More than 20 years after gaining FDA approval for Flovent, GSK still controlled the market in the U.S. for the asthma inhaler through a partnership with an “authorized generic” dealer, a setup that forced many users to pay higher prices and allowed the British drugmaker to avoid paying Medicaid rebates, according to a report (PDF) released by Sen. Maggie Hassan, D-N.H.
GSK’s control of the market reduced access to Flovent and created financial hardships for some who needed the medicine, according to the report. The result was worsening symptoms for patients in need and more emergency room visits and hospitalizations, the report added.
“For decades, (GSK) has blocked competitors and increased prices on a life-saving asthma inhaler to unconscionable levels, with children, families and taxpayers paying the price,” Hassan said in a statement. “Congress must act to close the loopholes that GSK exploited so that no other Big Pharma company can cause the harm that GSK did.”
In 2024, GSK exploited a loophole in the American Rescue Plan Act, which President Joe Biden signed into law in 2021 and went into effect in 2024, according to the report. The law required drugmakers that raised prices for drugs higher than the rate of inflation in previous years to make a rebate payment to Medicaid.
But, by taking branded Flovent off the market at the start of 2024, GSK freed itself from the liability and saved an estimated $368 million in 2024 alone, according to Hassan’s report.
Before the law went into effect, GSK had already struck a deal with Ohio-based Prasco Laboratories, allowing it to sell Flovent as an authorized generic. Even though the product was sold by Prasco at a discount to the branded version of Flovent, it ended up costing patients more because they could no longer take advantage of previous rebates and discounts that were offered by GSK.
Without these deals, insurers and pharmacy benefit managers denied or delayed coverage of the authorized generic, making it more expensive for patients and creating an access problem for those who needed the treatment.
Earlier this month, Glenmark scored FDA approval for its generic version of Flovent. At the time, pharmacy media outfit rxradio.fm hailed the nod as the “first true generic” for the treatment, “potentially reshaping access and pricing for millions of asthma patients.”
The Glenmark approval came two years after congressional leaders began pressuring GSK to surrender its “monopoly protection.”
“No company should be able to game the system the way GSK did,” Hassan added during a media briefing Monday.
For its part, GSK said that when Prasco launched the authorized generic in May 2022, the product’s wholesale acquisition cost was 35% below that of branded Flovent.
“From the beginning, we took steps to ensure that the transition from branded Flovent to the AG would not jeopardize patient access,” a GSK spokesperson said in an email. “We started notifying payors of the transition to the AG at the beginning of 2023. In mid-2023, we informed the [FDA], which in turn provided public notification of the discontinuation of branded Flovent on its website. Our sales team sent emails and letters notifying Flovent prescribers of the transition. Over the course of months, we carried out an expansive communications plan to also convey the information to wholesalers, distributors, pharmacists, and patients.”
GSK added that “external factors” have impacted patient access to the authorized generic and that it is not involved in the “process of negotiating or deciding formulary coverage, rebates or final net price.” The company also said it has supported Prasco’s launch of a patient assistance program for the authorized generic, which provides free products to patients who can’t afford treatment.
According to Hassan’s report, information investigators received from three PBMs indicated that the net cost to plan sponsors for an average beneficiary using the authorized generic versions of Flovent was nearly five times higher than the cost for branded Flovent. This indicates that while the authorized generic’s list price was lower than that of the branded medicine, the lack of other rebates or discounts made the substitute more expensive.
A survey of clinicians indicated that 37% said the discontinuation of Flovent had a moderate impact on their practice and 56% said it had a severe impact, according to the report. One PBM tied the discontinuation of Flovent to a 20% decrease in the use of inhaled corticosteroids by its beneficiaries.
In 2022, GSK was accused in a class-action lawsuit of using a ploy known as “device hopping,” in which a branded inhaler is retired and succeeded by a follow-on inhaler with the same active ingredients. The new product then gets a new patent and regulatory protection periods, keeping generic competition at bay.