AbbVie 2013 Annual Report Download - page 57

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related to the Medicare Part D coverage gap ‘‘donut hole.’’ These Medicare and Medicaid rebate
changes will continue to have a negative effect on AbbVie’s gross profit margin in future years.
In 2011, AbbVie began recording the annual fee imposed by health care reform legislation on
companies that sell branded prescription drugs to specified government programs. The amount of the
annual fee, which totaled approximately $110 million in 2013 and $100 million in both 2012 and 2011,
is based on the ratio of certain of AbbVie’s sales as compared to the total such sales of all covered
entities multiplied by a fixed dollar amount specified in the legislation by year. The fee is not tax
deductible and is included in SG&A expenses.
AbbVie’s markets are highly competitive and subject to substantial government regulations. AbbVie
expects debate to continue over the availability, method of delivery, and payment for health care
products and services. It is not possible to predict the extent to which AbbVie or the health care
industry in general might be adversely affected by these factors in the future. A more complete
discussion of these factors is contained in Item 1, ‘‘Business’’ and Item 1A, ‘‘Risk Factors.’’
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