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In re Avandia Marketing, Sales and Products Liability Litigation

United States Court of Appeals, Third Circuit

December 17, 2019

IN RE: AVANDIA MARKETING, SALES AND PRODUCTS LIABILITY LITIGATION UFCW Local 1776 and Participating Employers Health and Welfare Fund; J.B. Hunt Transport Services, Inc., Appellants

          Argued: March 6, 2019

          On Appeal from the United States District Court for the Eastern District of Pennsylvania (District Court Nos. 2-07-md-01871, 2-10-cv-02475, 2-11-cv-04013) Hon. Cynthia M. Rufe District Judge.

          Thomas M. Sobol [ARGUED] Hannah W. Brennan Edward Notargiacomo Kiersten A. Taylor Hagens Berman Sobol Shapiro James R. Dugan, II Douglas R. Plymale, Eric L. Young McEldrew Young, Eric H. Gibbs, Anne-Marie J. de Bartolomeo Counsel for Appellants

          Jay P. Lefkowitz [ARGUED] Thomas S. Burnett Kirkland & Ellis LLP Nina M. Gussack, Anthony C. Vale, Sean P. Fahey, Kyle A. Dolinsky, Hedya Aryani, Jeremy D. Heep, Yvonne M. McKenzie Pepper Hamilton LLP Counsel for Appellee

          Before: SMITH, Chief Judge, AMBRO and RESTREPO, Circuit Judges.



         Plaintiffs, two health benefit plans ("Plans"), appeal the District Court's grant of summary judgment in favor of Defendant, GlaxoSmithKline LLC ("GSK"), the manufacturer of the prescription drug Avandia. The Plans brought suit against GSK under various state consumer-protection laws and the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. ch. 96 ("RICO"), based on, among other things, GSK's marketing of Avandia. The District Court granted summary judgment in favor of GSK on the Plans' claims, finding, in relevant part, that (i) the Plans' state-law consumer-protection claims were preempted by the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. ch. 9 ("FDCA"); (ii) the Plans had failed to identify a sufficient "enterprise" for purposes of RICO; and (iii) the Plans' arguments related to GSK's alleged attempts to market Avandia as providing cardiovascular "benefits" were "belated." The Plans assert that the District Court erred in granting summary judgment, and we agree.

         Applying the guidance recently provided by the Supreme Court in Merck Sharp & Dohme Corp. v. Albrecht, 139 S.Ct. 1668 (2019), we hold that the Plans' state-law consumer-protection claims are not preempted by the FDCA. With respect to their RICO claims, the Plans should have been given the opportunity to seek discovery prior to the District Court's granting summary judgment on such claims. Further, from the inception of this litigation, the Plans' claims have centered on GSK's marketing of Avandia as providing superior cardiovascular outcomes-in other words, cardiovascular benefits-as compared to other forms of treatment, and therefore, the District Court's refusal to consider the Plans' "benefits" arguments was in error because those arguments were timely raised.

         Therefore, for the reasons that follow, we will reverse in part and vacate in part the order of the District Court granting summary judgment in favor of GSK, and we will remand to the District Court for further proceedings consistent with this opinion.


         In May 1999, the Food and Drug Administration ("FDA") approved Avandia (Rosiglitazone), a drug developed by GSK, for the treatment of type-2 diabetes. Prior to the development of Avandia and similar drugs, physicians primarily treated type-2 diabetes by prescribing metformin and/or sulfonylureas. GSK, however, marketed Avandia at a much higher price point than metformin and sulfonylureas: a one-month supply of Avandia cost approximately $220, approximately $140 of which typically was covered by patients' health benefit plans, whereas a one-month supply of metformin or sulfonylureas cost approximately $50, about $45 of which typically was covered by patients' health benefit plans.

         Despite this cost differential, health benefit plans- including the Plans-placed Avandia on their formularies as a "covered" drug. The Plans, for example, determined that it was advantageous to cover the cost of Avandia because GSK allegedly marketed Avandia as being capable of both controlling a patient's blood sugar levels and reducing cardiovascular risk, the latter of which is particularly pertinent to type-2 diabetes patients, 65% of whom suffer fatal cardiovascular-related illnesses or complications. Metformin and sulfonylureas-the drugs that constituted the "standard of care" for type-2 diabetes prior to Avandia's development-did not decrease cardiovascular risk, and therefore, according to the Plans, GSK presented Avandia as a cost-effective alternative to those drugs. As a result, health benefit plans covered a large portion of the expenses related to patients' prescriptions for Avandia, resulting in approximately $2.2 billion in U.S. sales in 2006 alone.

