of management positions globally and in the United States, 37 percent of AbbVie's workforce was comprised of members of historically underrepresented populations, an increase from 2021. Further, AbbVie is committed to pay equity and conducts pay equity analyses annually.
Through December 2023, women represented 52 percent of management positions globally and in the United States, 37 percent of AbbVie's workforce was comprised of members of historically underrepresented populations, consistent with 2022. Further, AbbVie is committed to pay equity and conducts pay equity analyses annually.
In addition, Venclexta 2022 Form 10-K | 2 is approved in combination with azacitidine, or decitabine, or low-dose cytarabine to treat adults with newly-diagnosed acute myeloid leukemia who are 75 years of age or older or have other medical conditions that prevent the use of standard chemotherapy. Aesthetics products.
In addition, Venclexta is approved in combination with azacitidine, or decitabine, or low-dose cytarabine to treat adults with newly-diagnosed acute myeloid leukemia who are 75 years of age or older or have other medical conditions that prevent the use of standard chemotherapy. Epkinly .
Recently, AbbVie adopted a five-year Equality, Diversity & Inclusion roadmap that defines key global focus areas, objectives and associated initiatives, and includes implementation plans organized by business function and geography. AbbVie’s senior leaders have adopted formal goals aligned with executing this strategy.
AbbVie's Equity, Equality, Diversity & Inclusion roadmap defines key global focus areas, objectives and associated initiatives, and includes implementation plans organized by business function and geography. AbbVie’s senior leaders have adopted formal goals aligned with executing this strategy.
It is also indicated for the treatment of moderate to severe atopic dermatitis in adults and children 12 years of age and older whose disease is not adequately controlled with other systemic drug products, including biologics, or when use of those therapies are inadvisable.
It is also indicated for the treatment of Crohn's disease in adult patients who have an inadequate response or intolerance to one or more TNF blockers and for moderate to severe atopic dermatitis in adults and children 12 years of age and older whose disease is not adequately controlled with other systemic drug products, including biologics, or when use of those therapies are inadvisable.
Employees AbbVie employed approximately 50,000 employees in over 70 countries as of January 31, 2023. Outside the United States, some of AbbVie's employees are represented by unions or works councils. AbbVie believes that it has good relations with its employees.
Employees AbbVie employed approximately 50,000 employees in over 70 countries as of January 31, 2024. Outside the United States, some of AbbVie's employees are represented by unions or works councils.
Imbruvica (ibrutinib) is an oral, once-daily therapy that inhibits a protein called Bruton's tyrosine kinase. Imbruvica was one of the first medicines to receive a United States Food and Drug Administration (FDA) approval after being granted a Breakthrough Therapy Designation and is one of the few therapies to receive four separate designations.
Imbruvica was one of the first medicines to receive a United States Food and Drug Administration (FDA) approval after being granted a Breakthrough Therapy Designation and is one of the few therapies to receive four separate designations.
Competition The markets for AbbVie's products are highly competitive. AbbVie competes with other research-based pharmaceuticals and biotechnology companies that discover, manufacture, market and sell proprietary pharmaceutical products, therapies and biologics.
AbbVie competes with other research-based pharmaceuticals and biotechnology companies that discover, manufacture, market and sell proprietary pharmaceutical products, therapies and biologics.
AbbVie’s Aesthetics portfolio consists of facial injectables, plastics and regenerative medicine, body contouring and skincare products, which hold market-leading positions in the U.S. and in key markets around the world. These products are: Botox Cosmetic.
Continued approval may be contingent upon verification and description of clinical benefit in a confirmatory trial. Aesthetics products. AbbVie’s Aesthetics portfolio consists of facial injectables, plastics and regenerative medicine, body contouring and skincare products, which hold market-leading positions in the U.S. and in key markets around the world. These products are: Botox Cosmetic.
A critical component of AbbVie's strategy is to instill an inclusive mindset in all AbbVie leaders and employees, so the company continues to realize the full value of its diverse workforce from recruitment through retirement.
A critical component of AbbVie's strategy is to instill an inclusive mindset in all AbbVie leaders and employees, so the company continues to realize the full value of its workforce from recruitment through retirement. AbbVie's Employee Resource Groups also help the company nurture an inclusive culture by building community and creating connections.
In 2023, capital expenditures for pollution control are estimated to be approximately $9 million and operating expenditures are estimated to be approximately $37 million.
In 2024, capital expenditures for pollution control are estimated to be approximately $22 million and operating expenditures are estimated to be approximately $45 million.
Ubrelvy is commercialized in the United States, Israel, Saudi Arabia, United Arab Emirates and has been approved in Canada. Qulipta. Qulipta (atogepant) is a calcitonin gene-related peptide receptor antagonist indicated for the preventive treatment of episodic migraine in adults. Qulipta is commercialized in the United States and has recently been approved for use in Canada. Eye care products.
Ubrelvy is commercialized in the United States, Israel, Saudi Arabia, United Arab Emirates and Canada. Qulipta. Qulipta (atogepant) is a calcitonin gene-related peptide receptor antagonist indicated for the preventive treatment of episodic and chronic migraine in adults. Qulipta is commercialized in the United States and Canada and is approved in the European Union under the brand name Aquipta.
One of AbbVie's mentorship programs allows employees to self-nominate as mentors or mentees and facilitates meaningful relationships supporting employees’ career and development goals. 2022 Form 10-K | 12 AbbVie also provides structured, broad-based development opportunities, focusing on high-performance skills and leadership training.
One of AbbVie's mentorship programs allows employees to self-nominate as mentors or mentees and facilitates meaningful relationships supporting employees’ career and development goals. AbbVie also provides structured, broad-based development opportunities, focusing on high-performance skills and leadership training. AbbVie's talent philosophy holds leaders accountable for building a high-performing organization, and the company provides development opportunities for all levels of leadership.
Medical devices that comply with the MDR are entitled to bear a Conformité Européenne marking evidencing such compliance and may be marketed in the European Union.
Medical devices that comply with the MDR are entitled to bear a Conformité Européenne marking evidencing such compliance and may be marketed in the European Union. Failure to comply with these domestic and international regulatory requirements could affect AbbVie’s ability to market and sell AbbVie’s products in these countries.
Regulations under federal and state environmental laws impose stringent limitations on emissions and discharges to the environment from various manufacturing operations. AbbVie's capital expenditures for pollution control in 2022 were approximately $12 million and operating expenditures were approximately $35 million.
Environmental Matters AbbVie believes that its operations comply in all material respects with applicable laws and regulations concerning environmental protection. Regulations under federal and state environmental laws impose stringent limitations on emissions and discharges to the environment from various manufacturing operations. AbbVie's capital expenditures for pollution control in 2023 were approximately $16 million and operating expenditures were approximately $43 million.
AbbVie has no single customer that, if the customer were lost, would have a material adverse effect on the company's business. No material portion of AbbVie's business is subject to renegotiation of profits or termination of contracts at the election of the government. Orders are generally filled on a current basis and order backlog is not material to AbbVie's business.
No material portion of AbbVie's business is subject to renegotiation of profits or termination of contracts at the election of the government. Orders are generally filled on a current basis and order backlog is not material to AbbVie's business. Competition The markets for AbbVie's products are highly competitive.
Outside the United States, AbbVie sells products primarily to wholesalers or through distributors, and depending on the market works through largely centralized national payers system to agree on reimbursement terms. 2022 Form 10-K | 4 Certain products are co-marketed or co-promoted with other companies.
Outside the United States, AbbVie sells products primarily to wholesalers or through distributors, and depending on the market works through largely centralized national payers systems to agree on reimbursement terms. Certain products are co-marketed or co-promoted with other companies. AbbVie has no single customer that, if the customer were lost, would have a material adverse effect on the company's business.
AbbVie’s eye care products address unmet needs and new approaches to help preserve and protect patients’ vision. These products are: Lumigan/Ganfort. Lumigan (bimatoprost ophthalmic solution) 0.01% is a once daily, topical prostaglandin analog indicated for the reduction of elevated intraocular pressure (IOP) in patients with open angle glaucoma (OAG) or ocular hypertension (OHT).
Ozurdex® is commercially available in the United States and numerous markets around the world. Lumigan/Ganfort. Lumigan (bimatoprost ophthalmic solution) 0.01% is a once daily, topical prostaglandin analog indicated for the reduction of elevated intraocular pressure (IOP) in patients with open angle glaucoma (OAG) or ocular hypertension (OHT).
It is an 8-week, pan-genotypic treatment for patients without cirrhosis and following the EXPEDITION-8 study, also in patients with compensated cirrhosis who are new to treatment. Creon. Creon (pancrelipase) is a pancreatic enzyme therapy for exocrine pancreatic insufficiency, a condition that occurs in patients with cystic fibrosis, chronic pancreatitis and several other conditions. Lupron.
Creon (pancrelipase) is a pancreatic enzyme therapy for exocrine pancreatic insufficiency, a condition that occurs in patients with cystic fibrosis, chronic pancreatitis and several other conditions. Lupron.
In the United States, the FDA regulates biologics under the Federal Food, Drug, and Cosmetic Act (the FFDCA), the Public Health Service Act (PHSA) and the regulations implementing these statutes.
Humira is facing direct biosimilar competition globally, and AbbVie will continue to face competitive pressure from these biologics and from orally administered products. In the United States, the FDA regulates biologics under the Federal Food, Drug, and Cosmetic Act (the FFDCA), the Public Health Service Act (PHSA) and the regulations implementing these statutes.
AbbVie's talent philosophy holds leaders accountable for building a high-performing organization, and the company provides development opportunities for all levels of leadership. AbbVie's Learn, Develop, Perform program offers year-long, self-directed leadership education, supplemented with tools and resources, and leverages leaders as role models and teachers.
AbbVie's Learn, Develop, Perform program offers year-long, self-directed leadership education, supplemented with tools and resources, and leverages leaders as role models and teachers.
Failure to comply can delay the release of a new product or result in regulatory and enforcement actions, the seizure or recall of a product, the suspension or revocation of the authority necessary for a product's production and sale and other civil or criminal sanctions, including fines and penalties.
Failure to comply can delay the release of a new product or result in regulatory and enforcement actions, the seizure or recall of a product, the suspension or revocation of the authority necessary for a product's production and sale and other civil or criminal sanctions, including fines and penalties. 9 | 2023 Form 10-K In addition to regulatory initiatives, AbbVie's business can be affected by ongoing studies of the utilization, safety, efficacy and outcomes of health care products and their components that are regularly conducted by industry participants, government agencies and others.
These patents and applications, including various patents that expire during the period 2023 to the early 2040s, in aggregate are believed to be of material importance in the operation of AbbVie’s business.
These patents and applications, including various patents that expire during the period 2024 to the mid 2040s, in aggregate are believed to be of material importance in the operation of AbbVie’s business. However, AbbVie believes that no single patent, license, trademark (or related group of patents, licenses, or trademarks), are material in relation to the company’s business as a whole.
Given the general increased global volatility due to the pandemic, AbbVie is monitoring and taking actions to mitigate potential supply shortages which may impact the fulfillment of product demand. Research and Development Activities AbbVie makes a significant investment in research and development and has numerous compounds (and complementary devices) in clinical development, including potential treatments for complex, life-threatening diseases.
Research and Development Activities AbbVie makes a significant investment in research and development and has numerous compounds (and complementary devices) in clinical development, including potential treatments for complex, life-threatening diseases.
Human Capital Management Attracting, retaining and providing meaningful growth and development opportunities to AbbVie's employees is critical to the company's success in making a remarkable impact on people’s lives around the world. AbbVie leverages numerous resources to identify and enhance strategic and leadership capability, foster employee engagement and create a culture where diverse talent is productive and engaged.
AbbVie believes that it has good relations with its employees. 2023 Form 10-K | 12 Human Capital Management Attracting, retaining and providing meaningful growth and development opportunities to AbbVie's employees is critical to the company's success in making a remarkable impact on people’s lives around the world.
It is also indicated for the treatment of moderate to severe atopic dermatitis in adults and children 12 years of age and older, and for moderately to severely active ulcerative colitis in adults. Oncology products. AbbVie’s oncology products target some of the most complex and difficult-to-treat cancers. These products are: Imbruvica.
It is also indicated for the treatment of Crohn's disease in adult patients who have an inadequate response or intolerance to one or more TNF blockers and for moderate to severe atopic dermatitis in adults and children 12 years of age and older, and for moderately to severely active ulcerative colitis in adults. 2023 Form 10-K | 2 Oncology products.
AbbVie implements detailed talent attraction strategies, with an emphasis on STEM skill sets, a diverse talent base and other critical skillsets, including drug discovery, clinical development, market access and business development. AbbVie has also invested in integrated inclusive practices across the end-to-end hiring process and introduced Inclusive Recruitment Live Trainings, as a requirement for all people leaders and recruiters.
Attracting and developing high-performing talent is essential to AbbVie’s continued success. AbbVie implements detailed talent attraction strategies, with an emphasis on STEM skill sets, a diverse talent base and other critical skillsets, including drug discovery, clinical development, market access and business development. AbbVie also invests in competitive compensation and benefits programs.
AbbVie invests in its employees through competitive compensation, benefits and employee support programs and offers best-in-class development and leadership opportunities. AbbVie has developed a deep talent base through ongoing investment in functional and leadership training and by sourcing world-class external talent, ensuring a sustainable talent pipeline.
AbbVie has developed a deep talent base through ongoing investment in functional and leadership training and by sourcing world-class external talent, ensuring a sustainable talent pipeline. AbbVie continuously cultivates and enhances its working culture and embraces equality, diversity and inclusion as fundamental to the company's mission. Attracting and Developing Talent.
In addition to regulatory initiatives, AbbVie's business can be affected by ongoing studies of the utilization, safety, efficacy and outcomes of health care products and their components that are regularly conducted by industry participants, government agencies and others. These studies can lead to updates to the data regarding utilization, safety and efficacy of previously marketed products.
These studies can lead to updates to the data regarding utilization, safety and efficacy of previously marketed products.
In addition, certain medical devices and components necessary for the manufacture of AbbVie products are provided by unaffiliated third party suppliers. Despite the disruption to the global supply chain caused by COVID-19, AbbVie has continued to supply patients with no material supply impact, except for the previously-disclosed supply issues impacting Lupron.
In addition, certain medical devices and components necessary for the manufacture of 7 | 2023 Form 10-K AbbVie products are provided by unaffiliated third party suppliers. AbbVie has robust business continuity and supplier monitoring programs.
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Humira is now facing direct biosimilar competition in Europe, the United States and other countries, and AbbVie will continue to face competitive pressure from these biologics and from orally administered products.
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AbbVie’s oncology products target some of the most complex and difficult-to-treat cancers. These products are: Imbruvica. Imbruvica (ibrutinib) is an oral, once-daily therapy that inhibits a protein called Bruton's tyrosine kinase.
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However, AbbVie believes that no single patent, license, trademark (or related group of patents, licenses, or trademarks), except for those related to adalimumab (which is sold under the trademark Humira), are material in relation to the company’s business as a whole. AbbVie has entered into settlement and license agreements with several adalimumab biosimilar manufacturers.
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Epkinly (epcoritimab) is a product used to treat adults with certain types of diffuse large B-cell lymphoma (DLBCL) and high-grade B-cell lymphoma that has recurred or that does not respond to previous treatment after receiving two or more treatments. Epkinly is administered as a subcutaneous injection. Elahere.
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Under the agreements, the licenses in the United States begin in 2023 and the licenses in Europe began in 2018.
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Elahere (mirvetuximab soravtansine-gynx) is an antibody-drug conjugate (ADC) used to treat certain types of cancer. On November 14, 2022, the FDA granted accelerated approval for the treatment of adult patients with FRα positive, platinum-resistant epithelial ovarian, fallopian tube, or primary peritoneal cancer, who have received one to three prior systemic treatment regimens.
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Failure to comply with these domestic and international regulatory requirements could affect AbbVie’s ability to market and sell AbbVie’s products in these countries. 11 | 2022 Form 10-K Environmental Matters AbbVie believes that its operations comply in all material respects with applicable laws and regulations concerning environmental protection.
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Eye care products. AbbVie’s eye care products address unmet needs and new approaches to help preserve and protect patients’ vision. These products are: Ozurdex . Ozurdex (dexamethasone intravitreal implant) is a corticosteroid implant that slowly releases medication over time. Injected directly into the back of the eye, it dissolves naturally and does not need to be removed.
