In October 1994, the FDA approved nasal spray Flonase, made by GlaxoSmithKline PLC (GSK), for allergy treatment. The Flonase patent expired in 2003, and the FDA allowed GSK market exclusivity until August 2004, when generic drugmakers would be allowed to release its generic equivalent, fluticasone propionate. Before its exclusivity expired, GSK formed an internal “Flonase brand maturation team” to determine ways to delay the generic release.
The team developed a four-pronged strategy. First, the company tried to influence the FDA as it developed a final guidance on standards for nasal spray products like Flonase, under the guise of advising the FDA on safety issues when its goal was really to tighten the standards generic manufacturers would have to meet. Next, GSK supplemented its original new drug application to get the FDA to delay approval of the generic drugmakers’ abbreviated new drug application (ANDA). Third, GSK tried to raise the standards through the United States Pharmacopeia (USP), which sets standards for drug quality, strength, and purity. Drugmakers usually supply only their data to the USP, which then creates a monograph of tests, test procedures, and acceptance criteria for the pharmaceutical ingredient. GSK submitted a full monograph to the USP, hoping to keep “the ball in our control,” as one team member said in an internal email.
Finally, GSK used citizen petitions to delay the generic manufacturers. Before 2007, when the law was changed, any entity was allowed to petition the FDA about any drug if it had concerns about safety, scientific, or legal issues. The agency was required to review and respond to each petition, which could take a substantial amount of time. Drug companies frequently used this procedure to delay generic drug entry by filing petitions on the eve of FDA approval of the generic drugmaker’s ANDA for competing drugs. GSK filed four citizen petitions after one pharmaceutical company filed an ANDA for fluticasone propionate. None were based on concerns about the drug’s safety or efficacy.
One petition, for example, urged the FDA not to approve any ANDA for fluticasone propionate until the agency had released its final guidance on nasal spray product testing. But GSK knew that the FDA often approves drugs while it is developing final guidances. Another petition sought to have the FDA require that ANDA filers meet the same quality tests that GSK was required to meet for Flonase. GSK could not have expected to prevail because each firm develops its own proprietary tests for each drug and thus it is impossible for a generic manufacturer to perform the same tests.
Through this multipronged strategy, GSK was able to delay the release of a generic version until March 2006, giving it an extra 20 months of exclusivity.
A group of consumers and third-party payers filed a class action, claiming they paid higher prices for Flonase than they would have had to pay for a generic drug. They alleged monopolization, unjust enrichment, and unfair and deceptive trade practices under various states’ laws.
GSK settled for $35 million. It also settled separately with a group of health plans for $11 million. The court has granted preliminary approval, and a final approval hearing is scheduled for June 3.
Citation: In re: Flonase Antitrust Litig., No. 2:08-cv-03301 (E.D. Pa. Jan. 14, 2013).
Plaintiff counsel: Marvin A. Miller and Lori A. Fanning, both of Chicago; and Michael M. Buchman, Marc I. Gross, and Adam G. Kurtz, all of New York City.