Wednesday, May 31, 2023
HomeHealth InsuranceWhite vs. Brown vs. Clear Bagging – Healthcare Economist

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 skill to implement these applications. As we speak, I summarize a white paper from ICER titled “White Bagging, Brown Bagging, and Web site of Service Insurance policies: Greatest Practices in Addressing Supplier Markup within the Business Insurance coverage Market“. This submit follows up my earlier submit on the subject two years in the past.


  • White bagging insurance policies ship medicine from specialty pharmacies on to suppliers on the website of service the place the drug shall be administered (usually a doctor’s workplace, HOPD, or residence infusion supplier). Suppliers are chargeable for receiving the drug supply from the specialty pharmacy, unboxing it, and storing it till the affected person is on website 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 influence of white bagging on payers and sufferers shall be mentioned later on this paper.
  • Brown bagging insurance policies require sufferers to choose up their prescribed clinician-administered medicine at a specialty pharmacy or have these medicine delivered on to sufferers, after which sufferers are chargeable for storing these medicine appropriately till the time of their appointment with a clinician, at which period sufferers deliver 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 entails a supplier, usually a hospital, creating a proper program by way of 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 a substitute for white bagging and brown bagging, thereby retaining the income related to specialty drug supply. Clear bagging additionally avoids a number of 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 widespread are these practices? Effectively, as of 2022, 27% of oncology remedy merchandise administered in doctor workplaces 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 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 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 need to drive quantity to their very own specialty pharmacies.

Restrictions on website of service meant to maneuver sufferers to decrease price websites of care are additionally turning into extra widespread. In keeping with one survey:

…by 2020 nearly 70% of business plans had site-of-service applications, of which 34% had been necessary 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 residence infusion, 19% to ambulatory infusion suites, and 14% to unbiased doctor workplaces in 2019.

Key criticisms of white and brown bagging are:

  • Affected person security. For brown bagging particularly, sufferers could not appropriately administer these specialty medicine at residence. Additionally, with lengthy journey instances, medicine could spoil if not saved correctly refrigerated.
  • Impression on deprived sufferers. For sufferers with restricted transportation possibility, brown bagging could impose a burden on sufferers.
  • Incorrect prescriptions and issue altering prescriptions. In a single survey, 66% of respondents mentioned that that they had obtained a product through white bagging that was now not appropriate because of up to date therapy 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 medicine 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 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 through 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 an additional affected person, leaving the payer and affected person chargeable for all the vial and related cost-share.”

Equally, criticism of website of companies restrictions embrace: (i) elevated affected person journey burden, (ii) decreased oversight for opposed occasion monitoring, and (iii) unfavourable influence 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 might 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
  • Web site of service. Three states (AR, MN, TN) have handed laws prohibiting payers from requiring a clinician-administered drug to be infused at residence.


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