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AbbVie continuously cultivates and enhances its working culture and embraces equality, diversity and inclusion as fundamental to the company's mission. Attracting and Developing Talent. Attracting and developing high-performing talent is essential to AbbVie’s continued success.
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Ozurdex is indicated for the treatment of adult patients with visual impairment due to diabetic macular oedema (DME), adult patients with macular oedema following either Branch Retinal Vein Occlusion (BRVO) or Central Retinal Vein Occlusion (CRVO) and patients with inflammation of the posterior segment of the eye presenting as non-infectious uveitis.
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AbbVie also invests in competitive compensation and benefits programs.
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Preclinical data and clinical trials from all of the development phases provide the data required to prepare and submit an NDA, a Biological License Application (BLA) or other submission for regulatory approval to the FDA or similar government agencies outside the United States.
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In recent years, AbbVie's board of directors has prioritized oversight of AbbVie's response to the U.S. racial justice movement, including overseeing internal programs designed to ensure that AbbVie is attracting, retaining and developing diverse talent.
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The Inflation Reduction Act of 2022 (the IRA) requires: (i) the government to set prices for select high expenditure Medicare Part D drugs (prices effective beginning in 2026) and Part B drugs (prices effective beginning in 2028) that are more than nine years (for small-molecule drugs) or 13 years (for biological products) from their FDA approval, (ii) manufacturers to pay a rebate for Medicare Part B and Part D drugs when prices for those drugs increase faster than inflation beginning in 2022 for Part D and 2023 for Part B, and (iii) a Medicare Part D redesign replacing the current coverage gap provisions and establishing a $2,000 cap for out-of-pocket costs for Medicare beneficiaries beginning in 2025, with manufacturers being responsible for 10% of costs up to the $2,000 cap and 20% after that cap is reached.
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AbbVie's Employee Resource Groups also help the company nurture an inclusive culture by building community and creating connections and opportunities for mentoring, professional development, talent attraction and networking.
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In August 2023, the U.S. Department of Health and Human Services, through the Centers for Medicare & Medicaid Services (the CMS), selected Imbruvica as one of the first 10 medicines subject to government-set prices beginning in 2026.
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In 2021, AbbVie reiterated its commitment to racial equality and social justice by, among other things, expanding its employee matching program to $3-to-$1 for donations to civil rights nonprofits fostering racial equity and by reaffirming its commitment to clinical trial diversity. Additional information about AbbVie's efforts on racial equality and social justice is provided on the company's website at: https://abbvie.com/our-company/equality-inclusion-diversity/our-commitment-to-racial-justice.html.
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The price-setting process will conclude by August 1, 2024, and on September 1, 2024, the CMS will publish prices that will be applicable to the 10 drugs in the Medicare program beginning January 1, 2026.
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It is possible that more of our products, including products that generate substantial revenues, 2023 Form 10-K | 10 could be selected in future years, which could, among other things, accelerate revenue erosion prior to expiration of intellectual property protections. The effect of reducing prices and reimbursement would significantly impact revenues for certain of our products. European Union.
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AbbVie leverages numerous resources to identify and enhance strategic and leadership capability, foster employee engagement and create a culture where talent is productive and engaged. AbbVie invests in its employees through competitive compensation, benefits and employee support programs and offers best-in-class development and leadership opportunities.
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Additional information about AbbVie's Equity, Equality, Diversity and 13 | 2023 Form 10-K Inclusion efforts can be found on the company's website at: https://www.abbvie.com/who-we-are/equity-equality-inclusion-diversity.html.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAbbVie'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." AbbVie's major products could lose patent protection earlier than expected, which could adversely affect AbbVie's revenues and operating earnings.
Biggest changeHumira is facing competition from biosimilar products in the United States following the loss of exclusivity in 2023, which AbbVie anticipates will continue to cause a significant decline in Humira's revenue and could adversely affect AbbVie’s revenues and operating earnings. 2023 Form 10-K | 14 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." AbbVie's major products could lose patent protection earlier than expected, which could adversely affect AbbVie's revenues and operating earnings.
All of these competitors may introduce new products or develop technological advances that compete with AbbVie’s products in therapeutic areas such as immunology, hematologic oncology, aesthetics, neuroscience and eye care. In addition, as AbbVie products lose exclusivity, competition surrounding such products will increase and generic and biosimilar products will increasingly penetrate the markets.
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 and eye care. In addition, as AbbVie products lose exclusivity, competition surrounding such products will increase and generic and biosimilar products will increasingly penetrate the markets.
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; 2022 Form 10-K | 22 • 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, or perceived failure, 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; 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.
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, or perceived failure, 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; 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.
AbbVie is dependent on wholesale distributors for distribution of its products in the United States and, accordingly, its business and results of operations could be adversely affected if they encounter financial or other difficulties. In 2022, three wholesale distributors (McKesson Corporation, Cardinal Health, Inc. and AmerisourceBergen Corporation) accounted for substantially all of AbbVie's pharmaceutical product sales in the United States.
AbbVie is dependent on wholesale distributors for distribution of its products in the United States and, accordingly, its business and results of operations could be adversely affected if they encounter financial or other difficulties. In 2023, three wholesale distributors (McKesson Corporation, Cardinal Health, Inc. and AmerisourceBergen Corporation) accounted for substantially all of AbbVie's pharmaceutical product sales in the United States.
These provisions may also prevent or discourage attempts to remove and replace incumbent directors. 2022 Form 10-K | 24 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.
These provisions may also prevent or discourage attempts to remove and replace incumbent directors. 2023 Form 10-K | 24 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.
Such adverse consequences could include loss of revenue or the loss of critical or sensitive information from AbbVie’s or third-party providers’ databases or IT systems and could also result in legal, financial, reputational or business harm to AbbVie and potentially substantial remediation costs.
Such adverse consequences could include loss of revenue or the loss of critical or sensitive information from AbbVie’s or third-party providers’ databases or information technology systems and could also result in legal, financial, reputational or business harm to AbbVie and potentially substantial remediation costs.
Additionally, changes to U.S. tax laws now require (i) a 15% minimum tax generally applied to U.S. corporations on adjusted financial statement income beginning in 2023 and (ii) a non-deductible 1% excise tax provision on net stock repurchases, to be applied to repurchases beginning in 2023.
Additionally, changes to U.S. tax laws now require (i) a 15% alternative minimum tax generally applied to U.S. corporations on adjusted financial statement income beginning in 2023 and (ii) a non-deductible 1% excise tax provision on net stock repurchases.
These provisions include, among others: • the inability of AbbVie's stockholders to call a special meeting; • the division of AbbVie's board of directors into three classes of directors, with each class serving a staggered three-year term; 23 | 2022 Form 10-K • a provision that stockholders may only remove directors for cause; • the ability of AbbVie's directors, and not stockholders, to fill vacancies on AbbVie's board of directors; and • the requirement that the affirmative vote of stockholders holding at least 80% of AbbVie's voting stock is required to amend certain provisions in AbbVie's amended and restated certificate of incorporation and AbbVie's amended and restated by-laws relating to the number, term and election of AbbVie's directors, the filling of board vacancies, the calling of special meetings of stockholders and director and officer indemnification provisions.
These provisions include, among others: • the inability of AbbVie's stockholders to call a special meeting; • the division of AbbVie's board of directors into three classes of directors, with each class serving a staggered three-year term; • a provision that stockholders may only remove directors for cause; • the ability of AbbVie's directors, and not stockholders, to fill vacancies on AbbVie's board of directors; and • the requirement that the affirmative vote of stockholders holding at least 80% of AbbVie's voting stock is required to amend certain provisions in AbbVie's amended and restated certificate of incorporation and AbbVie's amended and restated by-laws relating to the number, term and election of AbbVie's directors, the filling of board vacancies, the calling of special meetings of stockholders and director and officer indemnification provisions.
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; 19 | 2022 Form 10-K • 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, including as a result of the COVID-19 pandemic; • 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 • 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.
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; • 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 • 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.
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. Public health outbreaks, epidemics or pandemics, such as the coronavirus (COVID-19), have had, and could in the future have, an adverse impact on AbbVie’s operations and financial condition.
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 | 2023 Form 10-K Public health outbreaks, epidemics or pandemics, such as the coronavirus (COVID-19), have had, and could in the future have, an adverse impact on AbbVie’s operations and financial condition.
If the commercialization of AbbVie's principal products is unsuccessful, AbbVie's revenues and financial condition could be adversely affected. AbbVie may acquire other businesses, license rights to technologies or products, form alliances, or dispose of assets, which could cause it to incur significant expenses and could negatively affect profitability.
If the commercialization of AbbVie's principal products is unsuccessful, AbbVie's revenues and financial condition could be adversely affected. 2023 Form 10-K | 20 AbbVie may acquire other businesses, license rights to technologies or products, form alliances, or dispose of assets, which could cause it to incur significant expenses and could negatively affect profitability.
In addition, past financial performance may not be a reliable indicator of future performance and historical trends should not be used to anticipate results or trends in future periods. 13 | 2022 Form 10-K If any of the following risks and uncertainties develops into actual events, these events could have a material adverse effect on AbbVie's business, results of operations, financial condition or cash flows.
In addition, past financial performance may not be a reliable indicator of future performance and historical trends should not be used to anticipate results or trends in future periods. If any of the following risks and uncertainties develops into actual events, these events could have a material adverse effect on AbbVie's business, results of operations, financial condition or cash flows.
Additionally, changes in AbbVie's structure, operations, revenues, costs, or efficiency resulting from major transactions such as acquisitions, divestitures, mergers, alliances, joint ventures, restructurings or other strategic initiatives, may result in 2022 Form 10-K | 20 greater than expected costs, may take longer than expected to complete or encounter other difficulties, including the need for regulatory approval where appropriate.
Additionally, changes in AbbVie's structure, operations, revenues, costs, or efficiency resulting from major transactions such as acquisitions, divestitures, mergers, alliances, joint ventures, restructurings or other strategic initiatives, may result in greater than expected costs, may take longer than expected to complete or encounter other difficulties, including the need for regulatory approval where appropriate.
Rebates related to government programs, such as fee-for-service Medicaid or Medicaid managed care programs, arise from laws and regulations. AbbVie cannot predict with certainty if additional government initiatives to contain health care costs or other factors could lead to new or modified regulatory requirements that include higher or incremental rebates or discounts.
Rebates related to government programs, such as fee-for-service Medicaid or Medicaid managed care programs, arise from laws and regulations. AbbVie cannot predict with certainty if additional government initiatives to contain health care 2023 Form 10-K | 16 costs or other factors could lead to new or modified regulatory requirements that include higher or incremental rebates or discounts.
AbbVie's reputation and business could suffer harm as a result of counterfeit or diverted drugs sold under its brand name which may also result in reduced revenues that could negatively affect our results of operation. Other factors can have a material adverse effect on AbbVie's profitability and financial condition.
AbbVie's reputation and business could suffer harm as a result of counterfeit 2023 Form 10-K | 22 or diverted drugs sold under its brand name which may also result in reduced revenues that could negatively affect our results of operation. Other factors can have a material adverse effect on AbbVie's profitability and financial condition.
If new safety or efficacy issues are reported or if new scientific information becomes available (including results of post-marketing Phase 4 trials), or if governments change standards regarding safety, efficacy or labeling, AbbVie may be required to amend 17 | 2022 Form 10-K the conditions of use for a product.
If new safety or efficacy issues are reported or if new scientific information becomes available (including results of post-marketing Phase 4 trials), or if governments change standards regarding safety, efficacy or labeling, AbbVie may be required to amend the conditions of use for a product.
AbbVie depends on information technology and a failure of, or significant disruption to, those systems could have a material adverse effect on AbbVie's business. AbbVie relies on sophisticated software applications and complex information technology systems to operate its business, which may be vulnerable to malicious intrusion, random attack, loss of data privacy, disruption, degradation or breakdown.
AbbVie depends on information technology and a failure of, or significant disruption to, those systems could have a material adverse effect on AbbVie's business. AbbVie relies on sophisticated software applications and complex information technology systems (including cloud services) to operate its business, which are inherently vulnerable to malicious intrusion, random attack, loss of data privacy, disruption, degradation or breakdown.
AbbVie determines original fair value and amortization periods for developed product rights based on its assessment of various factors impacting estimated 21 | 2022 Form 10-K useful lives and cash flows of the acquired products.
AbbVie determines original fair value and amortization periods for developed product rights based on its assessment of various factors impacting estimated useful lives and cash flows of the acquired products.
AbbVie may pursue acquisitions, technology licensing arrangements, joint ventures and strategic alliances, or dispose of some of its assets, as part of its business strategy. AbbVie may not complete these transactions in a timely manner, on a cost-effective basis, or at all, and may not realize the expected benefits.
AbbVie from time to time pursues acquisitions, technology licensing arrangements, joint ventures and strategic alliances, and/or disposes of some of its assets, as part of its business strategy. AbbVie may not complete these transactions in a timely manner, on a cost-effective basis, or at all, and may not realize the expected benefits.
If problems arise during the production of a batch of product, such batch of product may have to be discarded and AbbVie may experience product shortages or incur added expenses.
If problems arise during the production of a batch of product, such batch of product may have to be 17 | 2023 Form 10-K discarded and AbbVie may experience product shortages or incur added expenses.
In the future, a stockholder's percentage ownership in AbbVie may be diluted because of equity issuances for capital market transactions, equity awards that AbbVie will be granting to AbbVie's directors, officers and employees, acquisitions or other purposes.
In the future, a stockholder's percentage ownership in AbbVie may be diluted because of equity issuances for capital market transactions, equity awards that AbbVie will be granting to AbbVie's directors, officers and employees, acquisitions or other purposes. AbbVie anticipates its compensation committee will grant additional stock options or other stock-based awards to its employees.
AbbVie continues to evaluate the impact that the Inflation Reduction Act 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 may result in additional pricing pressures.
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 may result in additional pricing pressures.
As of December 31, 2022, the carrying value of AbbVie’s developed product rights and other intangible assets was $67.4 billion and the carrying value of AbbVie’s goodwill was $32.2 billion. AbbVie’s developed product rights are stated at cost, less accumulated amortization.
As of December 31, 2023, the carrying value of AbbVie’s developed product rights and other intangible assets was $55.6 billion and the carrying value of AbbVie’s goodwill was $32.3 billion. AbbVie’s developed product rights are stated at cost, less accumulated amortization.
AbbVie must incur expense and spend time and effort to ensure compliance with these complex regulations. 2022 Form 10-K | 18 Possible regulatory actions could result in substantial modifications to AbbVie's business practices and operations; refunds, recalls or seizures of AbbVie's products; a total or partial shutdown of production in one or more of AbbVie's or its suppliers' facilities while AbbVie or its supplier remedies the alleged violation; the inability to obtain future approvals; and withdrawals or suspensions of current products from the market.
Possible regulatory actions could result in substantial modifications to AbbVie's business practices and operations; refunds, recalls or seizures of AbbVie's products; a total or partial shutdown of production in one or more of AbbVie's or its suppliers' facilities while AbbVie or its supplier remedies the alleged violation; the inability to obtain future approvals; and withdrawals or suspensions of current products from the market.
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.
From time to time, AbbVie will issue additional options or other stock-based awards to its employees under AbbVie's employee benefits plans. 23 | 2023 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.
Products that appear promising in development may fail to reach the market for numerous reasons, including 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.
Products that appear promising in development may fail to reach the market for numerous reasons, including 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. 15 | 2023 Form 10-K Decisions about research studies made early in the development process of a pharmaceutical product candidate can affect the marketing strategy once such candidate receives approval.
Failure to successfully discover, develop, manufacture and sell biologics—including Humira and Skyrizi —could have a negative impact on AbbVie's business and results of operations. New products and technological advances by AbbVie's competitors may negatively affect AbbVie's results of operations. AbbVie competes with other research-based pharmaceutical and biotechnology companies that research, develop, manufacture, market and sell proprietary pharmaceutical products and biologics.
Failure to successfully discover, develop, manufacture and sell biologics—including Humira, Skyrizi and Botox —could have a negative impact on AbbVie's business and results of operations. New products and technological advances by AbbVie's competitors may negatively affect AbbVie's results of operations.
Accordingly, AbbVie commits substantial effort, funds and other resources to research and development and must make ongoing substantial expenditures without any assurance that its efforts will be commercially successful.
Failure to do so would have a material adverse effect on AbbVie's revenue and profitability. Accordingly, AbbVie commits substantial effort, funds and other resources to research and development and must make ongoing substantial expenditures without any assurance that its efforts will be commercially successful.
