In an industry filled with jargon, the case against Johnson & Johnson is putting the word “prudence” center stage. For anyone who’s used the word prudence, or prudent, for years without giving it too much thought, here’s the definition (per Merriam-Webster):
- The ability to govern and discipline oneself by the use of reason
- Sagacity or shrewdness in the management of affairs
- Skill and good judgment in the use of resources
So, why is the word prudence suddently relevant? Employees accuse J&J of failing to use prudence in three areas of its health plan:
- Negotiating contract pricing terms
- Selecting pharmacy benefit managers (PBMs)
- Designing their prescription drug plan
Each of those three elements carries significant weight, involves a lot of complexity, and gets into the weeds of different rules and regulations. But taking a step back, we see that the bigger picture might simply be that J&J, as an employer, didn’t exercise good judgement or regulate how they made decisions about their healthcare plans.
That’s precisely the issue that Synchronomics is trying to address (as are a handful of other providers, though Synchronomics is the only company licensed to act as a fiduciary for both healthcare and retirement plans).
To read more about the details of the case, check out this writeup in HR Executive.