         In 2006, however, concerns arose that Avandia may in fact increase certain cardiac risks. In August of that year, GSK submitted a Prior Approval Supplement to the FDA, in which GSK sought approval to add information to Avandia's label regarding the results of a recent meta-analysis of various clinical trials. The meta-analysis, "ICT-42," demonstrated that use of Avandia was associated with a statistically significant increase in myocardial ischemic events-events during which the heart does not receive adequate oxygen because blood flow to it is reduced. In May 2007, GSK submitted an update to its Prior Approval Supplement, offering a new formulation of its proposed warning with respect to myocardial ischemic events that would, among other things, make the warning more prominent and clear.

         Three days after GSK submitted the update to its Prior Approval Supplement, the New England Journal of Medicine published a study authored by Dr. Steve Nissen regarding Avandia ("Nissen Study"), in which Dr. Nissen concluded that Avandia "was associated with a significant increase in the risk of myocardial infarction and with an increase in the risk of death from cardiovascular causes that had borderline significance." J. App. 1064. Following the release of the Nissen Study, a representative of GSK held a telephone conversation with an official at the FDA regarding progress on the FDA's review of the Prior Approval Supplement. According to GSK's representative, who wrote a memo memorializing the details of the conversation, the FDA official advised that another official within the FDA was "calling for withdrawal of [the] approval" of Avandia, and thus, it was difficult for FDA officials to agree on labeling language for Avandia. Sealed App. 655-56. GSK's representative then proposed implementing the labelling changes with respect to myocardial ischemic events through the Changes Being Effected ("CBE") process, which permits a drug manufacturer to implement a change to its label prior to approval of such label by the FDA. The FDA official "strongly advised against proceeding" through the CBE process, stating that doing so "may give legitimacy to Dr. Nissen's data" and "will make people think that GSK must have other information." Id. at 656. The FDA official concluded the conversation by reminding the GSK representative that he "knew the regulations," which state that the drug manufacturer is ultimately responsible for making the decision to pursue a labelling change through the CBE process. Id.

         On June 8, 2007, the FDA sent a letter ("Letter") to GSK regarding the Prior Approval Supplement. In the Letter, the FDA stated that it had "reviewed the data provided [by GSK in its Prior Approval Supplement] and f[ou]nd [that] the information presented [was] inadequate" and that, therefore, the Prior Approval Supplement was "not approvable." Id. at 660. The FDA stated that it had "concluded that the pooled data require[d] further analysis to adequately convey the potential risk for increased cardiac ischemia associated" with use of Avandia. In particular, the FDA stated that it had "identified certain subgroups of patients . . . that may be particularly vulnerable to experiencing an ischemic event" while using Avandia. Id. The FDA then directed GSK to provide additional information "to address the deficiency" in the Prior Approval Supplement, including "[d]ata from studies included in a meta-analysis performed by Dr. Steven Nissen published in the New England Journal of Medicine that were not included in [GSK's] pooled analysis," as well as data from various other clinical trials. Id. at 661.

         The FDA expressed its view that the "potential risk of increased cardiac ischemia [was] a significant finding that may impact a large proportion of patients with type[-]2 diabetes," and as a result, the FDA scheduled a joint meeting of two FDA advisory committees ("Joint Meeting") "to discuss the findings from th[e Prior Approval Supplement] submission, additional data recently requested, and accruing information from ongoing clinical trials" of Avandia. Id. The FDA stated that the "outcome of th[e Joint M]eeting w[ould] be particularly germane to any labeling or other regulatory action needed for [Avandia] and should be factored into any resubmission to address the above deficiencies." Id.

         Later in 2007, the FDA required GSK to implement various changes to Avandia's label. Subsequent to issuing the Letter, the FDA directed GSK to add a black-box warning to Avandia's label with respect to the risk of congestive heart failure that (i) advised physicians and patients that Avandia "cause[s] or exacerbate[s] congestive heart failure in some patients," (ii) instructed physicians to "observe patients [taking Avandia] carefully for signs and symptoms of heart failure," and (iii) warned patients with certain heart conditions not to take Avandia. J. App. 708. Following the Joint Meeting, the FDA additionally directed GSK to add a black-box warning to Avandia's label with respect to the risk of myocardial ischemic events, advising physicians and patients that a "meta-analysis of 42 clinical studies . . ., most of which compared Avandia to placebo, showed Avandia to be associated with an increased risk of myocardial ischemic events such as angina or myocardial infarction" and that "[t]hree other studies . . ., comparing Avandia to some other approved ...

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