Case Summary
A head of medicines optimisation at a clinical commissioning group (CCG), complained about a letter dated 30 August 2018 (ref UK/SFC/0007/18b) sent by GlaxoSmithKline and headed ‘Seretide List Price Reduction’. Seretide was a fixed dose combination of salmeterol and fluticasone (SFC) used in the treatment of asthma and of chronic obstructive pulmonary disease (COPD).
The letter explained that the list price of the three most commonly prescribed packs of Seretide would be reduced on 1 September 2018 providing the NHS an estimated annual saving of £52 million. The new Seretide prices were now lower than the equivalent dose/formulation of a branded generic. Under the heading ‘What does this mean if you have a Seretide rebate contract in place?’, readers were informed that for non-branded SFC prescriptions, they would pay the new lower NHS tariff price and thus see additional savings. The complainant noted, however, that the price had not been reduced in the September Drug Tariff as suggested and so there were no savings to be made from non branded SFC prescriptions. Further, in the preface of the September Drug Tariff, where it referred to October changes, there was no reference that the changes as suggested would occur. In that regard the complainant referred to a footnote on page 2 of the letter which stated that estimated savings were based on, inter alia, ‘both Seretide and nonbranded scripts for SFC [salmeterol fluticasone], as Seretide is used as the reference price in the drug tariff. Savings based on NHS Drug Tariff for Seretide Evohaler 25/125, 25/250 and Seretide Accuhaler 50/500 from October 2018’.
The complainant had tried to contact GlaxoSmithKline but it was unable to provide him/her with a response.
The detailed response from GlaxoSmithKline is given below.
The Panel noted that the claim of an estimated annual saving to the NHS of £52 million from 1 September 2018 was qualified by five bulleted footnotes which appeared in small font on the second page of the letter. The third bullet point read ‘It includes both Seretide and non-branded scripts for SFC, as Seretide is used as the reference price in the drug tariff. Savings based on NHS Drug Tariff for Seretide Evohaler 25/125, 25/250 and Seretide Accuhaler 50/500 from October 2018’.
The Panel noted GlaxoSmithKline’s submission that the price reduction would provide significant financial benefit for the NHS directly, as from 1 September, the price of Seretide was reduced, and indirectly as the Seretide list price was used as the reference price for all generic SFC equivalents. The indirect savings would be realised when the Drug Tariff was updated with the new lower Seretide prices which GlaxoSmithKline assumed would be in October.
The Panel noted that the second paragraph of the letter referred to the reduction of the list price on 1 September 2018 and gave estimated NHS savings. In the Panel’s view the bullet point on the first page of the letter which stated ‘ For non-branded salmeterol fluticasone (SFC) scripts you will pay the new lower NHS tariff price and therefore you will see additional savings’ implied that the savings for non-branded salmeterol fluticasone prescriptions could also be realised from 1 September 2018, which was not so. The Panel noted that the supplementary information to Clause 7 stated, inter alia, ‘In general claims should not be qualified by the use of footnotes and the like’. In the Panel’s view the qualification to the claim of an estimated annual saving of £52 million to the NHS which appeared in small font on the second page of the letter as a footnote did not negate the otherwise misleading impression of the claim at issue. The misleading implication was not capable of substantiation. Breaches of the Code were ruled.
The Panel noted that the complainant was variously in contact with GlaxoSmithKline from 3 September to 20 September without getting a satisfactory response. The Panel noted GlaxoSmithKline’s submission that since the complaint came to its attention (21 September), the senior executive ultimately responsible for Seretide within the UK had had a telephone conversation with the complainant and followed that up with an email.
The Panel was concerned that it was only after receipt of this complaint that GlaxoSmithKline contacted the complainant to answer his/her query. In the Panel’s view, GlaxoSmithKline should have been able to supply the answer sooner particularly given readers of the letter were encouraged to contact the company if they required further information. The Panel did not agree with GlaxoSmithKline’s submission that the information requested did not relate to data supporting a claim but rather the provision of specific budgetary information. In the Panel’s view the complainant was simply querying how the claim that savings based on non-branded salmeterol fluticasone prescriptions could be realised from 1 September when the lower Seretide prices were not yet reflected in the Drug Tariff. The Panel did not consider that GlaxoSmithKline provided the complainant with the relevant and accurate information promptly or substantiated the claim as soon as possible and within ten working days upon the complainant’s request and breaches of the Code were ruled. In the Panel’s view, GlaxoSmithKline had failed to maintain high standards and a further breach of the Code was ruled.
