EvilCorporations.com • Civil Action No. 24-cv-03043, D. Minn., filed 07/30/2024 • 62 min read

Wells Fargo’s Prescription Pricing Plunder

A federal class action filed in Minnesota accuses Wells Fargo of making its own employees pay up to 10,615% above the actual pharmacy acquisition cost for generic drugs they needed to survive. The alleged beneficiary: Express Scripts, the pharmacy benefit manager Wells Fargo hired to run its drug program.

The Non-Financial Ledger: What This Actually Costs People

Sergio Navarro worked at Wells Fargo for six months. Theresa Gamage, five years. Dayle Bulla, 26 years. Jane Kinsella, 41 years. These are not abstractions. These are people who showed up, did their jobs, and trusted that when the human resources department told them they had prescription drug coverage, that coverage was built to help them rather than to quietly bleed them.

The complaint describes a system designed, at every pressure point, to extract money from sick people. When a Wells Fargo employee with multiple sclerosis went to fill their teriflunomide prescription, they did not know they were participating in a financial arrangement that charged their plan $8,775.91 for a drug that Wegmans would sell them for $40.55 if they paid cash. They did not know that the $135.81 per person their plan funneled to Express Scripts in administrative fees every year exceeded what comparable plans paid. They did not know that their employer, a Fortune 50 bank with over $83 billion in annual revenue and substantial bargaining power, had allegedly done nothing meaningful to push back on those prices.

They knew something far simpler and far more painful: their premiums kept eating into their paychecks. Their co-pays were real. Their deductibles had to be met before any coverage kicked in. When the plan overpays for a drug, the employee is responsible for a portion of that inflated number at the counter, every time. The person who needed imatinib for leukemia didn’t pay $169 and move on with their life. They paid based on a price their employer agreed to: $8,199.00. The plan covered most of it, but the co-insurance percentage applied to that inflated figure, not the actual cost of the drug.

The complaint also names a mechanism that most workers never think about: wage suppression. When a company’s healthcare costs rise, employers absorb some of that cost, and they do not absorb it quietly. They offset it by slowing wage growth, increasing deductibles, shifting more premium cost onto employees, or reducing other forms of compensation. The Congressional Budget Office documented this pattern. UC Berkeley researchers confirmed it. The result is that a Wells Fargo employee who never filled a single specialty prescription still paid for the imatinib markup, the teriflunomide markup, the bexarotene markup. They paid through slower raises. Through higher premiums. Through the quiet erosion of benefits over time.

The people most harmed are those who were already sick. A cancer patient filling temozolomide. A person with HIV filling abacavir-lamivudine. A person with MS filling fingolimod. These are not discretionary medications. You do not skip them because the cost structure is unfavorable. You pay what you’re told to pay, or you go without, or you ration. The lawsuit does not document individuals who rationed their medication. But that is the predictable and documented consequence of the system it describes. When plan costs are this inflated and out-of-pocket exposure is tied to those inflated costs, the people at the end of the line are the ones least able to absorb the hit.

There is also the question of what was taken from these workers without their knowledge. The plan was funded in part by employee contributions. In the most recent year of reporting cited in the complaint, plan participants contributed approximately $650.94 million to the trust that funds the plan. That money was supposed to flow exclusively to their benefit. The complaint alleges a significant portion of it flowed instead to Express Scripts, through markups that no prudent fiduciary would have agreed to. The employees who put money into that trust did not consent to subsidizing Express Scripts’ profit margin. They were never asked.

Legal Receipts: What the Complaint Actually Says

The following quotes are drawn verbatim from the filed complaint. Each one is a direct legal allegation, not editorial commentary.

“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.” Class Action Complaint, ¶3 — re: fingolimod (generic for Gilenya, MS drug)

• This quote establishes the legal standard being applied: a “prudent fiduciary” benchmark drawn directly from ERISA. The complaint argues that no reasonable plan manager, knowing the drug was available for $648 cash at Wegmans, would lock in a contracted price of $9,994.37 for the same prescription.
• The word “fifteen” is conservative. The cash price at Cost Plus Drugs was $875.09 and at Walmart was $895.63. Depending on the comparison pharmacy, the multiple ranges from 11x to 15x.

