A groundbreaking lawsuit was filed on February 5, 2024, by a class of Johnson & Johnson (JNJ) employees against JNJ and the Pension & Benefits Committee, as well as the committee members (collectively, the "trustees"). Regardless of its outcome, this class action will dramatically change pharmacy benefit management and the standard of care to which management will be held on benefit design. 

Large employers looking to avoid copycat employee class actions have an urgent need to exercise prudence and diligently audit their pharmacy benefit managers (PBMs). The Employee Retirement Income Security Act (ERISA) establishes that health care plans, including prescription drug benefits and trustees owe employees a fiduciary duty of "loyalty" and "prudence" in managing pharmacy benefit design. This duty extends to deciding what drugs get placed on formulary and what drugs are excluded from formulary, and understanding rebates and amounts paid to employee benefit consultants.