Lewandowski v. Johnson & Johnson: Paragraph 157

Oof. Perhaps the most powerful paragraph in Ms. Lewandowski’s complaint against Johnson & Johnson is Paragraph 157:

“157. In 2023, JnJ wrote to the Pennsylvania Department of Insurance about a practice through which PBMs and health plans alter specialty drugs classifications to avoid regulatory caps on patient out-of-pocket expenses. The letter explained that ‘PBMs carve out a list of specialty drugs for third-party companies to manage. These third party companies can increase the patient's
copay for the given drug to an artificially high amount—often thousands of dollars per dose.’ Yet that is precisely the fate to which Defendants consigned the Plans and JnJ's tens of thousands of employees.”

Ms. Lewandowski's lawsuit accuses Johnson & Johnson of failing to negotiate lower prescription drug prices within their employee health plans, leading to millions in overpayments for generic drugs by workers.

The complaint highlights instances like
- an HIV antiviral costing the plan $1,629 for 90 pills, where pharmacies might only charge about $180, and
- a multiple sclerosis medication costing the health plan $10,200 versus the typical $77 out-of-pocket cost.

This mismanagement is alleged to be in violation of the federal Employee Retirement Income Security Act (ERISA).

For a more detailed summary and to understand the breadth of the allegations, you can review the lawsuit here: Lewandowski v. Johnson & Johnson (https://lnkd.in/eCVmB7fs).

It's critical for employers and advisors to look under the hood of vendors to ensure that the costs incurred are in line with the market and that employee benefits are managed prudently.