“Across all generic-specialty drugs on the formulary for which there is publicly available data on average acquisition costs, Defendants agreed to make the Plan and its beneficiaries pay, on average, a markup of 383% above what it costs pharmacies to acquire those drugs. In other words, Defendants agreed to make the Plan and its beneficiaries pay, on average, roughly 5 times as much as Express Scripts or Accredo paid for those very same drugs.” Class Action Complaint, ¶6

• This is an average across 38 generic specialty drugs for which the federal government (CMS/NADAC) publishes acquisition cost data. The total acquisition cost for one 90-day prescription of each of those 38 drugs was $26,528.25. The total Wells Fargo plan price was $128,239.77. The complaint stresses that even these figures understate the overpayment, because many of those drugs were available at retail pharmacies for even less than the NADAC average.
• The 383% average markup was not for brand-name drugs or rare biologics. It was for generic drugs, the category specifically designed to be affordable because multiple competing manufacturers produce them.

“The ‘specialty’ designation serves little purpose other than to enrich Express Scripts at the expense of the Plan and its beneficiaries.” Class Action Complaint, ¶132

• The complaint documents that most of the drugs labeled “specialty” by Express Scripts are widely available at standard retail pharmacies (Rite Aid, Walmart, Walgreens, CVS) without any special handling requirement. The “specialty” designation triggered mandatory routing through Accredo, Express Scripts’ own pharmacy, at dramatically higher prices.
• This allegation goes directly to the conflict of interest at the heart of the case: Express Scripts benefited financially every time a drug was labeled “specialty,” and Wells Fargo’s fiduciaries allegedly failed to monitor or challenge that designation.

“Defendants paid over $25 million in administrative fees to Express Scripts in 2022, or $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.” Class Action Complaint, ¶8

• This is drawn from Wells Fargo’s own Form 5500 filing, an annual government disclosure required of ERISA plans. The complaint argues that a plan of Wells Fargo’s size, serving over 200,000 employees, should have substantial bargaining power to negotiate lower per-participant fees. The allegation is that Wells Fargo squandered that leverage.
• Administrative fees are separate from the drug price markups. The complaint argues both the markups and the fees were individually unreasonable, and that together they caused the plan and its participants millions of dollars in harm annually.

“According to plan documents, specialty medications are ‘not covered’ at any retail pharmacy and instead are ‘only covered through Accredo specialty pharmacy delivery.’ Plan documents further state that ‘Specialty medications must be filled through Accredo, your specialty pharmacy.'” Class Action Complaint, ¶137

• This is the plan’s own language, meaning Wells Fargo formally encoded the Accredo mandate into its benefit documents. Employees had no choice. If they needed a drug classified as specialty, insurance would cover it only if they obtained it from Accredo. Retail pharmacy options, even when cheaper, were uncovered.
• The complaint frames this as the fiduciary opposite of “steering.” Prudent plans steer employees toward lower-cost options. Wells Fargo’s plan steered employees toward the higher-cost pharmacy owned by the plan’s own PBM.

“AWP is not a true representation of actual market prices for either generic or brand drug products, is highly manipulable by manufacturers and wholesalers, and often bears little to no relation to a pharmacy’s actual acquisition costs. (A common joke among insiders in the industry is that AWP stands for ‘Ain’t What’s Paid.’)” Class Action Complaint, ¶59

• The complaint alleges that Wells Fargo agreed to use Average Wholesale Price (AWP) as the pricing benchmark for generic drugs. This is the core structural problem. AWP is a manufacturer-reported figure that can be set arbitrarily high, and it frequently bears no relationship to what pharmacies actually pay for the drug.
• Researchers cited in the complaint found examples where AWP was 50, 70, or even 100 times higher than a drug’s actual acquisition cost. By anchoring prices to AWP rather than NADAC (actual acquisition cost), Wells Fargo locked its plan into a framework designed to generate maximum spread income for Express Scripts.

