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Senate Finance Hearing to Consider the Graham-Cassidy-Heller-Johnson Proposal

Hearing scheduled for Monday, Sept. 25, 2017, at 2 p.m. Includes testimony from: [1] The Honorable Lindsey Graham (R-SC); [2] The Honorable Mazie Hirono (D-HI); [3] The Honorable Bill Cassidy, M.D. (R-La); [4] The Honorable Rick Santorum, Former U.S. Senator, Pennsylvania; [5] Mr. Dennis G. Smith, Arkansas Department of Human Services; [6] Ms. Teresa Miller, Department of Human Services, Commonwealth of Pennsylvania; [7] Ms. Cindy Mann, Former Deputy Administrator and Director of the Center for Medicaid and CHIP Services; [8] Mr. Dick Woodruff, American Cancer Society.

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District Court Dismisses Johnson & Johnson ERISA Suit Over Drug Costs

"A federal judge [has] dismissed the primary claims in a lawsuit alleging that Johnson & Johnson had mismanaged prescription drug benefits for employees. Judge Zahid N. Quraishi ... ruled that plaintiffs Ann Lewandowski and Robert Gregory failed to show they had standing to allege that the company had breached its fiduciary duty under [ERISA]." [Lewandowski v. Johnson & Johnson, No. 24-0671 (D.N.J. Nov. 26, 2025)]  MORE >>

Johnson and Johnson (Again) Beats Back Allegations of Fiduciary Breach Regarding Prescription Drug Program

"Plan fiduciaries notched another victory in a much-watched, bellwether case alleging breaches of fiduciary duty for failures to manage the drug costs of employer-sponsored health plans." [Lewandowski v. Johnson & Johnson, No. 24-0671 (D.N.J. Nov. 26, 2025)]   MORE >>

Lawsuit Alleges Fiduciary Breach of Johnson & Johnson Health Plan

"The plaintiff ... claims that Johnson & Johnson breached its ERISA fiduciary duties ... [costing] the plan and its participants millions of dollars by requiring them to pay more in prescription drug prices and higher premiums, deductibles, copays, and coinsurance. The lawsuit, believed to be the first of its kind, may open up a new pathway in ERISA fiduciary litigation." [Lewandowski v. Johnson & Johnson, No. 24-0671 (D.N.J. complaint filed Feb. 5, 2024)]  MORE >>

Johnson & Johnson Case Signals Employee Drug Price Suits to Come

"A novel lawsuit from an employee suing Johnson & Johnson Inc. for allegedly mismanaging drug benefits appears a harbinger of litigation to come against companies, especially those that rely on pharmaceutical industry middlemen to negotiate pricing and rebates.... Employers can mitigate their liability exposure to these types of cases by ensuring they are engaged in a prudent process in selecting and monitoring their service providers, according to benefits attorneys who represent companies." [Lewandowski v. Johnson & Johnson, No. 24-0671 (D.N.J. complaint filed Feb. 5, 2024)]  MORE >>

Johnson & Johnson Sued for Alleged Violation of ERISA Duties in Three 401(k) Plans

"Two lawsuits claim that fiduciaries should have taken action to reduce the impact on the J&J stock based on allegations that the health-products company failed to disclose information about talc being used in the company's baby powder.... [The lawsuits] said fiduciaries' inaction caused 401(k) plan participants to lose money on their investments in company stock, the price of which, they allege, was inflated." [Perrone v. Johnson & Johnson, No. 19-923 (D.N.J. complaint filed Jan. 22, 2019); Tarantino v. Johnson & Johnson Pension & Benefits Comm., No. 19-1115 (D.N.J. complaint filed Jan. 25, 2019)]  MORE >>

Was the Johnson & Johnson Win a Win for Other Health and Welfare Plan Fiduciaries? Maybe Not

"Health plan fiduciaries should strongly consider these steps to reduce their litigation exposure: [1] Establish a fiduciary committee for health and welfare benefits, adopt a committee charter, and delegate fiduciary responsibility to the committee. [2] Engage qualified prescription drug plan consultants to assist in comparing PBMs and prescription drug arrangements.... [3] Request and review PBM agreements, fee and rebate arrangements, and formularies, and negotiate reasonable terms.... [4] Collect and review benchmark information from other plans and pharmacies and compare to current and prospective vendor agreements or proposals." [Lewandowski v. Johnson & Johnson, No. 24-0671 (D.N.J. Jan. 24, 2025)]   MORE >>