CASE AUTH/3066/9/18 HEAD OF MEDICINES OPTIMISATION v GSK GLAXOSMITHKLINE
List Price Reduction Claims
A head of medicines optimisation at a clinical commissioning group (CCG), complained about a letter dated 30 August 2018 sent by GlaxoSmithKline and headed ‘Seretide List Price Reduction’. Seretide was a fixed dose combination of salmeterol and fluticasone (SFC) used in the treatment of asthma and of chronic obstructive pulmonary disease (COPD).
The letter explained that the list price of the three most commonly prescribed packs of Seretide would be reduced on 1 September 2018 providing the NHS an estimated annual saving of £52 million. The new Seretide prices were now lower than the equivalent dose/formulation of a branded generic. Under the heading ‘What does this mean if you have a Seretide rebate contract in place?’, readers were informed that for non-branded SFC prescriptions, they would pay the new lower NHS tariff price and thus see additional savings. The complainant noted, however, that the price had not been reduced in the September Drug Tariff as suggested and so there were no savings to be made from nonbranded SFC prescriptions. Further, in the preface of the September Drug Tariff, where it referred to October changes, there was no reference that the changes as suggested would occur. In that regard the complainant referred to a footnote on page 2 of the letter which stated that estimated savings were based on, inter alia, ‘both Seretide and non-branded scripts for SFC [salmeterol fluticasone], as Seretide is used as the reference price in the drug tariff. Savings based on NHS Drug Tariff for Seretide Evohaler 25/125, 25/250 and Seretide Accuhaler 50/500 from October 2018’.
The complainant had tried to contact GlaxoSmithKline but it was unable to provide him/her with a response.
The detailed response from GlaxoSmithKline is given below.
The Panel noted that the claim of an estimated annual saving to the NHS of £52 million from 1 September 2018 was qualified by five bulleted footnotes which appeared in small font on the second page of the letter. The third bullet point read ‘It includes both Seretide and non-branded scripts for SFC, as Seretide is used as the reference price in the drug tariff. Savings based on NHS Drug Tariff for Seretide Evohaler 25/125, 25/250 and Seretide Accuhaler 50/500 from October 2018’.
The Panel noted GlaxoSmithKline’s submission that the price reduction would provide significant financial benefit for the NHS directly, as from 1 September, the price of Seretide was reduced, and indirectly as the Seretide list price was used as the reference price for all generic SFC equivalents. The indirect savings would be realised when the Drug Tariff was updated with the new lower Seretide prices which GlaxoSmithKline assumed would be in October.
The Panel noted that the second paragraph of the letter referred to the reduction of the list price on 1 September 2018 and gave estimated NHS savings. In the Panel’s view the bullet point on the first page of the letter which stated ‘ For non-branded salmeterol fluticasone (SFC) scripts you will pay the new lower NHS tariff price and therefore you will see additional savings’ implied that the savings for non-branded salmeterol fluticasone prescriptions could also be realised from 1 September 2018, which was not so. The Panel noted that the supplementary information to Clause 7 stated, inter alia, ‘In general claims should not be qualified by the use of footnotes and the like’. In the Panel’s view the qualification to the claim of an estimated annual saving of £52 million to the NHS which appeared in small font on the second page of the letter as a footnote did not negate the otherwise misleading impression of the claim at issue. The misleading implication was not capable of substantiation. Breaches of the Code were ruled.
The Panel noted that the complainant was variously in contact with GlaxoSmithKline from 3 September to 20 September without getting a satisfactory response. The Panel noted GlaxoSmithKline’s submission that since the complaint came to its attention (21 September), the senior executive ultimately responsible for Seretide within the UK had had a telephone conversation with the complainant and followed that up with an email.
