More than 20 years after FDA approval of Flovent, GSK still dominates the U.S. asthma inhaler market through partnerships with “authorized generic” distributors 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.H.).
GSK’s market dominance has reduced access to Flovent and created financial hardship for some people who need the drug, the report said. As a result, patients who needed help became sicker and emergency department visits and hospitalizations increased, the report added.
“For decades, (GSK) has deterred competitors and raised the price of lifesaving asthma inhalers to unconscionable levels, with children, families and taxpayers paying the price,” Hassan said in a statement. “Congress needs to act to close the loopholes exploited by GSK and prevent other big pharmaceutical companies from harming GSK.”
According to the report, GSK exploited loopholes in the American Rescue Plan Act of 2024, which President Joe Biden signed into law in 2021 and took effect in 2024. The law required drug companies that raised drug prices above the previous year’s inflation rate to pay rebates to Medicaid.
But by taking the brand Flovent off the market in early 2024, GSK was relieved of that responsibility, saving an estimated $368 million in 2024 alone, according to Hassan’s report.
Before the law took effect, GSK already had an agreement with Ohio-based Plasco Laboratories that allowed it to sell Flovent as an approved generic drug. Although the product was sold by Prasco at a discount compared to the branded version of Flovent, it ended up costing patients more because they no longer had access to the previous rebates and discounts offered by GSK.
Without these deals, insurance companies and pharmacy benefit managers would deny or delay coverage of approved generic drugs, making generic drugs more expensive for patients and creating problems in access for people in need of treatment.
Earlier this month, Glenmark won FDA approval for a generic version of Flovent. At the time, pharmacy media rxradio.fm hailed the approval as the treatment’s “first true generic drug” and praised it as “potential to transform access and affordability for millions of asthma patients.”
Glenmark’s approval comes two years after parliamentary leaders began pressuring GSK to give up its “monopoly protection.”
“No company should be able to game the system like GSK did,” Hassan added at a media briefing on Monday.
For its part, GSK said that when Prasco launched the certified generic drug in May 2022, the wholesale acquisition cost of the product was 35% lower than that of the branded product Floben.
“From the outset, we have taken steps to ensure that the transition of our brand from Flovent to AG did not jeopardize patient access,” a GSK spokesperson said in an email. “We began notifying payers about the AG transition in early 2023. We notified (FDA) in mid-2023, and the FDA published the discontinuation of branded Flovent on its website. Our sales team sent emails and letters to Flovent prescribers notifying them of the transition. We executed an extensive communications plan over several months to also inform wholesalers, distributors, pharmacists, and patients.”
GSK added that “external factors” affected patient access to approved generic medicines and that it was not involved in “the process of negotiating or determining the formulation’s coverage, rebates or final net price.” The company also said Prasco helped launch a patient assistance program for licensed generic drugs that provides free products to patients who cannot afford treatment.
According to Hassan’s report, information the investigators obtained from three PBMs showed that the net cost of sponsoring an average beneficiary plan using the approved generic version of Flovent was nearly five times the cost of branded Flovent. This indicates that although the list price of the approved generic drug was lower than the list price of the branded drug, the lack of other rebates or discounts made the substitute product more expensive.
In a survey of clinicians, 37% said discontinuing Flovent had a moderate impact on their practice, and 56% said it had a severe impact, according to the report. One PBM linked discontinuation of Flovent to a 20% reduction in the amount of inhaled corticosteroids used by its beneficiaries.
In 2022, GSK was accused in a class action lawsuit of using a tactic known as “device hopping,” in which it discontinues a branded inhaler and carries it over to a subsequent inhaler containing the same active ingredient. The new product is then given a new patent and regulatory protection period, keeping generic competition at bay.
