February 2026
On November 26, 2025, the District of New Jersey issued its latest ruling in Lewandowski v. Johnson & Johnson, granting Johnson & Johnson’s motion to dismiss the fiduciary breach claims for lack of Article III standing.
As a refresher, a class action lawsuit was filed by Johnson & Johnson (“J&J”) employees, against their employer, alleging several breaches of J&J’s fiduciary duties in its administration of its welfare benefit plan. The plaintiffs alleged that J&J failed to appropriately monitor the conflicted pharmacy benefit managers (“PBM”) and/or their formularies, failed to monitor prescription drug costs, and failed to consider alternative pricing arrangements or PBMs that would have saved the participants’ money. Lewandowski also alleged that J&J failed to provide requested Plan documents, which included a request for contracts and agreements for the administration and operation of the prescription drug benefits. The fiduciary claims here are similar to those alleged in two other recent PBM cases which were filed against global banks. To date, two of the cases have been dismissed for lack of standing (a hearing on the third case’s motion to dismiss was heard on February 13, 2026), with the Lewandowski decision emerging as the more recent.[1]
The latest decision in Lewandowski, however, when reviewed in the context of the other PBM cases, provides lessons for plan sponsors and plan fiduciaries navigating the wave of this novel PBM-related ERISA litigation.
1. Standing — Not Merits — Remains the Gatekeeper
As with the other PBM cases, the court dismissed the Lewandowski fiduciary claims because plaintiffs failed to sufficiently demonstrate concrete harm due to fees paid to the PBM. The court agreed that an economic harm is a concrete injury but found the argument that excessive fees paid by the plan to the PBM caused the participants to pay more in premiums and out-of-pocket costs was speculative and not redressable.
A critical factor in the dismissal was the plan sponsor’s discretion to set participant contributions. The court recognized that participant contribution amounts may be affected by many factors, including group health market trends, administrative expenses, historical cost-sharing levels, and the costs of prescription drugs. With all these factors, plaintiffs failed to link PBM fees to any participant harm. As stated in the motion to dismiss, the defendants had sole discretion to set participant contribution rates; the “requested relief could result in lower contribution rates and out-of-pocket costs, [but] there is no guarantee that it would.”
Thompson Hine takeaway:
Settlor decisions about premium-setting may offer a structural litigation defense. When premiums do not directly correlate to plan cost experience, plaintiffs have difficulty showing that alleged PBM overcharges increased their out-of-pocket costs. Therefore, plan sponsors should ensure that plan documents are written to clearly reflect the sponsor’s discretion and settlor decision making in setting premiums and plan fiduciaries should ensure that participant communications reflect that premiums are set by the plan sponsor in its settlor capacity and in the plan sponsor’s sole discretion.
2. Plaintiffs Have Proposed a Theory of Fiduciary Misconduct — But Courts Aren’t Weighing In (Yet)
Although the claims were dismissed for lack of standing, the Lewandowski complaints illustrate how plaintiffs believe plan fiduciaries should be acting. In particular, the Lewandowski plaintiffs alleged that prudent plan fiduciaries should, among other things: conduct recurring RFPs, eliminate spread pricing, negotiate AWP-independent generic pricing, supervise formulary decisions, and manage conflicts created by vertically integrated PBMs.
If courts get to the merits of these cases, courts will need to weigh in on what actions are necessary to demonstrate prudence in a particular case. Whether the duty of prudence is met is fact-specific, and the duty of prudence may not necessarily require all actions raised by the Lewandowski plaintiffs.
Thompson Hine takeaway:
It is always a good time to review plan fiduciary practices. While we monitor for further developments in the caselaw, plan fiduciaries could use the allegations in the complaints to review their own processes, as it is possible that such allegations could shape the next round of DOL audits or participant inquiries. Plan fiduciaries who have not done so recently could consider whether and to what extent to take proactive actions to reduce their risk of these claims, even if such claims ultimately are unsuccessful, such as:
- Conducting an independent RFP, which includes pass-through PBMs.
- Hiring an independent pharmacy consultant to provide advice on the formulary and specialty drug classifications.
- Reviewing all potential conflicts involving consultants receiving PBM compensation, PBMs that may be customers of the plan sponsor, or other conflicts with the selected PBM.
- Reviewing direct and indirect compensation and the reasonableness of the compensation.
3. Vertical Integration Allegations Are Not Going Away
Lewandowski and the other PBM cases highlight allegations that plan fiduciaries failed to mitigate PBM/manufacturer/specialty-pharmacy conflicts; particularly where the PBM owns the specialty pharmacy (e.g., ESI owns Accredo) and there is a requirement or incentive to use the PBM owned specialty pharmacy. As stated above, courts have not yet reached the merits of these claims, finding instead that plaintiffs failed to establish standing.
However, given the extent of vertical integration with PBMs, we expect to see more of these claims in the future, particularly if any plaintiff successfully defeats a motion to dismiss. Additionally, while courts of law have not reached decisions on the merits, whether vertical integration conflicts exist may be considered by the court of public opinion, and drive discussion among the public, media, regulators, and Congress.
Thompson Hine takeaway:
If plan fiduciaries have determined that engagement or retention of a vertically-integrated PBM is prudent despite the potential conflicts of interest, plan sponsor/settlor decisions about plan design may help mitigate those conflicts. For example, plan sponsors could consider eliminating any requirement or cost benefit to using a vertically integrated pharmacy. Before implementing any plan design change, the plan sponsor should work with the plan fiduciaries to determine whether and to what extent making such a design change would impact pricing under the PBM agreement.
Conclusion
Lewandowski, like its sibling PBM cases, failed at the standing stage. But beneath that procedural outcome lies a developing framework of expectations and potential risk pathways. The complaints can shape what stakeholders believe plan fiduciaries should be doing, so plan fiduciaries should treat these dismissals not as “wins,” but as warnings. Overall, these cases should encourage plan fiduciaries to understand their PBM arrangements, question conflicts and compensation, consider proactive steps, and remain updated with news and litigation. If you have any questions, please contact the authors or your Thompson Hine attorney.
[1] The Lewandowski plaintiff filed a notice of appeal from the dismissal on January 16, 2026.