Johnson & Johnson Health Care Sys. v. Save on SP, LLC
| Decision Date | 25 January 2023 |
| Docket Number | Civil Action 22-2632 |
| Court | U.S. District Court — District of New Jersey |
| Parties | JOHNSON & JOHNSON HEALTH CARE SYSTEMS INC., Plaintiff, v. SAVE ON SP, LLC, Defendant. |
Not for Publication
In this matter, Plaintiff Johnson & Johnson Health Care Systems Inc. (“JJHCS”) alleges that Defendant Save on SP LLC (“SaveOnSP”) created a plan to deplete Plaintiff's payment assistance program for patients using certain of its costly, specialty prescription medications. Plaintiff alleges that Defendant created its plan to financially benefit itself and its partners at Plaintiff and the patients' expense. Presently before the Court is Defendant's motion to dismiss the Complaint. D.E. 31. Plaintiff filed a brief in opposition, D.E. 34, to which Defendant replied, D.E. 43. In addition, non-parties the Aimed Alliance, Triage Cancer, the HIV + Hepatitis Policy Institute, the Coalition of State Rheumatology Organizations the AIDS Institute, the National Oncology State Network, and the Connecticut Oncology Association (collectively, the “Patient Advocate Amici”) and Pharmaceutical Research and Manufacturers of America (“PhRMA”) filed motions seeking leave to file Amicus Curiae briefs in support of Plaintiff. D.E. 35, 38. Defendant filed a brief in opposition to both motions, D.E. 49, to which the Patient Advocate Amici replied D.E. 52. The Court reviewed the parties' submissions[1] and decided the motions without oral argument pursuant to Fed.R.Civ.P. 78(b) and L. Civ. R 78.1(b). For the reasons set forth below, Defendant's motion to dismiss is DENIED and the amici's motions are GRANTED.
Plaintiff, a subsidiary of Johnson & Johnson, administers the Janssen CarePath program (“CarePath”). Compl. ¶¶ 7, 27.[2] CarePath, among other things, provides financial assistance that helps patients afford out-of-pocket costs for forty-four medications that are manufactured by Johnson & Johnson pharmaceutical companies. Id. ¶¶ 7, 47. The medications include complex biologic treatments for various cancers, pulmonary arterial hypertension, and autoimmune disorders. For many of the medications, there is no other treatment or “generic” substitute available. Id. ¶¶ 8, 32-34.
Patients must meet certain criteria to be eligible for CarePath, including being enrolled in commercial or private health insurance. Id. ¶ 48. The CarePath terms and conditions provide that CarePath “may not be used with any other coupon, discount, prescription savings card, free trial, or other offer.” Id. In addition, CarePath participating patients agree to “meet the program requirements every time [they] use the program.” Id. After a patient enrolls in CarePath, he or she receives a card that can then be used at a point-of-sale to cover most of the out-of-pocket costs for the medication. Id. ¶ 49.
Defendant is a company that works “in partnership” with pharmacy benefits manager (“PBM”) Express Scripts and specialty pharmacy Accredo Health Group, Inc. (“Accredo”) to administer the SaveOnSP Program (the “Program”). Id. ¶ 28. Commercial health insurance companies contract with PBMs to manage prescription drug benefits for health insurance plans. Thus, health insurance companies and PBMs work together to determine what cost-sharing obligations to impose on plan participants. Plaintiff alleges that PBMs “serve as middlemen with an aim towards increasing insurers' and their own profits by determining which drugs a plan will cover and to what extent they will be covered.” Id. ¶ 37. Defendant's Program is allegedly one way a PBM, here Express Scripts, maximizes its profits (and in turn commercial health insurance companies' profits) at Plaintiff and patients' expense. See id. ¶¶ 50-51.
Plaintiff alleges that the SaveOnSP Program has two components. First, the drugs at issue are reclassified from essential to non-essential health benefits under the Affordable Care Act (“ACA”). There is purportedly no medical reason for this change, and, in fact, it is made without regard to a patient's medical needs. Id. ¶ 9. Plaintiff alleges that the drugs are re-designated to avoid the ACA's co-pay limits and annual out-of-pocket limits, which caps the amount a patient with private insurance can be required to pay for medical care each year. Id. ¶¶ 9-10, 53-55, 5758. After a drug is designated as non-essential, the SaveOnSP Program “increases the patient's copay amount for the given drug to an artificially high amount--often thousands of dollars per dose.” Id. ¶ 10. Plaintiff indicates that Defendant “work[s] in tandem with its payer partners” to implement these changes, id. ¶ 9, but recognizes that “private payers and their affiliated entities”[3]determine copays, id. ¶ 6; see also id. ¶ 37 (). The inflated co-pays are key to the alleged scheme because the higher amounts essentially force patients into the Program. Id. ¶ 56.
