The buzz surrounding the class action lawsuit filed against Johnson and Johnson and members of its Pension & Benefits Committee (collectively "JNJ") has not subdued since its February 2024 filing. In fact, it has only gotten louder.  As the national media tracks the case, employer sponsors of employee welfare benefit plans throughout the country are discussing the ramifications of the case and its allegations; always returning to that nerve-wracking question: "What if I'm next?"  

Plan sponsors are right to be cognizant of the JNJ lawsuit, its outcome, and its consequences moving forward.  The landmark case is the first of its kind and, regardless of its outcome, the pharmacy benefits landscape will never be the same.  While the case is certainly significant, plan sponsors should be comforted by the learning opportunity in front of them.  The JNJ lawsuit illuminates many issues that have existed in the backdrop of the pharmacy benefits industry for far too long – one such issue being the self-serving pharmacy benefit manager (PBM).  

A self-serving PBM discretely deploys tactics that further their own interests at the expense of their employee-plan clients and plan members.  PBMs use their service agreements with benefit plans to impose their self-scheming schemes through often overlooked contractual provisions.  Inevitably, these self-service provisions increase the plan's total drug spend and the out-of-pocket costs borne by plan beneficiaries, but allow the PBM to increase its own compensation through hidden channels.  When faced with these increasing costs, JNJ's employees took action against their employer due to JNJ's alleged inability to adhere to their fiduciary duties and protect the plan from these common PBM schemes.