Decisions about research studies made early in the development process of a pharmaceutical product candidate can affect the marketing strategy once such candidate receives approval. More detailed studies may demonstrate additional benefits that can help in the marketing, but they also consume time and resources and may delay submitting the pharmaceutical product candidate for regulatory approval.
More detailed studies may demonstrate additional benefits that can help in the marketing, but they also consume time and resources and may delay submitting the pharmaceutical product candidate for regulatory approval.
In addition, while AbbVie maintains cyber insurance, it cannot guarantee that such insurance will be sufficient to cover the financial, legal, business or reputational losses that may result from an interruption or breach of AbbVie systems.
In addition, AbbVie’s cyber insurance may not be sufficient to 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.
Product liability claims and lawsuits and safety alerts or product recalls, regardless of their ultimate outcome, may have a material adverse effect on AbbVie's business, results of operations and reputation and on its ability to attract and retain customers.
Product liability claims and lawsuits and safety alerts or product recalls, regardless of their ultimate outcome, may have a material adverse effect on AbbVie's business, results of operations and reputation and on its ability to attract and retain customers. 2023 Form 10-K | 18 Consequences may also include additional costs, a decrease in market share for the product in question, lower revenue and exposure to other claims.
Consequences may also include additional costs, a decrease in market share for the product in question, lower revenue and exposure to other claims. 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.
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.
AbbVie's business is subject to risks associated with doing business internationally, including in emerging markets. Net revenues outside of the United States made up approximately 21% of AbbVie's total net revenues in 2022.
The international nature of AbbVie's business subjects it to additional business risks that may cause its revenue and profitability to decline. AbbVie's business is subject to risks associated with doing business internationally, including in emerging markets. Net revenues outside of the United States made up approximately 23% of AbbVie's total net revenues in 2023.
For example, Humira competes with anti- 2022 Form 10-K | 16 TNF products and other competitive products intended to treat a number of disease states and Mavyret/Maviret competes with other available hepatitis C treatment options.
AbbVie competes with other research-based pharmaceutical and biotechnology companies that research, develop, manufacture, market and sell proprietary pharmaceutical products and biologics. For example, Humira competes with anti-TNF products and other competitive products intended to treat a number of disease states and Mavyret/Maviret competes with other available hepatitis C treatment options.
Third parties may claim that an AbbVie product infringes upon their intellectual property. In addition, in its pursuit of valid business opportunities, AbbVie may be required to challenge intellectual property rights held by others that it believes were improperly granted.
In addition, in its pursuit of valid business opportunities, AbbVie may be required to challenge intellectual property rights held by others that it believes were improperly granted. Resolving an intellectual property infringement or other claim can be costly and time consuming and may require AbbVie to enter into license agreements.
Such awards will have a dilutive effect on AbbVie's earnings per share, which could adversely affect the market price of AbbVie's 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.
Such awards will have a dilutive effect on AbbVie's earnings per share, which could adversely affect the market price of AbbVie's common stock.
In the United States, practices of managed care groups, and institutional and governmental purchasers, as well as federal laws and regulations related to Medicare and Medicaid, contribute to pricing pressures.
In the United States, practices of managed care groups, and institutional and governmental purchasers, as well as federal laws and regulations related to Medicare and Medicaid, contribute to pricing pressures. In particular, the IRA will have the effect of reducing prices and reimbursements for certain of our products, which could significantly impact AbbVie’s results of operations.
Although AbbVie has invested in the protection of its data and information technology and monitors its systems on an ongoing basis, there can be no assurance that such efforts will prevent material breakdowns or breaches in AbbVie's information technology systems that could have a material adverse effect on AbbVie's business.
AbbVie’s investments in the protection of its data and information technology and its efforts to monitor its systems on an ongoing basis may be insufficient to prevent compromises in AbbVie's information technology systems that could have a material adverse effect on AbbVie's business.
Such launches must generate revenue sufficient both to cover its substantial research and development costs and to replace revenues of profitable products that are lost to or displaced by competing products or therapies. Failure to do so would have a material adverse effect on AbbVie's revenue and profitability.
To remain competitive, AbbVie must continue to launch new products and new indications and/or brand extensions for existing products. Such launches must generate revenue sufficient both to cover its substantial research and development costs and to replace revenues of profitable products that are lost to or displaced by competing products or therapies.
Data privacy or security breaches by employees or others may in the future result in the failure of critical business operations. Such breaches may cause sensitive data, including intellectual property, trade secrets or personal information belonging to AbbVie, its patients, customers or business partners, to be exposed to unauthorized persons or to the public.
Such breaches may cause sensitive data, including intellectual property, trade secrets or personal information belonging to AbbVie, its patients, customers or business partners, to be exposed to unauthorized persons or to the public. 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.
To the extent AbbVie's intellectual property is 2022 Form 10-K | 14 successfully challenged, circumvented or weakened, or to the extent such intellectual property does not allow AbbVie to compete effectively, AbbVie's business will suffer.
To the extent AbbVie's intellectual property is successfully challenged, circumvented or weakened, or to the extent such intellectual property does not allow AbbVie to compete effectively, AbbVie's business will suffer. 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.
A successful claim of patent or other intellectual property infringement could subject AbbVie to significant damages or an injunction preventing the manufacture, sale, or use of the affected AbbVie product or products. Any of these events could have a material adverse effect on AbbVie's profitability and financial condition.
AbbVie cannot guarantee that it would be able to obtain license agreements on commercially reasonable terms. A successful claim of patent or other intellectual property infringement could subject AbbVie to significant damages or an injunction preventing the manufacture, sale, or use of the affected AbbVie product or products.
However, AbbVie cannot guarantee that the conditions to such settlement will be satisfied, or that additional suits will not be filed. See Note 15, "Legal Proceedings and Contingencies" to the Consolidated Financial Statements included under Item 8, "Financial Statements and Supplementary Data." AbbVie cannot predict with certainty the outcome of these proceedings.
See Note 15, "Legal Proceedings and Contingencies" to the Consolidated Financial Statements included under Item 8, "Financial Statements and Supplementary Data." AbbVie cannot predict with certainty the outcome of these proceedings. AbbVie is subject to governmental regulations, and it can be costly to comply with these regulations and to develop compliant products and processes.
In addition, AbbVie cannot guarantee that it will remain compliant with applicable regulatory requirements once approval has been obtained for a product. These requirements include, among other things, regulations regarding manufacturing practices, product labeling and advertising and post-marketing reporting, including adverse event reports and field alerts due to manufacturing quality concerns.
These requirements include, among other things, regulations regarding manufacturing practices, product labeling and advertising and post-marketing reporting, including adverse event reports and field alerts due to manufacturing quality concerns. AbbVie must incur expense and spend time and effort to ensure compliance with these complex regulations.
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. 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.
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. Third parties may claim that an AbbVie product infringes upon their intellectual property.
AbbVie's research and development efforts may not succeed in developing and marketing commercially successful products and technologies, which may cause its revenues and profitability to decline. To remain competitive, AbbVie must continue to launch new products and new indications and/or brand extensions for existing products.
Any of these events could have a material adverse effect on AbbVie's profitability and financial condition. AbbVie's research and development efforts may not succeed in developing and marketing commercially successful products and technologies, which may cause its revenues and profitability to decline.
AbbVie cannot predict with certainty when additional changes in the healthcare industry in general, or the pharmaceutical industry in particular, will occur, or what the impact of such changes may be. For example, the Inflation Reduction Act is to be implemented through forthcoming agency action, the outcome of which cannot be reasonably determined with certainty.
AbbVie cannot predict with certainty when additional changes in the healthcare industry in general, or the pharmaceutical industry in particular, will occur, or what the impact of such changes may be. In addition, AbbVie cannot guarantee that it will remain compliant with applicable regulatory requirements once approval has been obtained for a product.
Removed
For example, Humira accounted for approximately 37% of AbbVie's total net revenues in 2022. Humira is facing competition from biosimilar products in the United States beginning in 2023 due to the loss of exclusivity, which AbbVie anticipates will cause a significant decline in Humira's revenue and could adversely affect AbbVie’s revenues and operating earnings.
Added
For example, Humira accounted for approximately 27% of AbbVie's total net revenues in 2023.
Removed
Resolving an intellectual property infringement or other claim can be costly and time consuming and may require AbbVie to enter into license agreements. AbbVie cannot guarantee that it would be able to obtain license agreements on commercially reasonable terms.
Added
Under the IRA, the U.S Department of Health and Human Services can effectively set prices for certain single-source drugs and biologics reimbursed under Medicare Part B and Part D.
Removed
In particular, the Inflation Reduction Act of 15 | 2022 Form 10-K 2022 requires (i) the government to negotiate prices for select high expenditure Medicare Part D drugs (prices effective beginning in 2026) and Part B drugs (prices effective beginning in 2028), (ii) manufacturers to pay a rebate for Medicare Part B and Part D drugs when prices for those drugs increase faster than inflation beginning in 2022 for Part D and 2023 for Part B, and (iii) a Medicare Part D redesign replacing the current coverage gap provisions and establishing a $2,000 cap for out-of-pocket costs for Medicare beneficiaries beginning in 2025, with manufacturers being responsible for 10% of costs up to the $2,000 cap and 20% after that cap is reached.
Added
Generally, these government prices can apply as soon as nine years (for small-molecule drugs) or 13 years (for biological products) from their FDA approval and will be capped at a statutory ceiling price that is likely to represent a significant discount from average prices to wholesalers and direct purchasers. In August 2023, the U.S.
Removed
The Inflation Reduction Act is to be implemented through forthcoming agency action, the outcome of which cannot be reasonably determined with certainty.
Added
Department of Health and Human Services, through the CMS, selected Imbruvica as one of the first 10 medicines subject to government-set prices beginning in 2026. The price-setting process will conclude by August 1, 2024, and on September 1, 2024, the CMS will publish prices that will be applicable to the 10 drugs in the Medicare program beginning January 1, 2026.
Removed
For example, Allergan was named as a defendant in approximately 3,000 matters relating to the promotion and sale of prescription opioid pain relievers. Allergan recently agreed to a nationwide settlement to resolve such matters, which will provide for up to $2.02 billion to help support state and local efforts to address opioid-related issues in the United States, among other things.
Added
It is possible that more of our products, including products that generate substantial revenues, could be selected in future years, which could, among other things, accelerate revenue erosion prior to expiration of intellectual property protections.
Removed
AbbVie is subject to governmental regulations, and it can be costly to comply with these regulations and to develop compliant products and processes.
Added
In addition, beginning in January 2025, under the IRA, the 70% coverage gap discount program will be replaced by a 10% manufacturer discount for all Medicare Part D beneficiaries that have met their deductible and incurred out of pocket drug costs below a $2,000 threshold and a 20% discount for beneficiaries that have incurred out of pocket drug costs above the $2,000 threshold under the new Part D benefit redesign.
Removed
While the impact of COVID-19 on AbbVie’s operations, including, among others, its manufacturing and supply chain, sales and marketing, commercial and clinical trial operations, to date was not material, AbbVie experienced lower new patient starts in certain products and markets.
Added
Manufacturers that fail to comply with the IRA may be subject to various penalties, including civil monetary penalties, which could be significant. The IRA has and will continue to meaningfully impact AbbVie’s business strategies and those of others in the pharmaceutical industry.
Removed
The impact of COVID-19 and other public health outbreaks on AbbVie over the long-term is uncertain and cannot be predicted with confidence.
Added
The full impact of the IRA on AbbVie’s business and the pharmaceutical industry, including the implications to us of our or a competitor's product being selected for price setting, remains uncertain. AbbVie continues to evaluate the impact that the IRA may have on the company.
Removed
The extent of the adverse impact of COVID-19 or any other public health outbreak on AbbVie’s operations will depend on the extent and severity of the continued spread of the disease globally, the timing and nature of actions taken to respond to it and the resulting economic consequences.
Added
Certain of these applications and systems are managed, hosted, provided or used by third parties. Data privacy or security breaches of our internal systems or those of our information technology vendors may in the future result in the failure of critical business operations.
Removed
Ultimately, efforts to mitigate the impact of COVID-19 or any other public health outbreak may not completely prevent AbbVie's business from being adversely affected and future impacts remain uncertain. The international nature of AbbVie's business subjects it to additional business risks that may cause its revenue and profitability to decline.
Added
Cybersecurity attacks and incidents are increasing in their frequency, sophistication and intensity and, due to the nature of some of these attacks, there 21 | 2023 Form 10-K is a risk that they may remain undetected for a period of time.
Removed
In particular, in February 2022, armed conflict escalated between Russia and Ukraine. In response thereto, the United States and other North Atlantic Treaty Organizations member states, as well as certain non-member states, announced targeted economic sanctions, embargoes and export controls on Russia and Belarus.
Removed
Although AbbVie is continuing to supply essential pharmaceutical products in Russia for humanitarian reasons while working to maintain compliance with evolving international sanctions, it has suspended operations for all aesthetics products in Russia. AbbVie's operations in Russia, Belarus and Ukraine are not significant.
Removed
However, it is not possible to predict with certainty the continued consequences of this conflict, which, in addition to sanctions, have included regional instability, geopolitical shifts and adverse effects on macroeconomic conditions, currency exchange rates and financial markets. Any such consequences could have an adverse impact on AbbVie's business and results of operations .
Removed
To date, neither AbbVie’s business nor operations have been materially impacted by such incidents.
Removed
AbbVie's employees have options to purchase shares of its common stock as a result of conversion of their Abbott stock options (in whole or in part) to AbbVie stock options. AbbVie anticipates its compensation committee will grant additional stock options or other stock-based awards to its employees.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−1 removed1 unchanged
Biggest changeAbbVie believes its facilities are suitable and provide adequate production capacity for its current and projected operations. There are no material encumbrances on AbbVie's owned properties. In the United States, including Puerto Rico, AbbVie has two central distribution centers.
Biggest changeAbbVie believes its facilities are suitable and provide adequate production capacity for its current and projected operations. There are no material encumbrances on AbbVie's owned properties. AbbVie distributes products through a network of central and regional distribution centers, with its central distribution centers located in the U.S. and Europe.
ITEM 2. PROPERTIES AbbVie's corporate offices are located at 1 North Waukegan Road, North Chicago, Illinois 60064-6400. As of December 31, 2022, AbbVie owns or leases approximately 637 facilities worldwide, containing an aggregate of approximately 19 million square feet of floor space dedicated to production, distribution and administration.
ITEM 2. PROPERTIES AbbVie's corporate offices are located at 1 North Waukegan Road, North Chicago, Illinois 60064-6400. As of December 31, 2023, AbbVie owns or leases approximately 620 facilities worldwide, containing an aggregate of approximately 19.5 million square feet of floor space dedicated to production, distribution and administration.
AbbVie also has research and development facilities in the United States located at: Abbott Park, Illinois; Branchburg, New Jersey; Cambridge, Massachusetts; Irvine, California; Madison, New Jersey; North Chicago, Illinois; Pleasanton, California; Santa Cruz, California; South San Francisco, California; and Worcester, Massachusetts.
AbbVie also has research and development facilities in the United States located at: Abbott Park, Illinois; Branchburg, New Jersey; Cambridge, Massachusetts; Irvine, California; Madison, New Jersey; North Chicago, Illinois; Pleasanton, California; South San Francisco, California; and Worcester, Massachusetts. Outside the United States, AbbVie's principal research and development facilities are located in Ludwigshafen, Germany.
Removed
Outside the United States, AbbVie's principal research and development facilities are located in Ludwigshafen, Germany. 25 | 2022 Form 10-K

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

15 edited+11 added−6 removed3 unchanged
Biggest changeSaleki-Gerhardt joined Abbott in 1993 and was first appointed as an AbbVie corporate officer in December 2012. She serves on the board of Entegris Inc. Mr. Siatis is AbbVie’s Executive Vice President, General Counsel and Secretary. Mr. Siatis previously served as Senior Vice President, Deputy General Counsel from September 2021 until October 2022. From 2013 until 2021, Mr.
Biggest changeSaleki-Gerhardt served as Abbott’s Vice President, Pharmaceuticals Manufacturing and Supply from 2011 to 2012, and as Divisional Vice President, Quality Assurance, Global Pharmaceutical Operations from 2008 to 2011. Dr. Saleki-Gerhardt joined Abbott in 1993 and was first appointed as an AbbVie corporate officer in December 2012. She serves on the board of Entegris Inc. Mr.
