How Environmentally Friendly Inhalers Might Avoid Impacting Biden's Drug Pricing Legacy
The Biden administration has implemented reforms in Medicare, targeted fraudulent drug patents, and encouraged pharmaceutical companies to lower the costs of inhalers for patients. However, the introduction of “climate-friendly inhalers” may threaten these achievements.
TroibNews 
President Joe Biden’s significant achievements in reforming Medicare to reduce drug prices and capping inhaler costs for many Americans with lung diseases are encountering a surprising challenge: pharmaceutical companies pivoting to environmental sustainability.
Major drug manufacturers are leveraging a global climate treaty to enhance their profit margins. Nearly a decade ago, the Kigali Amendment to the Montreal Protocol was signed by around 120 nations, and it is now granting inhaler manufacturers an exit strategy from Biden’s reforms, potentially earning them hundreds of millions annually.
This amendment urges pharmaceutical firms to redesign their inhalers to eliminate greenhouse gas emissions. This move allows them to launch climate-friendly versions of existing products, thereby limiting competition and potentially costing Medicare and Medicaid billions. Notably, companies have pledged to keep out-of-pocket costs for inhalers at $35, which may enable them to increase their prices simultaneously.
AstraZeneca and GlaxoSmithKline, which manufacture several popular inhalers such as Symbicort and Ventolin, intend to seek regulatory approval for their new eco-friendly inhalers by 2025. Each company has invested nearly $1 billion in developing alternatives that forgo using hydrofluorocarbons (HFCs) in their delivery systems.
In response to inquiries from PMG’s E&E News, representatives from both firms did not assure that they would maintain the price cap on these new inhalers.
Inhalers are crucial medical devices for the nearly 25 million individuals with asthma in the United States, providing relief from symptoms and helping prevent attacks. In 2020, over 140 million metered dose inhalers sold in the U.S. contained propellants, the emissions of which are comparable to those produced by half a million cars in a year, according to the EPA.
Transitioning to greener products allows drug companies to reclaim patent protections and effectively eliminate competition for a minimum duration of ten years. Increased prices for Medicare, Medicaid, and private insurers are anticipated, as revealed by an investigation conducted by PMG’s E&E News.
This shift represents substantial potential revenue for AstraZeneca, which has categorized its low-emission inhalers as a “business opportunity” in financial documents submitted to CDP Worldwide, an organization that assists companies in reporting their environmental impact. With the company’s respiratory medications generating $3.5 billion globally last year, they posit that a 5 to 10 percent increase in overall inhaler sales through these new green versions could yield additional yearly revenue of nearly $100 million.
“We are talking about big-name products that are going to be largely immune from price negotiations,” stated William Feldman, a pulmonologist at Brigham and Women’s Hospital in Boston, who specializes in studying drug patents and their cost implications.
Both AstraZeneca and GSK assert that their motivations are rooted in environmental responsibilities and not merely profit-driven.
AstraZeneca refrained from making its experts available for interviews, but a spokesperson claimed, “Patent extension is not a priority for us with the transition.”
However, the introduction of these new products could undermine efforts by Senator Bernie Sanders and the Biden administration to reduce drug costs for consumers, despite Vice President Kamala Harris's campaigning on the successes achieved.
As Vice President, Harris cast the decisive vote for the Inflation Reduction Act, which included measures to reform Medicare pricing. Following Biden's announcement of his reelection bid and her ascent as the expected Democratic presidential nominee, their first joint appearance was at an event in Largo, Maryland, celebrating Medicare’s inaugural round of price negotiations, anticipated to save taxpayers $6 billion in the first year.
“For years, Big Pharma has often inflated the price of lifesaving medications, often charging many times what it would cost to make just to increase their profits, and millions of Americans have suffered as a result,” she remarked.
As California's attorney general, Harris led a coalition of states in legal action against the manufacturers of the opioid addiction treatment Suboxone, accusing them of manipulating the market to stifle competition. The case concluded with California securing over $7 billion in settlements last summer. More recently, she highlighted the Biden administration's Medicare reforms during a debate with former President Donald Trump on September 10.
“We have capped the cost of insulin at $35 a month,” she proclaimed. “Since I’ve been vice president, we have capped the cost of prescription medication for seniors at $2,000 a year.”
