Navigating Fiduciary Responsibilities Webinar

In February 2024, Johnson & Johnson (JNJ) faced a federal class action lawsuit over alleged overpayment for prescription drugs within its plan. The lawsuit, citing ERISA obligations, accuses JNJ's fiduciaries of imprudence in agreeing to terms with a pharmacy benefit manager (PBM) resulting in excessive costs. This underscores the importance of transparency in drug pricing comparisons and highlights risks for health plan fiduciaries.

Employers should take proactive steps to mitigate risks:

Establish a dedicated fiduciary committee for health and welfare benefits.

Engage impartial consultants to assess PBMs and drug arrangements.

Review and negotiate PBM agreements to ensure reasonability.

Gather benchmark data to evaluate vendor agreements.

Scrutinize compensation arrangements for conflicts of interest.

Periodically solicit proposals from PBMs to reassess competitiveness.

Document all decisions to demonstrate procedural prudence and compliance.

These steps help navigate evolving fiduciary responsibilities and protect plan participants' interests.

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