Health Law Highlights

The Rise of Fiduciary Health Plan Litigation

Summary of article from The Wagner Law Group, by Michael Schloss, Stephen Wilkes:

In 2022, US health care spending reached $4.5 trillion, with $405 billion spent on prescription drugs and $800 billion paid through employer-sponsored health plans. A class action lawsuit, Lewandowski v. Johnson and Johnson, alleges mismanagement of the company’s health plans’ prescription-drug benefits, leading to higher costs for plan participants. The complaint argues that the company breached ERISA duties of prudence and loyalty and calls for various remedies. The defendants have filed a motion to dismiss the original complaint, arguing that the plaintiff received all benefits due to her under the plans and failed to plausibly allege an imprudent process for negotiating PBM services. The case serves as a wake-up call for health plan fiduciaries to review their PBM programs and consider the role of incentives and conflicts, among other measures.