The Panel was concerned that it was only after receipt of this complaint that GlaxoSmithKline contacted the complainant to answer his/her query. In the Panel’s view, GlaxoSmithKline should have been able to supply the answer sooner particularly given readers of the letter were encouraged to contact the company if they required further information. The Panel did not agree with GlaxoSmithKline’s submission that the information requested did not relate to data supporting a claim but rather the provision of specific budgetary information. In the Panel’s view the complainant was simply querying how the claim that savings based on non-branded salmeterol fluticasone prescriptions could be realised from 1 September when the lower Seretide prices were not yet reflected in the Drug Tariff. The Panel did not consider that GlaxoSmithKline provided the complainant with the relevant and accurate information promptly or substantiated the claim as soon as possible and within ten working days upon the complainant’s request and breaches of the Code were ruled. In the Panel’s view, GlaxoSmithKline had failed to maintain high standards and a further breach of the Code was ruled.
A head of medicines optimisation at an NHS clinical commissioning group (CCG), complained about a letter dated 30 August 2018 (ref UK/SFC/0007/18b) sent by GlaxoSmithKline and headed ‘Seretide List Price Reduction’. Seretide was a fixed dose combination of salmeterol and fluticasone (SFC) used in the treatment of asthma and of chronic obstructive pulmonary disease (COPD).
The letter explained that the list price of the three most commonly prescribed packs of Seretide would be reduced on 1 September 2018 providing the NHS an estimated annual saving of £52 million. The new Seretide prices were now lower than the equivalent dose/formulation of a branded generic. The statement at issue appeared as the second bullet point under the heading ‘What does this mean if you have a Seretide rebate contract in place?’ where readers were informed that for non-branded salmeterol fluticasone prescriptions, they would pay the new lower NHS tariff price and thus see additional savings.
COMPLAINT
The complainant noted the statement at issue and that the price had not been reduced in the September Drug Tariff as suggested and so there were no savings to be made from non-branded SFC prescriptions. The complainant also noted that in the preface of the September Drug Tariff, where it referred to October changes, there was no reference that the changes as suggested would occur. In that regard the complainant referred to a footnote on page 2 of the letter which stated that estimated savings were based on, inter alia, ‘both Seretide and non-branded scripts for SFC [salmeterol fluticasone], as Seretide is used as the reference price in the drug tariff. Savings based on NHS Drug Tariff for Seretide Evohaler 25/125, 25/250 and Seretide Accuhaler 50/500 from October 2018’.
The complainant further noted that he/she had tried to contact GlaxoSmithKline but it was unable to provide him/her with a response.
When writing to GlaxoSmithKline, the Authority asked it to consider the requirements of Clauses 7.1, 7.2, 7.4, 7.5 and 9.1 of the Code.
RESPONSE
GlaxoSmithKline stated that on 8 August, it received official permission from the Department of Health and Social Services (DHSS) to reduce the list price of three different formulations/doses of Seretide. Official approval for the reduced Seretide list prices was received on 31 August. Accordingly, GlaxoSmithKline reduced the list prices for Seretide 50/125, and 50/250 Evohaler and Seretide 50/250 Accuhaler with effect from 1 September 2018 and so savings for these three Seretide preparations were available with effect from that date.
On 31 August, the letter at issue was sent to inform those with NHS budgetary responsibility about the price change, so that they could plan their budgets accordingly. Apart from any positive promotional messages which could be made from this list price reduction, GlaxoSmithKline was also aware of the supplementary information to Clause 3.1 of the Code, which read:
‘NHS organisations and others involved in the purchase of medicines need to estimate their likely budgets in advance and there is a need for them to receive advance information about the introduction of new medicines, or changes to existing medicines, which may significantly affect their level of expenditure.’
GlaxoSmithKline noted that the Seretide price reduction was substantial and amounted to around 33% for some of the dose/formulations. The price reduction would provide significant financial benefit for the NHS both directly (as the price of Seretide itself was reduced), but also indirectly (as the Seretide list price was used as the reference price for all generically prescribed SFC preparations).
GlaxoSmithKline noted that the complainant had highlighted the second bullet in the section of the letter headed ‘What does that mean if you have a Seretide rebate contract in place?’ which stated: ‘For non-branded salmeterol fluticasone (SFC) scripts you will pay the new lower NHS price and therefore you will see additional savings …’ and that the complainant had noted that the price had not been reduced in the September Drug Tariff so there were no savings to be made for non-branded SFC prescriptions.
