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Monday, May 27, 2024

White vs. Brown vs. Clear Bagging – Healthcare Economist

In 2020, spending on specialty medicine was $265 billion; this constituted 49.6% of complete prescription drug expenditure. To fight rising prices, payers have turned to white, brown and clear bagging in addition to approaches to limit the location of care the place sufferers obtain specialty medicine. What are these “bagging” insurance policies, what are the professionals and cons, and what laws has or is taken into account being handed to limit payers capability to implement these applications. Right this moment, I summarize a white paper from ICER titled “White Bagging, Brown Bagging, and Web site of Service Insurance policies: Finest Practices in Addressing Supplier Markup within the Industrial Insurance coverage Market“. This publish follows up my earlier publish on the subject two years in the past.


  • White bagging insurance policies ship medicine from specialty pharmacies on to suppliers on the web site of service the place the drug will probably be administered (usually a doctor’s workplace, HOPD, or dwelling infusion supplier). Suppliers are accountable for receiving the drug supply from the specialty pharmacy, unboxing it, and storing it till the affected person is on web site and prepared for administration. The moniker “white bagging” arises from the “white coats” of the suppliers who obtain the drug from the specialty pharmacy. Evaluation of the affect of white bagging on payers and sufferers will probably be mentioned later on this paper.
  • Brown bagging insurance policies require sufferers to select up their prescribed clinician-administered medicine at a specialty pharmacy or have these medicine delivered on to sufferers, after which sufferers are accountable for storing these medicine appropriately till the time of their appointment with a clinician, at which period sufferers convey their drug with them handy over to a clinician for administration. The time period “brown bagging” comes from the analogy to a “brown bag” lunch carried by a person.
  • Clear bagging includes a supplier, usually a hospital, creating a proper program by way of which its inside specialty pharmacy can dispense the drug and ship it to the location of service. Clear bagging thus serves as a supplier technique to supply a substitute for white bagging and brown bagging, thereby retaining the income related to specialty drug supply. Clear bagging additionally avoids a few of the logistical and security challenges related to white bagging. As an illustration, if a affected person’s drug dosage must be adjusted, the hospital specialty pharmacy can dispense the brand new dosage and have it delivered to the on-site hospital suite or clinic with out having to reschedule the affected person’s appointment as might be the case with white bagging. There was a latest proliferation of hospital-owned specialty pharmacies, with estimates from 2019 displaying that 26% of hospitals owned a specialty pharmacy.

How widespread are these practices? Effectively, as of 2022, 27% of oncology remedy merchandise administered in doctor places of work underneath industrial insurance coverage had been topic to white bagging insurance policies. A part of that is pushed by trade consolidation.

It’s much more widespread amongst non-oncology merchandise as proven from information as of 2019 beneath.

A part of the rationale for elevated ‘bagging’ insurance policies has to do with trade consolidation.

the three largest PBMs aligned with payers –CVS/Aetna, Optum/UnitedHealthcare, and Specific Scripts/Cigna — accounted for 77% of all prescription claims.36,37 Some suppliers assert that bagging insurance policies are motivated by the well being plan’s want to drive quantity to their very own specialty pharmacies.

Restrictions on web site of service meant to maneuver sufferers to decrease price websites of care are additionally changing into extra widespread. In accordance with one survey:

…by 2020 nearly 70% of business plans had site-of-service applications, of which 34% had been obligatory and 32% had been voluntary.24 That very same survey discovered that throughout all site-of-service methods, industrial payers had shifted 30% of members into dwelling infusion, 19% to ambulatory infusion suites, and 14% to unbiased doctor places of work in 2019.

Key criticisms of white and brown bagging are:

  • Affected person security. For brown bagging particularly, sufferers might not appropriately administer these specialty medicine at dwelling. Additionally, with lengthy journey instances, medicine might spoil if not stored correctly refrigerated.
  • Influence on deprived sufferers. For sufferers with restricted transportation possibility, brown bagging might impose a burden on sufferers.
  • Incorrect prescriptions and problem altering prescriptions. In a single survey, 66% of respondents stated that that they had acquired a product by way of white bagging that was not appropriate on account of up to date remedy course or dose being modified.
  • Affected person out-of-pocket prices. Decrease payers prices from white and brown bagging usually will not be handed on to sufferers. In reality, OOP prices might rise if medicine transfer from being a part of the medical (i.e., doctor administered) profit to the affected person’s pharmacy profit.
  • Supplier income. Suppliers–significantly 340B hospitals–might expertise a major loss in income as drug administration strikes from hospital-based pharmacies to payer-owned/managed specialty pharmacies.
  • Drug wastage. “As a result of medicine obtained by way of white or brown bagging are particular to a person, versus the buy-and-bill course of whereby physicians buy medicine to have in-stock, any extra drug within the white or brown bagged vial have to be discarded and can’t be used for one more affected person, leaving the payer and affected person accountable for all the vial and related cost-share.”

Equally, criticism of web site of companies restrictions embrace: (i) elevated affected person journey burden, (ii) diminished oversight for opposed occasion monitoring, and (iii) detrimental affect on supplier (particularly hospital outpatient facility) income.

Legislative initiatives.

  • White bagging: Three states (LA, MN, VT) have handed laws proscribing white bagging and 9 states (AZ, CA, IL, KY, MO, NY, OH, WV) have proposed laws that will prohibit payer-mandated white bagging
  • Brown bagging. Two states (VA and VT) have applied insurance policies to ban brown bagging. Proposed laws in three states (CA, IL, NY) would prohibit brown bagging along with white bagging
  • Web site of service. Three states (AR, MN, TN) have handed laws prohibiting payers from requiring a clinician-administered drug to be infused at dwelling.

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