Employer plans face lawsuits over drug pricing, and the courts are split on how far they go.
Employees have sued over pharmacy benefit pricing, arguing fiduciaries failed to manage drug spending prudently.
What plaintiffs argue.
Imprudent Contracts
Plaintiffs say fiduciaries agreed to pharmacy contracts that cost the plan too much.
Prohibited Transactions
Some claims say payments to parties in interest broke ERISA Section 406.
Out-of-Pocket Harm
Plaintiffs point to higher out-of-pocket costs.
The results so far.
Navarro
Dismissed for lack of standing.
Lewandowski
Dismissed for lack of standing.
Stern
Fiduciary claims dismissed, prohibited transaction claims proceed.
Appeals
The law is still developing.
Quick answers.
Short answers. This is general information, not legal or tax advice.
Are we at risk?
Any plan fiduciary can be sued.
What helps?
Documented, prudent oversight of vendors.
Do we need a PBM RFP?
An RFP can be one way to show a prudent process.
Where the rules and figures come from.
Each figure on this page comes from the source below. Amounts are indexed or updated over time, so confirm current figures before relying on them.
29 U.S.C. 1106
ERISA prohibited transactions between a plan and parties in interest.
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