Employees at banking giant JPMorgan Chase claimed in a new class action suit that the company mismanaged their benefits, leading to far higher costs for prescription drugs and other services.
The suit, filed last week in New York’s Southern District Court, argues that the bank and its top brass used a “flawed” process in choosing CVS Caremark to manage its pharmacy benefits, given that CVS Health is a major investment banking client of JPMorgan.
The workers claim that CEO Jamie Dimon and other top executives who had a hand in benefits design “abandoned” efforts to reduce costs per their fiduciary duties under pressure from Caremark and other banking clients, putting those relationships ahead of employees.
The lawsuit cites a multiple sclerosis drug, teriflunomide, as an example. Patients who needed this drug could fill a generic prescription without using their insurance at Rite Aid for $32.96, Wegmans for $34.71, ShopRite for $29.24 or online through Cost Plus Drugs for $11.05.
However, under the plan agreement, the drug costs $6,229 for a 30-day prescription. The excess cost comes out of JPMorgan’s ERISA fund, according to the lawsuit, which drives up premiums and costs for patients.
“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,” according to the suit.
The lawsuit also claims that JPMorgan allowed Caremark to list its own private label Humira biosimilar as the only option on the formulary for employees, according to a release from Cohen Milstein Sellers & Toll PLLC, one of two law firms representing the employees.
Fairmark Partners LLP is also representing the class in the lawsuit, per the release.
“This case alleges that JPMorgan executives put lucrative investment banking revenue ahead of their fiduciary obligations to their employees, resulting in higher premiums and health care prices for employees and their families,” said Michael Lieberman of Fairmark Partners, in the press release.
“As one of the most powerful corporations in the world, JPMorgan has no excuse for allowing PBMs and Big Pharma to overcharge its employees for prescription drugs and healthcare,” Lieberman said.
JPMorgan had not responded to a request for comment at the time of publication.
