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What’s Up with White / Brown / Clear Bagging? (reprise)

We’ve written frequently on two of the biggest trends in channel access, the shift away from buy-and-bill to other, less costly, sites of service as well as payer policies that have shifted reimbursement away from physician / hospital purchased drugs to specialty pharmacies. An article we want to review today is from Drug Channels. It is a great read and includes some fresh data to document these trends.

That article, an excerpt from a larger market report available for purchase from the company, first refreshes our understanding of the types of patient access now being employed. By now we are all familiar with White Bagging and Brown Bagging (if not, read the article). A term that is beginning to catch on is Clear Bagging in which the hospital-owned specialty pharmacy does the fulfillment.

What the data shows is that there has been a significant increase in White Bagging over the past two years with a 20% increase at physician practices and a 25% increase at hospital outpatient departments. Brown Bagging has virtually disappeared in these settings. Strangely, buy-and-bill at Home Infusion companies increased by a whopping 41% in the same time period and Brown Bagging more than doubled. Go figure! The data is based on a very large ‘n’ of payers nationally.

There are several points for further consideration.

  • First, the list of impacted drugs goes beyond Oncology….. and is growing.
  • Secondly, a number of specialty pharmacies have been designated by manufacturers as limited distribution (LD) partners (often exclusive) for certain drugs….. even bypassing traditional wholesalers. Since virtually all of these SPs are now also licensed distributors they can sell direct for professional use as a buy-and-bill drug….. under the medical benefit. (Not popular with hospitals and many providers.)
  • Next, Payer and PBM policies have ramped in the past year+ to push these transactions over to the pharmacy benefit (even less popular) through rewriting the patient benefit plan…. including introducing patient OOP if billed as a medical benefit.
  • Concurrently, PBMs and Payers have been able to co-opt these dynamics to further their cost management efforts on other, non-LD drugs. The data does not separately break out these LD drugs which further muddies up the total White Bagging picture.
  • And finally, we can more easily understand why hospitals are increasingly desperate to redirect fills internally to owned specialty pharmacies to recapture lost buy-and-bill revenue.

White Bagging Update: PBMs’ Specialty Pharmacies Keep Gaining on Buy-and-Bill Oncology Channels Drug Channels


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