The emergence of green inhalers poses a threat to these advancements. Drug companies could charge a premium for these new devices, which would burden Medicare and Medicaid to the tune of billions of dollars, costs that taxpayers would ultimately absorb. Those with private insurance could also face rising expenses, as neither GSK nor AstraZeneca has assured that the $35 out-of-pocket limit will apply to the climate-friendly inhalers.
**‘A tremendous windfall’**
Pharmaceutical corporations have previously taken advantage of international treaties to enhance their profits. In 1987, nearly 200 countries adopted the Montreal Protocol to combat ozone layer depletion linked to rising skin cancer rates. This treaty necessitated the complete phase-out of chlorofluorocarbons (CFCs), which were prevalent in industrial and consumer products.
Inhalers traditionally utilized these ozone-depleting gases since 1956, inspired by a drug company CEO’s asthmatic daughter who desired the ability to spray her medicine in a similar fashion to hair spray.
With manufacturers failing to revise their inhalers for decades, finding alternatives to CFCs necessitated rigorous research, according to Richard Lostritto, a former employee at Boehringer Ingelheim.
“There was a lot of retooling and a lot of explosions,” Lostritto noted, highlighting the intricate challenges of redesigning inhalers to utilize safer propellants.
The FDA approved the initial HFC inhalers in 2001 and outright prohibited CFC-based devices by 2008. The outcome was a market dominated by brand-name drugs, devoid of competition from lower-cost generics.
The albuterol inhaler market, for instance, saw its annual sales for brand-name drugs soar to between $800 million and $1.3 billion after the CFC ban, generating approximately $14 billion in sales in the U.S. from 2007 to 2021.
“These environmental treaties are just a tremendous windfall for these companies,” Feldman remarked.
Currently, inhaler manufacturers face pressure to modify propellants yet again. The U.S. ratified the Kigali Amendment in 2022, which calls for phasing down HFCs, potent greenhouse gases capable of trapping heat much more effectively than carbon dioxide.
Although medical devices are exempt from the treaty, inhaler producers fear the eventual scarcity of the gases required for their products.
Both GSK and AstraZeneca are committed to substantially cutting their greenhouse gas emissions, with inhalers contributing significantly to their pollution footprints; GSK estimates that approximately 49 percent of its emissions stem from the use of its inhalers.
Laura Clow, GSK’s Medicine Development Leader, described the creation of a low-emission Ventolin inhaler as a “big win” for the company's environmental objectives, but also acknowledged the Kigali Amendment as an external factor influencing their goals.
“I think it’s exciting that we have set these incredibly ambitious sustainability goals,” Clow stated.
However, when it comes to drug pricing, Clow directed inquiries to GSK spokesperson Kate Kanaby, who indicated it was “too early to comment on pricing” for the climate-friendly Ventolin, as the product is still in clinical trials.
Diplomats and environmental advocates behind the Montreal Protocol and Kigali Amendment maintain that the treaties' ramifications should be viewed within the larger context of global cooperation addressing climate change and ozone depletion.
Jennifer Haverkamp, the chief U.S. negotiator for the Kigali Amendment during the Obama administration, emphasized the treaty's success in mobilizing industries reliant on the gases to seek new solutions and promote innovation.
“What has made it as successful as it has been in the U.S.,” she reflected, “is that the industry has seen a financial benefit to the change.”
**‘It’s a game’**
Brand-name inhaler manufacturers have successfully sustained profit margins and thwarted competition since the treaty's implementation, not by fostering genuine innovation, but rather by leveraging peculiarities within the American drug patent system.
One anonymous U.N. official acknowledged that the structure of the U.S. drug market is not a fault of the international community.
“Everyone knows U.S. drug prices pay for the research and development for the rest of the world,” he observed.
Inhalers consist of two primary components: medication mixed with propellants and the delivery device that dispenses the formulation. Pharmaceutical companies have barred generic competitors from entering the market by slightly altering the existing product’s design. Sometimes they issue new device patents for established brands or rename and phase out older products altogether—a tactic called “product hopping.”
Often, the enhancements made to these products are unrelated to their medical efficacy. An example is a patent held by AstraZeneca for a thin strap on the cap of the Symbicort inhaler that allows the cap to dangle while the device is in use. This patent, approved in 2013, extends protection through 2027, often sidelining potential competitors.
“It’s a game,” admitted Mike Gonzales, a former drug marketer at AbbVie who now works as a consultant.
