Teva recently launched the first true generic salmeterol/fluticasone propionate for asthma in the United States, but in a surprise twist, the generic is an authorized generic to Teva’s own “branded-generic” salmeterol/fluticasone propionate, AirDuo RespiClick, and is not directly substitutable with GlaxoSmithKline’s Advair. It was a clever move on Teva’s part to get approval for a novel version of salmeterol/fluticasone propionate with their own well-received inhaler device rather than trying to duplicate GSK’s beloved Diskus. It also allowed Teva to circumvent the traditional generic regulatory pathway, which has been nearly impossible to navigate for inhaled therapies. Thus far, two companies have embarked on the traditional route to generic entry: Mylan announced receipt of a Complete Response Letter (CRL) in March, while Hikma/Vectura await their May 10 GDUFA date. If Hikma/Vectura’s generic fails to gain approval as an AB-rated generic, then Teva will be rewarded for their strategic ingenuity.
Teva’s AirDuo and its corresponding generic offer an interesting alternative in the U.S. LABA/ICS market. The drugs are only approved for asthma—they lack the COPD indication labeling that Advair and AstraZeneca’s Symbicort enjoy—but they offer lower dosing than Advair (14/55, 14/113, and 14/232 mcg vs. Advair’s 50/100, 50/250, and 50/500 mcg). Given past concerns around the use of LABAs in asthma and a desire to keep corticosteroid exposure to a minimum, particularly in children, who make up a notable portion of the asthma population, lower doses could prove to be a key influencer in physicians’ prescribing decisions. The RespiClick dry-powder inhaler, known as the Spiromax in Europe, has also gotten positive reviews from its use with a generic version of Symbicort in Europe and as a rescue inhaler in the United States (ProAir RespiClick). The device boasts a taste indicator, dose counter, and reduced number of steps, all of which can help asthma patients to comply better with their prescribed regimen. Yet, the greatest advantage on which Teva can capitalize is lower cost. AirDuo’s authorized generic is coming in at a 69-81% discount to Advair. Even with undisclosed discounts to payers, such a discount is likely more than GSK wants to offer. Even if the new generics cannot be directly substituted for Advair, a subset of patients who simply need the least expensive LABA/ICS FDC will finally have a viable option, enabling Teva to take some volume away from GSK’s blockbuster and gain traction in the asthma market.
For years, GSK has been asked about what would happen when generics launched, and for years, the manufacturer held firm that the approval of a substitutable generic Advair would not be so simple. Even with Teva’s double launch and a new CEO at GSK, its tune remains the same. During its 2017 Q1 earnings call on April 26, GSK continued to downplay the impact that generics would have in this market. When asked about the impact of Teva’s two products, the CEO would only comment that it was a “very different product with [a] different mechanism, [and a] different dose” than Advair, while ignoring the part of the analyst’s question about potential impact on formulary positioning. Even if GSK refuses to think of AirDuo and its generic as a direct threat to Advair, the products are still a “me too” threat to Advair, adding more competition to this already-populated drug class. GSK has repeatedly said over the past few years that one reason they weren’t too concerned about the effect of a generic was that the increased formulary competition among agents in the class had already created the same effect as generic entry on the price of the LABA/ICSs. However, the steep price discount for Teva’s authorized generic should make GSK worry that the floor can still drop beneath Advair (and Breo, GSK’s once-daily follow-on to Advair). Despite their seemingly relaxed attitude on generic salmeterol/fluticasone propionate, GSK would want to prevent the price of the entire LABA/ICS class from dipping too much since that will affect Breo’s price as well. The company needs Breo, a key component of the newer Ellipta franchise, to continue to grow in order to help replace Advair’s waning sales.
A suggestion was made during GSK’s Q1 earnings call that GSK might be prepared to employ a similar strategy as Teva, that is, launching its own authorized generic to Advair when the time comes. If developing a copycat of the Diskus is truly that challenging, maybe GSK is the only company that can do so effectively. Of course, GSK refused to offer specifics but indicated it does have a multi-pronged action plan to execute if/when substitutable generics do launch. By being so focused on only substitutable generics to Advair, I hope GSK has not underestimated the threat that Teva’s dual launch could pose to their LABA/ICS FDC sales.
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