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NCCN Panel: How White Bagging Is Tied to High Drug Costs


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.

White bagging is wreaking havoc for patients and creates liability issues for hospital pharmacies, according to experts who appeared on a panel Friday during the National Comprehensive Cancer Network (NCCN) annual meeting, which was held in a virtual format.

Kathy W. Oubre, MS, CEO of Pontchartrain Cancer Center and a board member of The Center for Biosimilars®, discussed state and federal legislation to respond to the practice.

Other panelists were Kenneth M. Komorny, PharmD, BCPS, of Moffitt Cancer Center; Michael Kolodziej, MD, who was a longtime medical oncologist and then an executive with Aetna/CVS before joining ADVI; and Michael I. Rabin, MBA, MPA, of City of Hope National Medical Center, who served as moderator.

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. That’s assuming the drugs arrive safely, and no dose changes are needed, which often is not the case, the panelists said.

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. This creates safety and chain of custody issues for the practice or hospital that must administer the drugs.

Kolodziej said the real issue is that payers are determined to do something about rising drug costs, so white bagging has become their way of managing “site of service.” He 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. But optics of this method have become “problematic,” he said, especially with so many new, expensive cancer drugs being approved through 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 the does the federal government.”

Patient safety. Oubre and Komorny listed the problems with white bagging that have been reported to pharmacy boards and professional groups, such as drugs being shipped to the wrong address, drugs shipments that were interrupted due to weather events, or drugs left by delivery services not at a controlled temperature.

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.

Kolodziej said he wasn’t defending white bagging—he was simply noting why it exists. Rabin asked: how else will payers manage drug costs?

“I think commercial health plans are going to aggressively manage formulary,” Kolodziej said, noting that many oncologists were already “living that” as they use biosimilars—and being required to use a specific product, even in supportive care.

“That could be managed through prior authorization, that could be managed through step therapy. There's a bunch of ways that that can be managed—you'll get paid. But you'll get paid only if you give [a certain] drug. They’re tied together,” he said.

The federal government’s move toward Medicare price negotiation, which has been discussed for years, could actually be Medicare price setting, which Kolodziej noted is “not unlike what happens in other countries.”

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, which relate to medication management, diversion prevention, and drug stability and safety. Temperature control is extremely important. Separately, the FDA has supply chain requirements that must be followed to prevent counterfeiting.

Hospitals, he said, 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.

This is why many practices, including 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 risked violating state laws.

“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.

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