WSJ News Exclusive | J&J Sues Drug-Benefit Middleman Over Use of Drug-Cost Assistance Program

The civil lawsuit, filed in federal court in New Jersey, accuses SaveOnSP of contract interference and deceptive trade practices. J&J is seeking damages and a court order that SaveOnSP stop its program.

“Patient assistance should be for patients, not for payers,” said Harry Sandick, an attorney with Patterson Belknap Webb & Tyler LLP who is representing J&J.

SaveOnSP didn’t immediately respond to requests for comment.

At issue in the lawsuit is the assistance that patients can get to pay for the out-of-pocket, or copay, costs of their prescriptions. Health plans often ask patients to make a copay to share the cost of drugs.

To help patients with commercial health insurance to pay the sums and make sure their drugs get used, many drugmakers have established copay assistance programs that will subsidize the expense.

SaveOnSP helps employers and other drug-benefit plan sponsors save money on certain expensive specialty drugs by enrolling patients in drugmakers’ copay assistance programs, according to its website.

J&J has a copay assistance program called Janssen CarePath, which aids qualifying patients who have commercial or private insurance.

The program covers patients’ copays and can reduce a patient’s share to as little as $5 a month for drugs including J&J’s Stelara for psoriasis and other inflammatory conditions. Stelara has a list price of $12,332 per month. J&J sets limits on its out-of-pocket assistance that vary by drug and can be as much as $20,000 a year.

The lawsuit is the latest flare-up of long-running tension over drug prices among drug manufacturers, health insurers, pharmacy-benefit managers and other middlemen in recent years.

Drugmakers have charged high and rising list prices for many brand-name medicines in the U.S.

Insurers and industry middlemen have responded by negotiating discounts in the form of rebates, and by shifting some costs to patients in the form of copays or coinsurance that can add up to hundreds or thousands of dollars a year, depending on the drug and the plan.

Health insurers say pharmaceutical-company copay assistance programs drive up their costs by promoting use of higher-price brands.

According to J&J’s lawsuit, SaveOnSP works with drug-benefit-plan sponsors to enroll plan members in SaveOnSP’s program. SaveOnSP increases the plan’s copays for certain drugs, bills J&J’s copay assistance program and steers J&J’s payments to the drug-benefit plan, taking a commission for itself. This in turn reduces the amount the drug-benefit plan has to pay for each prescription, according to the lawsuit.

J&J’s lawsuit says that in some cases SaveOnSP will raise a drug’s copay to the maximum benefit set by J&J. J&J cited a SaveOnSP video presentation and other sources for the allegations in its lawsuit.

J&J found that in 2021 it paid an average of $1,171 per prescription in copay assistance to Stelara patients who weren’t enrolled in the SaveOnSP program, while paying an average of $4,301 for those who were enrolled in SaveOnSP, according to the lawsuit.

Write to Peter Loftus at [email protected]