J&J sues company over alleged abuse of its cost assistance program
Johnson & Johnson Health Care Systems is suing a New Jersey middleman to stop it from increasing drug costs for patients.
According to the lawsuit, the action is intended to stop SaveOnSP from conducting a scheme to pilfer tens of millions of dollars from the financial support program that J&J Healthcare Services provides for patients.
SaveOnSP, based in New York state, runs a co-pay adjustment strategy that intends to build on existing insurer-driven co-pay adjustment programs. The program is run in partnership with PBM Express Scripts and operated in conjunction with specialty pharmacy Accredo.
The scheme works by circumventing the constraints on the level of copay costs that payers can require patients to pay for prescription drugs. This will then inflate patients’ copay costs to increase the funds extracted from J&J’s patient assistance program, called Janssen CarePath. Once drugs are included in the SaveOnSP Program, the drug’s co-pay is also inflated to ensure the payer captures the total amount of co-pay assistance available regardless of the number of times the patient fills the prescription.
SaveOnSP was charging payers “25% of the savings that are achieved.” These savings were from patient assistance program funds. To facilitate this payment, payers signed a 25% joinder agreement, which allows insurers to bill patients for that fee on a patient’s administrative invoice.
The lawsuit alleges that SaveOnSP has extracted nearly $100 million in patient assistance support from CarePath.
J&J alleges SaveOnSP is circumventing the Affordable Care Act’s patient protections by reclassifying critical medications as “non-essential,” regardless of the patient’s actual needs as determined by the patient’s doctor.
To this date, SaveOnSP has not taken J&J’s drugs off its list and is continuing to break CarePath’s terms and conditions. Moreover, J&J feels that damages for ongoing and future wrongdoing are inadequate because SaveOnSP is taking concerted measures to avoid detection.
J&J demands a jury trial with the damage amount to be decided at trial. They also want the court to issue an injunction preventing SaveOnSP from implementing its program with Janssen drugs, among other demands.
This isn’t the only legal measure J&J filed recently. Last week, it filed suit in New York against distributors and pharmacies that have allegedly sold counterfeit HIV medication being advertised as their product.