March 2014 Edition Vol.11, Issue 3

The Evolving Use of White Bagging in Oncology

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

Payer Drivers

White bagging may be attractive to payers for a few reasons. Firstly, partnership with SPs allows payers to extend the reach and depth of utilization management on the pharmacy benefit. To accommodate this demand, SPs are ‘stepping up to the plate’ by partnering to offer these services. In addition, white bagging may be cost effective if payers are able to negotiate more favorable dispensing rates with SPs than through buy and bill. One-third of respondents in Kantar Health’s 2013 MCO survey reported that they had implemented or expanded their use of specialty pharmacies for office-administered drugs in 2013, and plan future increases in the use of SPs in 2014 (Figure 4). 

The upward trend in implementing use of specialty pharmacy for dispensing of some office infused drugs demonstrates payers’ interest in replacing buy and bill with a “neutral” and more easily managed alternative.

Despite these advantages and growth, white bagging in oncology is unlikely to completely displace buy and bill. White bagging, particularly in oncology, is complicated because the drugs and regimens are complex and often require dosing adjustments at the time of administration. There are inventory management implications for the practices in storing and using the IV drug for a specific patient, and the potential for wastage if the patient’s schedule changes. Payers who recognize this complexity, often avoid “mandating” white bagging because the “dispensed” and “paid for” drug may end up being wasted if the patient requires a different drug or dosing which cannot be adjusted after the SP has shipped the product to the clinic. Therefore, payers are more likely to encourage the purchase of physician-administered IV cancer drugs through SPs via reimbursement policy (38% of payers) rather than a mandate (25% of payers); only about a third of payers are not actively influencing the channel at all (Figure 5).  

Provider Choice

In addition to payer mandates, providers may choose to white bag to avoid carrying costs and the financial risk associated with very expensive drugs (Figure 6). Around 70% of practice managers in Kantar Health’s 2013 survey reported white bagging in some volume. These practices estimate 22% of practice drug volume flows through this channel. 

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