CNN –
Starting Jan. 1, a drug that thousands of patients rely on to breathe will disappear from pharmacy shelves, and doctors fear patients could face delays in switching to alternatives and getting insurance coverage.
Manufacturer GSK has announced that it will no longer offer the branded asthma inhaler Flovent and will instead produce an “authorized generic” version that is identical but not of the same brand.
Doctors who treat asthma patients say the approved generic works just as well as the brand-name drug, but it doesn't appear to be covered as widely by insurers. That can mean patients needing to get new prescriptions and overcome coverage hurdles at the height of respiratory virus season.
“This medication has been the most commonly used inhalation medication for the last 25 or 30 years,” said Dr. Robyn Cohen, director of the Pediatric Pulmonary and Allergy Clinic at Boston Medical Center. “The vast majority of pediatricians resort to this when they decide that their patient needs daily preventative medication. … The fact that it is being discontinued will be a major shock to the system for patients, families and physicians.”
Doctors are urging patients to take action now to ensure they continue to receive their medications in the new year, and advocacy groups have been trying to spread the word.
But the story of Flovent's disappearance and the lack of insurance coverage for its seemingly identical replacement touches on some of the most complex aspects of American health care and drug prices.
A GSK spokeswoman said the company was making the change “as part of our commitment to be ambitious for patients.”
She noted that the company launched the approved generics Flovent HFA, an inhalation aerosol, and Flovent Diskus, an inhalation powder, in May 2022 and October 2023, and that it subsequently began manufacturing the branded versions in the United States on January 1 States will hire , 2024.
The approved generics, she said, “will potentially provide U.S. patients with lower-cost alternatives to these medically important products.”
But experts who follow the industry both on Wall Street and in academia point out that GSK is making the switch just as a change in Medicaid rebates could leave the company facing hefty penalties of price increases at Flovent over a certain number of years.
The law change, which takes effect on the 1st of the year, removes a cap on Medicaid rebates that companies must pay if they increase drug prices more than inflation.
“Flovent Diskus has been on the market since 2000 and Flovent HFA since 2004, and GSK has increased the price of both products several times since their launch,” says Dr. William Feldman, a resident in the division of pulmonary and critical care medicine at Brigham and Women's Hospital who researches asthma medications, told CNN. “These are the exact medications that will be affected by the new rule eliminating the Medicaid rebate cap.”
Previously, rebates were limited to the total price of a drug, so manufacturers never had to pay more than the cost of the drug back to Medicaid.
But under a provision in the American Rescue Plan Act of 2021, that limit has been eliminated, and starting Jan. 1, 2024, drugs that have faced large price increases over time could end up with rebates to Medicaid that are higher than their price – meaning pharmaceutical companies would sell these drugs to Medicaid at a loss.
“Obviously Pharma doesn't want to sell anything in its portfolio at a loss,” said Andrew Baum, an analyst who covers shares of GSK and other pharmaceutical companies for financial firm Citi. “So attempts are made to avoid the impact through: attitude; Second: approved generic.”
An approved generic, Baum told CNN, would be considered a separate product but “still allows the pharmaceutical industry to reap some of the economic benefits.”
Or to put it another way, it's the same product without the brand and without the history of price increases that would make the drug vulnerable to such large rebates to Medicaid.
According to GoodRx, the price of the branded product Flovent has increased by approximately 47% since 2014.
Other drugmakers have also made changes ahead of the rebate cap being lifted on January 1st; As insulin makers announced significant price cuts – of 70% or more – for their products this year, analysts estimate they will save hundreds of millions of dollars a year.
The authorized generic strategy that GSK employs “is broadly a way to maximize the profitability of the product in question,” said David Amsellem, a financial analyst who covers the industry at investment firm Piper Sandler.
He noted that there are currently no other FDA-approved generic versions of Flovent.
GSK priced the approved generic lower than the branded product Flovent; For example, a package of Flovent HFA in the 110-microgram dose costs $273.83, about 50% more than the $177.99 wholesale cost of its approved generic counterpart, according to prices provided to CNN has communicated. The wholesale acquisition cost is the price before insurance and discounts.
But CVS Caremark, a large pharmacy benefit manager that determines which medications are covered by insurance for its members, is giving another branded inhaler, Pulmicort, priority placement in its formulary instead of the approved generic versions of Flovent.
“In this case, the approved generic drugs were more expensive than the brand-name drugs,” a CVS spokesperson told CNN. He noted that this is based on net prices, not wholesale acquisition costs, meaning Pulmicort could be cheaper because of the discounts its manufacturer, AstraZeneca, pays to get better insurance coverage.
The fact that insurance plans don't widely cover Flovent's approved generic, says BMC's Cohen, “means patients will need a brand new prescription for a completely different drug in the middle of the worst time of the year.” That's the winter season for respiratory viruses .”
For patients with persistent asthma, Flovent has been the most commonly used daily preventive anti-inflammatory medication for decades, Cohen said. It reduces swelling in the airways and reduces the body's exaggerated response to triggers that make breathing difficult.
During cold and flu season, having daily medication is even more important, she said.
“Flu, Covid, RSV — all of these circulating viruses that are circulating right now — are one of the biggest, if not the biggest, triggers for asthma attacks in children,” Cohen said. “This leads to children ending up in the emergency room.”
Cohen said she is concerned that patients as well as doctors and pharmacists don't know this change is coming with Flovent, and they need to act now to explore alternatives and determine insurance coverage.
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For some groups, the alternatives are more limited. For patients with a rarer inflammatory condition called eosinophilic esophagitis, Flovent HFA is one of the most commonly prescribed topical steroids, and for other medications there isn't as much data to support their use in this condition, Dr. Erin Syverson, a senior physician in the division of gastroenterology, hepatology and nutrition at Boston Children's Hospital.
Because EoE affects the esophagus, patients swallow the medicine instead of inhaling it. This helps reduce inflammation, which can cause pain when swallowing or sticking food and requires intervention to remove it. In children, Syverson said, EoE can cause recurrent vomiting, heartburn, abdominal pain and difficulty eating solid foods, and Flovent can help keep the condition under control.
“With discontinuation looming, I'm concerned that this will be just another hurdle for this population of patients who already have very limited medications available,” Syverson told CNN. “I don’t know what January will be like, but I’m worried.”