PRA Files Amicus Brief in Johnson & Johnson Employer Health Plan Lawsuit

PatientRightsAdvocate.org has filed an amicus brief in the U.S. Court of Appeals for the Third Circuit supporting employees and patients harmed by inflated prescription drug costs inside Johnson & Johnson's employer-sponsored health plans.

The case, Lewandowski v. Johnson & Johnson, centers on whether employees can challenge health plan fiduciaries under ERISA when prescription drug costs are inflated through poorly supervised Pharmacy Benefit Managers (PBMs). PRA’s brief argues that they can and that employers violate their fiduciary duty to manage benefits prudently when they allow such overcharging by health plan intermediaries.

The lawsuit alleges that Johnson & Johnson’s health plan fiduciaries failed to properly monitor their PBM, allowing excessive prescription drug markups that increased costs for employees and plan participants. According to the complaint, plan participants paid more through both premiums and out-of-pocket pharmacy costs.

The brief highlights several well-documented PBM practices that can inflate healthcare costs:

• “Spread pricing,” where PBMs charge employers far more than they reimburse pharmacies and keep the difference

• Steering patients toward higher-cost drugs instead of lower-cost alternatives

• Favoring affiliated pharmacies and specialty drug arrangements that maximize PBM profits

• Hidden markups and opaque pricing structures that employers and patients cannot easily audit or understand

PRA’s brief explains that ERISA imposes strict fiduciary duties on employers and plan administrators to supervise and stop such overcharges and profiteering. It calls on the appeals court to side with employee Ann Lewandowski and allow the case to proceed on the merits.

Read the amicus brief here.