The Johnson & Johnson ERISA lawsuit is a proposed class action brought by two J&J employees who allege the company breached its fiduciary duties under the Employee Retirement Income Security Act by allowing its self-funded health plan to drastically overpay for prescription drugs through its pharmacy benefit manager. A federal judge in New Jersey has dismissed the case twice on standing grounds without reaching the underlying question of whether J&J actually mismanaged the plan, and the plaintiffs are now asking the Third Circuit Court of Appeals to revive it.
What the Employees Are Alleging
Ann Lewandowski and Robert Gregory, participants in J&J’s employee health benefit plans, filed suit on February 5, 2024 in the U.S. District Court for the District of New Jersey.1Georgetown Law Litigation Tracker. Lewandowski v. Johnson and Johnson The complaint targets J&J’s relationship with Express Scripts, the pharmacy benefit manager (PBM) that administers prescription drug coverage for the plan, and Accredo, the specialty pharmacy Express Scripts owns.
The central allegation is that J&J’s plans were paying wildly inflated prices for drugs available far more cheaply at retail. The complaint cites a 90-pill prescription for the generic drug teriflunomide that cost J&J plan participants $10,239.69, while the same medication was available at retail pharmacies for as little as $28.40 to $77.41.2Cohen Milstein Sellers & Toll PLLC. Johnson and Johnson Prescription Drug Litigation An analysis in the Second Amended Complaint of generic specialty drugs on the PBM’s formulary found an average markup of 498% above pharmacy acquisition costs.3NFP. Lewandowski v. Johnson and Johnson Second Amended Class Action Complaint
The plaintiffs say J&J and its Pension & Benefits Committee failed to monitor Express Scripts, accepted unreasonable pricing methodologies, and allowed the PBM to profit from “spread pricing” (keeping the difference between what it charges the plan and what it pays the pharmacy). They also allege J&J steered employees toward the PBM’s mail-order pharmacy through cost-sharing structures, even when retail pharmacies offered lower prices. Because the plan is self-funded and its assets sit in a dedicated trust, ERISA’s fiduciary duties apply, and the plaintiffs argue those duties were breached.
Why the Case Has Been Dismissed Twice
The obstacle in this case has not been the strength of the pricing evidence. It has been Article III standing, the constitutional requirement that a plaintiff show a concrete personal injury caused by the defendant and fixable by a court.
On January 24, 2025, Judge Zahid N. Quraishi dismissed the fiduciary breach claims for the first time.4Sequoia Consulting Group. Johnson and Johnson Case Signals Importance of Employer Fiduciary Obligations The court rejected both theories of harm the plaintiffs offered. The claim that mismanagement led to higher premiums was called “speculative,” because J&J has broad discretion to set premium contribution rates and many factors unrelated to drug costs feed into those rates. The claim that overpayments raised out-of-pocket costs was found not “redressable,” because Lewandowski had already hit her annual out-of-pocket maximum, so a favorable ruling would not put money back in her pocket.5USI Insurance Services. Update on the Johnson and Johnson ERISA Fiduciary Lawsuit
The plaintiffs filed a Second Amended Complaint on March 10, 2025, adding more granular pricing data, an analysis of 57 specific drugs, and details about Lewandowski’s COBRA coverage, during which she paid 102% of the combined employer-employee contribution.3NFP. Lewandowski v. Johnson and Johnson Second Amended Class Action Complaint On November 26, 2025, Judge Quraishi dismissed the claims again.6Miller & Chevalier. ERISA Edit: Health Plan Excessive Fee Suit Dismissed on Standing Grounds The second opinion laid out several reasons the causal chain between PBM overcharges and participant harm was still too weak:
- J&J retains “sole discretion” to set participant contribution rates, so lower payments to Express Scripts would not necessarily lower premiums.
- Premium rates depend on market trends, non-drug medical costs, tobacco usage, family coverage status, and other variables unrelated to PBM pricing.
- The 57 drugs the plaintiffs compared to retail prices were a small subset of thousands covered by the plan and did not show overall plan costs were inflated.
- Alleged overpayments on specific prescriptions ranged from about $10 to $210, while the plaintiffs received hundreds of thousands of dollars in total plan benefits in the same years.7Miller & Chevalier. Lewandowski v. Johnson and Johnson Opinion
Both dismissals were without prejudice. Both left the merits untouched. The first dismissal explicitly stated that the standing ruling did not equate to a finding that no breach occurred.4Sequoia Consulting Group. Johnson and Johnson Case Signals Importance of Employer Fiduciary Obligations
The Appeal to the Third Circuit
Rather than file a Third Amended Complaint, the plaintiffs took the standing question to the Third Circuit. They filed a notice of voluntary dismissal on December 18, 2025, a stipulated judgment was entered on January 12, 2026, and they filed a notice of appeal on January 16, 2026.8Georgetown Law Litigation Tracker. Lewandowski et al. v. Johnson and Johnson et al. The appeal is docketed as No. 26-1107. The plaintiffs filed their opening brief on April 30, 2026, and J&J’s response was due July 10, 2026.
