About Richard Gonzalez
Richard Gonzalez, executive chairman of AbbVie, has been involved in discussions regarding the company's financial performance and drug pricing. On the company's Q4 2023 earnings call, Gonzalez stated that AbbVie's growth platform, excluding Humira, delivered full-year sales growth of more than 8% and that the company expects a return to robust growth in 2025. He also noted that AbbVie had received an initial offer on the cancer drug Imbruvica as part of a pricing process by the Centers for Medicare & Medicaid Services (CMS), with a final price expected by September 1, 2024. Gonzalez has previously defended the company's patenting practices, stating that AbbVie patents innovation it believes is meaningful, and has acknowledged that the company spends about $4 billion annually on marketing and advertising.
Gonzalez has also faced scrutiny from lawmakers regarding drug pricing and patent strategies. In a 2021 congressional hearing, Representative Katie Porter questioned him about AbbVie's price increases for Imbruvica and the company's spending on stock buybacks and dividends, which Gonzalez said totaled $13 billion in buybacks and $50 billion in dividends from 2013 to 2018. In another hearing, Representative Peter Welch questioned Gonzalez about AbbVie's use of product enhancements to extend patent protection, which Gonzalez said can result in maintaining pricing power. Gonzalez has also been questioned about his knowledge of the inventor of Humira, telling Representative Ro Khanna that he did not know who invented the drug, which Khanna noted was Nobel laureate Gregory Winter.
Source: AI-verified profile updated from Richard Gonzalez's recent appearances.
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Transcript (28 segments)
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Reporter0:00
Nice for five minutes. Thank you, Mr. Gonzalez. You're the CEO of AbV, which makes the cancer drug Imbruvica. Do you know what the annual price of Imbruvica was for a patient taking the standard three pills per day in 2013?
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Richard Gonzalez0:16
A hundred and thirty thousand dollars.
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Reporter0:18
Okay. We had ninety-nine thousand seven hundred and sixty-six. What about today for those same three pills?
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Richard Gonzalez0:26
I think it's 169,000.
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Reporter0:28
We have 181, but we can agree that there was a significant increase. Roughly in a matter of eight years, AbV more than doubled the price. Now, Mr. Gonzalez, how much money did AbV put directly into the research and development costs of Imbruvica before it hit the market in 2013?
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Richard Gonzalez0:50
We acquired Imbruvica when it was launched, so it would have been the company that we acquired. So, in my time, AbV itself didn't spend any money to create it.
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Reporter1:02
Imbruvica was invented by a smaller company, Pharmacyclics, which you later acquired. Correct?
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Richard Gonzalez1:08
We paid 21 billion dollars for the company. Correct.
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Reporter1:11
It was expensive to acquire them. So you paid fair market value for Pharmacyclics, but AbV then doubled the price, presumably justified by its $2.45 billion investment in R&D. Are there fewer side effects for patients now than there were in 2013?
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Richard Gonzalez1:31
Well, we developed significant indications and expansions and other disease studies.
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Reporter1:36
Are there fewer side effects, sir?
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Richard Gonzalez1:39
No, it has the same side effect profile.
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Reporter1:42
Mr. Gonzalez, do people need less of this medicine, Imbruvica, to treat lymphoma now?
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Reporter1:52
So AbV took zero risk to develop this drug. You bought it approved for the market, knowing it would be profitable. You hiked the price to pay for R&D, but you haven't made the drug any better, even as you doubled the cost. I wrote an entire report on what is essentially the Imbruvica story: big pharma gobbles up a small innovative company, does nothing to improve the drug, but jacks up the price. Now, you told us that you spent $2.54 billion for R&D for Imbruvica even though the drug didn't get any better. Really, it was all for these innovations and indications, which are designed to keep competitors off the market and find new sales opportunities. So I want to look at what other money AbV spends doing its business. You filed 165 patents for Imbruvica. You filed patents for Humera and other drugs to keep competitors off the market. How much did you spend on litigation and settlements from 2013 to 2018?
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Richard Gonzalez2:57
Let me correct one thing that you said: it is not true that we didn't invest in additional indications and additional diseases. As an example, we received approval after the development work of... graft versus host disease. We also...
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Reporter3:15
Proclaiming my time, Mr. Gonzalez. How much did AbV spend on litigation and settlements from 2013 to 2018?
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Richard Gonzalez3:23
I don't have that number off the top of my head. We'll be happy to give it to you.
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Reporter3:26
Okay. $1.6 billion. $2.45 billion on R&D, $1.6 billion in litigation and settlements. What about marketing and advertising? How much does AbV spend on that?
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Richard Gonzalez3:37
Well, marketing and advertising we spend about four billion dollars a year.
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Reporter3:42
Yep. $4.7 billion. How about executive compensation, 2013 to 2018?
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Richard Gonzalez3:49
2013 to 2018. It's probably on average about 60 million dollars a year.
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Reporter3:57
Try 334 on for size. Now, how much did AbV spend on stock buybacks and shareholders? Start stock buybacks and dividends to enrich your shareholders from 2013 to 2018?
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Richard Gonzalez4:10
Well, stock buybacks, if you actually look at just pure stock buybacks, it would be about 13 billion. Stock buybacks and dividends is the question, sir?
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Reporter4:19
Dividends, that have to come back with a number for that over that period of time.
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Richard Gonzalez4:24
50 billion dollars.
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Reporter4:27
So, Mr. Gonzalez, you're spending all this money to make sure you make money, rather than spending money to invest in and develop drugs and help patients with affordable life-saving drugs. You lie to patients when you charge them twice as much for an unimproved drug, and then you lie to policy makers when you tell us that R&D justifies those price increases. The big pharma fairy tale is one of groundbreaking R&D that justifies astronomical prices, but the real farmer reality is that you spend most of your company's money making money for yourself and your shareholders. And the fact that you're not honest about this with patients and with policy makers, that you're feeding us lies that we must pay astronomical prices to get innovative treatments, is false. The American people and the patients deserve so much better. I yield back.
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Interviewer5:26
The gentlelady's time has expired. The gentleman from Kansas, Mr. LaTurner, is recognized for five minutes.
