For families of children with asthma, affordable access to life-saving medication isn’t just a convenience – it’s a necessity. Yet according to a new report from the Senate Finance Subcommittee on Health Care, GlaxoSmithKline (GSK), the drugmaker of a popular asthma inhaler, leveraged its market power for years to hike prices, block competition, and put profits over patients. Recent findings from Senator Maggie Hassan’s investigative report lay bare how Big Pharma’s maneuvers can harm children and families. The report also revealed how PBMs moved to fill the void and ensure access in response to GSK’s disturbing activities.

Monopoly, Price Hikes, and a Costly Loophole Led to Medical Challenges

The report examines the drugmaker’s conduct around Flovent, a popular asthma inhaler, often used by children. The subcommittee found that the company spent years increasing the price of the drug “well above the rate of inflation, protecting its monopoly over it, and squeezing families who relied on the drug.”

It only got worse from there. In 2024, the company decided to pull the brand version of the inhaler from the market. But not before introducing an even more expensive “authorized generic” – the exact same product as the brand name drug that is marketed without the brand name on its label, or any discount, serving as another tool in Big Pharma’s playbook to block competition. Why? To exploit a Medicaid loophole that allowed it to avoid paying rebates tied to the sky-high price of the original Flovent brand drug.

Taxpayers paid the price for these actions. The report estimates that the drugmaker could have owed Medicaid an astounding $367.6 million in rebates in 2024 alone had it not discontinued its medicine. Instead, the “authorized generic” cost Medicaid a net $551.8 million that year.

Pharma Games Cause Costs to Skyrocket

For employers, labor unions, and health plans, costs effectively doubled and some found that, “using the authorized generic versions of Flovent was nearly five times higher than the cost for the branded Flovent products.”

The impact was staggering. According to the report, the “actions led to life-threatening medical challenges and cost and access issues for families across the United States.” After surveying parents, a group of physicians concluded that the families “experienced significant challenges, including higher costs, worsening symptoms, and increased acute healthcare utilization for asthma exacerbations.”

PBMs Step in to Provide Relief

Pharmacy benefit managers (PBMs) responded quickly, recognizing the steep cost of the “authorized generic,” nearly 50% higher than the branded version the year before. The report finds that in response to the drugmaker’s actions, “PBMs swiftly offered lower-cost alternatives in the face of exponentially higher costs from GSK’s actions.” For example, one PBM noted in the report, seeing that the list price of the authorized generic was even higher than the branded version, encouraged clients to transition patients to more affordable options. Other PBMs made formulary adjustments to encourage lower cost alternatives.

Congress Should Take Action to Make Meaningful Changes for Patients

PBMs showed once again that they are on the side of affordability for American families and took meaningful steps to protect patients. As a result of pressure from Congress, the drugmaker abandoned its product monopoly, finally allowing a lower-cost FDA-approved generic to enter the market.

American families should not have to worry about Big Pharma’s games pricing them out of life-saving medication. The report issues a clear call for action to Congress to prevent other drugmakers from using “authorized generics” to game the system and rip off American families:

“Without further action from Congress, however, other companies could also attempt to use “authorized generics” to evade Medicaid rebate payments as GSK did, resulting in similar health and cost challenges for patients.”

Read the full Senate report HERE.