A growing number of state legislatures and boards of pharmacy are considering ways to limit white bagging, a controversial practice in which health plans require patient-specific drugs to be dispensed from the plan's preferred specialty pharmacy and shipped directly to the provider for administration.
The drugs included in white bagging policies are often high-cost injection or infusion medications used in oncology, rheumatology, and neurology care, among other specialties. One of the most common oncology drugs that is subject to white bagging requirements is pegfilgrastim.
In June 2021, Louisiana enacted a law that prohibits health plans from imposing white bagging mandates and withholding payment from providers who don't use the plan's preferred specialty pharmacy (Senate Bill 191). Several other states have either passed or are actively considering bills that would limit or ban the practice.
White bagging bypasses the traditional “buy and bill” approach in which hospitals and physician practices purchase drugs directly from wholesalers, prepare and administer them to patients, and then bill health plans for the product and administration costs. Instead, with white bagging, the drug must be ordered from the health plan's preferred pharmacy and then shipped to the practice for administration. It represents a significant shift for large oncology practices and hospital systems that have their own on-site pharmacies that prepare and dispense patient-specific drugs based on the patient's same-day point-of-care assessment, including laboratory results.
While health plans tout white bagging as a way to make patient premiums affordable at a time of spiraling drug prices, oncologists and pharmacists contend that the practice is disruptive to patient care, poses safety concerns, leads to drug waste, and squeezes oncology practices financially.
“White bagging really changes the supply chain of how that drug is received,” said Jorge Garcia, PharmD, Assistant Vice President of the System Oncology Pharmacy Service Line at Baptist Health South Florida. “It creates workarounds in the system and delays therapy for many patients. We have multiple examples where patients have either not received the drug on time or, at the time they received it, the drug dose has not been optimal for what the patient needs that day.”
White & Brown Bagging
White bagging has been around for several years, though health plan requirements to use preferred specialty pharmacies have been on the rise recently, experts said. Similar to white bagging, some health plans have also directed the use of preferred pharmacies through so-called brown bagging policies. With brown bagging, health plans require the patient-specific medication to be dispensed from the preferred pharmacy directly to the patient, who then transfers the medication to their oncologist for administration.
White bagging would historically “bubble up and then go away,” explained Mark Howell, JD, Senior Associate Director of Policy at the American Hospital Association. Over the last 18 months, however, white bagging policies have been implemented by several payers across a growing list of physician-administered drugs. “Payers are saying in the next 30-45 days this is the new policy for this list of drugs, and providers are scrambling to adapt,” Howell said. “This is here to stay unless there is regulatory or legislative action.”
Tom Kraus, JD, Vice President of Government Relations at the American Society of Health-System Pharmacists (ASHP), said they have noted similar trends with increases in both the number of health plans requiring white bagging and the scope of the drugs included in the policies. “This practice has been going on for over a decade, but on a very small scale. It's the scale that has changed,” he said. “Now it is disrupting patient care.”
America's Health Insurance Plans (AHIP), the national trade association representing health insurers, frames the use of white bagging as a response to rising drug prices and high provider drug markups. The groups said white bagging also eliminates the need for providers to buy and store medications themselves.
“Specialty pharmacies ease the administrative burden for providers and hospitals,” said Kristine Grow, AHIP's Senior Vice President of Communications. “With specialty pharmacies, providers and hospitals do not have to spend valuable resources to seek reimbursement for the purchase of the drug, and they are still paid for the administration of the drug.”
Safety, Operational Concerns
A recent survey of health systems and hospitals revealed that operational and safety issues and patient care issues were common with white and brown bagging policies. The survey was conducted by the health care group purchasing organization Vizient. Among 143 respondents, 65 percent said they needed a separate inventory management system to track white and brown bagged drugs, while 63 percent reported disruptions related to delivery locations and security. On the patient care side, 83 percent of respondents reported that white and brown bagging resulted in issues with drugs not showing up on time for patient administration.
One of the key issues with white bagging is the inability to account for same-day dosing changes, said Miriam J. Atkins, MD, FACP, a medical oncologist who is part of a three-office oncology practice with locations in Georgia and South Carolina. In her practice, they perform same-day laboratory tests and adjust medication dosing based on platelet counts, white blood cell counts, renal function changes, and liver testing. With white bagging, those same-day adjustments can delay care, sometimes for weeks, while a new batch of the medication is ordered from the pharmacy.