All patents for a brand are listed in what’s known as the Orange Book, and the FDA cannot approve generic versions of medications with active patents recorded therein, regardless of the patents' relevance to the drug's therapeutic effects.
Research indicates that device patents can yield substantial profits long after the drug patents have lapsed. A study examining inhaler patents from 2000 to 2021 revealed that manufacturers earned $111 billion on inhalers after patents on active ingredients expired, compared to $67 billion while those drug patents were still valid.
**Going green, earning green**
AstraZeneca and GSK’s respective $1 billion investments in creating new devices have garnered accolades from environmental groups and even the Biden administration, which highlighted AstraZeneca’s initiatives as part of broader efforts to decrease healthcare emissions.
However, these transitions also serve to bolster the companies' profit potential.
GSK’s Ventolin inhaler, first introduced in 1967, faced virtually no direct competition for about 50 years due to its shift to HFCs. Currently, the only alternative is an authorized generic produced by GSK.
With a new “green” Ventolin in Phase III trials, GSK anticipates seeking FDA approval by 2025. Clow indicated that the company is still deliberating whether to launch a new version of generic Ventolin alongside the name brand. If the FDA only approves the new branded version, experts expect GSK might withdraw the older product from the market, consequently eliminating the generic version due to specific drug laws.
“There are all these discussions about climate change and concerns about emissions, but these climate-friendly inhalers are a way for them to take back their share of the market,” remarked Jeromie Ballreich, a researcher in health economics at Johns Hopkins Bloomberg School of Public Health.
AstraZeneca's Symbicort, after nearly 20 years on the market, is only now confronting competition from generic versions. This inhaler is known for its unique drug combination designed to manage asthma and minimize the risk of severe attacks.
Interestingly, half of Symbicort’s patents concern the device, not the active ingredient, effectively prolonging its patent protections by over six years, making it one of AstraZeneca’s top-selling drugs, generating more than $2.7 billion in sales in 2021.
AstraZeneca’s revenue from Symbicort dropped approximately 7 percent in 2023 after a federal court allowed the entry of a generic competitor. The company plans to replace Symbicort’s propellant within the next five years, with a relaunch by 2030.
Their climate reports illustrate that transitioning to greener products poses less risk to revenue than losing product exclusivity through patent expirations, even as AstraZeneca operates a dry powder version of Symbicort that emits no greenhouse gases. Advocates are urging its introduction in the U.S., where it has been available in the U.K. and Europe for nearly two decades.
“AstraZeneca positions itself as a very progressive pharmaceutical company around climate, but this is an area in which they are behaving quite hypocritically, and we should be calling out that hypocrisy,” said Gregg Furie, a pulmonologist and director of climate and sustainability at Brigham and Women’s Hospital.
AstraZeneca described its discussions with the FDA regarding the introduction of its dry powder Symbicort in the U.S. as stalled, citing the need for more research, which has deterred them from advancing the product.
The FDA declined to comment due to federal disclosure laws.
**‘Taxpayers are ... on the hook’**
Asthma prevalence is notably higher among communities of color and individuals living in poverty, as reported by the American Lung Association. This is partly because disadvantaged communities frequently reside near pollution sources.
A 2020 report titled "Asthma Disparities in America" noted that annual prescription costs for asthma medications can average $1,830 per person. Patients who cannot afford timely refills risk their health by skipping doses.
This context underscored Biden’s celebration at the White House in the spring to recognize Medicare reforms and inhaler cost caps won by Sanders.
“Finally, finally we beat Big Pharma — finally,” he said amid a gathering featuring various inhalers.
Despite these reforms, the introduction of green inhalers could impose significant costs on taxpayers, with Medicare and Medicaid projected to face billions in expenses.
Analyzing federal spending data, an E&E News assessment indicated that Medicare and Medicaid together spent $5.3 billion on metered dose inhalers produced by AstraZeneca and GSK in 2022. These drugs could be relaunched at higher prices with the new low-emission propellants.
This spring, Sanders completed an inquiry into the elevated prices consumers bear for inhalers, securing commitments from three companies, including GSK and AstraZeneca, to maintain a $35 cap on out-of-pocket costs.
“These companies, along with many others in the pharmaceutical sector, are beginning to recognize that Americans are fed up with exorbitant prices for essential prescription medications,” he stated.
