Arizona AG accuses asthma drug maker of scheming to avoid Medicaid rebates

PHOENIX — Arizona Attorney General Kris Mayes on Thursday sued drug producer GlaxoSmithKline (GSK) for predatory practices toward asthma patients, namely discontinuing one of its popular medications in order to “avoid paying Medicaid rebates” affected by inflation.

GSK stopped production of Flovent, a prescription drug for asthmatics age 4 or older, on January 1, 2024. The discontinuation aligned perfectly with the day in which the American Rescue Plan, a congressional move enacted by President Joe Biden in response to COVID-19, removed the cap on Medicaid rebates.

According to a press release, more than 1 million Arizonans depended on this long-term asthma control inhaler.

Prior to ending production, GSK had hiked up Flovent’s price “far beyond inflation.” In 2013, Flovent cost about $230 but a decade later, according to GoodRx, it rose to $340. This price was in stark contrast to a generic version of the drug that GSK began selling in 2022 for $310, per NPR.

The generic drug has the exact chemical makeup of Flovent and is being distributed through Prasco LLC.

Mayes said her office “will not stand by” as vulnerable patients are blatantly being taken advantage of.

“GSK put corporate greed ahead of the health and safety of Arizona’s families and children,” Mayes said in the release. “Their manipulation of the system has left countless patients without access to life-saving medication, caused a spike in emergency room visits and likely contributed to preventable deaths.”

How did GSK avoid paying rebates on the asthma drug?

The cap removal by American Rescue Plan effectively required GSK to either pay for rebates in full or lower the asthma drug’s price. GSK did neither, and Mayes accused the company of exploiting a loophole in the Medicaid rulebook which viewed the generic drug as a “new product with no pricing history” and therefore didn’t fall under those needing rebate repayment.

Mayes filed a lawsuit under the Arizona Consumer Fraud Act for “deceptive and unfair practices.”

Dr. Helene Felman, a Tucson-based general pediatrician, spoke directly to how some of her patients previously using Flovent have been negatively impacted by GSK’s schemes. She referenced one patient who had to wait six weeks to find a suitable replacement inhaler.

“I had one patient in particular who was stable on Flovent for years, and in January 2024 needed to transition to another inhaler when the switch happened,” Helene said in the release. “After the six weeks without medication, she needed a course of oral steroids to help her get over her asthma attack, but was fortunate that she didn’t need to be hospitalized like many others in similar situations.”

On Thursday, Mayes made a move toward and two days later was granted a temporary restraining order over the Department of Government Efficiency in effort to prevent the federal power from accessing Arizonan’s personal payment information.

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