A judge ruled that employees can sue JPMorgan Chase (JPM) over allowing repeated, unauthorized, excessive payments to CVS Caremark in a proposed class action, which accuses JPM of violating the Employee Retirement Income Security Act of 1974, Reuters reported.
The complaint alleged that the New York-based banking giant allowed its pharmacy partner CVS Caremark to raise prices of 366 generic drugs by an average of 211%, the Monday, March 9, report noted. Some employees consequently had to pay more than uninsured patients.
CVS Caremark’s parent company, CVS Health (CVS), is an investment banking client of the largest bank in the U.S. by assets, according to the proposed class action.
U.S. District Judge Jennifer Rochon in Manhattan reportedly said in her decision that JPM did not breach fiduciary duties of loyalty and prudence. Decisions about joint ventures, corporate strategy, or relationships with third parties do not become fiduciary acts merely because defendants also sponsor an ERISA plan.
However, employees may pursue part of their lawsuit accusing the lender of mismanaging its health and prescription benefits program, causing them to overpay for prescription drugs and premiums, according to Reuters.