Arizona Attorney General Kris Mayes announced in a press release that a lawsuit has been filed against pharmaceutical manufacturer GlaxoSmithKline (GSK) for allegedly engaging in deceptive and unfair practices that endangered vulnerable asthma patients, especially children, while exploiting taxpayers. The lawsuit alleges that GSK deliberately discontinued its widely used asthma medication, Flovent, and replaced it with an identical authorized generic as part of a calculated scheme to avoid paying Medicaid rebates tied to years of price inflation: “GSK put corporate greed ahead of the health and safety of Arizona’s families and children. 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. My office will not stand by while corporations put profit ahead of the health of children.”
For decades, Flovent was one of the most widely prescribed asthma medications in the country, relied upon by millions, including over 1 million Arizonans with asthma. However, over time, GSK raised the price of Flovent far beyond inflation, making billions of dollars from Medicaid and private consumers.
In January 2024, a provision of the American Rescue Plan removed a cap on Medicaid rebates. Previously, drug manufacturers could only be required to pay back up to 100% of a drug’s average manufacturer price (AMP) in rebates, no matter how much the price had been inflated. The ARP eliminated this cap, meaning GSK now faced the possibility of owing rebates that exceeded the price of Flovent—effectively repaying Medicaid for years of excessive price hikes.
Instead of lowering Flovent’s price or paying the required rebates, GSK allegedly executed a deliberate scheme to evade its obligations:
- On January 1, 2024, the exact day the rebate cap removal went into effect, GSK abruptly discontinued Flovent, making it unavailable under its original brand name.
- GSK launched an “authorized generic” version of Flovent through its distributor, Prasco LLC. The authorized generic was chemically identical to Flovent but sold under a different name and label.
- By reclassifying the drug as a new product, GSK avoided any rebate obligations tied to Flovent’s price inflation. Under Medicaid rules, the authorized generic was treated as a new product with no pricing history.
This alleged scheme allowed GSK to continue charging high prices while allegedly evading its legal obligations to taxpayers under Medicaid, leaving families and the public to bear the burden. The lawsuit, filed under the Arizona Consumer Fraud Act, seeks to hold GSK accountable for allegedly violating laws that protect consumers from deceptive and unfair practices.
The impact of Flovent’s removal from the market was felt acutely by Arizona’s healthcare providers, who witnessed the serious health consequences for children with asthma. Doctors across the state have shared their firsthand experiences treating young patients who struggled to access effective medication, leading to severe asthma attacks and, in some cases, hospitalization.
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