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The former employees are seeking class action status.
US employers spend about $1 trillion annually on company-sponsored health plans, the main source of insurance for working-age Americans. While employees typically are responsible for part of the premiums and out-of-pocket costs of their care, the prices they pay are determined by deals that their employers strike.
Companies are facing increasing questions over how they manage those contracts and potential legal risks about their oversight as employees find themselves paying more and more for medical care.
This is at least the second lawsuit from workers alleging they paid more than they should have for medications because their employers struck bad deals with the companies that oversee drug benefits for health plans, known as pharmacy benefit managers.
In February, a Johnson & Johnson worker made similar claims against the drugmaker in a New Jersey federal court. J&J has sought to dismiss the suit, arguing the plaintiff wasn’t prescribed any of the drugs and thus isn’t in a position to file such a complaint. The case is pending.
Employers typically rely on brokers, outside administrators and pharmacy benefits managers to design and run their health plans. Critics say those relationships can be rife with conflicts of interest and hidden fees that increase costs.
Richek, the
Some large companies and union plans have sued their health plan administrators, seeking more access to data on where their money is going.
“There are no excuses left for a large corporation like
Fiduciary breach
The plaintiffs allege that
Similar litigation targeting companies over fees in their retirement plans has led to millions of dollars in settlements. Trial lawyers are now testing whether that strategy can be replicated for health benefits and are recruiting people to bring cases against their own employers.
The lawsuit against
Representatives for Cigna didn’t immediately respond to a request for comment.
Pharmacy benefit managers are facing intensifying backlash in Washington, as members of Congress and the Federal Trade Commission fault them for driving up costs in the convoluted US drug supply chain. Pharmacy benefit managers counter that drug manufacturers set prices and should take the blame for rising costs.
The
The plaintiffs say the bank also overpaid in fees for administering the drug plan, paying $25 million to Express Scripts in 2022, or $136 per plan participant, which they said was higher than other plans.
The four named plaintiffs in the case worked for
The case is Navarro v.