JPMorgan Chase is the latest large corporation to face a lawsuit from employees alleging mismanagement of its employee prescription drug benefits plan, which is administered by CVS Health.
The lawsuit, filed March 13 in the U.S. District Court for the Southern District of New York, accuses JPMorgan of allowing inflated drug prices through its partnership with its PBM, CVS Caremark.
The plaintiffs, which include current and former employees, claim that the bank’s failure to properly oversee its PBM contract resulted in unnecessarily high prescription drug costs, thereby violating the best interests of employees under ERISA.
One example in the lawsuit points to the plan's purchase of the multiple sclerosis drug teriflunomide, which was allegedly bought at a price of $6,229, compared to about $30 at retail pharmacies.
"No prudent fiduciary would agree or allow for its plan and participants/beneficiaries pay a price that is more than two hundred times higher than the price available to any individual who just walks into a pharmacy and pays out-of-pocket, and five hundred sixty times higher than the price available with just a few clicks online," the lawsuit said.
The lawsuit also notes that JPMorgan previously launched initiatives such as Haven Healthcare, which aimed to address PBM practices and improve employer-sponsored health plans across industries. According to the suit, the bank allegedly ignored reform recommendations before Haven was shuttered in 2021.
The plaintiffs argue that JPMorgan could have saved millions of dollars by choosing better pricing options or a more transparent "pass-through" PBM model. Instead, the plaintiffs claim that JPMorgan’s failure to explore alternatives led to excessive costs for employees and their families through higher drug costs and overall premiums.
The lawsuit is seeking to recover any overpaid costs and ensure future plan compliance with ERISA.
Several large employers and insurers have faced lawsuits in recent years from employees over claims of mismanaging health and pharmaceutical benefits and violating their fiduciary duties, with notable examples including Owens & Minor, Kraft Heinz, Wells Fargo and Johnson & Johnson. In January, a federal judge partially dismissed the lawsuit against J&J.