Company: ABBV
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0001551152-25-000020
Chunk: 57

Company: AbbVie Inc.
Filing Date: 2025-02-14
Form: 10-K
Item: Item 3
Chunk 57
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 over the long term. The company's financial performance in 2024 included delivering worldwide net revenues of $56.3 billion, operating earnings of $9.1 billion, diluted earnings per share of $2.39 and cash flows from operations of $18.8 billion. Worldwide net revenues increased by 4% on a reported and 5% on a constant currency basis.

Diluted earnings per share in 2024 was $2.39 and included the following after-tax costs: (i) $6.5 billion related to the amortization of intangible assets; (ii) $3.7 billion for the change in fair value of contingent consideration liabilities; (iii) $3.5 billion related to intangible asset impairment; (iv) $978 million of acquisition and integration expenses; and (v) $721 million for charges related to litigation matters. These costs were partially offset by an income tax benefit of $1.8 billion primarily related to the settlement of income tax examinations. Additionally, financial results reflected continued funding to support all stages of AbbVie’s pipeline assets and continued investment in AbbVie’s on-market brands.

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. In 2023, Imbruvica was selected as one of the first 10 medicines subject to government-set prices beginning in 2026. In 2024, the CMS published Medicare Part D prices that will be applicable to the 10 selected drugs, including Imbruvica, beginning in 2026. In January 2025, HHS, through the CMS, selected Vraylar and Linzess as two of the 15 medicines subject to government-set prices beginning in 2027. 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. See Part I, Item 1 “Business – Regulation – Commercialization, Distribution and Manufacturing,” Part I,