WSJ: Glaxo Tries to Shake Marketing Questions
07/05/2012| 05:18pm US/Eastern
By Jeanne Whalen
GlaxoSmithKline PLC's (GSK, GSK.LN) $3 billion criminal and civil settlement with the U.S. government this week raises questions about the future of asthma treatment Advair--the company's biggest moneymaker and one of the top-selling drugs in the world.
According to the U.S. government, from 2001 through "at least 2010," Glaxo used illegal marketing tactics to promote Advair, an inhaler licensed to treat moderate to severe forms of asthma. In a complaint filed in federal court in Massachusetts in October, the government accused the company of promoting the drug for the treatment of mild asthma and other uses not licensed by the Food and Drug Administration, an illegal practice known as off-label marketing.
The company's promotion of Advair, which had global sales of 5 billion pounds ($7.8 billion) last year, exposed patients to "significant safety risks" and led insurers including Medicaid to overspend on asthma drugs, the government alleged in its complaint, which was disclosed this week as the U.S. Department of Justice announced its settlement with Glaxo over illegal drug marketing and other matters.
In reaching the settlement following a nine-year federal investigation, Glaxo pleaded guilty to some criminal behavior--illegally promoting two antidepressants and withholding safety data about a diabetes drug from the FDA--but it didn't admit wrongdoing regarding the Advair allegations.
On Thursday, a Glaxo spokesman said: "The government has made many allegations and legal conclusions concerning Advair that GSK denies and vigorously disputes. The DOJ allegations about our marketing of Advair are based on its interpretation of the FDA's approved indication for the product. We believe that the company's promotional strategies were consistent with Advair's FDA-approved label."
The U.S. government alleges Glaxo pushed Advair for use in patients with mild asthma who hadn't previously tried more basic treatments--a use it said isn't sanctioned by Advair's FDA-approved prescribing label. Advair combines two asthma drugs in one inhaler, and is meant for patients whose asthma isn't adequately controlled by simpler, cheaper medicines, such as inhaled corticosteroids. Doctors are allowed to prescribe drugs as they see fit, but it is illegal for companies to promote products for unapproved uses.
The government's allegations that illegal Advair marketing continued through at least 2010 raises questions about Chief Executive Andrew Witty's pledge to have reformed Glaxo's marketing since he became CEO in 2008. Speaking about the settlement earlier this week, Mr. Witty said: "Since I became CEO, we have had a clear priority to ingrain a culture of putting patients first, acting transparently, respecting people inside and outside the organization and displaying integrity in everything we do." A Glaxo spokesman said Mr. Witty was unavailable to comment Thursday.
Sales of Advair--called Seretide outside the U.S.--represented about 18% of Glaxo's total revenue of 27.4 billion pounds last year. But there are signs of a slowdown.
The drug's sales were flat in 2011, which Citigroup pharmaceutical analyst Andrew Baum attributes in part to more cautious marketing. With the weight of a long-running federal investigation hanging over him, Mr. Witty has taken steps to tone down Glaxo's marketing, Dr. Baum said.
James Seltzer, an allergist who treats asthmatics in Worcester, Mass., said he sees many patients taking combination inhalers such as Advair who don't need them.
"If somebody has mild intermittent or mild persistent asthma, there's no reason to use" combination inhalers, which contain a type of drug called a long-acting beta agonist, or LABA, that carries some safety risks, he said. "If they don't need it, the first thing I do is take them off the LABA," he said, adding that primary-care doctors who aren't specialists in asthma sometimes over-prescribe combination inhalers.
Some of Glaxo's most senior executives, including former chief executive J.P. Garnier, encouraged the company's sales force to promote Advair off-label for mild asthma, the U.S. government alleges. Mr. Garnier, now chairman of Swiss drug maker Actelion Ltd., didn't respond to requests for comment.
At an event for sales representatives to mark Advair's U.S. launch, Mr. Gariner "instructed the entire Advair sales force that they could promote Advair as necessary for all asthma patients," the government alleges, saying Mr. Garnier told the reps that a doctor had told him "it would be criminal not to put an asthmatic patient on Advair." David Stout, then Glaxo's president, told the same gathering: "You've got to make Advair the first choice, first-line, for the treatment of asthma," the government alleges. Mr. Stout, who is no longer with Glaxo, couldn't be reached to comment.
Glaxo's bonus policy for salespeople encouraged them to promote off-label, the U.S. government says. The company offered reps $5 for every prescription they got doctors to write for the lowest dose of Advair, which had the effect of pushing reps to promote the drug for mild asthma patients, according to the government. At the same time, Glaxo offered the sales force no incentives to promote Flovent, an older, cheaper product that is an inhaled corticosteroid often prescribed for mild asthma, the government says.
Over the years, the FDA increased the safety warnings on Advair's label as evidence mounted that one of the drug's ingredients, a long-acting beta agonist called salmeterol, was tied to a "small but significant" risk of asthma-related death. In 2006, the FDA added strong warnings to Advair's label saying the drug should be used as initial therapy only in patients whose "disease severity clearly warrants" it, and not in patients "whose asthma can be successfully managed by" more basic medicines, such as inhaled corticosteroids.
Asked by investors in 2006 how these new warnings might affect Glaxo's stock price, Mr. Garnier said: "I think products such as Advair are phenomenal for the treatment of asthma, and they should be used for mild to moderate and severe asthmatics," according to the government complaint. He added: "physicians are not going to listen to the FDA," the complaint said.
In a statement, Glaxo said the U.S. government's claim interpreted Advair's FDA-approved label too rigidly. "Even under the most recent changes" to the label, Glaxo "is not required to promote Advair only for patients who first receive" more basic medicines, the company said. An outside lawyer for Glaxo who declined to be quoted by name said the most relevant section of Advair's FDA-approved label until 2006 was written with no restrictions on the level of disease severity required to use Advair, which he said left the government unable to establish that off-label marketing had occurred. The Justice Department had "an incredibly expansive view of off-label promotion, and it was just wrong," he said.
Aside from asthma, Advair is also FDA-approved to treat chronic obstructive pulmonary disease, or COPD. Through "at least the spring of 2010," the government claims, Glaxo's sales force marketed the drug improperly for COPD through its "Only 1" campaign, which encouraged doctors to prescribe the drug to patients who had had only one exacerbation of their condition. The FDA approved Advair for COPD patients "with a history of exacerbations," the government claim said. Glaxo said the "Only 1" program was "entirely consistent" with Advair's FDA-approved label.
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