Boost for GSK as US reinstates best-selling lung drug on the approved list

GlaxoSmithKline received a boost yesterday from a decision by Express Scripts, the largest US pharmacy benefit manager, to reinstate its top-selling lung drug Advair as an approved drug in 2015.

The British company’s business has suffered since January after the inhaled medicine Advair was dropped from various formulary lists – including that of Express Scripts – while it fights growing price competition from rival products.

Drugs excluded from such lists have to be paid for out of patients’ pockets, hitting their use. Pharmacy benefit managers administer prescription drug benefits for employers and health plans.

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Express Scripts said the decision followed GSK’s willingness to offer the 15-year-old respiratory drug at a highly competitive price.

“We have changed the formulary status of Advair in 2015 due to the improved pricing we were able to negotiate for our clients,” said spokesman David Whitrap.

Disappointing US sales of Advair were largely to blame for GSK’s worse-than-expected second-quarter results, which prompted the company to cut its 2014 earnings outlook last month.

Advair makes up nearly a fifth of GSK’s sales but demand is eroding both in Europe, where it faces competition from copycat versions, and in the United States, due to lack of formulary cover and keen competition from AstraZeneca’s Symbicort. US sales of Advair, which is used to treat asthma and chronic lung disease, tumbled 19 per cent in the second quarter in constant currency terms.

Even after the Express Scripts change, however, Advair will still be at a disadvantage, according to Credit Suisse analysts, since it is not listed as a preferred treatment, unlike Symbicort and Merck & Co’s Dulera.

The analysts believe Advair prices are likely to remain under heavy pressure as GSK strives to secure market share.