GSK pushes back on FTC ‘junk patents’ claim as it raises profit outlook

GSK has pushed back on US claims it is holding back competition among drugmakers with “junk patents”, after the country’s Federal Trade Commission alleged the pharmaceutical group was one of several companies that could be keeping branded drug prices “artificially high”.

GSK, AstraZeneca, Novo Nordisk and Novartis were among 10 companies to receive letters from the FTC on Tuesday informing them that the agency had disputed a number of patents with the Food and Drug Administration. The regulator has accused the pharma groups of potentially stifling generic competition with “bogus patent listings”.

On Wednesday GSK chief executive Emma Walmsley disputed the FTC’s allegations, saying “none of the GSK patents have delayed in any way [the] entry of generics products”.

“We alongside many others received letters from the FTC . . . we don’t list patents to prevent any kind of legitimate competition,” she added.

Drugmakers file patents in order to develop and sell their products exclusively for a set period. After patents expire, generic drugmakers can create products based on the original, enabling lower prices through competition.

But pharmaceutical companies can file several patents for single drugs at different times, delaying the entry of generic medicines. The FTC said on Tuesday that it was disputing the accuracy or relevance of more than 300 patents across 20 different products.

The letters come as US authorities continue to push back on drugmakers over pricing, with the Biden administration making the lowering of prices in the world’s most lucrative drug market a political priority.

GSK capped prices of its asthma inhalers at $35 and delisted other patents following FTC action in November. Tuesday’s FTC letter to GSK also related to asthma and lung disease products.

“We completely understand why governments are facing into the challenge of making their healthcare systems accessible and affordable,” said Walmsley, adding that the company’s portfolio of vaccines could save costs for government by “investing in prevention”.

The comments came as the British drugmaker raised its profit forecast for the year on Wednesday, in part thanks to strong sales of its shingles vaccine and HIV drugs, boosting total sales by 10 per cent in the first quarter of the year. Total sales for the quarter were £7.4bn, ahead of analysts’ estimates.

The company now expects core profits, its preferred measure, to increase by 9 to 11 per cent, compared with 7 to 10 per cent in previous guidance, while sales for the current financial year are set to grow at the top end of a previously guided range of 5 to 7 per cent.

The results signal a continued strong start to the year for GSK, whose shares are up by more than 15 per cent since January — well ahead of the FTSE 100, including a rise of almost 2 per cent in morning trading on Wednesday.

That was despite a fall in sales for Arexvy, the company’s new vaccine for respiratory syncytial virus, a common flu-like condition, which dropped to below £200mn, compared with more than £500mn in the previous quarter. The result was below analysts’ expectations and suggests that the income from the jab is likely to be seasonal.

Walmsley said she expected GSK to be able to roll out its vaccine to 50-59 year-olds in time for next winter’s RSV season, if the FDA expands the drug beyond its current approvals for over-60s.

Arexvy’s successful rollout has helped in part to address long-term concerns among analysts about how it will replace some of its best-selling drugs when they go off patent, with drugs based on dolutegravir, its leading HIV medicine that will lose exclusivity in about 2028, bringing in £1.3bn in the quarter.

Peter Welford, an analyst at Jefferies, said “long-acting HIV injectables, vaccines and new pipeline launches mean profits likely face a ‘blip’ not ‘cliff’ on [HIV patent expirations]”.

Walmsley, who earned £12.7mn in 2023, also said that she was “very well paid”, following a shareholder revolt over the £18.7mn package agreed for Pascal Soriot, chief executive of AstraZeneca last month.