While AstraZeneca cites its reagent costs in part for high drug prices, it has not guaranteed that the $35 out-of-pocket cap will apply to new green inhalers, stating, “We remain dedicated to addressing the need for affordability of our medicines, but the system is complex and we cannot do it alone.”
Although the caps do not cover Medicare and Medicaid beneficiaries, the Inflation Reduction Act of 2022 introduces a $2,000 annual threshold for out-of-pocket costs set to begin next year. This landmark legislation also permits Medicare to negotiate drug prices—an endeavor initiated by Biden 50 years earlier when he co-sponsored a bill to limit Medicare drug costs.
The Biden administration revealed negotiated prices for the first ten drugs in August, but none were inhalers. Prices for some of these medications, including non-injectable diabetes drugs, were reduced by several hundred dollars, with the new rates scheduled to take effect in 2026. Inhalers are expected to be among the next ten drugs Medicare negotiates next year.
AstraZeneca has initiated legal proceedings against the government regarding this law, arguing the importance of setting its own prices to maintain access to future medications, with the case currently in appeal.
However, should Medicare negotiate a reduced price for an existing inhaler, the presence of a new environmentally friendly variant could render it moot, particularly if the company decides to phase out the generic version.
The IRA also allows Medicare to impose penalties on drugmakers for exorbitant price increases on existing drugs. However, similar Medicaid reforms in the American Rescue Plan triggered GSK to discontinue one of its leading inhalers, Flovent, rather than incur penalties, subsequently launching a higher-cost authorized generic.
While GSK agreed to a $35 cap for brand-name inhalers, there has been no commitment to apply this limit to the newer variants.
Geoff Joyce, director of health policy at the Schaeffer Center at USC, highlighted that Medicare and Medicaid reforms are vital but maintaining low pharmacy costs for patients isn’t sufficient if patients remain unaware of tax implications tied to these changes.
“If there's not a competitive market for these new climate-friendly inhalers, taxpayers are going to be on the hook,” he cautioned.
**Going after ‘bogus’ patents**
The Federal Trade Commission has been scrutinizing pharmaceutical companies for product-hopping tactics for about a year.
The agency challenged numerous Orange Book listings for patents concerning various drugs, including those linked to Symbicort's cap and dose counter, asserting that patents should not obstruct generic competition if they don't pertain to the active ingredients.
“Inhalers have been around for decades, but they still cost hundreds of dollars,” FTC Chair Lina Khan stated on "The Daily Show with Jon Stewart," addressing the monopolistic strategies employed by drug companies.
“Our staff took a close look and realized some of the patents listed for these inhalers were improper; they were bogus,” she remarked.
The initiative has yielded results. Last winter, GSK agreed to remove the final patent for Ventolin from the Orange Book, which could allow new manufacturers to produce generic versions for the first time in almost 20 years.
The FTC has also intervened on behalf of generic competitors in legal proceedings. When Teva Pharmaceuticals sued a generic drugmaker attempting to compete with its brand-name ProAir HFA albuterol inhaler, the FTC supported Amneal Pharmaceuticals’ position with an amicus brief, arguing against patents that improperly hindered market entry.
Regarding upcoming climate-friendly inhalers, FTC's director of policy planning, Hannah Garden-Monheit, reiterated that the agency would continue examining improper Orange Book listings that might obstruct competition.
“It should also be an ongoing area of focus to drug companies,” she concluded.
Simultaneously, the U.S. Patent and Trademark Office is contemplating regulations to tackle so-called “patent thickets,” where manufacturers secure multiple patents for minor variations of the same drug. In May, the office proposed lowering barriers for generic makers faced with numerous patents, with new guidelines aimed at eliminating “indistinct” patents that prolong their validity beyond that of existing patents.
The proposal has faced substantial opposition from industry groups like the Pharmaceutical Research and Manufacturers of America, which argue that robust patent protections are essential due to the growing costs associated with drug development.
Congress remains divided on addressing this issue. In July, the Senate passed the "Affordable Prescriptions for Patients Act," a move celebrated as overdue by co-sponsor Sen. John Cornyn. A sister bill in the House has received bipartisan support but has yet to proceed to hearings.
Merith Basey, executive director of Patients for Affordable Drugs, advocates for such legislation, also pushing Congress to enact measures to stop common tactics used by pharmaceutical companies to delay generic entries and improve coordination between the FDA and the Patent and Trademark Office.
