J.P. Morgan Is Getting Sued by Its Employees for Overpaying for Generic Drugs

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Thanks for your patience today. I’m a little out of position as Reid Strategic has pulled up stakes at its temporary headquarters and returned to Maine. (Our social media manager and her Terrier teammates mounted a late comeback last night but couldn’t quite get over the hump. To everything there is a season, and the season for hockey is now over. At least for the next six months.) 

So, given the lateness of the hour, here’s a slightly more stream-of-consciousness Curve than usual: 

Yesterday, I included among my “five biggest stories” list the idea that one of the emerging megatrends was employers being forced to pay a lot more attention to what was once a super-dull topic: employee benefit design. 

The theory here is that it’s easier than ever to compare whatever price an employer pays for a medicine -- especially a specialty generic -- and what a reasonable price is. (Thanks, Mark Cuban!) As a result, when employers sign on to plans with questionable benefits, they can be called on it. 

When I wrote that this was one of the biggest stories in health care, I was wishcasting a little bit. The highest-profile legal effort to hold employers accountable, a suit against J&J, had somewhat fizzled. Outside of another similar (and still-pending!) action against Wells Fargo, there hasn’t exactly been an explosion of these lawsuits. 

A cynic could have asked: is this REALLY that big a deal? 

But -- fortunately timing -- it turns out that a third high-profile suit was filed yesterday, per Bloomberg. J.P. Morgan is on the hook for making poor calls on its benefits. I haven’t read through the filing yet, but the impact here has less to do with any one specific legal effort and more to do with the idea that this is now a generic risk for employers. 

Here’s what else I’m tracking on: 

• So the J.P. Morgan story was written by Bloomberg’s John Tozzi, who is really good at his job. If you need more evidence of that, he also wrote this piece about how there is an industry sprouting up to deal with insufferable utilization management practices … that is often bankrolled by the very people who are responsible for the insufferable utilization management practices. It’s good work.

• If the Bloomberg piece is the shot, here’s the chaser: a PhRMA-sponsored Ipsos poll of clinicians and insured Americans found that everyone really hates how complex insurance has become and sees that complexity as profit-driven.

• This seems to be a hesitancy in industry to draw a straight line between the struggles of biotech and the broader political environment, but this Boston Globe story on the dark days for Hub biopharma goes there: “In the short term, the biggest obstacle to recovery may be the growing number of uncertainties hanging over the sector, many stemming from Trump administration’s changes in policies and personnel.” The piece is the most-read piece on STAT today, and for good reason.

• I’m the wrong person to ask about whether the GoodRx model makes sense -- piggybacking off a rebate-driven PBM universe probably comes with some risks -- but this Endpoints profile gives a good overview of where the company is now headed. 

And here’s what I’m saving up:

• I know Mehmet Oz’s confirmation hearing was today, and I’ve seen some snippets of the made-for-TikTok moments, but I haven’t gone deep on the serious questions of how he’s going to run the agency, especially the price control regime. If you want to fill me in, I’m here for it. Otherwise, I’m spending a lazy Saturday morning with the transcript. More next week. 

• Next week, I’ll also get into this JAMA Health Forum cost-effectiveness analysis of obesity meds. The conclusion is that the meds don’t meet traditional standards for cost-effectiveness, which is different from what other efforts have found (e.g., ICER). At first glance, I’m not sure they quite have the pricing inputs nailed, and I hope to give this a closer look to see if there are other questionable assumptions.

• There are a couple of 340B links worth sharing, but I’ll keep those to myself because this has been a 340B-free newsletter today, and I like to make sure everyone has a day to two every week where they can try to forget about 340B for a moment or two. 

Cost Curve is produced by Reid Strategic, a consultancy that helps companies and organizations in life sciences communicate more clearly and more loudly about issues of value, access, and pricing. We offer a range of services, from strategic planning to tactical execution, designed to shatter the complexity that hampers constructive conversations. 

To learn more about how Reid Strategic can help you, email Brian Reid at [email protected].