March 2014 Edition Vol.11, Issue 3

The Evolving Use of White Bagging in Oncology

The Evolving Use of White Bagging in Oncology (cont.)

Financial pressures experienced by oncology practices over the last several years increase practices’ sensitivity to carrying costs and reimbursement risk – and thus, indirectly drive white bagging. Financial pressure stems primarily from decreased payer reimbursement (including the sequester impact) and patient ability to pay their co-pay or co-insurance (for which practices are at risk). In the 2013 Kantar Health Practice Manager survey, decreased payer reimbursement accounts for 50% of mentions as the primary reason for decreased infusion revenues; patient inability to pay is the next most cited reason (Figure 7).

In addition to these financial motivations, growing oncologist comfort with and reliance on SPs for oral oncolytics may be supporting increased practice use of SPs for IVs. Kantar Health’s survey of oncologists supports a growing comfort with orals based on the services SPs provide (Figure 8). Practices are likely to leverage the relationships they have with a specific SP for oral fulfillment to support selective white bagging of physician-administered drugs.

Conclusion

The confluence of payer and provider drivers is likely to precipitate a slow but steady growth of white bagging of physician-administered oncology drugs over time. The result will likely be a combination of models in oncology – buy and bill and white-bagging – co-existing across provider segments and even within practices. Since payer reimbursement rates in the context of price increases and GPO contracting can differentially impact products’ margins, manufacturers need to understand how their products’ use may – or may not – be impacted by  white bagging.

Additionally, physician choice of white bagging for select products may signal unfavorable economics for those products, which manufacturers may be able to address. Are payers disadvantaging the product? Have price increases outpaced ASP?  Are GPO contracting terms creating provider carry cost issues and risk? As one example, BMS has created a limited distribution for Yervoy through McKesson Specialty and Oncology Supply, with a requirement that the SPs extend payment terms to community practices, addressing the risk of carrying costs.

In any case, manufacturers of IV products may want to expand relationships with SPs and leverage their relationships with customers, e.g. sharing reimbursement and financial assistance materials to support dispensing.

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About Kantar Health

Deni Deasy Boekell is a Senior Director, Commercial Planning at Kantar Health.

Kantar Health is a leading global healthcare advisory firm and trusted advisor to the world’s largest pharmaceutical, biotech, and medical device and diagnostic companies. It combines evidence-based research capabilities with deep scientific, therapeutic and clinical knowledge, commercial development know-how, and marketing expertise to help clients launch products and differentiate their brands in the marketplace.

Kantar Health’s oncology-related offers include Oncology Market Access US (OMA US), which provides strategic and tactical insights into the evolving oncology landscape. Combining Kantar Health’s commercial and clinical expertise in oncology, OMA US provides cutting-edge information and analysis on critical reimbursement, coverage and competitive issues in the US oncology marketplace.

If you would like us to act as catalysts for you, contact us at www.kantarhealth.com/contactus

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