Without decisive Congressional action, there are growing concerns that inhaler prices will escalate as they transition to environmentally friendly versions.
“We need this to be the law of the land, rather than the will of the corporations,” she emphasized.
Ramin Sohrabi contributed to this report for TROIB News
Major drug manufacturers are leveraging a global climate treaty to enhance their profit margins. Nearly a decade ago, the Kigali Amendment to the Montreal Protocol was signed by around 120 nations, and it is now granting inhaler manufacturers an exit strategy from Biden’s reforms, potentially earning them hundreds of millions annually.
This amendment urges pharmaceutical firms to redesign their inhalers to eliminate greenhouse gas emissions. This move allows them to launch climate-friendly versions of existing products, thereby limiting competition and potentially costing Medicare and Medicaid billions. Notably, companies have pledged to keep out-of-pocket costs for inhalers at $35, which may enable them to increase their prices simultaneously.
AstraZeneca and GlaxoSmithKline, which manufacture several popular inhalers such as Symbicort and Ventolin, intend to seek regulatory approval for their new eco-friendly inhalers by 2025. Each company has invested nearly $1 billion in developing alternatives that forgo using hydrofluorocarbons (HFCs) in their delivery systems.
In response to inquiries from PMG’s E&E News, representatives from both firms did not assure that they would maintain the price cap on these new inhalers.
Inhalers are crucial medical devices for the nearly 25 million individuals with asthma in the United States, providing relief from symptoms and helping prevent attacks. In 2020, over 140 million metered dose inhalers sold in the U.S. contained propellants, the emissions of which are comparable to those produced by half a million cars in a year, according to the EPA.
Transitioning to greener products allows drug companies to reclaim patent protections and effectively eliminate competition for a minimum duration of ten years. Increased prices for Medicare, Medicaid, and private insurers are anticipated, as revealed by an investigation conducted by PMG’s E&E News.
This shift represents substantial potential revenue for AstraZeneca, which has categorized its low-emission inhalers as a “business opportunity” in financial documents submitted to CDP Worldwide, an organization that assists companies in reporting their environmental impact. With the company’s respiratory medications generating $3.5 billion globally last year, they posit that a 5 to 10 percent increase in overall inhaler sales through these new green versions could yield additional yearly revenue of nearly $100 million.
“We are talking about big-name products that are going to be largely immune from price negotiations,” stated William Feldman, a pulmonologist at Brigham and Women’s Hospital in Boston, who specializes in studying drug patents and their cost implications.
Both AstraZeneca and GSK assert that their motivations are rooted in environmental responsibilities and not merely profit-driven.
AstraZeneca refrained from making its experts available for interviews, but a spokesperson claimed, “Patent extension is not a priority for us with the transition.”
However, the introduction of these new products could undermine efforts by Senator Bernie Sanders and the Biden administration to reduce drug costs for consumers, despite Vice President Kamala Harris's campaigning on the successes achieved.
As Vice President, Harris cast the decisive vote for the Inflation Reduction Act, which included measures to reform Medicare pricing. Following Biden's announcement of his reelection bid and her ascent as the expected Democratic presidential nominee, their first joint appearance was at an event in Largo, Maryland, celebrating Medicare’s inaugural round of price negotiations, anticipated to save taxpayers $6 billion in the first year.
“For years, Big Pharma has often inflated the price of lifesaving medications, often charging many times what it would cost to make just to increase their profits, and millions of Americans have suffered as a result,” she remarked.
As California's attorney general, Harris led a coalition of states in legal action against the manufacturers of the opioid addiction treatment Suboxone, accusing them of manipulating the market to stifle competition. The case concluded with California securing over $7 billion in settlements last summer. More recently, she highlighted the Biden administration's Medicare reforms during a debate with former President Donald Trump on September 10.
“We have capped the cost of insulin at $35 a month,” she proclaimed. “Since I’ve been vice president, we have capped the cost of prescription medication for seniors at $2,000 a year.”
The emergence of green inhalers poses a threat to these advancements. Drug companies could charge a premium for these new devices, which would burden Medicare and Medicaid to the tune of billions of dollars, costs that taxpayers would ultimately absorb. Those with private insurance could also face rising expenses, as neither GSK nor AstraZeneca has assured that the $35 out-of-pocket limit will apply to the climate-friendly inhalers.
