JPMorgan Chase mismanaged employee health benefits, resulting in past and present employees paying inflated prices for prescription drugs and other health care costs, a lawsuit filed last week alleges.
Filed in United States District Court for the Southern District of New York, the lawsuit accuses central Ohio’s largest private employer of failing its employees by agreeing to overcharges in prescription drugs by the company’s pharmacy benefit manager (PBM), CVS Caremark. As a PBM, Caremark sets the drug prices for JPMorgan Chase’s employee health plans.
JPMorgan Chase employs roughly 20,000 people in central Ohio. The lawsuit is being brought by both current and former employees across the country.
The consequence, according to the lawsuit, is JPMorgan Chase itself and employees and their families paying an average of over 200 times the cost for hundreds of generic prescription drugs available at drastically cheaper prices, even for the uninsured.
One example includes the plan’s purchase of the multiple sclerosis drug teriflunomide, which was allegedly bought at a price of $6,229. At retail pharmacies, the drug can be purchased for around $30 without insurance. A drug price like this paid by a health plan can result in higher out-of-pocket costs and higher premiums for participants, while much of the money is pocketed by a PBM.
Bank abandoned “fiduciary responsibility,” plaintiffs say
The lawsuit further alleges that any lack of oversight by the company is “willful” and violates the Employee Retirement Income Security Act (ERISA).
ERISA is a federal law that aims to protect the interests of participants in a health plan, by setting industry standards and the fiduciary responsibilities of employers and others who control health plans. The lawsuit accuses JPMorgan Chase of abandoning that “fiduciary responsibility” by agreeing to inflated drug prices to the detriment of their employees, even though less expensive options and health plan models were available.
“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 reads.
JPMorgan Chase declined to comment on the lawsuit.
Samantha Hendrickson is The Dispatch’s medical business and health care reporter. She can be reached at shendrickson@dispatch.com
Source: dispatch.com