Societal Impact Mapping: Who Gets Hurt Beyond the Plaintiffs

Public Health

When a drug benefit plan systematically overpays for the medications its members need most, the downstream effect is not abstract. It strikes people managing serious, chronic, and life-threatening conditions.

• The drugs with the highest markups in this case are treatments for cancer (imatinib for leukemia, abiraterone for prostate cancer, temozolomide, capecitabine), HIV (abacavir-lamivudine, efavirenz-based regimens), and multiple sclerosis (fingolimod, teriflunomide, dimethyl fumarate). These are not optional medications. Interruption or discontinuation of any of these carries severe health consequences.
• When a plan overpays and passes costs to participants through co-insurance (a percentage of the contracted price), a patient filling imatinib at a contracted price of $8,199 pays their co-insurance percentage against that inflated number, not against the $169.20 it cost to acquire. The gap between what the plan version requires versus the actual drug cost translates directly to out-of-pocket burden on chronically ill workers.
• The complaint documents that plan participants must meet deductibles before coverage activates. During the deductible phase, they pay the full inflated contracted price. A cancer patient filling temozolomide at $16,405.38 while working through a deductible is facing a financial emergency alongside a medical one.
• The Accredo mandate for specialty drugs blocked employees from obtaining medications at standard retail pharmacies, even when those pharmacies were geographically accessible and had the medication in stock. This created an access barrier for people whose treatment required medication that could otherwise be obtained conveniently and cheaply. Convenience and continuity of care for chronic conditions are directly tied to patient outcomes.
• Employees in lower-wage positions at Wells Fargo face a compounding disadvantage: their wages are most likely to be suppressed as the employer offsets rising healthcare costs, while their ability to absorb inflated co-insurance payments is lowest. The burden of the alleged overcharging falls hardest on those least able to carry it.

Economic Inequality

The financial harm alleged here ripples far beyond the individual plan participant at the pharmacy counter. The structure of the scheme, as described in the lawsuit, transfers wealth upward systematically.

• The approximately $650.94 million contributed annually by Wells Fargo plan participants was supposed to pay for their healthcare. The complaint alleges a significant portion of those worker contributions funded excessive markups that enriched Express Scripts, a publicly traded company whose shareholders benefit from that spread pricing revenue.
• Premium increases affect every plan member, including those who never filled a specialty prescription. An employee who takes no medications at all still pays higher premiums because the plan’s overall costs are inflated by the markup structure the complaint describes. Health insurance costs function as a tax on employment, and when that tax is inflated by mismanagement, it is workers who bear it.
• The Congressional Budget Office finding cited in the complaint is direct: employer healthcare spending increases are associated with slower wage growth. Wells Fargo, with over 200,000 employees, wields enormous influence over the wage trajectories of a workforce that spans every income level. If overspending on prescription drugs suppressed wages even marginally, the aggregate effect across that workforce is substantial.
• The pass-through PBM model, which the complaint identifies as a readily available alternative, would have eliminated spread pricing and returned rebate savings to the plan. Pass-through PBMs like Navitus and Capital Rx maintain national pharmacy networks comparable to Express Scripts. The complaint argues that choosing not to even investigate this option was itself a breach of fiduciary duty.
• Express Scripts, as a traditional PBM with its own pharmacy (Accredo), was financially incentivized at every decision point to maximize plan spending, not minimize it. The complaint argues that Wells Fargo’s fiduciaries either did not understand this incentive structure or chose to ignore it, at the direct financial expense of every person enrolled in the plan.
• The Aon conflict of interest allegation adds another layer. If the broker guiding PBM selection was receiving per-prescription income from Express Scripts, then the advice Defendants received was structurally compromised. Workers who trusted the process of PBM selection had no idea that the advisor managing that process may have had a financial stake in the outcome.