**‘A tremendous windfall’**
Pharmaceutical corporations have previously taken advantage of international treaties to enhance their profits. In 1987, nearly 200 countries adopted the Montreal Protocol to combat ozone layer depletion linked to rising skin cancer rates. This treaty necessitated the complete phase-out of chlorofluorocarbons (CFCs), which were prevalent in industrial and consumer products.
Inhalers traditionally utilized these ozone-depleting gases since 1956, inspired by a drug company CEO’s asthmatic daughter who desired the ability to spray her medicine in a similar fashion to hair spray.
With manufacturers failing to revise their inhalers for decades, finding alternatives to CFCs necessitated rigorous research, according to Richard Lostritto, a former employee at Boehringer Ingelheim.
“There was a lot of retooling and a lot of explosions,” Lostritto noted, highlighting the intricate challenges of redesigning inhalers to utilize safer propellants.
The FDA approved the initial HFC inhalers in 2001 and outright prohibited CFC-based devices by 2008. The outcome was a market dominated by brand-name drugs, devoid of competition from lower-cost generics.
The albuterol inhaler market, for instance, saw its annual sales for brand-name drugs soar to between $800 million and $1.3 billion after the CFC ban, generating approximately $14 billion in sales in the U.S. from 2007 to 2021.
“These environmental treaties are just a tremendous windfall for these companies,” Feldman remarked.
Currently, inhaler manufacturers face pressure to modify propellants yet again. The U.S. ratified the Kigali Amendment in 2022, which calls for phasing down HFCs, potent greenhouse gases capable of trapping heat much more effectively than carbon dioxide.
Although medical devices are exempt from the treaty, inhaler producers fear the eventual scarcity of the gases required for their products.
Both GSK and AstraZeneca are committed to substantially cutting their greenhouse gas emissions, with inhalers contributing significantly to their pollution footprints; GSK estimates that approximately 49 percent of its emissions stem from the use of its inhalers.
Laura Clow, GSK’s Medicine Development Leader, described the creation of a low-emission Ventolin inhaler as a “big win” for the company's environmental objectives, but also acknowledged the Kigali Amendment as an external factor influencing their goals.
“I think it’s exciting that we have set these incredibly ambitious sustainability goals,” Clow stated.
However, when it comes to drug pricing, Clow directed inquiries to GSK spokesperson Kate Kanaby, who indicated it was “too early to comment on pricing” for the climate-friendly Ventolin, as the product is still in clinical trials.
Diplomats and environmental advocates behind the Montreal Protocol and Kigali Amendment maintain that the treaties' ramifications should be viewed within the larger context of global cooperation addressing climate change and ozone depletion.
Jennifer Haverkamp, the chief U.S. negotiator for the Kigali Amendment during the Obama administration, emphasized the treaty's success in mobilizing industries reliant on the gases to seek new solutions and promote innovation.
“What has made it as successful as it has been in the U.S.,” she reflected, “is that the industry has seen a financial benefit to the change.”
**‘It’s a game’**
Brand-name inhaler manufacturers have successfully sustained profit margins and thwarted competition since the treaty's implementation, not by fostering genuine innovation, but rather by leveraging peculiarities within the American drug patent system.
One anonymous U.N. official acknowledged that the structure of the U.S. drug market is not a fault of the international community.
“Everyone knows U.S. drug prices pay for the research and development for the rest of the world,” he observed.
Inhalers consist of two primary components: medication mixed with propellants and the delivery device that dispenses the formulation. Pharmaceutical companies have barred generic competitors from entering the market by slightly altering the existing product’s design. Sometimes they issue new device patents for established brands or rename and phase out older products altogether—a tactic called “product hopping.”
Often, the enhancements made to these products are unrelated to their medical efficacy. An example is a patent held by AstraZeneca for a thin strap on the cap of the Symbicort inhaler that allows the cap to dangle while the device is in use. This patent, approved in 2013, extends protection through 2027, often sidelining potential competitors.
“It’s a game,” admitted Mike Gonzales, a former drug marketer at AbbVie who now works as a consultant.
All patents for a brand are listed in what’s known as the Orange Book, and the FDA cannot approve generic versions of medications with active patents recorded therein, regardless of the patents' relevance to the drug's therapeutic effects.
