J&J worker accuses employee health plan of drug benefits mismanagement

A Johnson & Johnson employee is suing the New Brunswick, N.J.-based pharmaceutical giant for allegedly mismanaging workers' prescription drug benefits and violating its fiduciary duties under the Employee Retirement Income Security Act.

ERISA requires self-funded employers acting as health plan fiduciaries to make an effort to find the lowest costs for healthcare services, compare alternative providers in the marketplace and continuously monitor healthcare expenses to ensure they are reasonable.

In the lawsuit, filed Feb. 5 in a New Jersey federal court, the J&J worker accuses her employer of paying inflated costs for generic prescription drugs designated as specialty medications to its PBM, Cigna's Express Scripts, thereby harming employees through higher costs, premiums, deductibles, copays and lower or limited wage growth.

In one named example, J&J's employee health plan paid more than $10,000 for a 90-day prescription of a generic drug used to treat multiple sclerosis, which is available for as little as $40 without insurance at retail pharmacies, according to the suit.

"No prudent fiduciary would agree to make its plan and beneficiaries pay a price that is two-hundred-and-fifty times higher than the price available to any individual who just walks into a pharmacy and pays out-of-pocket," the plaintiff's attorneys wrote.

The plaintiff, Ann Lewandowski, has served as J&J's healthcare policy and advocacy director for Wisconsin and Minnesota since 2021, but is on leave over "a dispute regarding a reasonable accommodation for a medical condition." She is seeking class-action status on behalf of J&J's health plan members.

The J&J suit is the latest development in recent lawsuits that have focused on self-funded employers' fiduciary duties under ERISA, especially as federal healthcare pricing transparency laws have come into effect over the past few years.

"This is the first suit of its kind that we're aware of," Elizabeth Mitchell, CEO of the Purchaser Business Group on Health, told The Wall Street Journal. "It definitely will not be the last."

In June, Kraft Heinz alleged Aetna has used its role as its third-party health plan administrator "to enrich itself to Kraft Heinz's detriment" through undisclosed fees and processing medical and dental claims without human review. The food manufacturer voluntarily dismissed the lawsuit in December and moved it to private arbitration.

In January, the Labor Department sued Blue Cross and Blue Shield of Minnesota for allegedly violating its fiduciary duties under ERISA by secretly passing the cost of a state provider tax to self-funded health plans as part of the negotiated rates it pays to providers.


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