The second part of the purported SaveOnSP Program is to target patients. Plaintiff alleges that Defendant uses the threat of the artificially inflated copay to coerce patients into enrolling in the SaveOnSP Program. Specifically, Defendant's representatives allegedly tell patients that they will be responsible for the entire copay amount unless they join the Program; if the patients join the Program, the copay will be paid. Id. ¶¶ 12, 60. Defendant, however, fails to tell patients that they can access patient assistance program like CarePath without enrolling in the SaveOnSP Program. Id. ¶ 76. Defendant institutes an “outreach campaign” to get patients to enroll in the Program. Id. ¶¶ 12, 61. This campaign results in enrollment of 55% to 65% of a payer's membership. Id. ¶ 62. For those members who do not enroll through Defendant's outreach, Accredo conducts a warm transfer[4] to SaveOnSP when a member submits a claim. Id. ¶ 62. Plaintiff also alleges that Defendant, through Accredo, manufacturers a false rejection to recruit patients. Id. ¶¶ 13, 63. Plaintiff alleges that an Accredo phone representative informs unenrolled patients that their claim for a covered medication was rejected and then transfers the patients to a SaveOnSP representative who attempts to enroll the patient in the Program. Id. The impetus for patients to enroll in the SaveOnSP Program is that they are informed that they will be responsible for the very high co-pay if they do not enroll but will not have any co-pay if they do enroll.
Once enrolled in the Program, Defendant's representatives walk patients through the process of joining a manufacturer's assistance program. CarePath is one such program. Id. ¶¶ 16, 64. Plaintiff alleges that by participating in the SaveOnSP Program, patients who utilize CarePath breach the CarePath terms and conditions. Plaintiff further alleges that Defendant knows that enrolling in the Program violates the CarePath terms and conditions. Id. ¶¶ 48, 65. Defendant then electronically bills the inflated copay amount to CarePath. Because the SaveOnSP Program increases the copay amount, the SaveOnSP Program drains CarePath's available funds more quickly. Id. ¶¶ 23, 51, 66. CarePath provides several examples of the average amount it pays per fill for persons not enrolled in the Program compared to those who are: STELARA - $1,171 v. $4,301; TREMYA - $1,126 v. $3,717; and UPTRAVI - $418 v. $5,000. Id. ¶¶ 92-94. Plaintiff indicates that not only do these higher payments result in CarePath funds being depleted more quickly, it also results in a higher percentage of patients reaching the annual limits of the CarePath program, sometimes by the middle of the year. Id. ¶¶ 98-99.
Pharmacists are the paid the same amount for the prescription, so they do not benefit from the alleged scheme. Id. ¶ 17. Instead, Defendant and the others participating in the alleged scheme split the additional money recovered from CarePath, with Defendant receiving 25% of the “savings” received (i.e., the difference between amount CarePath would have paid without the Program and the amount it paid through the Program). Id. ¶ 68. Plaintiff claims that “SaveOnSP's business model is to drain patient assistance from programs like CarePath by increasing patient out-of-pockets costs in a manner that serves no end other than to maximize profits for SaveOnSP and its partners.” Id. ¶ 51.
Plaintiff filed its two-count Complaint challenging the SaveOnSP Program on May 4, 2022. D.E. 1. Plaintiff asserts a claim for tortious interference with patient's CarePath contracts (Count I) and a claim asserting that the second component of the SaveOnSP program, the patient targeting aspect, amounts to a deceptive trade practice under New York General Business Law (“GBL”) § 349 (Count II). Plaintiff seeks monetary damages and an injunction preventing Defendant from implementing the SaveOnSP Program as to certain of its drugs. Compl. at 41. Defendant subsequently filed the instant motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). D.E. 31. Proposed amici then filed their motions seeking leave to appear in support of Plaintiff. D.E. 35, 38. Defendant opposes all three motions.
Defendant moves to dismiss for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). For a complaint to survive dismissal under Rule 12(b)(6), it must contain sufficient factual matter to state a claim that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S 544, 570 (2007)). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for...
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