Wells Fargo is the most recent corporation to get sued, as alleged by former employees, for inadequately overseeing the price workers were forced to pay for prescription drug prices.
In a class action lawsuit filed in federal court named Navarro et al v. Wells Fargo Company, employees say the company did not fulfill its fiduciary obligations. Under the Employee Retirement Income Security Act of 1974, employers are required to adequately manage employee benefits programs.
The plaintiffs argue Wells Fargo’s management of the prescription drugs program resulted in higher premiums, out-of-pocket costs and limited wage growth because of the prices it agreed to pay Express Scripts, one of its pharmacy benefit managers, for generic drugs.
Employees, they say in the suit, were forced to pay nearly $10,000 for a a prescription of fingolimod, used to treat multiple sclerosis, when the generic version could be purchased without insurance for less than a $1,000 at pharmacies like Cost Plus Drugs and Rite Aid.
“No prudent fiduciary would agree to make its plan and participants/beneficiaries pay a price that is fifteen times higher than the price available to anyone who just walks into a pharmacy and pays without using their insurance,” the plaintiffs said in the lawsuit.
Across approximately 300 generic drugs, Wells Fargo and Express Scripts made employees pay a markup on average of 114.97% what it costs pharmacies to obtain the drugs, the lawsuit alleges. For specialty drugs, employees said they paid a markup of 383% on average.
Other prescriptions were far more expensive for employees at Express Scripts’ pharmacy Accredo. Bexarotene gel, available at Rite Aid for $3,750, cost employees nearly $70,000 from Accredo.
“The price discrepancies noted herein are illustrative of a pervasive and systematic problem of unreasonable prescription drug charges, despite well-known alternatives available to defendants,” the lawsuit said.
Plaintiffs in the lawsuit say Wells Fargo should have received better rates from Express Scripts or a different PBM, guided employees to more cost-effective options or utilized a pass-through PBM that doesn’t use spread pricing.
Wells Fargo was also tagged with accusations that it should have operated with more expertise given its standing in the industry. Plaintiffs noted Wells Fargo publishes research on the economics of the pharma industry, hosts an annual healthcare conference with speakers from major PBMs, operates an employee benefits consulting practice and has publicly warned about rising prescription drug costs and business practices by Express Scripts.
A similar lawsuit was filed against Johnson & Johnson in February by the same law firm, Fairmark Partners.
“This case alleges that Wells Fargo has failed its employees once again, this time by agreeing to obviously unreasonable terms and prices with its PBM that cause workers to vastly overpay for prescription drugs,” said Michael Lieberman, an attorney with Fairmark Partners. “After years of scrutiny and with clear alternatives available, there are no excuses left for a large corporation like Wells Fargo to ignore its legal obligation to identify reasonable prescription drug coverage options for its employees.”
Mark Cuban, founder of Cost Plus Drugs, said in a X post that this type of lawsuit can be expected to occur more often.
“This lawsuit is going to happen over and over and over with self insured companies until they realize they have to drop their big 3 PBM and use a Pass Through PBM,” he said. “The good news is if they switch they will save money and get control of their claims data.”
As well as the Wells Fargo health plan, top human resource employees were also named as defendants in the lawsuit.
Wells Fargo and Express Scripts did not immediately respond to a request for comment from Fierce Healthcare.
Aon, the broker for Wells Fargo, was also listed in the lawsuit. Express Scripts was not listed as a defendant.