Who is Richard Gonzalez? AbbVie CEO to testify before Congress on company's drug pricing and patent system
A report by the House Oversight and Reform Committee found that the pharma inflated prices over the last two decades and 'engaged in a series of anticompetitive strategies'
Pharmaceutical company AbbVie has been accused of inflating drug prices for profit, according to a new report by the House Oversight and Reform Committee. Released on Tuesday, May 18, the 43-page report calls out the company for inflating the price of two critical drugs — Humira and Imbruvica.
According to the committee report, Humira is now "the highest-grossing drug in the world". The company reportedly made $16B from that drug alone in 2020, all at the cost of patients in need. The report also found that the sharp increase in costs force many patients to stop taking the drug for rheumatoid arthritis because they could not afford it.
The CEO of the company, Richard Gonzalez, is currently testifying in front of Congress on the matter. The company's patent tactics have also been panned, putting Gonzalez in the hot seat at a critical time for the US, when the government is considering lifting patent protections for Covid-19 vaccines. It's unclear how Gonzalez plans to defend his actions, but here's everything we know about him.
Who is Richard Gonzalez?
Gonzalez currently serves as the CEO and Chairman of the Board of AbbVie. He has been in that role since 2013, before which he was president and chief operating officer of Abbott Laboratories. In 2007, Gonzalez briefly retired after being diagnosed with throat cancer. "I was retired for about two years. I went stir crazy," he told Crain's Chicago Business. According to the interview, he was spurred to return because "I realized I'm just not wired to retire, my golf game is lousy. I decided I was going to go back and do something."
With that, Gonzalez returned to business in 2009, taking over Abbott's venture portfolio that eventually led to a split into AbbVie. Gonzalez is a vastly different CEO, having grown up the ranks without a strong educational background. His LinkedIn profile doesn't list any educational qualifications, nor does his official biography on the company website. He did, however, briefly court some controversy after the Abbot website listed degrees for a while in 2012. The website said he had a bachelor's degree in biochemistry from the University of Houston and a master's degree from the University of Miami. It quickly removed them, calling it an 'administrative error'. Reportedly, he attended both universities but never got a degree.
Beyond that controversy, Gonzalez has kept himself focused on his work, with little known about his personal life. Sometime in 2015, he married jewelry designer Chantel Poynton in Miami, Florida. He can occasionally be seen in Poynton's Instagram photos, so we do know the couple is together. Gonzalez currently lives in Chicago, where he is a well-known face. According to the AbbVie website, Gonzalez is a member of the Commercial Club of Chicago and represents AbbVie on their Civic Committee.
AbbVie accused of 'abusive' patent strategy
Gonzalez is now facing massive scrutiny from Congress as his company's practices are called into question. According to the report, "AbbVie pursued a variety of tactics to increase drug sales while raising prices for Americans." Some of those tactics include anti-competitive pricing, abusing orphan drug protection and using a tactic known as 'patent thicket'. In this tactic, AbbVie "seeks to overwhelm potential competitors with the sheer number of patents on Humira regardless of whether individual patents were properly granted under US law."
The committee found over 200 patents on Humira alone, even though the patent on Humira's active ingredient expired on December 31, 2016. As a result of these tactics, patients were left out in the cold, while executives made plenty of money. "Documents and information obtained by the committee indicate that AbbVie’s senior executives received larger bonuses by raising the price of Humira, Imbruvica, and other drugs," the report said. Reportedly, top executives received around $480M in compensation, "directly linked to revenue increases".
There is also a vast difference in what US patients pay as compared to those outside the country. In 2015, a 40-milligram syringe of Humira was $1,727 in the US, but between $400 and $970 in Canada, the UK, Germany, Japan and South Korea. The investigation is one of the many cases about the cost of healthcare in the US, which both Democrats and Republicans are keen to fight, albeit in different ways. Both parties have introduced legislation to lower drug prices, but face challenges getting them passed in a split Senate.