AbbVie (ABBV) shares have surged 38.4% over the past twelve months, trading near their yearly highs despite a high valuation of 49.8x trailing earnings. Management identified a specific headwind beginning in 2027: the Inflation Reduction Act (IRA) price cap on its psychiatry drug Vraylar. This potential revenue pressure follows a similar impact seen with cancer drug Imbruvica, which faced significant sales declines attributed to IRA pricing and competition. Vraylar remains a strong growth driver, reaching nearly $1.1 billion in global sales during fiscal Q3 2026, a 14.3% increase year-over-year. The company expects Vraylar sales to grow further to $4.2 billion in fiscal 2026 before the price cap takes effect. Meanwhile, AbbVie successfully defended its Botox Therapeutic product from an IRA price selection in a recent federal court ruling, though the government retains the right to appeal. The company's financial resilience is supported by robust growth in its two largest franchises, Skyrizi and Rinvoq, which generated $17.6 billion and $8.3 billion respectively in fiscal 2025. Total revenue rose 10.3% in the third quarter of fiscal 2026 even as Imbruvica sales contracted. AbbVie has also demonstrated defensive characteristics during recent market shocks, falling less than the S&P 500 during tariff and inflation events. Investors will closely monitor Vraylar's performance and guidance in February 2027 to determine if new growth can offset the anticipated price reductions. The stock's high valuation relies on reported earnings which are lower than adjusted measures, adding a layer of complexity to its investment case. Management expects top-tier growth to continue in 2027 despite the looming regulatory pressure.