He served as AbbVie’s Vice President, Treasurer from 2015 to 2016, as Vice President, Controller, Commercial Operations from 2013 to 2015 and Vice President, Financial Planning and Analysis from 2012 to 2013. At Abbott, Mr. Michael served as Division Controller, Nutrition Supply Chain from 2010 to 2012. Mr.
He served as AbbVie’s Vice President, Treasurer from 2015 to 2016, as Vice President, Controller, Commercial Operations from 2013 to 2015 and as Vice President, Financial Planning and Analysis from 2012 to 2013. At Abbott, Mr. Michael served as Division Controller, Nutrition Supply Chain from 2010 to 2012. Mr.
Hudson served at the Ontario Institute for Cancer Research as President and Scientific Director. He also previously served as Founder and Director of the McGill University and Genome Quebec Innovation Centre and Assistant Director of the Whitehead/MIT Center for Genome Research. Dr. Hudson was first appointed as an AbbVie corporate officer in July 2019. Ms.
Hudson served at the Ontario Institute for Cancer Research as President and Scientific Director. He also previously served as Founder and Director of the McGill University and Genome Quebec Innovation Centre and Assistant Director of the Whitehead/MIT Center for Genome Research. Dr. Hudson was first appointed as an AbbVie corporate officer in July 2019. Dr.
He previously served as Senior Vice President, Chief Financial Officer from June 2022 to November 2022, as Vice President, Tax and Treasury from 2019 to June 2022, and as Vice President, Tax from 2013 to 2019. Mr. Reents joined Abbott in 2008 and was first appointed as an AbbVie corporate officer in June 2022. Mr.
He previously served as Senior Vice President, Chief Financial Officer from June 2022 to November 2022, as Vice President, Tax and Treasury from 2019 to June 2022, and as Vice President, Tax from 2013 to 2019. Mr. Reents joined Abbott in 2008 and was first appointed as an AbbVie corporate officer in June 2022. Dr.
Michael previously served as Vice Chairman, Finance and Commercial Operations and Chief Financial Officer from June 2021 to June 2022, as Executive Vice President, Chief Financial Officer from 2019 to 2021, as Senior Vice President, Chief Financial Officer from 2018 to 2019 and as Vice President, Controller from 2017 to 2018.
Michael previously served as Vice Chairman and President from June 2022 to July 2023, as Vice Chairman, Finance and Commercial Operations and Chief Financial Officer from June 2021 to June 2022, as Executive Vice President, Chief Financial Officer from 2019 to 2021, as Senior Vice President, Chief Financial Officer from 2018 to 2019 and as Vice President, Controller from 2017 to 2018.
Mr. Stewart is AbbVie’s Executive Vice President, Chief Commercial Officer. He previously served as Senior Vice President, U.S. Commercial Operations from 2018 to 2020 and as AbbVie’s President, Commercial Operations from 2013 to 27 | 2022 Form 10-K 2018. Prior to AbbVie’s separation from Abbott, he served as Vice President, Abbott Proprietary Pharmaceutical Division, United States. Mr.
Mr. Stewart is AbbVie’s Executive Vice President, Chief Commercial Officer. He previously served as Senior Vice President, U.S. Commercial Operations from 2018 to 2020 and as AbbVie’s President, Commercial Operations from 2013 to 2018. Prior to AbbVie’s separation from Abbott, he served as Vice President, Abbott Proprietary Pharmaceutical Division, United States. Mr.
There are no family relationships between any of the executive officers listed above. 2022 Form 10-K | 28 PART II
There are no family relationships between any of the executive officers listed above. 29 | 2023 Form 10-K PART II
Durkin joined Abbott in 1986 and was first appointed as an AbbVie corporate officer in October 2018. The executive officers of AbbVie are elected annually by the board of directors. All other officers are elected by the board or appointed by the Chairman of the Board.
Thakkar joined Abbott in 2003 and was first appointed as a corporate officer in December 2023. The executive officers of AbbVie are elected annually by the board of directors. All other officers are elected by the board or appointed by the Chairman of the Board.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 2022 Form 10-K | 26 INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following table lists AbbVie's executive officers: Name Age Position Richard A. Gonzalez 69 Chairman of the Board and Chief Executive Officer Robert A. Michael 52 Vice Chairman and President Scott T. Reents 55 Executive Vice President, Chief Financial Officer Timothy J.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 27 | 2023 Form 10-K INFORMATION ABOUT OUR EXECUTIVE OFFICERS Name Age Position Richard A. Gonzalez 70 Chairman of the Board and Chief Executive Officer Robert A. Michael 53 President and Chief Operating Officer Scott T. Reents 56 Executive Vice President, Chief Financial Officer Nicholas J.
Stewart joined Abbott in 1992 and was first appointed as an AbbVie corporate officer in December 2018. Dr. Hudson is AbbVie's Senior Vice President, Research & Development and Chief Scientific Officer. He previously served as Vice President, Head of Oncology Discovery and Early Development from 2016 to 2019. Prior to joining AbbVie, Dr.
Hudson is AbbVie's Senior Vice President, Chief Scientific Officer, Global Research. He previously served as Senior Vice President, Research & Development and Chief Scientific Officer from 2019 to 2023, and as Vice President, Head of Oncology Discovery and Early Development from 2016 to 2019. Prior to joining AbbVie, Dr.
Richmond served as Abbott’s Divisional Vice President of Compensation & Benefits from 2008 to 2012, as Group Vice President of Talent and Rewards from 2007 to 2008 and as Divisional Vice President of Talent Acquisition from 2006 to 2007. Mr. Richmond joined Abbott in 2006 and was first appointed as an AbbVie corporate officer in December 2012. Dr.
Richmond served as Abbott’s Divisional Vice President of Compensation & Benefits from 2008 to 2012, as Group Vice President of Talent and Rewards from 2007 to 2008 and as Divisional Vice President of Talent Acquisition from 2006 to 2007. Mr.
Richmond 56 Executive Vice President, Chief Human Resources Officer Azita Saleki-Gerhardt, Ph.D. 59 Executive Vice President, Operations Perry C. Siatis 48 Executive Vice President, General Counsel and Secretary Jeffrey R. Stewart 54 Executive Vice President, Chief Commercial Officer Thomas J. Hudson, M.D. 61 Senior Vice President, Research & Development and Chief Scientific Officer Elaine K.
Donoghoe, M.D. 43 Executive Vice President, Chief Business and Strategy Officer Timothy J. Richmond 57 Executive Vice President, Chief Human Resources Officer Azita Saleki-Gerhardt, Ph.D. 60 Executive Vice President, Chief Operations Officer Perry C. Siatis 49 Executive Vice President, General Counsel and Secretary Jeffrey R. Stewart 55 Executive Vice President, Chief Commercial Officer Kevin K.
Michael joined Abbott in 1993 and was first appointed as an AbbVie corporate officer in March 2017. Mr. Reents is AbbVie’s Executive Vice President, Chief Financial Officer.
Stewart joined Abbott in 1992 and was first appointed as an AbbVie corporate officer in December 2018. Mr. Buckbee is AbbVie’s Senior Vice President, Controller. Mr.
Richmond is AbbVie’s Executive Vice President, Chief Human Resources Officer. He served as Senior Vice President, Human Resources from 2013 to 2018. Mr.
Prior to joining AbbVie in 2019, he served as a Partner at McKinsey & Company where he was a leader of the firm's Pharma and Biotechnology practice for over a decade. Mr. Richmond is AbbVie’s Executive Vice President, Chief Human Resources Officer. He served as Senior Vice President, Human Resources from 2013 to 2018. Mr.
Saleki-Gerhardt is AbbVie’s Executive Vice President, Operations. She served as Senior Vice President, Operations from 2013 to 2018. Dr. Saleki-Gerhardt served as Abbott’s Vice President, Pharmaceuticals Manufacturing and Supply from 2011 to 2012, and as Divisional Vice President, Quality Assurance, Global Pharmaceutical Operations from 2008 to 2011. Dr.
Richmond joined Abbott in 2006 and was first appointed as an AbbVie corporate officer in December 2012. 2023 Form 10-K | 28 Dr. Saleki-Gerhardt is AbbVie’s Executive Vice President, Chief Operations Officer. She served as Executive Vice President, Operations from 2018 to July 2023, and as Senior Vice President, Operations from 2013 to 2018. Dr.
Removed
Sorg 56 Senior Vice President, AbbVie and President, U.S. Commercial Operations Carrie Strom 45 Senior Vice President, AbbVie and President, Global Allergan Aesthetics Brian L. Durkin 62 Vice President, Controller _______________________________________________________________________________ Mr. Gonzalez is the Chairman and Chief Executive Officer of AbbVie.
Added
Buckbee 58 Senior Vice President, Controller Thomas J. Hudson, M.D. 62 Senior Vice President, Chief Scientific Officer, Global Research Roopal Thakkar, M.D. 52 Senior Vice President, Chief Medical Officer, Global Therapeutics _______________________________________________________________________________ Mr. Gonzalez is the Chairman and Chief Executive Officer of AbbVie, a position he has held since 2013.
Removed
Gonzalez joined Abbott in 1977 and held various management positions. He was first appointed as an AbbVie corporate officer in December 2012. Mr. Michael is AbbVie’s Vice Chairman and President. Mr.
Added
Gonzalez joined Abbott in 1977 and held various management positions before briefly retiring in 2007, including: Abbott’s President and Chief Operating Officer; President, Chief Operating Officer of Abbott’s Medical Products Group; Senior Vice President and President of Abbott’s former Hospital Products Division; Vice President and President of Abbott’s Health Systems Division; and Divisional Vice President and General Manager for Abbott’s Diagnostics Operations in the United States and Canada.
Removed
Sorg is AbbVie’s Senior Vice President, AbbVie, and President U.S. Commercial Operations. She previously served as AbbVie’s President, U.S. Immunology and Patient Services from 2019 to 2020 and as Vice President, Immunology and Oncology from 2016 to 2018. She served as Vice President, Immunology prior to AbbVie’s separation from Abbott and until 2016 at AbbVie. Ms.
Added
On February 14, 2024, the Board of Directors of AbbVie unanimously selected Mr. Michael to succeed Mr. Gonzalez as the Company's Chief Executive Officer. Mr. Gonzalez will retire from the role of Chief Executive Officer and become Executive Chairman of the Board of Directors, effective July 1, 2024. Mr. Michael is AbbVie’s President and Chief Operating Officer. Mr.
Removed
Sorg joined Abbott in 2012 and was first appointed as an AbbVie corporate officer in November 2020. Prior to joining Abbott, Ms. Sorg served in management roles at Eli Lilly and Company for 23 years. Ms. Strom is AbbVie’s Senior Vice President, AbbVie, and President, Global Allergan Aesthetics, responsible for the worldwide operations of the aesthetics franchise.
Added
Michael joined Abbott in 1993 and was first appointed as an AbbVie corporate officer in March 2017. On February 14, 2024, the Board of Directors of AbbVie unanimously selected Mr. Michael to succeed Mr. Gonzalez as the Company's Chief Executive Officer. Mr.
Removed
She was appointed to the position upon AbbVie’s acquisition of Allergan in 2020 and was first appointed as an AbbVie corporate officer in May 2020. At Allergan, Ms. Strom previously served as Senior Vice President, U.S. Medical Aesthetics from 2018 to 2020. She joined Allergan in 2011. Mr. Durkin is AbbVie’s Vice President, Controller. Mr.
Added
Gonzalez will retire from the role of Chief Executive Officer and become Executive Chairman of the Board of Directors, effective July 1, 2024. The Board also appointed Mr. Michael as a member of the Board of Directors as a Class II director, effective July 1, 2024. Mr. Reents is AbbVie’s Executive Vice President, Chief Financial Officer.
Removed
Durkin previously served as Vice President, Internal Audit from 2016 to 2018. Prior to joining AbbVie, he served as Vice President of Finance and Division Controller for Abbott’s Vision Care business from 2009 to 2016 and Controller Pharmaceutical Research and Development from 2005 to 2009. Mr.
Added
Donoghoe is AbbVie’s Executive Vice President, Chief Business and Strategy Officer.
Added
He has previously served as AbbVie’s Senior Vice President, Chief Operating Officer, R&D from 2022 to 2023, as Senior Vice President, Portfolio Innovation from 2021 to 2022, as Senior Vice President, Global Strategy and Operations, Allergan Aesthetics, from 2020 to 2021, and as Senior Vice President, Enterprise Innovation from 2019 to 2020.
Added
Siatis is AbbVie’s Executive Vice President, General Counsel and Secretary. Mr. Siatis previously served as Senior Vice President, Deputy General Counsel from September 2021 until October 2022. From 2013 until 2021, Mr.
Added
Buckbee previously served as AbbVie’s Vice President, Controller, Global Commercial Operations from January 2016 until March 2023, and as Vice President, Controller, US Commercial Operations from AbbVie’s separation from Abbott in 2013 until December 2015. Mr. Buckbee joined Abbott in 1991 and held several positions in the finance organization. Dr.
Added
Thakkar serves as AbbVie's Senior Vice President, Chief Medical Officer, Global Therapeutics.
Added
He previously served as Senior Vice President of Development and Regulatory Affairs and Chief Medical Officer at AbbVie from late 2022 until early December 2023, as Vice President, Global Regulatory Affairs and R&D Quality Assurance from 2019 to 2022, and as Vice President, Global Regulatory Affairs from 2015 to 2019. Dr.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+0 added−0 removed3 unchanged
Biggest changeIssuer Purchases of Equity Securities Period Total Number of Shares (or Units) Purchased Average Price Paid per Share (or Unit) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs October 1, 2022 - October 31, 2022 926 (1) $ 141.34 (1) — $ 1,393,714,917 November 1, 2022 - November 30, 2022 940 (1) $ 146.61 (1) — $ 1,393,714,917 December 1, 2022 - December 31, 2022 26,019 (1) $ 161.87 (1) — $ 1,393,714,917 Total 27,885 (1) $ 160.67 (1) — $ 1,393,714,917 1.
Biggest changeIssuer Purchases of Equity Securities Period Total Number of Shares (or Units) Purchased Average Price Paid per Share (or Unit) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs October 1, 2023 - October 31, 2023 952 (1) $ 147.82 (1) — $ 4,808,991,028 November 1, 2023 - November 30, 2023 1,175 (1) $ 141.94 (1) — $ 4,808,991,028 December 1, 2023 - December 31, 2023 26,320 (1) $ 153.02 (1) — $ 4,808,991,028 Total 28,447 (1) $ 152.39 (1) — $ 4,808,991,028 1.
This graph assumes $100 was invested in AbbVie common stock and each index on December 31, 2017 and also assumes the reinvestment of dividends. The stock price performance on the following graph is not necessarily indicative of future stock price performance.
This graph assumes $100 was invested in AbbVie common stock and each index on December 31, 2018 and also assumes the reinvestment of dividends. The stock price performance on the following graph is not necessarily indicative of future stock price performance.
These shares do not include the shares surrendered to AbbVie to satisfy minimum tax withholding obligations in connection with the vesting or exercise of stock-based awards. 2022 Form 10-K | 30
These shares do not include the shares surrendered to AbbVie to satisfy minimum tax withholding obligations in connection with the vesting or exercise of stock-based awards. 31 | 2023 Form 10-K
This performance graph is furnished and shall not be deemed "filed" with the SEC or subject to Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any of AbbVie's filings under the Securities Act of 1933, as amended. 29 | 2022 Form 10-K Dividends On October 28, 2022, AbbVie's board of directors declared an increase in the quarterly cash dividend from $1.41 per share to $1.48 per share, payable on February 15, 2023, to stockholders of record as of January 13, 2023.
This performance graph is furnished and shall not be deemed "filed" with the SEC or subject to Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any of AbbVie's filings under the Securities Act of 1933, as amended. 2023 Form 10-K | 30 Dividends On October 26, 2023, AbbVie's board of directors declared an increase in the quarterly cash dividend from $1.48 per share to $1.55 per share, payable on February 15, 2024, to stockholders of record as of January 16, 2024.
In addition to AbbVie shares repurchased on the open market under a publicly announced program, if any, these shares also included the shares purchased on the open market for the benefit of participants in the AbbVie Employee Stock Purchase Plan – 926 in October; 940 in November; and 26,019 in December.
In addition to AbbVie shares repurchased on the open market under a publicly announced program, if any, these shares also included the shares purchased on the open market for the benefit of participants in the AbbVie Employee Stock Purchase Plan – 952 in October; 1,175 in November; and 26,320 in December.
