GSK’s Flovent Strategy Under Federal Scrutiny?

US Senator Elizabeth Warren has requested that the US Office of Inspector General (OIG) at the Department of Health and Human Services investigate GSK for alleged “profiteering” and “brazen circumvention” of Medicaid rebate regulations through the pricing and discontinuation of asthma medicine, Flovent HFA (fluticasone). In a letter, Warren accuses GSK of driving up healthcare costs for both taxpayers and patients, while also creating a shortage of alternatives, particularly for pediatric patients.

GSK increased the price of Flovent HFA by approximately 50 percent between 2013 and 2023. Under the American Rescue Plan Act, drug manufacturers are required to pay increased rebates to Medicaid, if they raise drug prices faster than inflation. This rule, which took effect on January 1, 2024, would have resulted in GSK “losing $367.6 million per year after the rebate cap removal. This amount was almost as high as Flovent’s total net US sales (approximately $394 million in 2022).”

Instead of lowering the price or paying the rebate, GSK discontinued Flovent HFA on the same day the rule went into effect and introduced an authorized generic version through Prasco, a company known for marketing generics for brand-name drugmakers.

Warren’s letter states that “Johns Hopkins Bloomberg School of Public Health estimated that the average net price GSK has charged insurers for the authorized generic is four times as high as the price that the drugmaker charged for Flovent HFA.” GSK CEO Emma Walmsley admitted to investors that the company’s revenue loss from discontinuing Flovent HFA was fully offset by increased sales of authorized generics.

Warren’s letter adds: “GSK’s reply largely focused on its new patient assistance program targeted at uninsured patients, entirely sidestepping my concerns about its overcharging of Medicaid and insured patients’ loss of access to the medication.” 

Many private insurers have refused to cover the authorized generic or have placed it on non-preferred drug lists because of its price tag.

Impact on public health
 

As one of the few inhalers suitable for pediatric use, Flovent HFA’s discontinuation has driven demand for its primary alternative, Asmanex, which has experienced shortages, resulting in increased emergency room visits and hospitalizations, according to some media reports, with pediatricians reporting cases of children experiencing severe asthma attacks due to a lack of access.

Another media report cited a 24 percent increase in asthma hospitalizations following the discontinuation of Flovent. There are also documented cases of patients who were unable to access their inhalers because of the price, including a Wisconsin man who died from an asthma attack after his insurer stopped covering the medication.

Warren alleges that an attempt to obtain information from GSK through formal inquiries in March and December 2024 was avoided, with Arizona Attorney General Kris Mayes further alleging that the company’s pricing scheme violated the Arizona Consumer Fraud Act, contributed to preventable deaths, and led to increased emergency room visits.

The Massachusetts senator urges the OIG to investigate whether GSK or Prasco has violated Medicaid drug pricing laws and to evaluate the financial and health impacts of their actions. She also asks the OIG to consider what regulatory or legislative actions could prevent similar pricing maneuvers by other drug manufacturers in the future.

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