Third-party payors who covered prescriptions for the diabetes medication Avandia brought a putative class action against the manufacturer, GlaxoSmithKline, for misrepresenting the drug’s cardiovascular risks and benefits. GSK’s misrepresentations, they claim, caused more health care providers to prescribe Avandia than cheaper alternatives. That, in turn, allegedly caused these TPPs to reimburse patients for Avandia that otherwise would not have been prescribed.

GSK challenged the District Court’s certification of the class, arguing that (i) it is not ascertainable, because there is not enough evidence to identify which TPPs reimbursed members for the drug, and (ii) that common issues do not predominate on causation because the plaintiffs lack class-wide evidence that GSK’s fraud caused them to cover more Avandia prescriptions than they would have otherwise.

The U.S. Third Circuit held that the proposed class was ascertainable, but parted with the District Court on the issue of whether common issues would predominate on causation.

Joining the First, Second, and Ninth Circuits, the Court concluded 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. In this case, the plaintiffs’ statistical evidence did not satisfy this standard.

With respect to Ascertainability:

GSK advances two arguments that the Plans failed to prove there is a reliable and feasible mechanism for identifying class members: “First, it contends there are no records of which putative members reimbursed Avandia prescriptions in the class period. Second, it asserts that even if those records existed, they would not indicate whether a putative member was an end-payor (thus eligible for class membership) or was fully insured (hence ineligible for class membership). The District Court’s finding that there are objective records of the Plans’ reimbursements for Avandia prescriptions has no clear error. We note that two named plaintiffs dropped out of the case when they could not obtain purchase records from their pharmaceutical benefit managers. But, after receiving a subpoena, UBF’s PBM provided the data, showing it has (or at least had) the records after all. Even if PBMs could not provide the requisite data, the District Court’s finding that class members would be able to corroborate their claims was not clearly erroneous because a potential class member’s affidavit can be corroborated using multiple forms of documentation. The District Court’s finding the Plans will be able to distinguish end-payors from fully insured plans did not clearly err either. GSK claims that most TPPs will rely on PBM purchase records to establish their membership in the class. Generally, those documents do not identify whether a purchaser was an end-payor. The Plans, however, do not propose to rely on PBM data alone; the record contained ample evidence they would be able to use other resources to distinguish end-payors from fully insured TPPs. In a final bid to prevent class certification, GSK frames the Plans’ proposal as a dilemma. In its view, the proposal permits potential class members to identify themselves—violating our admonition that ascertainability cannot rest on mere say-so—or it depends on individualized evidence, risking the very mini-trials the ascertainability requirement exists to prevent. This dilemma is illusory. The Plans’ proposal for distinguishing end-payors from fully insured plans does not rely on mere say-so. 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. To the contrary, it is the straightforward yes-or-no review of existing records to identify class members we have held is administratively feasible even if it requires review of individual records with cross-referencing of voluminous data from multiple sources.”

With respect to Commonality, Predominance, and Causation:

“We do not presume in law that x caused y merely because x happened first. The connection might be causal. But it might be coincidental. Or some z might be responsible for x and y alike. As statisticians emphasize, correlation alone does not prove causation.

“One method experts have developed for distinguishing true causation from mere correlation is multiple regression analysis. It can define statistically the relationship between a dependent variable (e.g., salary) and one or more independent variables (e.g., education or work experience), enabling us to conclude with confidence that the latter is the reason for the former (or is at least one reason). It can also enable us to control for other independent variables so we can rule out competing explanations (or at least rule them unlikely). And it can quantify how much of a difference the cause makes to the effect. Thus, although it may be that the only empirical facts we can discover about the world are facts about correlation, regression analysis can justify the inference of causation by testing and attempted invalidation of other causal hypotheses.”

In this case: “The District Court stated that the Plans introduced internal GSK studies showing a few of its marketing campaigns caused an increase in prescriptions.  On their own, they may not be evidence that GSK’s purportedly unlawful promotion caused an increase in prescriptions, because they did not isolate the cardiovascular messaging from other messaging about Avandia as the cause of increased prescriptions. The Court, while acknowledging GSK raised this concern, defended its determination that the internal marketing research could establish ‘class-wide reliance’ by citing cases holding that, in general, such an inference can be justified by statistical or aggregate evidence a RICO defendant’s fraud caused the plaintiffs’ injuries. That is true. But it does not resolve GSK’s concern. If the GSK studies showed its allegedly fraudulent claims about Avandia’s cardiac effects caused an uptick in prescriptions, then the cases the District Court cited would provide a legal foundation for putting them to work here. But as far as we can tell from the expert reports describing the studies, they did not identify the distinctive consequences of GSK’s allegedly fraudulent marketing as opposed to its marketing generally. Even if they could show physicians relied on what GSK said about Avandia, they may not be able to show doctors were swayed by its alleged misrepresentations about its cardiac effects in particular. Similarly, even if the problem is that all of GSK’s marketing omitted the truth about Avandia’s cardiac profile, the data in the record may not explain how much of its efficacy arose from that omission.

“If the District Court understood the actual scope of the studies but reasoned they sufficed to justify an inference of class-wide reliance, an error of law crept in: what the studies can prove is a legal matter, not a factual one. Even by the lights of the cases the District Court cited, only a report that attempts to isolate the effects of the alleged fraud could warrant that inference. And if the District Court incorrectly understood what the data concerned, its factual error was a clear one. Nothing in the record indicated the studies isolated the effects of GSK’s fraudulent marketing from the effects of its marketing in general. And the Plans disavow using these studies for that purpose. Further, because these studies do not seem to speak to the issue at hand, combining them with the common evidence of GSK’s alleged scheme does not yield an adequate basis for the District Court’s decision either….

“The Plans claim they can show reliance differently: by introducing statistical evidence of a correlation between the Nissen study’s exposure of the fraud and the subsequent decline in prescriptions, then using circumstantial evidence to show that the earlier exposure of the fraud would have led to the same decline — thus closing the gap between correlation and causation. In their view, if the public had learned the truth about Avandia’s cardiovascular profile at the start of the class period in 2005, prescriptions would have declined in the same way they did after the Nissen study exposed that information in 2007.

“We disagree. A few courts have permitted TPPs in similar RICO class actions to prove reliance with class-wide evidence when the evidence includes both statistical and circumstantial evidence of causation. But we are not aware that any court has permitted a putative class of TPPs to prove providers’ reliance by class-wide evidence without statistical evidence the defendant’s conduct caused the injuries. The Plans could have cleared the bar if they had introduced statistical evidence of causation, like a regression analysis. They tried. But the District Court struck that evidence after a Daubert hearing. Without it, the Plans have only statistical evidence of correlation and circumstantial evidence of causation. In this context, where their theory depends on establishing the fraud caused enough prescriptions to make it likely the fraud injured the entire class, that is not enough. TPP pharmaceutical fraud class action plaintiffs can prove causation by class-wide statistical evidence. But doing so takes more rigorous statistics than the Plans so far have presented. Every circuit to address this question has held or suggested that statistical evidence of causation may prove a drug manufacturer’s fraud injured a class of TPPs.”

 

In re Avandia, No.25-2278, 2026 WL 2093904 (3d Cir. July 21, 2026).