White vs. Brown vs. Clear Bagging – Healthcare Economist

In 2020, spending on specialty medication 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 medication. 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. In the present day, I summarize a white paper from ICER titled “White Bagging, Brown Bagging, and Site of Service Policies: Best Practices in Addressing Provider Markup in the Commercial Insurance Market“. This publish follows up my earlier publish on the subject two years in the past.

Definitions

• White bagging insurance policies ship medication from specialty pharmacies on to suppliers on the web site of service the place the drug will likely be administered (sometimes a doctor’s workplace, HOPD, or residence infusion supplier). Suppliers are liable 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 likely be mentioned later on this paper.
• Brown bagging insurance policies require sufferers to select up their prescribed clinician-administered medication at a specialty pharmacy or have these medication delivered on to sufferers, after which sufferers are liable for storing these medication appropriately till the time of their appointment with a clinician, at which period sufferers deliver their drug with them at hand 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 entails a supplier, sometimes a hospital, creating a proper program by which its inner specialty pharmacy can dispense the drug and ship it to the location of service. Clear bagging thus serves as a supplier technique to supply an alternative choice to white bagging and brown bagging, thereby retaining the income related to specialty drug supply. Clear bagging additionally avoids among the logistical and security challenges related to white bagging. For example, 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 could be the case with white bagging. There was a latest proliferation of hospital-owned specialty pharmacies, with estimates from 2019 exhibiting that 26% of hospitals owned a specialty pharmacy.

How frequent are these practices? Nicely, as of 2022, 27% of oncology therapy products administered in doctor places of work underneath business insurance coverage have been topic to white bagging insurance policies. A part of that is pushed by trade consolidation.

It’s much more frequent amongst non-oncology merchandise as proven from knowledge as of 2019 under.

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

the three greatest PBMs aligned with payers –CVS/Aetna, Optum/UnitedHealthcare, and Categorical 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 need to drive quantity to their very own specialty pharmacies.

Restrictions on web site of service supposed to maneuver sufferers to decrease price websites of care are additionally turning into extra frequent. In response to one survey:

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

Key criticisms of white and brown bagging are:

• Affected person security. For brown bagging particularly, sufferers could not appropriately administer these specialty medication at residence. Additionally, with lengthy journey occasions, medication could spoil if not saved correctly refrigerated.
• Affect on deprived sufferers. For sufferers with restricted transportation choice, brown bagging could impose a burden on sufferers.
• Incorrect prescriptions and issue altering prescriptions. In a single survey, 66% of respondents stated that that they had acquired a product through white bagging that was now not right attributable to up to date remedy course or dose being modified.
• Affected person out-of-pocket prices. Decrease payers prices from white and brown bagging typically usually are not handed on to sufferers. In actual fact, OOP prices could rise if medication transfer from being a part of the medical (i.e., doctor administered) profit to the affected person’s pharmacy profit.
• Supplier income. Suppliers–notably 340B hospitals–could expertise a big loss in income as drug administration strikes from hospital-based pharmacies to payer-owned/managed specialty pharmacies.
• Drug wastage. “As a result of medication obtained through white or brown bagging are particular to a person, versus the buy-and-bill course of whereby physicians buy medication to have in-stock, any extra drug within the white or brown bagged vial should be discarded and can’t be used for one more affected person, leaving the payer and affected person liable for the whole vial and related cost-share.”

Equally, criticism of web site of providers restrictions embody: (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 limiting white bagging and 9 states (AZ, CA, IL, KY, MO, NY, OH, WV) have proposed laws that may limit payer-mandated white bagging
• Brown bagging. Two states (VA and VT) have carried out insurance policies to ban brown bagging. Proposed laws in three states (CA, IL, NY) would prohibit brown bagging along with white bagging
• Website of service. Three states (AR, MN, TN) have handed laws prohibiting payers from requiring a clinician-administered drug to be infused at residence.