Antitrust Law Daily Wrap Up, ADVERTISING—3d Cir.: Class certification rescinded in Avandia deceptive marketing case, (Jul 22, 2026)

By Donielle Tigay Stutland, J.D.

The class was ascertainable, but common issues would not predominate on causation.

The Third Circuit vacated and remanded an order granting class certification to Third-Party Payor (TPPs) plaintiffs in their action against GlaxoSmithKline LLC (GSK) in connection with the marketing of Avandia, a diabetes drug. The Third Circuit agreed with the district court that the proposed class is ascertainable. However, the Third Circuit joined other circuits in concluding that plaintiffs in a pharmaceutical fraud RICO class action may use statistical evidence to prove the defendant was responsible for their injuries when the evidence can establish causation, not merely correlation. The case was remanded for further fact-finding on predominance under the clarified standard (In re: Avandia Marketing, Sales Practices and Products Liability Litigation, No. 25-2278 (3d Cir. Jul. 21, 2026)).

Background. Third-Party Payors (TPPs) United Food and Commercial Workers Local 1776 and Participating Employers Health and Welfare Fund and J.B. Hunt Transport Services, Inc. (collectively, the plans) sued GlaxoSmithKline LLC (GSK) alleging violations of the Racketeer Influenced Corrupt Organizations Act (RICO) and various state consumer protection laws in connection with the marketing of the diabetes drug Avandia. The courts consolidated the various actions into multi-district litigation (MDL).

In July 2013, the court ruled that prescription drug users could not state consumer protection claims. However, in October of that year, the court said the plans successfully stated RICO and state law consumer protection claims.

The plans moved to certify a class of TPPs who alleged injury arising from alleged fraudulent GSK marketing. The proposed class was to consist of all entities in the U.S. and its territories which indirectly bought or reimbursed some or all of the purchase price for Avandia, Avandamet, and/or Avandaryl from May 25, 1999 until August 14, 2007. The class was to include self-insured non-government entities and TPPs that offered insured plans to private individuals and groups as well as TPPs that offered insured plans to government entities including the Federal Employee Program, Managed Medicaid, and Medicare Part D. The class was to exclude governmental entities other than municipalities and/or local governments with self-funded prescription drug plans, fully insured health plans, pharmacy benefit managers (PBMs), natural person consumers, and GSK employees.

In May 2025, the the federal district court in Philadelphia granted the plans’ motion for class certification as to claims beginning January 1, 2005, until August 14, 2007, but it partly denied the motion as to claims before January 1, 2005. Preliminary to class certification, the court granted or partly granted GSK motions to exclude certain plan experts whose opinions had a bearing on class certification. (see Antitrust Law Daily,

GSK appealed, challenging the District Court’s holdings that the class is ascertainable and that common issues would predominate on causation.

Analysis. On appeal, GSK challenged the District Court’s holdings that the class is ascertainable and that common issues would predominate on causation. The Third Circuit also requested the parties brief a third, threshold issue: the scope of our review of a Rule 23(f) appeal. The court began by outlining that it may limit the scope of its review under Rule 23(f), which provides that a “court of appeals may permit an appeal from an order granting or denying class-action certification under this rule.” The court held that it “may circumscribe review of a Rule 23(f) appeal to the issues we choose.”

Next, the court noted that “there is no dispute the Plans satisfied Rule 23(a). What is disputed is whether they satisfy two requirements of Rule 23(b)(3): predominance and ascertainability.” Looking first at ascertainability, the court concluded that the proposed class is ascertainable, and can be determined by objective means. Here, “each potential class member’s payor status would be verified with documentation like receipts, claims data, plan documents, or public records. And using these records to confirm a TPP is an end-payor hardly constitutes a mini-trial.” The court found no errors of the District Court in its conclusion that the class was ascertainable.

However, the Third Circuit found that “the record so far does not show that common issues would predominate.” Here, for the RICO claim, “Establishing liability under [§ 1962(c)] of the RICO statute requires (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity, plus an injury to business or property,” and “Implicit is a requirement that the racketeering activity was the but-for cause of the alleged injury.” Here, the but-for-causation would be in the form of TPP reliance on the misrepresentations that produced excess prescriptions reimbursed by the Plans. In other words, here, “the predominance question is whether the Plans can prove by class-wide evidence that they covered more Avandia prescriptions by reason of GSK’s fraud.” The court also stressed that “proof of correlation is not enough.”

The District Court made note of three possible regression or statistical analyses that the Plans could have lean on class-wide evidence; however, it held that only one of these analyses could be used to prove reliance: GSK’s internal statistical analyses. However, the Third Circuit indicated that the district court did not resolve all of the disputes relevant to certification. The Third Circuit also disagreed that the evidence of a common scheme, without more, warranted an inference of reliance in this case.

The court found that the District Court did not adequately justify its finding that GSK’s marketing studies warranted an inference of reliance. The court pointed to the First, Second, and Ninth Circuits, which have held that “TPPs in a pharmaceutical fraud RICO action may prove but-for causation with class-wide statistical evidence so long as that evidence is sufficiently rigorous to show causation, not just correlation. Statistical evidence has such rigor if, like a regression analysis, it can distinguish the causal significance of the variable at issue and justify the rejection of competing explanations.”

The court noted that the Plans have about the same circumstantial evidence the plaintiffs had other RICO cases cited, But here, the evidence “boils down to a graph showing Avandia prescriptions fell sharply after the Nissen study exposed the drug’s true cardiac profile.” Here no regression analysis or expert testimony has been offered “to distinguish causation from correlation by isolating other potential variables; the expert concluding that each TPP likely paid for Avandia in reliance on the fraud was offered only for damages.” The court also stressed that “no appellate court has yet held TPPs established predominance on RICO but-for causation with as weak statistical evidence as the Plans so far put forward here.”

The court concluded that although but-for causation is generally provable by statistical evidence, the evidence the Plans have offered is not yet sufficient. The court remanded the case. The court also indicated that on remand, the District Court may reopen discovery on predominance under Federal Rule of Civil Procedure 16(b) if good cause is shown.

The Case is No. 25-2278.

Judge: Ambro, T.

Attorneys: Hannah W. Brennan (Hagens Berman Sobol Shapiro) for United Food and Commercial Workers Local 1776 and Participating Employers Health and Welfare Fund. Devora W. Allon (Kirkland & Ellis) for GlaxoSmithKline LLC.

Companies: United Food and Commercial Workers Local 1776 and Participating Employers Health and Welfare Fund; GlaxoSmithKline LLC

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