This case arises from the largest healthcare fraud in U.S. history. The complaint – brought by a proposed class of health plans – alleges that GlaxoSmithKline LLC (GSK) fraudulently promoted its diabetes medication, Avandia, as reducing inherent cardiovascular risks faced by those living with Type 2 diabetes. In reality, the drug does the opposite.
The complaint alleges the following: cardiovascular disease is leading cause of death for the 27 million Americans living with Type 2 diabetes. Launched in 1999, GSK’s Avandia was considerable more expensive than metformin or sulfonylureas. Yet, it became the standard of care, bringing in billions annually, because GSK promised it would reduce inherent cardiovascular risks faced by those living with Type 2 diabetes.
Avandia does not reduce cardiovascular risk; it increases it. What’s worse, GSK knew this before it sold a single tablet of Avandia on the U.S. market. The company’s own clinical trials revealed Avandia elevated cholesterol ratios – a known risk factor for heart disease – and cardiac risk in Type 2 diabetics. Yet, through a scientifically dishonest marketing campaign in combination with a selective publication strategy, GSK and its associates managed to conceal this lie for nearly a decade.
THE TRUTH ABOUT AVANDIA REVEALED
In 2007, the New England Journal of Medicine exposed GSK’s fraud. Two researchers aggregated data from GSK’s clinical trials and found Avandia was associated with increased, not reduced, cardiovascular risk. As a result of this revelation, the FDA required GSK to place a black box warning on Avandia’s label and Congress enacted a new law requiring pharmaceutical companies to disclose the results of all clinical trials. By 2012, GSK paid over $650 million to settle federal and state civil charges that it falsely promoted Avandia to physicians and other health care providers as providing cardiovascular benefits it did not. GSK also paid a $250 million criminal fine to settle charges that, between 2001 and 2007, GSK concealed data concerning the cardiovascular safety of Avandia.
In May 2010, health plans filed a class-action lawsuit to recover for GSK fraudulent promotion of Avandia. They alleged violations of RICO and state consumer protection law. In the fall of 2010, GSK moved to dismiss the lawsuit. The district court denied that motion in October 2013. GSK filed an interlocutory appeal, but the Third Circuit affirmed the district court’s decision in October 2016. In 2017, the case returned to the district court for discovery. But before the plaintiff health plans could obtain discovery, the district court permitted GSK to move for summary judgment.
AVANDIA CASE PROGRESSION
At summary judgment, GSK asserted a preemption defense: GSK argued that the FDA’s regulation of Avandia preempted the plaintiffs’ allegations that GSK should have warned of Avandia’s cardiovascular risks. GSK’s motion for summary judgment did not address the plaintiffs’ false marketing claims. Nonetheless, the district court granted complete summary judgment in GSK’s favor, ignoring the plaintiffs’ false marketing claims, dismissing the plans’ RICO claims, and holding the plans state law claims preempted.
The plaintiffs appealed that ruling to the Third Circuit and won. In December 2019, the Third Circuit reversed the district court’s grant of summary judgment on all three issues and remanded the entire case for adjudication. The Third Circuit has denied GSK’s petition for en banc review and panel rehearing.
The plaintiffs also appealed the district court’s decision to seal the entire summary judgment record. Again, the Third Circuit sided with the plaintiffs. The Third Circuit held that the public holds a common law right to access the summary judgment records and remand the sealing issue to the district court for further adjudication. Based on this decision, GSK has agreed to unseal the vast majority of documents at issue in this case.
The Court of Appeals directed the district court to apply the common law right of access to determine whether the documents should be made public. The Third Circuit further instructed the lower court to determine whether the First Amendment required unsealing if the common law did not.
The parties are now proceeding with discovery, which closes on October 27, 2022. The plaintiffs will file their motion for class certification on March 13, 2023.
CASE TIMELINE
The district court officially re-opened this lawsuit and the parties are now proceeding with discovery.
On Sept. 3, 2020, the U.S. District Court for the Eastern District of Pennsylvania granted the plaintiffs’ motion to unseal the summary judgment record in this case, unsealing thousands of records of one of the largest pharmaceutical frauds in U.S. history. E.D. Pa. District Court Decision on Sealing
The Third Circuit sided with the plaintiffs and reversed the District Court’s grant of summary judgment to GSK. The Third Circuit held that the plaintiffs had properly raised a claim that GSK falsely advertised their diabetes medication, causing the plaintiffs to overpay for this drug instead of more affordable alternatives. The Third Circuit also agree with the plaintiffs that the district court had improperly denied the plaintiffs discovery on their RICO claim.
The Third Circuit agreed with the plaintiffs and held that the district court failed to apply the correct standard of review when determining whether GSK’s decades-old documents should remain sealed.