GlaxoSmithKline noted that it did not claim that the savings would be available from 1 September. The letter included an estimate of the savings that would be achieved by the NHS when the reduced Drug Tariff Price for Seretide was introduced, which the company assumed would be in October. This assumption was clearly set out in the third bullet point, under the section headed ‘Estimated Savings are based on’ which read:
‘Savings based on the NHS Drug Tariff price for Seretide Evohaler and Accuhaler are from October 2018’ (emphasis added).
GlaxoSmithKline stated that although it had approval for the list price reduction, it had no control as to when this would be adopted by the Drug Tariff as the Tariff was managed by the NHS Prescription Service and there were no DHSS Guidelines which indicated the timelines that might be anticipated in updating the Drug Tariff. The estimated savings referred to in the letter were based on the assumption that the Drug Tariff would be updated in October throughout the whole of the UK.
GlaxoSmithKline also noted that the complainant assumed that the list price reduction for Seretide would also not be seen in the October Drug Tariff Price list. However, as referred to above, this assumption was incorrect.
GlaxoSmithKline reiterated that it had clearly set out in its letter the basis on which the estimated savings had been calculated and it considered that the information provided was accurate, balanced, fair, and capable of substantiation. The company thus denied any breach of Clauses 7.2 and 7.4.
GlaxoSmithKline stated that since sending its letter on 31 August, there had been several communications with the complainant; the information sent to him/her was quite general rather than a specific tailored response to his/her question for the CCG. However, since this complaint had come to the company’s attention, a senior executive had had a telephone conversation with the complainant and followed that up with an email to answer his/her specific question.
GlaxoSmithKline noted that Clause 7.1 related to the provision of information ‘about the medicines which the company markets’. In that regard, the information provided in the GlaxoSmithKline letter was not information about Seretide itself, but about a price change.
The complainant had requested specific budgetary information for an individual CCG, and an estimated forecast based on the model provided. GlaxoSmithKline noted that Clause 7.5 typically related to the provision of clinical trial data supporting a claim. The information requested did not relate to data supporting a claim.
GlaxoSmithKline denied a breach of Clauses 7.1 and 7.5.
GlaxoSmithKline submitted that it had provided correct and factual information for budgetary purposes and followed up accordingly to specific questions raised by the complainant. Therefore, high standards had been maintained and the company denied a breach of Clause 9.1.
When it reviewed the file in relation to this case, the Panel noted that the email correspondence between the complainant and GlaxoSmithKline, as provided by the complainant to the Authority, was, in error, not provided to GlaxoSmithKline in its entirety. GlaxoSmithKline was provided with this information and asked for any comments it might have.
In response GlaxoSmithKline submitted that when it received the complaint on 23 September, it fully investigated exchanges which had occurred between its employees and the complainant and therefore it was already aware of the correspondence. GlaxoSmithKline stated that the correspondence showed the ongoing dialogue before the complaint was submitted in September and which continued until 3 December 2018 and demonstrated the complexity of the complainant’s questions.
GlaxoSmithKline stated that in its letter to the Authority, the complainant in his/her capacity as the head of medicines optimisation in a named CCG, referred to the additional savings that ‘the impact of the Seretide price reduction on non-branded salmeterol/fluticasone propionate preparations’ not being available for September would have on his/ her CCG, whereas the letter at issue referred to a 12 month period for the whole of the UK commencing on 1 October 2018. Although the calculation relating to the above was relatively easy to undertake at a national level, it was more complex at a CCG level as it required an in-depth analysis of the data available for that CCG, including the number of patients (asthma and COPD), Seretide prescriptions, other branded SFC prescriptions (of which there were 5) and non-branded SFC prescriptions. Such data needed to be fed into a budget impact model and then independently verified; all of which took time. However, in future, GlaxoSmithKline would provide payors and such-like, better clarity regarding anticipated timelines for providing answers to these more complex budgetary questions.