Stockholders There were 44,487 stockholders of record of AbbVie common stock as of January 31, 2023. Performance Graph The following graph compares the cumulative total returns of AbbVie, the S&P 500 Index and the NYSE Arca Pharmaceuticals Index for the period from December 31, 2017 through December 31, 2022.
Stockholders There were 42,369 stockholders of record of AbbVie common stock as of January 31, 2024. Performance Graph The following graph compares the cumulative total returns of AbbVie, the S&P 500 Index and the NYSE Arca Pharmaceuticals Index for the period from December 31, 2018 through December 31, 2023.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

74 edited+48 added−31 removed45 unchanged
Biggest changePercent change At actual currency rates At constant currency rates years ended (dollars in millions) 2022 2021 2020 2022 2021 2022 2021 United States $ 45,713 $ 43,510 $ 34,879 5.1 % 24.7 % 5.1 % 24.7 % International 12,341 12,687 10,925 (2.7) % 16.1 % 5.5 % 12.6 % Net revenues $ 58,054 $ 56,197 $ 45,804 3.3 % 22.7 % 5.1 % 21.9 % 37 | 2022 Form 10-K The following table details AbbVie's worldwide net revenues: Percent change At actual currency rates At constant currency rates years ended December 31 (dollars in millions) 2022 2021 2020 2022 2021 2022 2021 Immunology Humira United States $ 18,619 $ 17,330 $ 16,112 7.4 % 7.6 % 7.4 % 7.6 % International 2,618 3,364 3,720 (22.2) % (9.6) % (14.9) % (12.8) % Total $ 21,237 $ 20,694 $ 19,832 2.6 % 4.3 % 3.8 % 3.7 % Skyrizi United States $ 4,484 $ 2,486 $ 1,385 80.4 % 79.6 % 80.4 % 79.6 % International 681 453 205 50.4 % >100.0 % 67.1 % >100.0 % Total $ 5,165 $ 2,939 $ 1,590 75.7 % 84.9 % 78.3 % 84.0 % Rinvoq United States $ 1,794 $ 1,271 $ 653 41.2 % 94.8 % 41.2 % 94.8 % International 728 380 78 91.4 % >100.0 % >100.0 % >100.0 % Total $ 2,522 $ 1,651 $ 731 52.8 % >100.0 % 58.1 % >100.0 % Hematologic Oncology Imbruvica United States $ 3,426 $ 4,321 $ 4,305 (20.7) % 0.4 % (20.7) % 0.4 % Collaboration revenues 1,142 1,087 1,009 5.1 % 7.7 % 5.1 % 7.7 % Total $ 4,568 $ 5,408 $ 5,314 (15.5) % 1.8 % (15.5) % 1.8 % Venclexta United States $ 1,009 $ 934 $ 804 8.0 % 16.1 % 8.0 % 16.1 % International 1,000 886 533 12.9 % 66.2 % 24.6 % 60.9 % Total $ 2,009 $ 1,820 $ 1,337 10.4 % 36.1 % 16.1 % 34.0 % Aesthetics Botox Cosmetic (a) United States $ 1,654 $ 1,424 $ 687 16.2 % >100.0 % 16.2 % >100.0 % International 961 808 425 18.9 % 90.0 % 28.8 % 83.9 % Total $ 2,615 $ 2,232 $ 1,112 17.2 % >100.0 % 20.8 % 98.4 % Juvederm Collection (a) United States $ 548 $ 658 $ 318 (16.7) % >100.0 % (16.7) % >100.0 % International 880 877 400 0.3 % >100.0 % 8.9 % >100.0 % Total $ 1,428 $ 1,535 $ 718 (7.0) % >100.0 % (2.1) % >100.0 % Other Aesthetics (a) United States $ 1,122 $ 1,268 $ 666 (11.5) % 90.2 % (11.5) % 90.2 % International 168 198 94 (14.9) % >100.0 % (8.3) % >100.0 % Total $ 1,290 $ 1,466 $ 760 (12.0) % 93.0 % (11.1) % 91.9 % Neuroscience Botox Therapeutic (a) United States $ 2,255 $ 2,012 $ 1,155 12.1 % 74.3 % 12.1 % 74.3 % International 464 439 232 5.6 % 89.0 % 15.3 % 78.8 % Total $ 2,719 $ 2,451 $ 1,387 10.9 % 76.7 % 12.6 % 75.0 % Vraylar (a) United States $ 2,037 $ 1,728 $ 951 17.9 % 81.7 % 17.9 % 81.7 % International 1 — — n/m n/m n/m n/m Total $ 2,038 $ 1,728 $ 951 17.9 % 81.7 % 17.9 % 81.7 % Duodopa United States $ 95 $ 102 $ 103 (6.7) % (1.0) % (6.7) % (1.0) % International 363 409 391 (11.3) % 4.6 % (0.8) % (0.1) % Total $ 458 $ 511 $ 494 (10.4) % 3.4 % (2.0) % (0.3) % Ubrelvy (a) United States $ 680 $ 552 $ 125 23.2 % >100.0 % 23.2 % >100.0 % Qulipta United States $ 158 $ — $ — >100.0 % n/m >100.0 % n/m Other Neuroscience (a) United States $ 456 $ 667 $ 528 (30.5) % 26.3 % (30.5) % 26.3 % International 19 18 11 4.8 % 77.4 % 9.0 % 64.7 % Total $ 475 $ 685 $ 539 (29.6) % 27.2 % (29.5) % 27.0 % 2022 Form 10-K | 38 Percent change At actual currency rates At constant currency rates years ended December 31 (dollars in millions) 2022 2021 2020 2022 2021 2022 2021 Eye Care Lumigan/Ganfort (a) United States $ 242 $ 273 $ 165 (11.0) % 64.7 % (11.0) % 64.7 % International 272 306 213 (11.3) % 44.1 % (3.0) % 38.1 % Total $ 514 $ 579 $ 378 (11.2) % 53.1 % (6.8) % 49.7 % Alphagan/Combigan (a) United States $ 202 $ 373 $ 223 (45.8) % 66.5 % (45.8) % 66.5 % International 144 156 103 (7.9) % 52.5 % 2.5 % 50.6 % Total $ 346 $ 529 $ 326 (34.6) % 62.1 % (31.5) % 61.5 % Restasis (a) United States $ 621 $ 1,234 $ 755 (49.6) % 63.3 % (49.6) % 63.3 % International 45 56 32 (20.2) % 75.3 % (13.8) % 80.1 % Total $ 666 $ 1,290 $ 787 (48.3) % 63.8 % (48.0) % 64.0 % Other Eye Care (a) United States $ 538 $ 523 $ 305 2.3 % 72.7 % 2.3 % 72.7 % International 637 646 388 (1.2) % 66.1 % 8.7 % 61.0 % Total $ 1,175 $ 1,169 $ 693 0.4 % 69.0 % 5.9 % 66.1 % Other Key Products Mavyret United States $ 755 $ 754 $ 785 0.2 % (4.0) % 0.2 % (4.0) % International 786 956 1,045 (17.8) % (8.5) % (8.5) % (10.8) % Total $ 1,541 $ 1,710 $ 1,830 (9.9) % (6.5) % (4.7) % (7.8) % Creon United States $ 1,278 $ 1,191 $ 1,114 7.3 % 6.9 % 7.3 % 6.9 % Linzess/Constella (a) United States $ 1,003 $ 1,006 $ 649 (0.4) % 55.1 % (0.4) % 55.1 % International 32 32 18 0.3 % 77.3 % 7.6 % 66.4 % Total $ 1,035 $ 1,038 $ 667 (0.3) % 55.7 % (0.1) % 55.4 % All other $ 4,137 $ 5,019 $ 5,119 (17.6) % (2.0) % (16.3) % (2.8) % Total net revenues $ 58,054 $ 56,197 $ 45,804 3.3 % 22.7 % 5.1 % 21.9 % n/m – Not meaningful (a) Net revenues include Allergan product revenues after the acquisition closing date of May 8, 2020.
Biggest changePercent change At actual currency rates At constant currency rates years ended (dollars in millions) 2023 2022 2021 2023 2022 2023 2022 United States $ 41,883 $ 45,713 $ 43,510 (8.4) % 5.1 % (8.4) % 5.1 % International 12,435 12,341 12,687 0.8 % (2.7) % 3.4 % 5.5 % Net revenues $ 54,318 $ 58,054 $ 56,197 (6.4) % 3.3 % (5.9) % 5.1 % 2023 Form 10-K | 38 The following table details AbbVie's worldwide net revenues: Percent change At actual currency rates At constant currency rates years ended December 31 (dollars in millions) 2023 2022 2021 2023 2022 2023 2022 Immunology Humira United States $ 12,160 $ 18,619 $ 17,330 (34.7) % 7.4 % (34.7) % 7.4 % International 2,244 2,618 3,364 (14.3) % (22.2) % (11.8) % (14.9) % Total $ 14,404 $ 21,237 $ 20,694 (32.2) % 2.6 % (31.9) % 3.8 % Skyrizi United States $ 6,753 $ 4,484 $ 2,486 50.6 % 80.4 % 50.6 % 80.4 % International 1,010 681 453 48.3 % 50.4 % 50.3 % 67.1 % Total $ 7,763 $ 5,165 $ 2,939 50.3 % 75.7 % 50.6 % 78.3 % Rinvoq United States $ 2,824 $ 1,794 $ 1,271 57.4 % 41.2 % 57.4 % 41.2 % International 1,145 728 380 57.3 % 91.4 % 60.7 % >100.0 % Total $ 3,969 $ 2,522 $ 1,651 57.4 % 52.8 % 58.4 % 58.1 % Oncology Imbruvica United States $ 2,665 $ 3,426 $ 4,321 (22.2) % (20.7) % (22.2) % (20.7) % Collaboration revenues 931 1,142 1,087 (18.5) % 5.1 % (18.5) % 5.1 % Total $ 3,596 $ 4,568 $ 5,408 (21.3) % (15.5) % (21.3) % (15.5) % Venclexta United States $ 1,087 $ 1,009 $ 934 7.8 % 8.0 % 7.8 % 8.0 % International 1,201 1,000 886 20.1 % 12.9 % 22.3 % 24.6 % Total $ 2,288 $ 2,009 $ 1,820 13.9 % 10.4 % 15.0 % 16.1 % Epkinly Collaboration Revenues $ 28 $ — $ — n/m n/m n/m n/m International 3 — — n/m n/m n/m n/m Total $ 31 $ — $ — n/m n/m n/m n/m Aesthetics Botox Cosmetic United States $ 1,670 $ 1,654 $ 1,424 1.0 % 16.2 % 1.0 % 16.2 % International 1,012 961 808 5.3 % 18.9 % 9.7 % 28.8 % Total $ 2,682 $ 2,615 $ 2,232 2.6 % 17.2 % 4.2 % 20.8 % Juvederm Collection United States $ 519 $ 548 $ 658 (5.4) % (16.7) % (5.4) % (16.7) % International 859 880 877 (2.4) % 0.3 % 1.9 % 8.9 % Total $ 1,378 $ 1,428 $ 1,535 (3.6) % (7.0) % (0.9) % (2.1) % Other Aesthetics United States $ 1,060 $ 1,122 $ 1,268 (5.6) % (11.5) % (5.6) % (11.5) % International 174 168 198 3.3 % (14.9) % 8.1 % (8.3) % Total $ 1,234 $ 1,290 $ 1,466 (4.4) % (12.0) % (3.8) % (11.1) % Neuroscience Botox Therapeutic United States $ 2,476 $ 2,255 $ 2,012 9.8 % 12.1 % 9.8 % 12.1 % International 515 464 439 11.1 % 5.6 % 15.5 % 15.3 % Total $ 2,991 $ 2,719 $ 2,451 10.0 % 10.9 % 10.8 % 12.6 % Vraylar United States $ 2,755 $ 2,037 $ 1,728 35.2 % 17.9 % 35.2 % 17.9 % International 4 1 — >100.0 % n/m >100.0 % n/m Total $ 2,759 $ 2,038 $ 1,728 35.4 % 17.9 % 35.4 % 17.9 % Duodopa United States $ 97 $ 95 $ 102 3.0 % (6.7) % 3.0 % (6.7) % International 371 363 409 2.1 % (11.3) % 1.8 % (0.8) % Total $ 468 $ 458 $ 511 2.3 % (10.4) % 2.1 % (2.0) % Ubrelvy United States $ 803 $ 680 $ 552 18.2 % 23.2 % 18.2 % 23.2 % International 12 — — >100.0 % n/m >100.0 % n/m Total $ 815 $ 680 $ 552 19.9 % 23.2 % 19.9 % 23.2 % Qulipta United States $ 405 $ 158 $ — >100.0 % >100.0 % >100.0 % >100.0 % International 3 — — >100.0 % n/m >100.0 % n/m Total $ 408 $ 158 $ — >100.0 % >100.0 % >100.0 % >100.0 % 39 | 2023 Form 10-K Percent change At actual currency rates At constant currency rates years ended December 31 (dollars in millions) 2023 2022 2021 2023 2022 2023 2022 Other Neuroscience United States $ 254 $ 456 $ 667 (44.4) % (30.5) % (44.4) % (30.5) % International 22 19 18 20.2 % 4.8 % 24.4 % 9.0 % Total $ 276 $ 475 $ 685 (41.9) % (29.6) % (41.7) % (29.5) % Eye Care Ozurdex United States $ 143 $ 139 $ 130 2.7 % 6.9 % 2.7 % 6.9 % International 329 289 288 14.0 % 0.3 % 15.9 % 12.9 % Total $ 472 $ 428 $ 418 10.3 % 2.4 % 11.6 % 11.0 % Lumigan/Ganfort United States $ 173 $ 242 $ 273 (28.4) % (11.0) % (28.4) % (11.0) % International 259 272 306 (4.8) % (11.3) % (3.6) % (3.0) % Total $ 432 $ 514 $ 579 (15.9) % (11.2) % (15.3) % (6.8) % Alphagan/Combigan United States $ 121 $ 202 $ 373 (40.1) % (45.8) % (40.1) % (45.8) % International 151 144 156 4.9 % (7.9) % 10.4 % 2.5 % Total $ 272 $ 346 $ 529 (21.4) % (34.6) % (19.1) % (31.5) % Restasis United States $ 382 $ 621 $ 1,234 (38.5) % (49.6) % (38.5) % (49.6) % International 54 45 56 19.3 % (20.2) % 25.3 % (13.8) % Total $ 436 $ 666 $ 1,290 (34.6) % (48.3) % (34.2) % (48.0) % Other Eye Care United States $ 433 $ 399 $ 393 9.0 % 0.8 % 9.0 % 0.8 % International 370 348 358 6.1 % (2.4) % 8.7 % 5.4 % Total $ 803 $ 747 $ 751 7.6 % (0.7) % 8.8 % 3.0 % Other Key Products Mavyret United States $ 659 $ 755 $ 754 (12.7) % 0.2 % (12.7) % 0.2 % International 771 786 956 (1.9) % (17.8) % 1.0 % (8.5) % Total $ 1,430 $ 1,541 $ 1,710 (7.2) % (9.9) % (5.7) % (4.7) % Creon United States $ 1,268 $ 1,278 $ 1,191 (0.8) % 7.3 % (0.8) % 7.3 % Linzess/Constella United States $ 1,073 $ 1,003 $ 1,006 7.1 % (0.4) % 7.1 % (0.4) % International 35 32 32 8.8 % 0.3 % 9.7 % 7.6 % Total $ 1,108 $ 1,035 $ 1,038 7.1 % (0.3) % 7.1 % (0.1) % All other $ 3,035 $ 4,137 $ 5,019 (26.7) % (17.6) % (25.7) % (16.3) % Total net revenues $ 54,318 $ 58,054 $ 56,197 (6.4) % 3.3 % (5.9) % 5.1 % n/m – Not meaningful The following discussion and analysis of AbbVie's net revenues by product is presented on a constant currency basis.
AbbVie intends to execute its strategy and advance its mission in a number of ways, including: (i) maximizing the benefits of a diversified revenue base with multiple long-term growth drivers; (ii) leveraging AbbVie's commercial strength and international infrastructure across therapeutic areas and ensuring strong commercial execution of new product launches; (iii) continuing to invest in and expand its pipeline in support of opportunities in immunology, oncology, aesthetics, neuroscience and eye care as well as continued investment in key on-market products; (iv) generating substantial operating cash flows to support investment in innovative research and development, and return cash to shareholders via a strong and growing dividend while also reducing debt.