The “Cost of a Life” Metric

The Numbers, Unfiltered: All 38 Generic-Specialty Drugs

The following table is derived directly from the complaint (¶126). It shows every generic-specialty drug for which NADAC acquisition cost data was available, along with what the Wells Fargo plan agreed to pay. Drugs with markups above 1,000% are highlighted.

Source: Class Action Complaint ¶126. Drugs in red exceeded 1,000% markup. Zidovudine was the sole drug where the plan price was lower than acquisition cost.

What Now? How to Fight Back

This case is pending in the U.S. District Court for the District of Minnesota under Civil Action No. 24-cv-03043. The following individuals are named defendants who held fiduciary authority over the Wells Fargo plan:

• Defendant Wells Fargo & Company — Plan sponsor; liable as appointing and monitoring fiduciary for all named Plan Administrators.
• Defendant David Galloreese — Former SVP, Head of Human Resources. Plan Administrator and fiduciary during his tenure.
• Defendant Michael Branca — Former EVP, Head of Total Rewards. Signed the 2018 and 2019 Form 5500s as Plan Administrator.
• Defendant Mark Hickman — Former Head of Benefits & Enterprise Recognition. Signed the 2020 and 2021 Form 5500s as Plan Administrator.
• Defendant Drew Wineland — SVP, Head of Human Capital Initiatives. Active Plan Administrator. Signed the 2022 Form 5500.
• Defendant Bei Ling — SVP, Head of Human Resources. Active Plan Administrator and fiduciary at time of filing.

Watchlist: Regulatory Bodies With Jurisdiction Over This Type of Conduct

• DOL (Department of Labor / EBSA) — The Employee Benefits Security Administration enforces ERISA fiduciary standards. ERISA claims of this type fall squarely within their mandate. File complaints at dol.gov/agencies/ebsa.
• DOJ (Department of Justice) — DOJ can pursue criminal referrals for egregious ERISA violations and antitrust enforcement against PBM pricing practices.
• FTC (Federal Trade Commission) — The FTC has been actively investigating PBM practices. A 2022 study order targeted the six largest PBMs, including Express Scripts. Contact ftc.gov/reportfraud.
• SEC — Aon’s acknowledgment of “market-derived income” in its SEC filings, and the potential conflict of interest in its advisory role, is within SEC enforcement territory for broker-dealer disclosure obligations.
• State Insurance Commissioners — Several states have passed or are considering PBM transparency and spread pricing legislation. Contacting your state insurance commissioner can accelerate state-level oversight.

Concrete Steps: Mutual Aid, Organizing, and Self-Defense

• Check your own plan’s formulary prices. Every employer-sponsored plan must file a Form 5500 annually with the DOL. These are publicly searchable at efast.dol.gov. Your plan’s administrative fees to its PBM are disclosed there. Look them up.
• Use Cost Plus Drugs and GoodRx before assuming your insurance price is cheaper. As documented in this case, the cash price at low-cost pharmacies frequently beats the plan price. For generic drugs especially, ask your pharmacist what the GoodRx or Mark Cuban Cost Plus Drugs price is before running it through insurance.
• If you are a Wells Fargo current or former employee, contact the plaintiffs’ legal team. Class actions require class members to come forward. The attorneys of record are listed in the court filing available at PACER (pacer.gov), case 0:24-cv-03043, D. Minn.
• Demand PBM contract transparency from your employer. Under the Consolidated Appropriations Act of 2021, employers are required to receive and disclose certain fee and compensation data from their PBM and benefits consultants. Ask your HR department for a copy of the PBM contract and the consultant’s compensation disclosures. They are legally required to have them.
• Push your union or worker advocacy group to demand PBM accountability. This case is a template for how to scrutinize employer-sponsored drug benefits. Organizations like the National Alliance of Mental Illness, the American Cancer Society Cancer Action Network, and patient advocacy groups for MS and HIV have all called for PBM reform. Join or support their campaigns.
• Contact your congressional representatives about federal PBM reform legislation. Multiple bills targeting spread pricing, mandatory rebate pass-through, and PBM transparency have been introduced in recent congressional sessions. Constituent pressure moves these bills. Contact information is at congress.gov.