Johnson & Johnson's Dismissal Does Not Affect Employers' Continued Emphasis on Fiduciary Governance

"J&J 's dismissal was based on procedural litigation rules and stopped short of weighing in on the ERISA fiduciary breach allegations. This does not change employers' responsibility to fulfill their fiduciary duties and they should continue the course with a proper fiduciary governance plan." [Lewandowski v. Johnson & Johnson, No. 24-0671 (D.N.J. Jan. 24, 2025)]  MORE >>

Johnson & Johnson Case Sparks Concerns Over Future Excessive Health Fee Litigation

Defendants" motion to dismiss has been fully briefed as of August 12. However, both Plaintiff and Defendants recently filed notices of supplemental authority citing to the Third Circuit's decision in Knudsen v. MetLife Group, Inc.... The Third Circuit held that Plaintiffs lacked standing to lead the suit because they couldn't show they were owed the rebate savings, thus failing to establish an injury-in-fact.... If Plaintiff successfully survives the dismissal, we can expect to see even more of these cases filed by plaintiffs' firms, regardless of the merits of the allegations. " [Lewandowski v. Johnson & Johnson, No. 24-0671 (D.N.J. complaint filed Feb. 5, 2024)]  MORE >>

Lewandowski v. Johnson and Johnson: Where Oh Where is the Plan Document

"If the 'rules of the road' are not established and well communicated, the result is not only inefficiency, but such a failure prevents proper administration and management of these important benefits. So, ... the noted defects ... in the J&J Rx Plan Document/SPD are very important to the proper functioning of this benefit plan. The failure to establish and communicate rules in a reasoned fashion speaks to a failure to manage and a potential failure of the required fiduciary functions related to the J&J Rx Plan." [Lewandowski v. Johnson & Johnson, No. 24-0671 (D.N.J. complaint filed Feb. 5, 2024)]

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Lewandowski v. Johnson and Johnson: We've Only Just Begun

"With a new Complaint to be filed, in some sense, the case is starting all over again. But, there is some learning from the Defendants' letter and their Memorandum on dismissal that are worth a review, and that Plaintiff is no doubt taking into account for purposes of a First Amended Complaint." [Lewandowski v. Johnson & Johnson, No. 24-0671 (D.N.J. complaint filed Feb. 5, 2024)]

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Lewandowski v Johnson and Johnson Marks the Beginning of a New Era

"PBMs have just not been in the plan document business. This is a huge gap in the industry that is potentially exposed by this lawsuit.... Questions arise from the lawsuit that compel consideration of the ERISA fiduciary roles and responsibilities. How is the selection of a PBM an ERISA fiduciary function? Are all acts by the J&J Committee and its members subject to the ERISA fiduciary standards? Are actions by the PBM subject to the ERISA fiduciary rules?" [Lewandowski v. Johnson & Johnson, No. 24-0671 (D.N.J. complaint filed Feb. 5, 2024)]  MORE >>

Health and Welfare Benefit Plan Fiduciary Governance in the Wake of the Johnson & Johnson Lawsuit

"If the merits of the J&J lawsuit are litigated, we can infer from analogous fee litigation concerning retirement plans that the question before the court will be whether the J&J defendants engaged in and documented a prudent process in selecting and monitoring the plan's PBM and its prescription drug benefits." [Lewandowski v. Johnson & Johnson, No. 24-0671 (D.N.J. complaint filed Feb. 5, 2024)]  MORE >>

Johnson & Johnson Case Highlights Fiduciary Duty Obligations of Employer-Sponsored Health Plans

"[T]he plan administrator of an employer-sponsored, group health plan, particularly one funded by a VEBA, has a fiduciary responsibility to engage in a prudent process when selecting and negotiating with its PBM, which may require an open RFP.... [P]lan fiduciaries should have ongoing processes for monitoring and reviewing plan fees, the prescription drug formulary, and the PBM's performance." [Lewandowski v. Johnson & Johnson, No. 24-0671 (D.N.J. complaint filed Feb. 5, 2024)]  MORE >>