AbbVie intends to execute its strategy and advance its mission in a number of ways, including: (i) maximizing the benefits of a diversified revenue base with multiple long-term growth drivers; (ii) leveraging AbbVie's commercial strength and international infrastructure across therapeutic areas and ensuring strong commercial execution of new product launches; (iii) continuing to invest in and expand its pipeline in support of opportunities in immunology, oncology, aesthetics, neuroscience and eye care as well as continued investment in key on-market products; (iv) generating substantial operating cash flows to support investment in innovative research and development, and return cash to shareholders via a strong and growing dividend while also continuing to repay debt.
Discussions of 2020 items and year-to-year comparisons between 2021 and 2020 that are not included in this Form 10-K can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 that are not included in this Form 10-K can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
In the United States, AbbVie distributes pharmaceutical products principally through independent wholesale distributors, with some sales directly to retailers, pharmacies, patients or other customers. Outside the United States, AbbVie sells products primarily to wholesalers or through distributors, and depending on the market works through largely centralized national payers system to agree on reimbursement terms.
In the United States, AbbVie distributes pharmaceutical products principally through independent wholesale distributors, with some sales directly to retailers, pharmacies, patients or other customers. Outside the United States, AbbVie sells products primarily to wholesalers or through distributors, and depending on the market works through largely centralized national payers systems to agree on reimbursement terms.
The current health care cost trend rate is supported by the historical trend experience of each plan. Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans as of December 31, 2022 and will be used in the calculation of net periodic benefit cost in 2023.
The current health care cost trend rate is supported by the historical trend experience of each plan. Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans as of December 31, 2023 and will be used in the calculation of net periodic benefit cost in 2024.
Interest payments on debt are calculated for future periods using forecasted interest rates in effect at the end of 2022. Projected interest payments include the related effects of interest rate swap agreements. Certain of these projected interest payments may differ in the future based on changes in floating interest rates or other factors or events.
Interest payments on debt are calculated for future periods using forecasted interest rates in effect at the end of 2023. Projected interest payments include the related effects of interest rate swap agreements. Certain of these projected interest payments may differ in the future based on changes in floating interest rates or other factors or events.
AbbVie's assumed expected long-term rate of return has a significant effect on the amounts reported for defined benefit pension plans as of December 31, 2022 and will be used in the calculation of net periodic benefit cost in 2023.
AbbVie's assumed expected long-term rate of return has a significant effect on the amounts reported for defined benefit pension plans as of December 31, 2023 and will be used in the calculation of net periodic benefit cost in 2024.
This commentary should be read in conjunction with the Consolidated Financial Statements and accompanying notes appearing in Item 8, "Financial Statements and Supplementary Data." This section of Form 10-K generally discusses 2022 and 2021 items and year-to-year comparisons between 2022 and 2021.
This commentary should be read in conjunction with the Consolidated Financial Statements and accompanying notes appearing in Item 8, "Financial Statements and Supplementary Data." This section of Form 10-K generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
The projected interest payments only pertain to obligations and agreements outstanding at December 31, 2022. See Note 10 to the Consolidated Financial Statements for additional information regarding the company's debt instruments and Note 11 for additional information on the interest rate swap agreements outstanding at December 31, 2022.
The projected interest payments only pertain to obligations and agreements outstanding at December 31, 2023. See Note 10 to the Consolidated Financial Statements for additional information regarding the company's debt instruments and Note 11 for additional information on the interest rate swap agreements outstanding at December 31, 2023.
Revenue Recognition AbbVie recognizes revenue when control of promised goods or services is transferred to the company’s customers, in an amount that reflects the consideration AbbVie expects to be entitled to in exchange for those goods or services. Sales, value add and other taxes collected concurrent with revenue-producing activities are excluded from revenue. AbbVie generates revenue primarily from product sales.
Revenue Recognition AbbVie recognizes revenue when control of promised goods or services is transferred to the company’s customers, in an amount that reflects the consideration AbbVie expects to be entitled to in exchange for those goods or services. Sales, value add and other taxes collected concurrent with revenue-producing activities are excluded from revenue.
AbbVie's pipeline currently includes over 80 compounds, devices or indications in development individually or under collaboration or license agreements and is focused on such important specialties as immunology, oncology, aesthetics, neuroscience and eye care. Of these programs, approximately 50 are in mid- and late-stage development.
AbbVie's pipeline currently includes approximately 90 compounds, devices or indications in development individually or under collaboration or license agreements and is focused on such important specialties as immunology, oncology, aesthetics, neuroscience and eye care. Of these programs, approximately 50 are in mid- and late-stage development.
In 2022, the change in fair value reflected higher estimated Skyrizi sales driven by stronger market share uptake and the passage of time, partially offset by higher discount rates.
In 2023, the change in fair value reflected higher estimated Skyrizi sales driven by stronger market share uptake, the passage of time and lower discount rates. In 2022, the change in fair value reflected higher estimated Skyrizi sales driven by stronger market share uptake and the passage of time, partially offset by higher discount rates.
AbbVie repurchased 8 million shares for $1.1 billion in 2022 and 6 million shares for $670 million in 2021. AbbVie's remaining stock repurchase authorization was $1.4 billion as of December 31, 2022. On February 16, 2023, AbbVie's board of directors authorized a $5.0 billion increase to the existing stock repurchase authorization.
AbbVie repurchased 10 million shares for $1.6 billion in 2023 and 8 million shares for $1.1 billion in 2022. AbbVie's remaining stock repurchase authorization was $4.8 billion as of December 31, 2023. On February 16, 2023, AbbVie's board of directors authorized a $5.0 billion increase to the existing stock repurchase authorization.
A one percentage point change in assumed expected long-term rate of return on plan assets would increase or decrease the net period benefit cost of these plans in 2023 by $98 million. The health care cost trend rate is selected by reviewing historical trends and current views on projected future health care cost increases.
A one percentage point change in assumed expected long-term rate of return on plan assets would increase or decrease the net period benefit cost of these plans in 2024 by $106 million. The health care cost trend rate is selected by reviewing historical trends and current views on projected future health care cost increases.
The timing, 43 | 2022 Form 10-K declaration, amount of and payment of any dividends by AbbVie in the future is within the discretion of its board of directors and will depend upon many factors, including AbbVie's financial condition, earnings, capital requirements of its operating subsidiaries, covenants associated with certain of AbbVie's debt service obligations, legal requirements, regulatory constraints, industry practice, ability to access capital markets and other factors deemed relevant by its board of directors.
The timing, declaration, amount of and payment of any dividends by AbbVie in the future is within the discretion of its board of directors and will depend upon many factors, including AbbVie's financial condition, earnings, capital requirements of its operating subsidiaries, covenants associated with certain of AbbVie's debt service obligations, legal requirements, regulatory constraints, industry practice, ability to access capital markets and other factors deemed relevant by its board of directors.
Significant judgment is employed in determining the appropriateness of certain of these inputs, which are disclosed in Note 11 to the Consolidated Financial Statements. Changes to the inputs described above could have a material impact on the company's financial position and results of operations in any given period. 47 | 2022 Form 10-K
Significant judgment is employed in determining the appropriateness of certain of these inputs, which are disclosed in Note 11 to the Consolidated Financial Statements. Changes to the inputs described above could have a material impact on the company's financial position and results of operations in any given period. 2023 Form 10-K | 48
The significant assumptions, which are reviewed annually, include the discount rate, the expected long-term rate of return on plan assets and the health care cost trend rates and are disclosed in Note 12 to the Consolidated Financial Statements. The discount rate is selected based on current market rates on high-quality, fixed-income investments at December 31 each year.
The significant assumptions, which are reviewed annually, include the discount rate, the expected long-term rate of return on plan assets and the health care cost trend rates and are disclosed in Note 12 to the Consolidated Financial Statements. 2023 Form 10-K | 46 The discount rate is selected based on current market rates on high-quality, fixed-income investments at December 31 each year.
IPR&D acquired in transactions that are not business combinations is expensed immediately, unless deemed to have an alternative 2022 Form 10-K | 46 future use. Payments made to third parties subsequent to regulatory approval are capitalized and amortized over the remaining useful life.
IPR&D acquired in transactions that are not business combinations is expensed immediately, unless deemed to have an alternative future use. Payments made to third parties subsequent to regulatory approval are capitalized and amortized over the remaining useful life.
Interest income in 2022 increased compared to 2021 primarily due to the impact of higher interest rates. Other expense, net included charges related to changes in fair value of contingent consideration liabilities of $2.8 billion in 2022 and $2.7 billion in 2021.
Interest income in 2023 increased compared to 2022 primarily due to the impact of higher interest rates. Other expense, net included charges related to changes in fair value of contingent consideration liabilities of $5.1 billion in 2023 and $2.8 billion in 2022.
Historically, adjustments to rebate accruals have not been material to net earnings. 2022 Form 10-K | 44 The following table is an analysis of the three largest accruals for rebates and chargebacks, which comprise approximately 94% of the total consolidated rebate and chargebacks recorded as reductions to revenues in 2022.
Historically, adjustments to rebate accruals have not been material to net earnings. The following table is an analysis of the three largest accruals for rebates and chargebacks, which comprise approximately 94% of the total consolidated rebate and chargebacks recorded as reductions to revenues in 2023.
The effective income tax rates differed from the U.S. statutory tax rate of 21% principally due to the impact of foreign operations which reflects the impact of lower income tax rates in locations outside the United States, tax incentives in Puerto Rico and other foreign tax jurisdictions, business development activities and changes in fair value of contingent consideration.
The effective income tax rates differed from the statutory tax rate principally due to the impact of foreign operations with lower income tax rates in locations outside the United States, the U.S. global minimum tax, changes in fair value of contingent consideration, tax credits and incentives in the United States, Puerto Rico and other foreign tax jurisdictions, and business development activities.
Additionally financing cash flows included repayment of a $2.0 billion floating term loan due May 2025 and issuance of a new $2.0 billion floating rate term loan as part of the term loan refinancing in February 2022.
Additionally financing cash flows included repayment of a $2.0 billion floating term loan due May 2025 and issuance of a new $2.0 billion floating rate term loan as part of the term loan refinancing in February 2022. Financing cash flows also included cash dividend payments of $10.5 billion in 2023 and $10.0 billion in 2022.
A 50 basis point change in the assumed discount rate would have had the following effects on AbbVie's calculation of net periodic benefit costs in 2023 and projected benefit obligations as of December 31, 2022: 50 basis point (in millions) (brackets denote a reduction) Increase Decrease Defined benefit plans Net periodic benefit cost $ (34) $ 57 Projected benefit obligation (612) 687 Other post-employment plans Net periodic benefit cost $ (5) $ 6 Projected benefit obligation (44) 49 The expected long-term rate of return is based on the asset allocation, historical performance and the current view of expected future returns.
A 50 basis point change in the assumed discount rate would have had the following effects on AbbVie's calculation of net periodic benefit costs in 2024 and projected benefit obligations as of December 31, 2023: 50 basis point (in millions) (brackets denote a reduction) Increase Decrease Defined benefit plans Net periodic benefit cost $ (49) $ 70 Projected benefit obligation (674) 756 Other post-employment plans Net periodic benefit cost $ (6) $ 7 Projected benefit obligation (53) 59 The expected long-term rate of return is based on the asset allocation, historical performance and the current view of expected future returns.
The company completed the transition requirements of the Puerto Rico Act in 2022, resulting in the remeasurement of certain deferred tax assets and liabilities based on income tax rates at which they are expected to reverse in the future. The net tax benefit from the remeasurement of deferred taxes related to the Puerto Rico Act was $323 million.
The company completed the transition requirements of the Puerto Rico Act in 2022, resulting in the remeasurement of certain deferred tax assets and liabilities based on income tax rates at which they are expected to reverse in the future.
AbbVie expects to achieve its strategic objectives through: • Skyrizi and Rinvoq revenue growth driven by increasing market share and indication expansion. • Advancing our hematologic oncology portfolio by increasing Venclexta market share and new indications, strong commercial execution of new product launches and effectively managing market and competitive challenges impacting Imbruvica. • Continuing investment in the global expansion of aesthetics and increasing market penetration of Botox and Juvederm Collection. • Neuroscience revenue growth driven by Vraylar, Botox Therapeutic, Ubrelvy and Qulipta. • Maximizing AbbVie's existing eye care portfolio. • Effectively managing the impact of Humira biosimilar erosion. • The favorable impact of pipeline products and indications recently approved or currently under regulatory review where approval is expected in 2023.
AbbVie expects to achieve its strategic objectives through: • Skyrizi and Rinvoq revenue growth driven by increasing market share and Skyrizi indication expansion. • Successful integration of the ImmunoGen, Inc. and proposed Cerevel Therapeutics acquisitions. • Advancing our oncology portfolio driven by Venclexta, strong commercial execution of Epkinly, Elahere and other new product launches and effectively managing regulatory, market and competitive challenges impacting Imbruvica. • Aesthetics revenue growth driven by global expansion, increasing market penetration of Botox and Juvederm Collection and strong commercial execution of new product launches. • Neuroscience revenue growth driven by Vraylar, Botox Therapeutic, Ubrelvy and Qulipta as well as strong commercial execution of new product launches. • Maximizing AbbVie's existing eye care portfolio. • Continuing to effectively manage the impact of Humira biosimilar erosion. 33 | 2023 Form 10-K • The favorable impact of pipeline products and indications recently approved or currently under regulatory review where approval is expected in 2024.
The following sections summarize transitions of significant programs from mid-stage development to late-stage development as well as developments in significant late-stage and registration programs. AbbVie expects multiple mid-stage programs to transition into late-stage programs in the next 12 months. Significant Programs and Developments Immunology Skyrizi • In January 2022, AbbVie announced that the U.S.
The following sections summarize transitions of significant programs from mid-stage development to late-stage development as well as developments in significant late-stage and registration programs. AbbVie expects multiple mid-stage programs to transition into late-stage programs in the next 12 months.
Credit Ratings In 2022, Moody’s Investors Service upgraded AbbVie's senior unsecured long-term credit rating to Baa1 from Baa2, affirmed its Prime-2 short-term credit rating and revised its outlook to positive from stable. In addition, Standard and Poor's Global Ratings revised its outlook to positive from stable and affirmed its long-term issuer credit rating of BBB+.
Credit Ratings In 2023, Moody’s Investors Service upgraded AbbVie’s senior unsecured long-term credit rating to A3 with a stable outlook from Baa1 with a positive outlook and affirmed AbbVie’s Prime-2 short-term credit rating. In addition, Standard and Poor's Global ratings upgraded AbbVie's long-term issuer credit rating to A- with a stable outlook from BBB+ with a positive outlook.
Quarterly Cash Dividend On October 28, 2022, AbbVie announced that its board of directors declared an increase in the quarterly cash dividend from $1.41 per share to $1.48 per share beginning with the dividend payable on February 15, 2023, to stockholders of record as of January 13, 2023. This reflects an increase of approximately 5.0% over the previous quarterly rate.
Quarterly Cash Dividend On October 26, 2023, AbbVie announced that its board of directors declared an increase in the quarterly cash dividend from $1.48 per share to $1.55 per share beginning with the dividend payable on February 15, 2024, to stockholders of record as of January 16, 2024. This reflects an increase of approximately 4.7% over the previous quarterly rate.
Other Non-Operating Expenses years ended December 31 (in millions) 2022 2021 2020 Interest expense $ 2,230 $ 2,423 $ 2,454 Interest income (186) (39) (174) Interest expense, net $ 2,044 $ 2,384 $ 2,280 Net foreign exchange loss $ 148 $ 51 $ 71 Other expense, net 2,448 2,500 5,614 Interest expense in 2022 decreased compared to 2021 primarily due to a lower average debt balance as a result of deleveraging, partially offset by the impact of higher interest rates.
Other Non-Operating Expenses years ended December 31 (in millions) 2023 2022 2021 Interest expense $ 2,224 $ 2,230 $ 2,423 Interest income (540) (186) (39) Interest expense, net $ 1,684 $ 2,044 $ 2,384 Net foreign exchange loss $ 146 $ 148 $ 51 Other expense, net 4,677 2,448 2,500 Interest expense in 2023 decreased compared to 2022 primarily driven by lower average debt balances as a result of deleveraging, partially offset by the impact of higher interest rates.
These costs were partially offset by an after-tax gain of $126 million related to the divestiture of Pylera and a benefit of $26 million related to certain tax items. Additionally, financial results reflected continued funding to support all stages of AbbVie’s pipeline assets and continued investment in AbbVie’s on-market brands.