GlaxoSmithKline submitted that contrary to the complainant’s expectations, the October 2018 Drug Tariff was updated with the reduced Seretide prices and validated the assumption made on the letter at issue. In addition, GlaxoSmithKline highlighted that following the complaint in September 2018, there had been ongoing email and verbal dialogue with the complainant regarding various other commercial considerations related to Seretide and which GlaxoSmithKline considered came to a successful conclusion on 3 December 2018 (details of the correspondence was provided). GlaxoSmithKline therefore denied any breach of Clauses 7.1, 7.2, 7.4, 7.5, and 9.1.
PANEL RULING
The Panel noted that the letter at issue, dated 30 August 2018, began by informing readers of important pricing changes for Seretide. It stated that on 1 September 2018, GlaxoSmithKline would reduce the list price of the three most commonly prescribed packs of Seretide providing the NHS an estimated annual saving of £52 million. This savings claim was referenced to data on file and had an asterix which pointed to a footnote which appeared in small font on the second page of the letter titled ‘Estimated savings are based on’ and listed five bullet points. The first bullet point stated ‘Using the difference between the current list price (August 2018) and the new price for Seretide Evohaler 25/125, 25/250 and Seretide Accuhaler 50/500’. The second bullet point stated ‘Calculations use the data from the last twelve months of Seretide and non-branded Salmeterol Fluticasone (SFC) scripts and assumes that there will be no change in prescribing volumes over the next twelve months’. The third bullet point highlighted by the complainant stated ‘It includes both Seretide and non-branded scripts for SFC, as Seretide is used as the reference price in the drug tariff. Savings based on NHS Drug Tariff for Seretide Evohaler 25/125, 25/250 and Seretide Accuhaler 50/500 from October 2018’.
The Panel noted GlaxoSmithKline’s submission that the price reduction would provide significant financial benefit for the NHS both directly (as the price of Seretide itself was reduced), but also indirectly (as the Seretide list price was used as the reference price for all generically prescribed salmeterol/fluticasone propionate preparations).
The Panel noted GlaxoSmithKline’s submission that the list prices for Seretide 50/125, and 50/250 Evohaler and Seretide 50/250 Accuhaler were reduced with effect from 1 September 2018 and so savings for those three preparations were available with effect from that date. The Panel understood that this was the direct saving referred to by GlaxoSmithKline, if prescriptions for Seretide were received.
The Panel noted GlaxoSmithKline’s submission that it was not claimed in the letter in question that the savings related to non-branded prescriptions would be available from 1 September. The Panel understood these to be the indirect savings referred to by GlaxoSmithKline when non-branded prescriptions for SFC were dispensed. The Panel noted GlaxoSmithKline’s submission that the letter included an estimate of the savings that would be achieved by the NHS when the reduced Drug Tariff Price for Seretide was introduced, which the company assumed would be in October and which GlaxoSmithKline submitted was clearly set out in the footnote referred to above. GlaxoSmithKline further stated that although it had official approval for the list price reduction, it had no control as to when this would be adopted by the Drug Tariff. The estimated savings referred to in the letter were based on the assumption that the Drug Tariff would be updated in October throughout the whole of the UK. The Panel noted that the October 2018 Drug Tariff provided by GlaxoSmithKline did appear to reflect the new lower Seretide prices.
It appeared to the Panel that the direct savings referred to based on Seretide prescriptions could be realised from 1 September 2018 but the savings based on the non-branded SFC prescriptions could not be realised until the new lower Seretide reference prices were reflected in the Drug Tariff which occurred in October.
The Panel noted that the second paragraph of the letter in question referred to the reduction of the list price on 1 September and gave estimated NHS savings. In the Panel’s view the bullet point highlighted by the complainant on the first page of the letter which stated ‘ For non-branded salmeterol fluticasone (SFC) scripts you will pay the new lower NHS tariff price and therefore you will see additional savings’ implied that the savings for non-branded salmeterol fluticasone prescriptions could also be realised from 1 September 2018, which was not so. The Panel noted that the supplementary information to Clause 7 stated, inter alia, ‘In general claims should not be qualified by the use of footnotes and the like’. In the Panel’s view, the qualification to the claim of an estimated annual saving of £52 million to the NHS which appeared in small font on the second page of the letter as a footnote did not negate the otherwise misleading impression of the claim at issue. The misleading implication was not capable of substantiation. Breaches of Clauses 7.2 and 7.4 were ruled.
