A well-known drug for asthmatics is being removed from pharmacies

The well-known asthma drug Flovent , which helps thousands of patients breathe, has been off the shelves since early January. The British pharmaceutical company GSK is discontinuing the branded inhaler and offering an identical generic version instead. In countries where the drug was fully or partially covered by health insurance, doctors are concerned about the future of their patients.

Many have already encountered insurance obstacles when switching to an alternative drug. To get access to a new inhaler, a new prescription and a verdict from insurers are required, which takes a lot of time. The situation is also exacerbated by the SARS season, when patients may not be able to switch to a generic in time.

Problems with insurance: a new generic can hit the pocket

Doctors treating patients with asthma claim that an authorized generic is as effective as a branded drug. However, insurers are in no hurry to cover it. Patients will have to get new prescriptions and deal with insurance coverage issues at the height of the respiratory virus season.

"This drug has been the most popular inhaled drug for the last 25 or 30 years. It's been the most commonly prescribed by pediatricians for patients who need daily preventive medication," said Robyn Cohen, a pediatric pulmonologist at Boston Medical Center.

Doctors urged patients to take action back in December 2023 so that they could receive the medicine before the New Year. However, the disappearance of Flovent and the lack of insurance coverage for its supposedly identical replacement have touched on complex aspects of American healthcare and drug prices.

A revolution in the Medicaid program

In justifying its decision on the Flovent inhaler, the manufacturer GSK said it strives to be ambitious for patients by creating new solutions. The company also noted that the authorized generics Flovent HFA inhalation aerosol and Flovent Diskus inhalation powder were launched in May 2022 and October 2023. At the same time, the manufacturer warned that it would stop producing branded versions from January 1, 2024.

The authorized generics, according to GSK, "will provide patients in the United States with potentially cheaper alternatives to these medically important products."

However, experts who follow the industry both on the Wall Street stock market and in academia point out that GSK is making the move just as a new law regulating Medicaid rebates has been issued. Under the new regulations, the company will have to pay large fines for raising prices for Flovent for several years.

The legal changes, which came into effect on January 1, 2024, in the US healthcare system, remove restrictions on Medicaid rebates that companies must reimburse in the event of a drug price increase.

"Flovent Diskus has been on the market since 2000 and Flovent HFA since 2004, and GSK has repeatedly raised prices for both products since their launch. These are exactly the drugs that will be affected by the new policy that removes the Medicaid rebate cap," said Dr. William Feldman, an associate physician in the pulmonary medicine department.

Pharmaceutical companies do not want to sell at a loss

Until the end of 2023, drug rebates were limited to the total price of the drug, so manufacturers never paid Medicaid more than the cost of the drug. However, under a new provision of the American Recovery and Reinvestment Act of 2021, this restriction has been lifted.

Starting January 1, 2024, drugs whose prices have increased significantly may result in Medicaid rebates that exceed their cost. This means that pharmaceutical companies will sell these drugs to Medicaid at a loss.

"Obviously, a pharmaceutical company does not want to sell anything in its portfolio at a loss. So they try to avoid this in two ways: by removing the drug from the market or authorizing a generic," concludes analyst Andrew Baum.

Baum also notes that an authorized generic is treated as a separate product, but still allows the pharmaceutical company to receive part of the economic benefits. In other words, it is the same product without a brand name and a history of price increases. According to GoodRx, the price of branded Flovent has increased by about 47% since 2014.

The new law has shaken up the US pharmaceutical market

In anticipation of the abolition of the Medicaid rebate cap on January 1, 2024, many other drug manufacturers have also made changes. This year, insulin manufacturers announced a significant reduction in prices for their products - by more than 70%. According to analysts, this step will allow companies to save hundreds of millions of dollars a year.

"The authorized generic strategy used by GSK, in a broad sense, is a way to maximize the profitability of this product," said financial analyst David Ansell.

GSK has indeed set the price of the authorized generic lower than the branded Flovent. For example, one package of Flovent HFA in a dose of 110 mg costs $274, which is about 50% higher than the cost of the generic equivalent, which costs $178.

According to experts, if insurance plans do not cover the generic Flovent, patients will have to get a new prescription for a completely different drug during the winter SARS season.

The Flovent inhaler is the most common preventive medicine among patients with persistent asthma. It reduces airway swelling and reduces the body's overreaction to triggers that interfere with breathing. According to pulmonologist Robin Cohen, during the cold and flu season, taking such medications daily becomes even more important.

"Influenza, Covid, RSV - all of these circulating viruses are some of the most serious factors that trigger asthma attacks in children," Cohen notes. "This leads to children ending up in the emergency room," the doctor adds.

Experts are also concerned that patients, doctors, and pharmacists alike are not fully aware of the upcoming changes to Flovent. It will take time to find a suitable alternative and resolve prescription and insurance coverage issues. Given that this is a daily life-saving drug for asthmatics, delaying the process could have the most unexpected consequences.