These costs were partially offset by an after-tax gain of $381 million related to a favorable settlement of a litigation matter. Additionally, financial results reflected continued funding to support all stages of AbbVie’s pipeline assets and continued investment in AbbVie’s on-market brands.
Diluted earnings per share in 2022 was $6.63 and included the following after-tax costs: (i) $6.4 billion related to the amortization of intangible assets; (ii) $2.8 billion for the change in fair value of contingent consideration liabilities; (iii) $2.0 billion for charges related to litigation matters; (iv) $766 million of acquisition and integration expenses; and (v) $604 million related to intangible asset impairment.
Diluted earnings per share in 2023 was $2.72 and included the following after-tax costs: (i) $6.7 billion related to the amortization of intangible assets; (ii) $5.0 billion for the change in fair value of contingent consideration liabilities; (iii) $3.5 billion related to intangible asset impairment; and (iv) $122 million of acquisition and integration expenses.
FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES years ended December 31 (in millions) 2022 2021 2020 Cash flows provided by (used in) Operating activities $ 24,943 $ 22,777 $ 17,588 Investing activities (623) (2,344) (37,557) Financing activities (24,803) (19,039) (11,501) Operating cash flows in 2022 increased from 2021 primarily due to improved results of operations resulting from revenue growth and lower income tax payments, partially offset by the timing of working capital.
FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES years ended December 31 (in millions) 2023 2022 2021 Cash flows provided by (used in) Operating activities $ 22,839 $ 24,943 $ 22,777 Investing activities (2,009) (623) (2,344) Financing activities (17,222) (24,803) (19,039) Operating cash flows in 2023 decreased from 2022 primarily due to decreased results of operations driven by lower net revenues and higher income tax payments, partially offset by the timing of working capital.
(b) Includes contingent consideration liabilities which are recorded at fair value on the consolidated balance sheet. Potential contingent consideration payments that exceed the fair value recorded on the consolidated balance sheet are not included in the table of contractual obligations. See Note 11 to the Consolidated Financial Statements for additional information regarding these liabilities.
(b) Includes contingent consideration liabilities which are recorded at fair value on the consolidated balance sheet. Potential contingent consideration payments that exceed the fair value recorded on the consolidated balance sheet are not included in the table of contractual obligations.
Gross Margin Percent change years ended December 31 (dollars in millions) 2022 2021 2020 2022 2021 Gross margin $ 40,640 $ 38,751 $ 30,417 5 % 27 % as a percent of net revenues 70 % 69 % 66 % Gross margin as a percentage of net revenues in 2022 increased compared to 2021.
Gross Margin Percent change years ended December 31 (dollars in millions) 2023 2022 2021 2023 2022 Gross margin $ 33,903 $ 40,640 $ 38,751 (17) % 5 % as a percent of net revenues 62 % 70 % 69 % Gross margin as a percentage of net revenues in 2023 decreased compared to 2022.
At December 31, 2022, the company was in compliance with all covenants, and commitment fees under the credit facility were insignificant.
At December 31, 2023, the company was in compliance with all covenants, and commitment fees under the credit facility were insignificant. No amounts were outstanding under the company's credit facility as of December 31, 2023, December 31, 2022, or December 31, 2021.
See Note 5 to the Consolidated Financial Statements for additional information. Other Operating Expense, Net Other operating expense, net in 2022 included a one-time charge of $229 million related to an asset divested as part of the Allergan acquisition, partially offset by $172 million of income related to the sale of worldwide commercial rights of a mature brand Pylera.
Other operating expense (income), net in 2022 also included $172 million of income related to the sale of worldwide commercial rights of a mature brand Pylera. See Note 5 to the Consolidated Financial Statements for additional information.
Research and Development and Acquired IPR&D and Milestones Percent change years ended December 31 (dollars in millions) 2022 2021 2020 2022 2021 Research and development $ 6,510 $ 6,922 $ 6,379 (6) % 9 % as a percent of net revenues 11 % 12 % 14 % Acquired IPR&D and milestones $ 697 $ 1,124 $ 1,376 (38) % (18) % R&D expenses as a percentage of net revenues decreased in 2022 compared to 2021.
Research and Development Percent change years ended December 31 (dollars in millions) 2023 2022 2021 2023 2022 Research and development $ 7,675 $ 6,510 $ 6,922 18 % (6) % as a percent of net revenues 14 % 11 % 12 % Research and development (R&D) expenses as a percentage of net revenues increased in 2023 compared to 2022.
Operating cash flows also reflected AbbVie’s contributions to its defined benefit plans of $357 million in 2022 and $376 million in 2021. 41 | 2022 Form 10-K Investing cash flows in 2022 included payments made for capital expenditures of $695 million, other acquisitions and investments of $539 million, $255 million cash consideration paid to acquire DJS Antibodies Ltd offset by cash acquired and net sales and maturities of investments securities totaling $92 million.
Investing cash flows in 2022 included payments made for capital expenditures of $695 million, other acquisitions and investments of $539 million, $255 million cash consideration paid to acquire DJS Antibodies Ltd offset by cash acquired and net revenues and maturities of investments securities totaling $92 million.
Product returns can be reliably estimated based on the company's historical return experience. Cash discounts totaled $1.8 billion in 2022, $1.6 billion in 2021 and $1.2 billion in 2020. Allowances other than cash discounts are not significant.
Reserves for cash discounts and sales incentives are readily determinable because the company's experience of payment history is fairly consistent. Product returns can be reliably estimated based on the company's historical return experience. Cash discounts totaled $2.0 billion in 2023, $1.8 billion in 2022 and $1.6 billion in 2021. Allowances other than cash discounts are not significant.
No amounts were outstanding under the company's credit facility as of December 31, 2022 and December 31, 2021. 2022 Form 10-K | 42 Access to Capital The company intends to fund short-term and long-term financial obligations as they mature through cash on hand, future cash flows from operations or has the ability to issue additional debt.
Access to Capital The company intends to fund short-term and long-term financial obligations as they mature through cash on hand, future cash flows from operations or has the ability to issue additional debt.
AbbVie reflects the plans' specific cash flows and applies them to the corresponding individual spot rates along the yield curve in calculating the service cost and interest cost portions of expense.
AbbVie reflects the plans' specific cash flows and applies them to the corresponding individual spot rates along the yield curve in calculating the service cost and interest cost portions of expense. For other countries, AbbVie reviews various indices such as corporate bond and government bond benchmarks to estimate the discount rate.
Selling, General and Administrative Percent change years ended December 31 (dollars in millions) 2022 2021 2020 2022 2021 Selling, general and administrative $ 15,260 $ 12,349 $ 11,299 24 % 9 % as a percent of net revenues 26 % 22 % 25 % Selling, general and administrative (SG&A) expenses as a percentage of net revenues increased in 2022 compared to the prior year primarily due to the unfavorable impact of litigation reserve charges of $2.5 billion, partially offset by leverage from revenue growth and increased synergies realized.
Selling, General and Administrative Percent change years ended December 31 (dollars in millions) 2023 2022 2021 2023 2022 Selling, general and administrative $ 12,872 $ 15,260 $ 12,349 (16) % 24 % as a percent of net revenues 24 % 26 % 22 % Selling, general and administrative (SG&A) expenses as a percentage of net revenues decreased in 2023 compared to the prior year primarily due to income of $485 million driven by a favorable settlement of a litigation matter in 2023 compared to litigation reserve charges of $2.5 billion in 2022, partially offset by the unfavorable impact of increased brand investments and lower net revenues primarily driven by the Humira loss of exclusivity in the United States.
Rebate amounts are typically based upon the volume of purchases using contractual or statutory prices, which may vary by product and by payer.
Provisions for rebates and chargebacks totaled $56.8 billion in 2023, $41.4 billion in 2022 and $33.9 billion in 2021. Rebate amounts are typically based upon the volume of purchases using contractual or statutory prices, which may vary by product and by payer.
For other countries, AbbVie reviews various indices such as corporate bond and government bond benchmarks to estimate the discount rate. 45 | 2022 Form 10-K AbbVie's assumed discount rates have a significant effect on the amounts reported for defined benefit pension and other post-employment plans as of December 31, 2022.
AbbVie's assumed discount rates have a significant effect on the amounts reported for defined benefit pension and other post-employment plans as of December 31, 2023.
Valuation of Goodwill and Intangible Assets AbbVie has acquired and may continue to acquire significant intangible assets in connection with business combinations that AbbVie records at fair value. Transactions involving the purchase or sale of intangible assets occur between companies in the pharmaceuticals industry and valuations are usually based on a discounted cash flow analysis incorporating the stage of completion.
Transactions involving the purchase or sale of intangible assets occur between companies in 47 | 2023 Form 10-K the pharmaceuticals industry and valuations are usually based on a discounted cash flow analysis incorporating the stage of completion.
Future Cash Requirements Contractual Obligations The following table summarizes AbbVie's estimated material contractual obligations as of December 31, 2022: (in millions) Total Current Long-term Long-term debt, including current portion $ 63,128 $ 4,132 $ 58,996 Interest on long-term debt (a) 28,445 2,363 26,082 Contingent consideration liabilities (b) 16,384 1,469 14,915 (a) Includes estimated future interest payments on long-term debt.
Future Cash Requirements Contractual Obligations The following table summarizes AbbVie's estimated material contractual obligations as of December 31, 2023: (in millions) Total Current Long-term Long-term debt, including current portion $ 59,245 $ 7,170 $ 52,075 Interest on long-term debt (a) 26,273 2,313 23,960 Contingent consideration liabilities (b) 19,890 1,952 17,938 (a) Includes estimated future interest payments on long-term debt.
Net revenues for Botox Therapeutic increased 13% in 2022 due to market growth. Net revenues for Vraylar increased 18% in 2022 due to higher market share and market growth. Net revenues for Ubrelvy increased 23% in 2022 primarily due to increased market share uptake since launch, partially offset by unfavorable pricing.
Net revenues for Botox Therapeutic increased 11% in 2023 driven by market growth and market share uptake, partially offset by unfavorable pricing. Net revenues for Vraylar increased 35% in 2023 primarily driven by continued market share uptake as well as market growth.
For the majority of sales, the company transfers control, invoices the customer and recognizes revenue upon shipment to the customer. Rebates AbbVie provides rebates to pharmacy benefit managers, state government Medicaid programs, insurance companies that administer Medicare drug plans, wholesalers, group purchasing organizations and other government agencies and private entities.
Rebates AbbVie provides rebates to pharmacy benefit managers, state government Medicaid programs, insurance companies that administer Medicare drug plans, wholesalers, group purchasing organizations and other government agencies and private entities. Rebate and chargeback accruals are accounted for as variable consideration and are recorded as a reduction to revenue in the period the related product is sold.
AbbVie operates as a single global business segment and has approximately 50,000 employees. 2022 Financial Results AbbVie's strategy has focused on delivering strong financial results, maximizing the benefits of the Allergan acquisition, advancing and investing in its pipeline and returning value to shareholders while ensuring a strong, sustainable growth business over the long term.
These products are described in greater detail in the section labeled "Research and Development" included as part of this Item 7. 2023 Financial Results AbbVie's strategy has focused on delivering strong financial results, maximizing the benefits of a diversified revenue base, advancing and investing in its pipeline and returning value to shareholders while ensuring a strong, sustainable growth business over the long term.
Credit Facility, Access to Capital and Credit Ratings Credit Facility AbbVie currently has a $4.0 billion five-year revolving credit facility that matures in August 2024. This credit facility enables the company to borrow funds on an unsecured basis at variable interest rates and contains various covenants.
The amendment increased the unsecured revolving credit facility commitments from $4.0 billion to $5.0 billion and extended the maturity date of the facility from August 2023 to March 2028. This credit facility enables the company to borrow funds on an unsecured basis at variable interest rates and contains various covenants.
Financing cash flows in 2021 included early repayments of $1.8 billion aggregate principal amount of the company's 2.3% principal notes, $1.2 billion aggregate principal amount of the company's 5.0% senior notes and €750 million aggregate principal amount of the company's 0.5% senior Euro notes.
Financing cash flows in 2023 included repayment of $1.0 billion floating rate three-year term loan, $1.0 billion aggregate principal amount of the company's 2.85% senior notes and $350 million aggregate principal amount of the company's 2.80% senior notes.
Liabilities for unrecognized tax benefits totaled $6.5 billion as of December 31, 2022. It is not possible to reliably estimate the timing of the future cash outflows related to these liabilities. See Note 14 to the Consolidated Financial Statements for additional information on these unrecognized tax benefits.
The one-time transition tax liability was $3.0 billion as of December 31, 2023 and is payable in three future annual installments. Liabilities for unrecognized tax benefits totaled $6.7 billion as of December 31, 2023. It is not possible to reliably estimate the timing of the future cash outflows related to these liabilities.
Credit Risk AbbVie monitors economic conditions, the creditworthiness of customers and government regulations and funding, both domestically and abroad. AbbVie regularly communicates with its customers regarding the status of receivable balances, including their payment plans and obtains positive confirmation of the validity of the receivables.
AbbVie regularly communicates with its customers regarding the status of receivable balances, including their payment plans and obtains positive confirmation of the validity of the receivables. AbbVie establishes an allowance for credit losses equal to the estimate of future losses over the contractual life of outstanding accounts receivable.
Income Taxes Future income tax cash requirements include a one-time transition tax liability on a mandatory deemed repatriation of previously untaxed earnings of foreign subsidiaries resulting from U.S. tax reform enacted in 2017. The one-time transition tax liability was $3.4 billion as of December 31, 2022 and is payable in four future annual installments.
There have been no changes to these commitments that would have a material impact on the company’s ability to meet either short-term or long-term future cash requirements. Income Taxes Future income tax cash requirements include a one-time transition tax liability on a mandatory deemed repatriation of previously untaxed earnings of foreign subsidiaries resulting from U.S. tax reform enacted in 2017.
AbbVie establishes an allowance for credit losses equal to the estimate of future losses over the contractual life of outstanding accounts receivable. AbbVie may also utilize factoring arrangements to mitigate credit risk, although the receivables included in such arrangements have historically not been a significant amount of total outstanding receivables.
AbbVie may also utilize factoring arrangements to mitigate credit risk, although the receivables included in such arrangements have historically not been a significant amount of total outstanding receivables. 43 | 2023 Form 10-K Credit Facility, Access to Capital and Credit Ratings Credit Facility In March 2023, AbbVie entered into an amended and restated five-year revolving credit facility.
Net revenues for Skyrizi increased 78% in 2022 primarily driven by continued strong volume and market share uptake since launch as a treatment for plaque psoriasis as well as market growth. Net revenues were also favorably impacted by recent regulatory approvals and expansion of Skyrizi for the treatment of psoriatic arthritis and Crohn’s disease.
Net revenues for Qulipta increased greater than 100% in 2023 primarily driven by continued strong market share uptake as well as market growth. Net revenues were also favorably impacted by the regulatory approval of Qulipta for the preventive treatment of chronic migraine in adults.
(in millions) Medicaid and Medicare Rebates Managed Care Rebates Wholesaler Chargebacks Balance at December 31, 2019 $ 1,765 $ 1,936 $ 686 Additions (a) 1,266 649 71 Provisions 6,715 8,656 8,677 Payments (6,801) (8,334) (8,693) Balance at December 31, 2020 2,945 2,907 741 Provisions 9,622 11,306 11,286 Payments (8,751) (11,116) (11,125) Balance at December 31, 2021 3,816 3,097 902 Provisions 11,713 14,119 13,070 Payments (10,331) (12,974) (12,829) Balance at December 31, 2022 $ 5,198 $ 4,242 $ 1,143 (a) Represents rebate accruals and chargeback allowances assumed in the Allergan acquisition.
(in millions) Medicaid and Medicare Rebates Managed Care Rebates Wholesaler Chargebacks Balance as of December 31, 2020 $ 2,945 $ 2,907 $ 741 Provisions 9,622 11,306 11,286 Payments (8,751) (11,116) (11,125) Balance as of December 31, 2021 3,816 3,097 902 Provisions 11,713 14,119 13,070 Payments (10,331) (12,974) (12,829) Balance as of December 31, 2022 5,198 4,242 1,143 Provisions 15,153 23,978 14,191 Payments (15,054) (21,200) (14,162) Balance as of December 31, 2023 $ 5,297 $ 7,020 $ 1,172 Other Allowances Other allowances include cash discounts, product returns, sales incentives and other adjustments, which are accounted for as variable consideration and are recorded as a reduction to revenue in the same period the related product is sold.
Other operating expense, net in 2021 included a $500 million charge related to the extension of the Calico Life Sciences LLC collaboration. See Note 5 to the Consolidated Financial Statements for additional information.