Research indicates that device patents can yield substantial profits long after the drug patents have lapsed. A study examining inhaler patents from 2000 to 2021 revealed that manufacturers earned $111 billion on inhalers after patents on active ingredients expired, compared to $67 billion while those drug patents were still valid.
**Going green, earning green**
AstraZeneca and GSK’s respective $1 billion investments in creating new devices have garnered accolades from environmental groups and even the Biden administration, which highlighted AstraZeneca’s initiatives as part of broader efforts to decrease healthcare emissions.
However, these transitions also serve to bolster the companies' profit potential.
GSK’s Ventolin inhaler, first introduced in 1967, faced virtually no direct competition for about 50 years due to its shift to HFCs. Currently, the only alternative is an authorized generic produced by GSK.
With a new “green” Ventolin in Phase III trials, GSK anticipates seeking FDA approval by 2025. Clow indicated that the company is still deliberating whether to launch a new version of generic Ventolin alongside the name brand. If the FDA only approves the new branded version, experts expect GSK might withdraw the older product from the market, consequently eliminating the generic version due to specific drug laws.
“There are all these discussions about climate change and concerns about emissions, but these climate-friendly inhalers are a way for them to take back their share of the market,” remarked Jeromie Ballreich, a researcher in health economics at Johns Hopkins Bloomberg School of Public Health.
AstraZeneca's Symbicort, after nearly 20 years on the market, is only now confronting competition from generic versions. This inhaler is known for its unique drug combination designed to manage asthma and minimize the risk of severe attacks.
Interestingly, half of Symbicort’s patents concern the device, not the active ingredient, effectively prolonging its patent protections by over six years, making it one of AstraZeneca’s top-selling drugs, generating more than $2.7 billion in sales in 2021.
AstraZeneca’s revenue from Symbicort dropped approximately 7 percent in 2023 after a federal court allowed the entry of a generic competitor. The company plans to replace Symbicort’s propellant within the next five years, with a relaunch by 2030.
Their climate reports illustrate that transitioning to greener products poses less risk to revenue than losing product exclusivity through patent expirations, even as AstraZeneca operates a dry powder version of Symbicort that emits no greenhouse gases. Advocates are urging its introduction in the U.S., where it has been available in the U.K. and Europe for nearly two decades.
“AstraZeneca positions itself as a very progressive pharmaceutical company around climate, but this is an area in which they are behaving quite hypocritically, and we should be calling out that hypocrisy,” said Gregg Furie, a pulmonologist and director of climate and sustainability at Brigham and Women’s Hospital.
AstraZeneca described its discussions with the FDA regarding the introduction of its dry powder Symbicort in the U.S. as stalled, citing the need for more research, which has deterred them from advancing the product.
The FDA declined to comment due to federal disclosure laws.
**‘Taxpayers are ... on the hook’**
Asthma prevalence is notably higher among communities of color and individuals living in poverty, as reported by the American Lung Association. This is partly because disadvantaged communities frequently reside near pollution sources.
A 2020 report titled "Asthma Disparities in America" noted that annual prescription costs for asthma medications can average $1,830 per person. Patients who cannot afford timely refills risk their health by skipping doses.
This context underscored Biden’s celebration at the White House in the spring to recognize Medicare reforms and inhaler cost caps won by Sanders.
“Finally, finally we beat Big Pharma — finally,” he said amid a gathering featuring various inhalers.
Despite these reforms, the introduction of green inhalers could impose significant costs on taxpayers, with Medicare and Medicaid projected to face billions in expenses.
Analyzing federal spending data, an E&E News assessment indicated that Medicare and Medicaid together spent $5.3 billion on metered dose inhalers produced by AstraZeneca and GSK in 2022. These drugs could be relaunched at higher prices with the new low-emission propellants.
This spring, Sanders completed an inquiry into the elevated prices consumers bear for inhalers, securing commitments from three companies, including GSK and AstraZeneca, to maintain a $35 cap on out-of-pocket costs.
“These companies, along with many others in the pharmaceutical sector, are beginning to recognize that Americans are fed up with exorbitant prices for essential prescription medications,” he stated.
While AstraZeneca cites its reagent costs in part for high drug prices, it has not guaranteed that the $35 out-of-pocket cap will apply to new green inhalers, stating, “We remain dedicated to addressing the need for affordability of our medicines, but the system is complex and we cannot do it alone.”
