J&J copay lawsuit against drug benefit firm gets green light

Johnson & Johnson has been cleared to continue a lawsuit filed last year against drug benefit programme SaveOnSP, which claims it defrauded a payment assistance programme for patients out of "at least $100 million."

The complaint – originally filed in May 2022 in a New Jersey federal court – alleges that SaveOnSP took advantage of J&J's Janssen CarePath programme, which covers eligible patients' out-of-pocket expenses for 44 of its more expensive prescription drugs, including complex biologic treatments for various cancers, pulmonary arterial hypertension, and autoimmune disorders.

SaveOnSP had attempted to have the legal action dismissed, but that was denied earlier this week, allowing J&J to continue to press its case. It is being supported by several patient advocacy groups, including the AIDS Institute, the National Oncology State Network, and the HIV + Hepatitis Policy Institute.

While SaveOnSP is the nominal target of the lawsuit, it claims to expose one of the failings in the US health insurance sector, adding fire to an increasingly heated exchange between pharma manufacturers and pharmacy benefit managers (PBMs), which have blamed each other for high medicine prices in the US.

According to court documents, SaveOnSP works 'in partnership' with PBM Express Scripts and specialty pharmacy group Accredo Health to operate the programme, which is described as "one way a PBM […] maximises its profits (and, in turn, commercial health insurance companies' profits) at plaintiff and patients' expense."

The complaint says that the SaveOnSP programme involves reclassification of medicines from essential to non-essential in order to avoid copay limits and annual out-of-pocket limits mandated by the US Affordable Care Act (ACA), which puts a ceiling on the amount a patient with private insurance can be required to pay for medical care each year.

After the drug is re-designated, the SaveOnSP programme "increases the patient's copay amount for the given drug to an artificially high amount – often thousands of dollars per dose," it continues.

SaveOnSP is accused of using those high copays to coerce patients into enrolling into its programme, without telling them that they can access other schemes like J&J's CarePath. Once enrolled into SaveOnSP, the inflated copay amounts are billed to CarePath, draining its available funds.

Examples of drugs affected by the alleged scam are given, with the pay-per-fill amount billed for J&J's anti-inflammatory biologic Stelara (ustekinumab) set at $1.171 for patients in CarePath, compared to $4,301 in the defendant's programme.

J&J further alleges that the partners in the programme split the additional money recovered from CarePath, and is seeking monetary damages and an injunction preventing SaveOnSP from implementing its programme on its medicines.

The case is Johnson & Johnson Healthcare Systems v. Save On SP, LLC, 2:22-cv-02632, being heard in the US District Curt for the District of New Jersey.