See Note 5 to the Consolidated Financial Statements for additional information. Other Operating Expense (Income), Net Other operating expense (income), net included a gain of $169 million in 2023 and a charge of $229 million in 2022 related to a development liability associated with an asset divested as part of Allergan acquisition.
Net revenues for Rinvoq increased 58% in 2022 primarily driven by continued strong volume and market share uptake since launch for the treatment of moderate to severe rheumatoid arthritis as well as market growth.
Net revenues for Rinvoq increased 58% in 2023 primarily driven by continued strong market share uptake as well as market growth across all indications, partially offset by unfavorable pricing. Net revenues for Imbruvica represent product revenues in the United States and collaboration revenues outside of the United States related to AbbVie's 50% share of Imbruvica profit.
ABBV-951 • In May 2022, AbbVie submitted a New Drug Application to the FDA for ABBV-951 (foscarbidopa/foslevodopa) for the treatment of motor fluctuations in patients with advanced Parkinson's disease. 2022 Form 10-K | 36 RESULTS OF OPERATIONS Net Revenues The comparisons presented at constant currency rates reflect comparative local currency net revenues at the prior year's foreign exchange rates.
The CRL did not request that AbbVie conduct additional efficacy and safety trials related to the drug. • In December 2023, AbbVie submitted the Complete Response Resubmission for NDA for ABBV-951. • In January 2024, AbbVie announced the launch of Produodopa (ABBV-951) in the European Union for the treatment of advanced Parkinson's disease with severe motor fluctuations and hyperkinesia (excessive movement) or dyskinesia (involuntary movement), and when available combinations of Parkinson's medicinal products have not given satisfactory results. 37 | 2023 Form 10-K RESULTS OF OPERATIONS Net Revenues The comparisons presented at constant currency rates reflect comparative local currency net revenues at the prior year's foreign exchange rates.
No commercial paper borrowings were issued during 2022 or 2021 and there were no commercial paper borrowings outstanding as of December 31, 2022 or December 31, 2021. AbbVie may issue additional commercial paper or retire commercial paper to meet liquidity requirements as needed.
No commercial paper borrowings were issued during 2023 or 2022 and there were no commercial paper borrowings outstanding as of December 31, 2023 or December 31, 2022. Subsequent to 2023, AbbVie issued commercial paper borrowings of which $1.7 billion were outstanding as of the date of filing this Annual Report on Form 10-K.
The company's financial performance in 2022 included delivering worldwide net revenues of $58.1 billion, operating earnings of $18.1 billion, diluted earnings per share of $6.63 and cash flows from operations of $24.9 billion. Worldwide net revenues increased by 3% on a reported basis and 5% on a constant currency basis, reflecting growth across its immunology, neuroscience and aesthetics portfolios.
The company's financial performance in 2023 included delivering worldwide net revenues of $54.3 billion, operating earnings of $12.8 billion, diluted earnings per share of $2.72 and cash flows from operations of $22.8 billion.
Investment cash flows in 2021 included $535 million cash consideration paid to acquire Soliton, Inc. offset by cash acquired, payments made for other acquisitions and investments of $1.4 billion, capital expenditures of $787 million and net purchases of investment securities totaling $21 million.
Operating cash flows also reflected AbbVie’s contributions to its defined benefit plans of $366 million in 2023 and $357 million in 2022. Investing cash flows in 2023 included payments made for other acquisitions and investments of $1.2 billion, capital expenditures of $777 million, and net purchases of investments securities totaling $22 million.
AbbVie's global Imbruvica revenues decreased 16% in 2022 as a result of decreased market demand and lower market share in the United States. The decrease in net revenues was also partially offset by increased collaboration revenues.
AbbVie's global Imbruvica revenues decreased 21% in 2023 primarily driven by decreased demand and lower market share in the United States as well as decreased collaboration revenues. Net revenues for Venclexta increased 15% in 2023. In the United States, Venclexta net revenues increased 8% driven by continued market growth across all indications, market share uptake as well as favorable pricing.
On January 31, 2023, Humira lost exclusivity in the United States. Following this loss of exclusivity, AbbVie expects direct biosimilar competition and Humira net revenues to decline in the United States. AbbVie continues to pursue strategies to maintain broad formulary access of Humira and manage the impact of biosimilar erosion.
Global Humira sales decreased 32% in 2023. In the United States, Humira sales decreased 35% in 2023 primarily driven by direct biosimilar competition following loss of exclusivity on January 31, 2023. Internationally, Humira revenues decreased 12% in 2023 primarily driven by the continued impact of direct biosimilar competition.
Net revenues for Juvederm Collection decreased 2% in 2022 due to economic pressures impacting consumer discretionary spending and increased pricing promotions to support the market. International net revenues increased by 9% due to increased investment in key markets, partially offset by the suspension of aesthetic operations in Russia and the impact of COVID-19 in China.
In the United States, Juvederm Collection net revenues decreased 5% primarily driven by decreased consumer demand due to economic pressures, partially offset by new product launches. Internationally, Juvederm Collection revenue increased 2% driven by increased consumer demand across key international markets and price.
Gross margin percentage for 2022 was favorably impacted by changes in product mix, partially offset by an intangible asset impairment charge of $770 million.
Gross margin percentage for 2023 was unfavorably impacted by intangible asset impairment charges of $3.6 billion primarily related to Imbruvica, CoolSculpting and Liletta, higher amortization of intangibles and changes in product mix, partially offset by the favorable tax law changes in Puerto Rico.
Oncology Teliso-V • In January 2022, AbbVie announced that the FDA granted Breakthrough Therapy Designation to investigational telisotuzumab vedotin (Teliso-V) for the treatment of patients with advanced/metastatic epidermal growth factor receptor wild type, nonsquamous non-small cell lung cancer with high levels of c-Met overexpression whose disease has progressed on or after platinum-based therapy. • In May 2022, AbbVie initiated a Phase 3 clinical trial to evaluate Teliso-V versus docetaxel for the treatment of patients with previously treated c-Met overexpressing, epidermal growth factor receptor wild type, advanced/metastatic non-squamous non-small cell lung cancer.
Teliso-V • In November 2023, AbbVie announced positive top-line results from the Phase 2 LUMINOSITY trial evaluating telisotuzumab-vedotin (Teliso-V) in patients with c-Met protein overexpression, epidermal growth factor receptor wild type, advanced/metastatic nonsquamous non-small cell lung cancer.
The extent to which COVID-19 may impact AbbVie's financial condition and results of operations remains uncertain and is dependent on numerous evolving factors, including the measures being taken by authorities to mitigate against the spread of COVID-19, the emergence of new variants and the effectiveness of vaccines and therapeutics. 2023 Strategic Objectives AbbVie's mission is to discover and develop innovative medicines and products that solve serious health issues today and address the medical challenges of tomorrow while achieving top-tier financial performance through outstanding execution.
Certain products are co-marketed or co-promoted with other companies. AbbVie operates as a single global business segment and has approximately 50,000 employees. 2024 Strategic Objectives AbbVie's mission is to discover and develop innovative medicines and products that solve serious health issues today and address the medical challenges of tomorrow while achieving top-tier financial performance through outstanding execution.
Food and Drug Administration (FDA) approved Skyrizi for the treatment of adults with active psoriatic arthritis. • In June 2022, AbbVie announced that the FDA approved Skyrizi for the treatment of adults with moderately to severely active Crohn’s disease. • In November 2022, AbbVie announced that the European Commission (EC) approved Skyrizi for the treatment of adults with moderately to severely active Crohn's disease who have had inadequate response, lost response or were intolerant to conventional or biologic therapy.
Confirming the Committee for Medicinal Products for Human Use (CHMP) opinion, the previously approved Rinvoq indication statements were not changed and the dosage and special warnings for all JAK inhibitors were updated to include additional information about the risks associated with JAK inhibitors. 2023 Form 10-K | 34 • In April 2023, AbbVie announced that the EC approved Rinvoq for the treatment of adults with moderately to severely active Crohn’s disease who have had an inadequate response, lost response or were intolerant to either conventional therapy or a biologic agent. • In May 2023, AbbVie announced that the U.S.
The following discussion and analysis of AbbVie's net revenues by product is presented on a constant currency basis. Global Humira sales increased 4% in 2022 primarily driven by market growth across therapeutic categories, partially offset by direct biosimilar competition in international markets.
Worldwide net revenues decreased by 6% on a reported and constant currency basis due to Humira biosimilar competition which was partially offset by growth across the non-Humira product portfolio.
Acquired IPR&D and milestones expense in 2022 included a charge of $130 million related to acquiring Syndesi Therapeutics SA, charges related to other upfront payments totaling $315 million and development milestones of $252 million.
R&D expense percentage in 2023 was also unfavorably impacted by an intangible asset impairment charge of $630 million. 41 | 2023 Form 10-K Acquired IPR&D and Milestones years ended December 31 (in millions) 2023 2022 2021 Upfront charges $ 582 $ 445 $ 962 Development milestones 196 252 162 Acquired IPR&D and milestones $ 778 $ 697 $ 1,124 Acquired IPR&D and milestones expense in 2022 included a charge related to the upfront payment of $130 million to acquire Syndesi Therapeutics SA.
In this study, epcoritamab demonstrated efficacy with durable responses in patients who had previously received at least two prior lines of anti-lymphoma therapy including chimeric antigen receptor T-cell therapy. • In September 2022, AbbVie and Genmab submitted a biological license application (BLA) to the FDA for epcoritamab for the treatment of patients with relapsed/refractory large B-cell lymphoma. • In October 2022, AbbVie and Genmab submitted an MAA to the EMA for epcoritamab for the treatment of patients with relapsed/refractory diffuse large B-cell lymphoma. • In October 2022, AbbVie initiated a Phase 3 clinical trial to evaluate epcoritamab in combination with rituximab and lenalidomide compared to rituximab and lenalidomide in patients with relapsed or refractory follicular lymphoma. • In November 2022, AbbVie announced that the FDA has accepted for priority review the BLA for epcoritamab for the treatment of relapsed/refractory large B-cell lymphoma.
Oncology Epkinly • In March 2023, AbbVie initiated a Phase 3 clinical trial to evaluate epcoritamab in combination with R-CHOP compared to R-CHOP in patients with newly diagnosed diffuse large B-cell lymphoma (DLBCL). • In May 2023, AbbVie announced that the FDA approved Epkinly (epcoritamab) as the first bispecific antibody to treat adult patients with relapsed or refractory (R/R) DLBCL. • In September 2023, AbbVie announced that the EC approved Tepkinly (epcoritamab) for adults with R/R DLBCL after two or more lines of systemic therapy. • In November 2023, AbbVie announced that the FDA granted Breakthrough Therapy Designation to Epkinly for the treatment of adult patients with R/R follicular lymphoma after two or more therapies.
Financing cash flows also included repayment of $750 million aggregate principal amount of floating rate senior notes, $1.3 billion aggregate principal amount of 3.375% senior notes, $1.8 billion aggregate principal amount of 2.15% senior notes and $750 million aggregate principal amount of floating rate senior notes at maturity.
During the quarter ended December 31, 2023 the company also repaid €500 million aggregate principal amount of 1.50% senior euro notes and $1.3 billion aggregate principal amount of 3.75% senior notes at maturity.
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Certain products are co-marketed or co-promoted with other companies.
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Regulation The Inflation Reduction Act of 2022 has and will continue to have a significant impact on how drugs are covered and paid for under the Medicare program, including through the creation of financial penalties for drugs whose price increases outpace inflation, the redesign of Medicare Part D benefits to shift a greater portion of the costs to manufacturers, and through government price-setting for certain Medicare Part B and Part D drugs.
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Following the closing of the Allergan acquisition in 2020, AbbVie implemented an integration plan designed to reduce costs, integrate and optimize the combined organization. As a result of the successful execution of the integration plan, AbbVie realized $2.5 billion of annual cost synergies in 2022. To achieve these integration objectives, AbbVie incurred total cumulative charges of $2.3 billion through 2022.
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In 2023, Imbruvica was selected as one of the first 10 medicines subject to government-set prices beginning in 2026. The price-setting process will conclude in 2024 and the Centers for Medicare & Medicaid Services will publish prices that will be applicable to the 10 selected drugs beginning in 2026.
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These costs consisted of severance and employee benefit costs (cash severance, non-cash severance, including accelerated equity award compensation expense, retention and other termination benefits) and other integration expenses. 2022 Form 10-K | 32 Recent Global Events Russia/Ukraine In response to the military conflict between Russia and Ukraine, the United States and other North Atlantic Treaty Organization member states, as well as certain non-member states, announced targeted economic sanctions and export controls on Russia and Belarus.
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It is possible that more of our products, including products that generate substantial revenues, could be selected in future years, which could, among other things, accelerate revenue erosion prior to expiration of intellectual property protections. The effect of reducing prices and reimbursement for certain of our products would significantly impact our results of operations.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe following table reflects the total foreign currency forward exchange contracts outstanding at December 31, 2022 and 2021: 2022 2021 as of December 31 (in millions) Contract amount Weighted average exchange rate Fair and carrying value receivable/(payable) Contract amount Weighted average exchange rate Fair and carrying value receivable/(payable) Receive primarily U.S. dollars in exchange for the following currencies: Euro $ 8,507 1.071 $ 9 $ 10,253 1.155 $ 195 Canadian dollar 1,302 1.312 40 571 1.258 9 British pound 772 1.234 (8) 605 1.331 9 Chinese yuan 596 7.024 (5) 673 6.400 (1) Japanese yen 567 133.3 (3) 602 113.3 9 All other currencies 1,954 n/a (2) 1,549 n/a 5 Total $ 13,698 $ 31 $ 14,253 $ 226 The company estimates that a 10% appreciation in the underlying currencies being hedged from their levels against the U.S. dollar, with all other variables held constant, would decrease the fair value of foreign exchange forward contracts by $1.4 billion at December 31, 2022.
Biggest changeThe following table reflects the total foreign currency forward exchange contracts outstanding at December 31, 2023 and 2022: 2023 2022 as of December 31 (in millions) Contract amount Weighted average exchange rate Fair and carrying value receivable/(payable) Contract amount Weighted average exchange rate Fair and carrying value receivable/(payable) Receive primarily U.S. dollars in exchange for the following currencies: Euro $ 10,707 1.107 $ (99) $ 8,507 1.071 $ 9 Canadian dollar 1,244 1.329 (8) 1,302 1.312 40 Japanese yen 726 139.636 2 567 133.271 (3) British pound 505 1.271 (1) 772 1.234 (8) Chinese yuan 479 7.104 — 596 7.024 (5) All other currencies 2,263 n/a (31) 1,954 n/a (2) Total $ 15,924 $ (137) $ 13,698 $ 31 The company estimates that a 10% appreciation in the underlying currencies being hedged from their levels against the U.S. dollar, with all other variables held constant, would decrease the fair value of foreign exchange forward contracts by $1.6 billion at December 31, 2023.
Interest Rate Risk The company estimates that an increase in interest rates of 100 basis points would adversely impact the fair value of AbbVie's interest rate swap contracts by approximately $155 million at December 31, 2022. If realized, the fair value reduction would affect earnings over the remaining life of the contracts.
Interest Rate Risk The company estimates that an increase in interest rates of 100 basis points would adversely impact the fair value of AbbVie's interest rate swap contracts by approximately $216 million at December 31, 2023. If realized, the fair value reduction would affect earnings over the remaining life of the contracts.
As of December 31, 2022, the company has €5.9 billion aggregate principal amount of unsecured senior Euro notes outstanding, which are exposed to foreign currency risk. The company designated these foreign currency denominated notes as hedges of its net investments in certain foreign subsidiaries and affiliates.
As of December 31, 2023, the company has €5.4 billion aggregate principal amount of unsecured senior Euro notes outstanding, which are exposed to foreign currency risk. The company designated these foreign currency denominated notes as hedges of its net investments in certain foreign subsidiaries and affiliates.
The company estimates that an increase of 100 basis points in long-term interest rates would decrease the fair value of long-term debt by $4.2 billion at December 31, 2022. A 100 basis point change is believed to be a reasonably possible near-term change in interest rates. 2022 Form 10-K | 48
The company estimates that an increase of 100 basis points in long-term interest rates would decrease the fair value of long-term debt by $3.9 billion at December 31, 2023. A 100 basis point change is believed to be a reasonably possible near-term change in interest rates. 49 | 2023 Form 10-K

Other ABBV 10-K year-over-year comparisons