Successful challenge to the selection of a drug for AbbVie

Partner Kannon Shanmugam and a team from Davis Polk represented AbbVie in the first successful challenge to the selection of a drug for price controls under the Medicare Drug Price Negotiation Program.

AbbVie filed suit in the United States District Court for the District of Columbia in February after the Centers for Medicare and Medicaid Services selected BOTOX for price controls. AbbVie argued that CMS exceeded its statutory authority because BOTOX falls within a statutory exclusion for biological products “derived from human whole blood or plasma.” The parties filed cross-motions for summary judgment, and Shanmugam presented oral argument on behalf of AbbVie in September.

On October 29, 2026, Judge Carl J. Nichols granted summary judgment in relevant part to AbbVie, holding that BOTOX falls within the statutory exclusion for plasma-derived products. He accordingly vacated the selection of BOTOX and enjoined CMS from applying any of the provisions of the Drug Price Negotiation Program to BOTOX.

There has been extensive litigation over the Drug Price Negotiation Program, and 11 prior challenges have been rejected by district courts and courts of appeals. This is the first successful challenge to the selection of a drug, and it is the first opinion to address the scope of one of the program’s statutory exclusions. The case sets an important precedent about the scope of the program and the statute’s judicial-review bar. The case also has significant financial consequences for AbbVie. According to CMS, the government spent over $1.1 billion on BOTOX through Medicare in the 2024-2025 fiscal year. Under the Drug Price Negotiation Program, AbbVie would have had to accept a significant reduction in the price that Medicare pays for BOTOX.

The Davis Polk team included partner Kannon Shanmugam, counsel Jamie Durling and associate Ellie Ritter. All members of the Davis Polk team are based in the Washington DC office.