The Panel noted the complainant’s statement that he/she had tried to contact GlaxoSmithKline with regard to the fact the Seretide price was not reduced in the September Drug Tariff, and it did not appear that it would be reduced in the October Drug Tariff so there were no savings to be made from non-branded SFC prescriptions; GlaxoSmithKline was unable to provide him/her with a response.
The Panel noted that the letter at issue told readers that if they would like to discuss the matter further then they should contact their GlaxoSmithKline local key account manager and named a GlaxoSmithKline employee and provided his/her email address. The Panel noted that the complainant first contacted GlaxoSmithKline by replying to an email, the content of which was similar to the letter at issue, on 3 September. The complainant contacted the GlaxoSmithKline employee named in the letter at issue on 5 September after not receiving a response to his/her email of 3 September. The GlaxoSmithKline employee responded the same day stating that he/she had forwarded the query to the head office team which was dealing specifically with rebate logistics and would respond as soon as possible. The GlaxoSmithKline employee followed up on 12 September and informed the complainant that the head office team was pulling together the figures to demonstrate the savings his/her CCG would see as a result of the price change but had to wait for it to be approved before sharing it with the complainant the following week. The complainant replied the following day reiterating his/her concerns and on 20 September the GlaxoSmithKline employee replied that the best thing would be for one of the Seretide team to telephone him/her to answer the questions in depth and asked if the complainant would be happy for him/her to arrange it. The Panel noted GlaxoSmithKline’s submission that since the complaint came to its attention, a senior executive had spoken to the complainant directly by telephone and followed up with an email to answer his/her specific question.
The Panel noted GlaxoSmithKline’s submission that it was already aware of the correspondence between the complainant and GlaxoSmithKline, as provided by the complainant to the Authority, which in error, was not previously provided to GlaxoSmithKline in its entirety. The Panel noted that GlaxoSmithKline provided additional correspondence which it submitted showed the ongoing dialogue between the complainant and GlaxoSmithKline which continued until 3 December 2018 and demonstrated the complexity of the questions being asked.
The Panel disagreed with GlaxoSmithKline’s submission that the complaint referred to the additional savings that the impact of Seretide price reduction on non-branded SFC preparations not being available for September would have on the complainant’s CCG. In the Panel’s view, the complaint was more general: whether the suggested additional savings for non-branded SFC prescriptions could be realised when the September Drug Tariff did not yet reflect the lower Seretide prices. It appeared that on 30 November, after the complaint was received and following GlaxoSmithKline’s response, the complainant contacted GlaxoSmithKline with more specific questions. These subsequent questions did not form part of the complaint.
The Panel noted that Clause 7.1 stated that upon reasonable request, a company must promptly provide members of the health professions and other relevant decision makers with accurate and relevant information about the medicines which the company markets.
Clause 7.5 stated, inter alia, that substantiation for any information, claim or comparison must be provided as soon as possible, and certainly within ten working days, at the request of members of the health professions or other relevant decision makers. The Panel noted the supplementary information to Clause 7 stated that the application of the clause was not limited to information or claims of a medical or scientific nature. It included, inter alia, information or claims relating to pricing and market share.
The Panel noted that whilst GlaxoSmithKline appeared to be in contact with the complainant with regards to his/her query it was of concern that it was only after receipt of this complaint that GlaxoSmithKline contacted him/her to answer it. In the Panel’s view GlaxoSmithKline should have been able to answer the complainant’s question sooner particularly given readers of the letter were encouraged to contact the company if they required further information. The Panel did not agree with GlaxoSmithKline’s submission that the information requested did not relate to data supporting a claim but rather the provision of specific budgetary information. In the Panel’s view the complainant was simply querying how the claim that savings based on non-branded SFC prescriptions could be realised from 1 September when the lower Seretide prices were not yet reflected in the Drug Tariff. The Panel did not consider that GlaxoSmithKline provided the complainant with the relevant and accurate information promptly or substantiated the claim as soon as possible and within ten working days upon the complainant’s request and a breach of Clauses 7.1 and 7.5 were ruled. In the Panel’s view GlaxoSmithKline had failed to maintain high standards and a breach of Clause 9.1 was ruled.
Complaint received 21 September 2018
Case completed 17 April 2019