Chris Deacon, a former Assistant Director of the Division of Pensions and Benefits for the State of New Jersey, filed an amicus brief supporting the plaintiffs on May 6, 2026. Her argument is that the district court made a “conceptual error” by measuring participant injury at the aggregate annual level instead of at the individual transaction level. When a participant pays more out of pocket for a specific prescription because of an imprudent pricing arrangement, she wrote, that overpayment is itself a concrete injury at the point of sale, whatever other benefits the participant received during the year.9Georgetown Law Litigation Tracker. Amicus Brief of Chris Deacon
The Third Circuit is being asked to clarify the standing framework it set out in Knudsen v. MetLife Group, Inc., decided in September 2024. In Knudsen, plan participants alleged MetLife improperly retained $65 million in drug rebates. The court held that the theory of harm was too speculative, but it left an opening: unlike fixed pension benefits, health plan premiums and cost-sharing can change from year to year, so a plaintiff who could plausibly link mismanagement to a specific increase in their own costs might establish standing.10Justia. Knudsen v. MetLife Group Inc.11Miller & Chevalier. ERISA Edit: Third Circuit Upholds Dismissal of Drug Rebate Dispute on Standing Grounds The Lewandowski appeal will test how narrow or wide that opening really is.
How This Case Fits Alongside Similar Suits
Lewandowski is not alone. A similar case against Wells Fargo, Navarro v. Wells Fargo, was dismissed in Minnesota after the court found the link between PBM administrative fees and individual employee costs “tenuous at best.” That case was dismissed a second time on March 3, 2026, and is also on appeal.12Healthcare Dive. Judge Dismisses Wells Fargo ERISA Drug Lawsuit13Groom Law Group. Second Case Regarding Prescription Drug Costs Dismissed
A third case has fared better. In Stern v. JPMorgan Chase & Co., filed in March 2025, employees alleged that JPMorgan’s contract with CVS Caremark inflated drug prices, providing a detailed analysis of 404 generic drugs on the plan’s formulary and alleging that 366 of them carried an average markup above 200% of the National Average Drug Acquisition Cost. On March 9, 2026, Judge Jennifer L. Rochon in the Southern District of New York dismissed the fiduciary breach claims (finding formulary and cost-sharing design to be “settlor decisions” about plan design) but allowed the prohibited transaction claims to proceed.14Trucker Huss. Employees of JPMorgan May Proceed With Their Lawsuit Over High Drug Costs in Health Plan On standing, the court agreed that alleged premium increases were too speculative, but found allegations of specific out-of-pocket overpayments on specific drugs on specific dates sufficient. The Stern plaintiffs had not reached their out-of-pocket maximums, avoiding the redressability problem that sank Lewandowski’s original claim.
The pattern matters for anyone tracking Lewandowski. If the Third Circuit sides with the plaintiffs, similar suits in the region gain a path past the motion-to-dismiss stage. If it affirms, plaintiffs will likely pivot toward the prohibited transaction theory that survived in Stern.
What It Means for Employers
Every dismissal so far has turned on whether the plaintiffs could get into court, not on whether J&J or any other sponsor actually mishandled its PBM relationship. That leaves plan sponsors of self-funded health plans exposed to the underlying legal question the courts have not yet answered.
Under ERISA, plan fiduciaries owe a duty of loyalty and a duty of prudence, and those duties extend to selecting and monitoring service providers like PBMs.15NFP. J&J Lawsuit Industry analysts responding to the Lewandowski filing have recommended that employers formalize PBM oversight through dedicated fiduciary committees, competitively bid PBM contracts, benchmark drug pricing against publicly available data, demand transparent pricing models, and document every step of the process.16HR Executive. Employer Fiduciary Duties Under Scrutiny Following J&J Suit Over Health Plan
Regulatory pressure is building alongside the litigation. In December 2025, a coalition of financial officers from 14 states sent letters to Fortune 500 companies warning that failure to conduct a “payment-integrity analysis” of health care spending could invite litigation, Department of Labor enforcement, and personal liability for individual fiduciaries.17Jones Day. Rising Scrutiny of Employer Health Plan Administration
The New Federal PBM Law
One boundary worth flagging: the Consolidated Appropriations Act of 2026, signed on February 3, 2026, includes sweeping PBM reform provisions, but they do not directly affect the pending Lewandowski appeal. The provisions take effect for plan years beginning on or after January 1, 2029 for calendar-year plans. The law requires PBMs to pass through 100% of drug rebates, fees, and price concessions to the plan on a quarterly basis, classifies PBMs as “covered service providers” under ERISA, and mandates semiannual reports on gross and net drug spending, spread pricing, rebates, formulary rationale, and affiliate data for plans with 100 or more participants.18Health Affairs. Federal PBM Reforms in Action and Context19Morgan Lewis. Consolidated Appropriations Act of 2026: The New Landscape of PBM Fiduciary Oversight The law also creates an “innocent fiduciary” exception for sponsors who reasonably believed their PBM was complying and took documented steps to compel compliance upon discovering a failure.
Once the disclosure rules kick in, plan sponsors will no longer be able to say they had no way to know what their PBMs were charging. Failing to review and act on those disclosures could itself become evidence of imprudent oversight.20Davis Wright Tremaine. Reform Raises Stakes for PBMs and ERISA Fiduciaries
Where the Case Stands Now
As of mid-2026, Lewandowski v. Johnson & Johnson is pending before the Third Circuit Court of Appeals, with briefing underway.8Georgetown Law Litigation Tracker. Lewandowski et al. v. Johnson and Johnson et al. The appeal asks whether employees who allege they overpaid for specific prescriptions because of imprudent PBM arrangements have suffered a concrete enough injury to sue. A ruling for the plaintiffs would open the door for this case and similar suits to reach the merits for the first time. A ruling for J&J would leave the standing barrier in place across the Third Circuit and push future plaintiffs toward the prohibited transaction theory that has already survived in the JPMorgan case.