Why White Bagging Is a Symptom of High Drug Costs, and What States Are Doing

The rise of white bagging is wreaking havoc for patients and has spurred legislation in several states, according to 2 experts who said their oncology practices refuse to take part in the practice. With white bagging, pharmacy benefit managers (PBMs) require certain high-cost drugs to be shipped from their own specialty pharmacies to practices, where clinicians then administer the drugs to patients—assuming the drugs arrive safely and no dose changes are needed.

But the real issue, according to a third expert on Friday’s panel on PBM practices during the National Comprehensive Cancer Network (NCCN) annual meeting, is that payers are determined to do something about rising drug costs.

Michael Kolodziej, MD, who was a longtime medical oncologist and then an executive with Aetna/CVS before joining ADVI, noted that oncologists didn’t create the “buy and bill” reimbursement system, in which they receive 6% of the average sales price of the drugs they administer. The optics of this method are “problematic,” he said, especially with so many new expensive cancer drugs being approved through the FDA’s accelerated pathway. Payers, he said, are skeptical of the value of some treatments; indeed, in the past year, some drug companies withdrew indications after confirmatory trials failed.

“Payers don’t like this,” Kolodziej said. “And, oh, by the way—neither does the federal government.”

Kolodziej was joined on the panel by Kathy W. Oubre, MS, Pontchartrain Cancer Center; Kenneth M. Komorny, PharmD, BCPS, Moffitt Cancer Center; and Michael I. Rabin, MBA, MPA, City of Hope National Medical Center, who served as moderator.

Oubre explained the difference between white bagging and clear bagging, in which a provider’s in-house specialty pharmacy prepares a medication and administers it during a patient visit—which oncologists prefer because doses can be adjusted based on lab reports taken that day. Brown bagging, another cost-cutting practice, involves shipping drugs directly to the patient. In some cases, the patient is expected to bring the drugs to the oncologist for administration. Documented cases include patients leaving drugs in their car instead of putting them in the refrigerator.

Patient safety. Both Oubre and Komorny raised safety and chain-of-custody issues that have been reported to pharmacy boards and professional associations, such as the Community Oncology Alliance. These include drugs shipped to the wrong address, drugs left on loading docks not at a controlled temperature, or drug shipments that were interrupted due to weather events.

Komorny said delays in shipping a patient’s granulocyte colony-stimulating factor are extremely dangerous. “In these cases, patients have missed this rescue medication when the medicine was due,” he said. “Not receiving this medication when due could lead to significant complications, including neutropenic fever, which of course has a higher mortality rate.”

“All of these issues negatively affect the patient, by resulting in delays in care,” Oubre said. “And if it’s a dose reduction, you’re talking about additional copays for that patient.”

Frustration over cost. Noting that the issue might be sensitive to some NCCN member institutions, Kolodziej explained that payers are frustrated by hospitals that inflate the cost of oncology drugs. He cited both a report paid for by the pharmaceutical industry that found hospitals mark up drug prices by an average of 500% and data that show more than half of hospitals now take part in the 340B program, which allow them to participate in drug discount purchasing programs while charging payers full price.

The combination is not sustainable, he said, and that’s why white bagging exists. Kolodziej noted he wasn’t defending the practice—he didn’t allow it when he was practicing. But the policy is a way for vertically integrated payers and PBMs to push down on costs, by controlling site of service. Step edits are another tactic. “The fact of the matter is that all of these policies can be executed now, because they can control the pharmacy benefit in house,” he said.

It might be in oncologists’ interest to embrace a phaseout of buy and bill for something similar to a plan advocated by former American Medical Association President Barbara McAneny, MD, which pays oncologists for the actual services they provide with an administrative fee to the drugs they administer.

“I think most of us would agree that we’d like to be paid for the work that we’re doing,” Kolodziej said. “The question is, how do we get from Point A to Point B?”

Legislation. In her home state of Louisiana, Oubre successfully advocated for a law that says payers cannot refuse to reimburse providers for approved physician-administered drugs and services “even if these services are obtained at out-of-network pharmacies,” according to the summary. Oubre has since pressed for similar laws in other states, and governors in such politically diverse states as Michigan, New York, and Texas have signed legislation.

At the federal level, she’s working with bipartisan sponsors on the TACT Act, which requires that patients be provided their oral cancer drugs within 72 hours, allowing for situations such as obtaining financial support, that are “understandable and acceptable.”

Hospital liability. Komorny sought to help NCCN members with connections to institutional pharmacies understand the laws and regulations that apply to white bagging, because the real-world situations that community oncology has experienced—and the potential liability—will only grow as this practice becomes more widespread.

“As this practice is being expanded to hospitals, hospital pharmacies need to be aware of how this practice might affect hospital regulations that must be followed,” he said. CMS accreditation by the Joint Commission requires multiple standards that hospitals must follow, including 9 specific standards related to medication management, 10 standards adopted in March 2001 to prevent drugs from being diverted, and 5 standards developed in May 2007 that involve compounding under proper supervision and sterile conditions. Separately, the FDA has supply chain requirements that must be followed to prevent counterfeiting.

Komorny outlined the detailed steps taken to ensure temperature control in sunny Florida.

“Within the pharmacy, we store these medications in temperature-regulated storage units that are monitored 24/7, 365 days a year. Electronically, these units record the temperature every 5 minutes, average those 3 temperatures every 15 minutes, and document that 15 minute average continuously. If there’s any deviation from the recommended range, we’re alerted and take action,” he said.

Hospitals, he said, must follow the same regulations—and are expected to maintain these standards with all the drugs coming in the door from unaffiliated pharmacies. Rules state the hospital must remove any vials that are damaged or stored outside FDA-recommended temperature ranges.

An unaffiliated specialty pharmacy will receive, store, prepare, and ship medications via third-party shipping companies. “As we did not have possession of this medication until the very end, it’s impossible for us to assure proper storage or protection against contamination or counterfeiting. Cases of delayed shipments and receipt of boxes with room temperature freezer packs, along with medications that should have been refrigerated, are not uncommon,” Komorny said.

It’s for reasons like this that Moffitt and Pontchartrain will not allow white bagging. Komorny outlined some scenarios that spoke to serious patient safety issues around chain of custody and dosing—some of which involve the transfer of data for the prescription itself, as well as legal questions of whether the hospital pharmacy would need to assume additional levels of responsibility to get a drug to a patient. Sometimes, insurers try to avoid this by brown bagging the drugs to the patient. But Komorny warned that if something went wrong, the hospital pharmacy and perhaps the individual pharmacist risk violating state laws.

And yet, if a fill is missed, there is the chance that a state board of pharmacy will discipline the pharmacy or pharmacist. “Brown bagging into the hospital is becoming very popular with insurance companies,” Komorny said. “Regulatory and legal compliance with white bagging can be impossible to meet for health system pharmacies.”

“At the end of the day, it’s not the insurance company and the PBM, or even the specialty pharmacy that is going to be accountable to the regulatory bodies, including the Board of Pharmacy; it’s going to be your hospital and your pharmacy that will be held accountable,” he said.