That is one of the reasons that Atkins' practice refuses to participate in white or brown bagging policies. “We cannot take 200 different bags of chemo from different insurance companies every day,” said Atkins, who is also the Vice President of the Community Oncology Alliance (COA). “Logistically, that's just not going to work. It's a set up for error.”
For hospital pharmacists, white bagging creates headaches because it is a supply of drugs that is not tracked throughout the supply chain. Without a transaction history for the drug, pharmacists cannot know if the drug is counterfeit or adulterated, Garcia said. Since these drugs are not procured by the practice, white bagged drugs may not be compatible with automated systems or the safety checks within the electronic health record.
“The problem is that this is circumventing the formal channels that have been put in place to ensure safety,” he said. “When I get a drug like this into my hospital, it may not be in my computer system, it may not be recognized by my infusion pumps, and it may not be recognized by our scanners. All of these are layers of safety that we have intentionally put in place.”
But AHIP asserts that white bagging policies are safe for patients, noting that specialty pharmacies are subject to the same supply chain safety requirements as any other dispensing pharmacy under federal law, and state licensing laws and regulations. Specialty pharmacies also must meet additional safety requirements imposed by the FDA and by drug manufacturers, according to Grow.
Are There Cost Savings?
Oncologists and pharmacists also take issue with the idea that white bagging saves money. While the practice may benefit the health plan, especially if it has an ownership stake in a preferred specialty pharmacy, providers say the policy only adds cost to the health care system overall.
Based on survey responses, Vizient estimates that health systems are spending $310 million a year in labor costs to manage the additional workload associated with white and brown bagging.
Medication waste also contributes to the cost of white bagging, according to Lalan Wilfong, MD, Vice President of Payer Solutions and Practice Transformation at the US Oncology Network. “Many drugs have multidose vial options so that one vial can be used to draw doses for multiple patients to maximize dosing options and efficient use of resources,” Wilfong said. “White bagging prevents this option, resulting in increased waste and cost.”
Even for practices and health systems that reject white bagging, fighting each request from the health plan is a resource-intensive process, Garcia noted. “We have pushed back on every single patient having that policy and every single time the insurer has backed down and allowed us to provide the drug. The unfortunate thing here is that you have to do that for every patient and for every infusion,” he said. “It becomes a resilience game.”
White bagging is also squeezing oncology practices by changing the payment structure around physician-administered drugs. Instead of being reimbursed for both the drug and the administration, practices that accept white bagged medications are only paid for administration. But Atkins said that means many practice functions that would normally be paid for within the drug payment are going unreimbursed, such as the services of the oncology-trained nurse, the cost of IV tubing, and the preparation of the chemotherapy by the pharmacist.
“That [payment] has to cover all of that, plus time in the chair and lights in the office,” she said. “The markup helps us run the office. If they white bag, they aren't covering those costs.”
Along with state legislative action, some state boards of pharmacy have also begun to examine their policies on white bagging. The goal of the board of pharmacy is to protect the consumer, explained Lemrey “Al” Carter, PharmD, RPh, Executive Director of the National Association of Boards of Pharmacy.
Carter said he expects that the boards of pharmacy will seek to better define the practice of white bagging and provide guidelines that would set out safe practices. For instance, they may require temperature tracking and other safeguards that would ensure the integrity of the drug through the supply chain. Some boards may also establish regulations to ensure equal access to specialty medications from in-house providers and the health plan's preferred pharmacy.
The Virginia Board of Pharmacy, for instance, recently enacted white bagging regulations that require a written agreement between the pharmacy and the provider spelling out the procedures for tracking, product security, integrity, delivery accuracy, and accountability.
In 2022, Garcia predicts continued expansion of white bagging requirements by health plans, as well as more activity by state legislatures and boards of pharmacy to add safeguards to these policies. In the meantime, oncology practices can establish formal policies to reject white bagging mandates and continue to push back on this practice with health plans.
Atkins echoed that, calling on oncologists to use their leverage to reject this practice. “Just keep fighting them. Don't take no for an answer.”
Mary Ellen Schneider is a contributing writer.