Although the caps do not cover Medicare and Medicaid beneficiaries, the Inflation Reduction Act of 2022 introduces a $2,000 annual threshold for out-of-pocket costs set to begin next year. This landmark legislation also permits Medicare to negotiate drug prices—an endeavor initiated by Biden 50 years earlier when he co-sponsored a bill to limit Medicare drug costs.
The Biden administration revealed negotiated prices for the first ten drugs in August, but none were inhalers. Prices for some of these medications, including non-injectable diabetes drugs, were reduced by several hundred dollars, with the new rates scheduled to take effect in 2026. Inhalers are expected to be among the next ten drugs Medicare negotiates next year.
AstraZeneca has initiated legal proceedings against the government regarding this law, arguing the importance of setting its own prices to maintain access to future medications, with the case currently in appeal.
However, should Medicare negotiate a reduced price for an existing inhaler, the presence of a new environmentally friendly variant could render it moot, particularly if the company decides to phase out the generic version.
The IRA also allows Medicare to impose penalties on drugmakers for exorbitant price increases on existing drugs. However, similar Medicaid reforms in the American Rescue Plan triggered GSK to discontinue one of its leading inhalers, Flovent, rather than incur penalties, subsequently launching a higher-cost authorized generic.
While GSK agreed to a $35 cap for brand-name inhalers, there has been no commitment to apply this limit to the newer variants.
Geoff Joyce, director of health policy at the Schaeffer Center at USC, highlighted that Medicare and Medicaid reforms are vital but maintaining low pharmacy costs for patients isn’t sufficient if patients remain unaware of tax implications tied to these changes.
“If there's not a competitive market for these new climate-friendly inhalers, taxpayers are going to be on the hook,” he cautioned.
**Going after ‘bogus’ patents**
The Federal Trade Commission has been scrutinizing pharmaceutical companies for product-hopping tactics for about a year.
The agency challenged numerous Orange Book listings for patents concerning various drugs, including those linked to Symbicort's cap and dose counter, asserting that patents should not obstruct generic competition if they don't pertain to the active ingredients.
“Inhalers have been around for decades, but they still cost hundreds of dollars,” FTC Chair Lina Khan stated on "The Daily Show with Jon Stewart," addressing the monopolistic strategies employed by drug companies.
“Our staff took a close look and realized some of the patents listed for these inhalers were improper; they were bogus,” she remarked.
The initiative has yielded results. Last winter, GSK agreed to remove the final patent for Ventolin from the Orange Book, which could allow new manufacturers to produce generic versions for the first time in almost 20 years.
The FTC has also intervened on behalf of generic competitors in legal proceedings. When Teva Pharmaceuticals sued a generic drugmaker attempting to compete with its brand-name ProAir HFA albuterol inhaler, the FTC supported Amneal Pharmaceuticals’ position with an amicus brief, arguing against patents that improperly hindered market entry.
Regarding upcoming climate-friendly inhalers, FTC's director of policy planning, Hannah Garden-Monheit, reiterated that the agency would continue examining improper Orange Book listings that might obstruct competition.
“It should also be an ongoing area of focus to drug companies,” she concluded.
Simultaneously, the U.S. Patent and Trademark Office is contemplating regulations to tackle so-called “patent thickets,” where manufacturers secure multiple patents for minor variations of the same drug. In May, the office proposed lowering barriers for generic makers faced with numerous patents, with new guidelines aimed at eliminating “indistinct” patents that prolong their validity beyond that of existing patents.
The proposal has faced substantial opposition from industry groups like the Pharmaceutical Research and Manufacturers of America, which argue that robust patent protections are essential due to the growing costs associated with drug development.
Congress remains divided on addressing this issue. In July, the Senate passed the "Affordable Prescriptions for Patients Act," a move celebrated as overdue by co-sponsor Sen. John Cornyn. A sister bill in the House has received bipartisan support but has yet to proceed to hearings.
Merith Basey, executive director of Patients for Affordable Drugs, advocates for such legislation, also pushing Congress to enact measures to stop common tactics used by pharmaceutical companies to delay generic entries and improve coordination between the FDA and the Patent and Trademark Office.
Without decisive Congressional action, there are growing concerns that inhaler prices will escalate as they transition to environmentally friendly versions.
“We need this to be the law of the land, rather than the will of the corporations,” she emphasized.
Ramin Sohrabi contributed to this report for TROIB News