Johnson & Johnson Litigation Highlights Significant Risks for Health and Welfare Plan Fiduciaries

"The J&J lawsuit highlights that plan participants (or more likely their lawyers) not only scrutinize the reasonability of their own out-of-pocket costs, but how much the plan is paying for a drug as compared to other plans or pharmacies in the market.... Even though the claims are paid by the plan sponsor, plaintiffs will allege that a participant's premiums, co pays, and deductible will all be higher if the fiduciary is not ensuring the lowest cost drugs possible. If the plaintiffs are successful, this will turn the health and welfare plan industry upside down." [Lewandowski v. Johnson & Johnson, No. 24-0671 (D.N.J. complaint filed Feb. 5, 2024)]  MORE >>

Flipping the Script on the New Excess Health Plan Fee Case Against Johnson and Johnson

"The highly detailed and lengthy complaint represents a groundbreaking attempt to turn plan sponsors into guarantors of the lowest possible fees for every drug or medical service offered by the plan.... If there is any victim of excess fees in health plans, the victim is the plan sponsor. If there is an culprit in health plan excess fees, it is the PBM or other service provider. Consequently, if there is any liability for excess fees, the liability should be borne by health care providers. And any liability damage recoveries should be returned to plan sponsors -- not to plaintiff lawyers or even participants." [Lewandowski v. Johnson & Johnson, No. 24-0671 (D.N.J. complaint filed Feb. 5, 2024)]  MORE >>

ERISA Fiduciary Suit Challenges Johnson & Johnson Health Plan Prescription Drug Costs

"Echoing the language found in many 401(k) excessive fee suits, this one argues that the plan fiduciaries failed to use their bargaining power to obtain better rates.... The suit would appear to have its basis in the ... Consolidated Appropriations Act of 2021 (CAA) ... In essence, ERISA Section 408(b)(2) -- which greatly expanded fee disclosure responsibilities for retirement plan providers -- now applies to health care providers as well. And plan sponsor fiduciaries are on the hook to ensure that those fees/services rendered are reasonable, as they have been required to do for retirement plans." [Lewandowski v. Johnson & Johnson, No. 24-0671 (D.N.J. complaint filed Feb. 5, 2024)]   MORE >>

Lawsuit Alleges Johnson and Johnson Mismanaged Company's Health Plan Prescription Costs

"Ann Lewandowski, a healthcare policy and advocacy director at J&J ... accused the company of breaching its fiduciary duties to manage health benefit funds responsibly. In one instance, the complainant alleges that JNJ pays $10,200 for a multiple sclerosis drug called teriflunomide, which costs no more than $77 out of pocket at retail pharmacies." [Lewandowski v. Johnson & Johnson, No. 24-0671 (D.N.J. complaint filed Feb. 5, 2024)]  MORE >>

Third Circuit Sides with Plan Fiduciaries in Johnson & Johnson Stock Drop Case on 'More Harm Than Good' Standard for Early Disclosure

"The Third Circuit, like the Fifth and the Ninth Circuits, seems to be holding a fairly tight line on stock drop cases -- requiring that plaintiffs clear the 'high bar' of the 'more harm than good' test before proceeding. And the 'Jander exception' to this rule -- requiring disclosure by fiduciaries where ultimate disclosure is 'inevitable' -- is, in the Third Circuit at least, being limited to a very narrow circumstance: where disclosure is imminent, and it has (at the time the motion to dismiss is being considered) already been admitted by the sponsor that disclosure is or was necessary." [Perrone v. Johnson & Johnson, No. 21-1885 (3d Cir. Sep. 7, 2022)]  MORE >>

Johnson & Johnson Prevails Again in Stock-Drop Suit

"[The judge found that] 'issuing a corrective SEC disclosure revealing the alleged truth about the over inflation of J&J stock and/or the asbestos in the company's talc products, is not a viable alternative action because it is not one which could be taken in a fiduciary capacity, but only in a corporate one[.]' " [Perrone v. Johnson & Johnson, No. 19-0923 (D.N.J. Feb. 26, 2021)]  MORE >>