Wells Fargo Class Action Claims Bank Forced Employees to Pay Exorbitant Prescription Drug Premiums

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Four former Wells Fargo employees claim in a proposed class action lawsuit that the company has mismanaged its prescription drug benefits program, costing its health plan and plan participants millions in medication costs, premiums and out-of-pocket expenses.

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The 101-page Wells Fargo lawsuit alleges the bank failed to act prudently and in the interest of plan participants and beneficiaries when it agreed to “unreasonable” prices and terms for numerous generic prescription drugs that are widely available at substantially lower costs. According to the suit, the defendants—which also include current and former Wells Fargo executives—have breached their fiduciary obligations under the Employee Retirement Income Security Act (ERISA), a federal law that imposes strict duties of “loyalty and prudence” on employee benefits plan administrators.

The case contends that Wells Fargo’s conduct has caused its ERISA plan and employees to drastically overpay Express Scripts, the company’s pharmacy benefits manager, for prescription drugs. For example, the complaint says, although a 90-unit prescription for the drug fingolimod—the generic form of multiple sclerosis treatment medication Gilenya—could be filled without using insurance for between $648 and $895.63 at ordinary pharmacies, Wells Fargo has agreed to a staggering price of $9,994.37 for each 90-unit fingolimod prescription. Per the suit, the costs of prescriptions are paid primarily from plan assets and covered by participants in the form of increased premiums and out-of-pocket costs.

“No prudent fiduciary would agree to make its plan and participants/beneficiaries pay a price that is fifteen times higher than the price available to anyone who just walks into a pharmacy and pays without using their insurance,” the lawsuit emphasizes.

In addition, the suit claims that Wells Fargo encourages plan participants and beneficiaries to use certain “preferred” drugs for which the bank has agreed to excessive prices.

“Across all such ‘preferred’ drugs for which there is publicly available data on average acquisition costs, [Wells Fargo] agreed to make the Plan and its beneficiaries pay, on average, a markup of 114.97% above what it costs pharmacies to acquire those same drugs,” the case asserts.

The same is true for certain generic medications designated as “specialty” drugs based on the conditions they treat “or other factors,” the complaint states. As the filing tells it, Wells Fargo has agreed to prices that are, on average, 383 percent above what it costs pharmacies to acquire these specialty drugs—reportedly around five times as much as Express Scripts or Accredo, its mail-order pharmacy, pays for them.

Per the suit, Wells Fargo has also agreed to require plan participants to obtain some of their prescriptions through Accredo even though the prices are significantly higher than at other pharmacies.

In short, the lawsuit alleges, the bank is “steering” plan participants and beneficiaries towards options that, in many cases, “waste[] thousands of dollars in Plan assets” and generate massive profit for Express Scripts.

What’s more, Wells Fargo has also paid Express Scripts excessive administration fees for its services, the suit contends. Per the case, the bank paid over $25 million in such fees in 2022, totaling $135.81 per participant.

“That amount greatly exceeds the per-participant fees paid to Express Scripts by plans comparable in size and smaller than Wells Fargo’s plan,” the complaint shares. “These excessive fees have resulted in higher costs for the plan and higher premiums for participants/beneficiaries, including [the plaintiffs].”

Despite the ERISA’s requirements that Wells Fargo make a “diligent and thorough comparison” of alternative options in the market and negotiate reasonably on behalf of its benefits plan, the bank has elected, instead, to force participants and beneficiaries to pay for prescription drugs through “some of the most expensive methods conceivable,” the filing charges.

The Wells Fargo lawsuit looks to represent anyone who was a participant in or beneficiary of the Wells Fargo & Company health plan since July 30, 2018.

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