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This week, we are joined by Kyle Robb, a state policy and advocacy associate for the American Society of Health System Pharmacists (ASHP). Kyle discusses the rise in payer-mandated white bagging, why hospital pharmacists are concerned about the trend, and how health providers and patients are affected by this model. Before the interview, our news update covers the critical step the Health Resources & Services Administration (HRSA) recently took to enforce the law on drug companies that have refused discounts to 340B covered entities when drugs are dispensed at contract pharmacies.
340B Insight provides members and supporters of 340B Health with timely updates and discussions about the 340B drug pricing program. The podcast helps listeners stay current with and learn more about 340B to help them serve their patients and communities and remain compliant. We publish new episodes twice a month, with news reports and in-depth interviews with leading health care practitioners, policy and legal experts, public policymakers, and our expert staff.
Speaker 1 (00:05):
Welcome to 340B Insight from 340B Health.
David Glendinning (00:13):
Hello from Washington, DC, and welcome back to 340B Insight, the podcast about the 340B Drug Pricing Program. I'm David Glendinning with 340B Health.
David Glendinning (00:24):
This episode is sponsored by Caravan Health. Caravan Health creates a sustainable model for safety net providers to Excel in value-based care in the 340B. Through new technology, data and workflows, covered entities in a Caravan-supported ACO can maximize 340B discounts while remaining compliant with HRSA audit requirements. These savings can be used to improve patient care. For more information, visit caravanhealth.com.
David Glendinning (00:55):
Our guest today is Kyle Robb with the American Society of Health System Pharmacists. We spoke with Kyle about white bagging, a specialty pharmacy practice that has become much more prevalent, including in the 340B world. We know many of you have questions and more than a few concerns about the rise in payer-mandated white bagging policies.
David Glendinning (01:17):
But before we go to that interview, let's take a minute to cover some of the latest news about 340B.
David Glendinning (01:30):
There has been major activity in the fight over 340B contract pharmacies in recent weeks. On May 17th, the Health Resources and Services Administration sent letters to the six drug companies that have stopped offering 340B discounts on drugs dispensed to contract pharmacies. HRSA told the companies that their actions are a direct violation of the 340B statute, instructed them to submit plans to restore this 340B pricing and ordered repayment of past overcharges. The deadline for those plans was June 1st. If the companies refuse to provide those plans in a timely manner, HRSA said it could consider imposing hefty financial penalties for each overcharge.
David Glendinning (02:15):
This is, of course, a huge development in this dispute, but it is not the end of the fight. The drug companies receiving the letters quickly sought to block these enforcement actions in federal courts. The legal proceedings involving multiple lawsuits in multiple jurisdictions raise the likelihood that this issue will not be resolved any time soon. But the HRSA order could prove to be a key turning point in the nearly year-long effort to stop these drug company actions. You can visit the show notes to read the latest.
David Glendinning (02:55):
Now for our feature interview with Kyle Robb. Kyle is a pharmacist who started his career at a 340B hospital system before moving into health policy. He now serves as a state policy and advocacy associate for ASHP, where the issue of payer-mandated white bagging comes up frequently in his work. Myles Goldman is away this week, so I sat down with Kyle to learn more about this concept. Here's that conversation.
David Glendinning (03:23):
I'm joined today by Kyle Robb. Kyle, thank you for joining us today and welcome to 340B Insight.
Kyle Robb (03:30):
Thank you, David. Happy to be here.
David Glendinning (03:32):
On our topic today, I confess that when I'd first heard the term white bagging, it sounded like it had to do with someone's lunch order, but I understand it's much more serious than that. So what is white bagging?
Kyle Robb (03:45):
I think a important thing to mention, first off, when we start talking about white bagging is that this applies to clinician-administered drugs. What we say we mean clinician-administered drugs is basically a drug that cannot reasonably be self-administered by a patient and, typically, is administered under direct supervision of medical professionals. Think IV infusions, implantable drugs, stuff like that, not your normal self-administered drugs.
Kyle Robb (04:08):
Traditionally, the way that reimbursement for these drugs occurred was through what we call the buy-and-bill model. That basically this means the provider of the infusion purchases the drug beforehand. The patient arrives at the appointment, they receive the infusion. Then after the infusion, the provider bills the health insurance plan for both the drug and the cost associated with administering the drug. Typically, that's reimbursed through the medical benefit.
Kyle Robb (04:34):
In white bagging, rather than the administering facility directly purchasing the drug, the drug is dispensed through a specialty pharmacy that is often directly affiliated with the health plan, or the PPM that administers the plan, and that specialty pharmacy dispenses the drug and then ships it via common carrier, usually like UPS or USPS, directly to the clinic location. The clinic then receives that single patient-specific drug, and then they administer that drug to the patient. So in the case of white bagging, the drug is reimbursed via the pharmacy benefit and not via the medical benefit and reimbursement for the drug is decoupled from reimbursement for associated services with the administration.
David Glendinning (05:14):
And just to make things more confusing, there's also something called brown bagging and clear bagging, correct?
Kyle Robb (05:21):
Correct, yes. Brown bagging, similar to white bagging, also occurs when these clinician-administered drugs are dispensed via specialty pharmacies under the pharmacy benefit, but rather than being mailed directly to the provider facility for administration, they're actually mailed directly to the patient's house.
Kyle Robb (05:38):
Really just imagine getting the Amazon box on your front porch with an IV bag in it. Then you have to open up that box, put it in your fridge and then wait maybe one week, two weeks until the date of your appointment. Then put it in your car with you and drive to the appointment and bring it with you, wait in the waiting room with it, and then have it administered. That's brown bagging.
Kyle Robb (05:56):
What distinguishes clear bagging is that it comes from a pharmacy that is under common ownership with the administering facility. So think if you're receiving the infusion at a hospital outpatient system, it's from the hospital's own specialty pharmacy. So while their reimbursement structure is similar to white bagging and brown bagging, a lot of the safety concerns that we see with white bagging and brown begging don't as much exist with clear bagging because you do have that element of common ownership.
David Glendinning (06:24):
So with white bagging, what is the harm of payer sending a specific patient's medications to the hospital or to the clinic for administration?
Kyle Robb (06:35):
As I alluded to in the previous answer, care coordination is fundamentally always going to become more complicated or more difficult if you have to deal with additional external entities that you're injecting into the care provision process that would not have previously been there. You're requiring an additional shipping step from an external specialty pharmacy to provide a drug that these facilities have direct access through, through their existing wholesaler agreements.
Kyle Robb (07:00):
Typically, a hospital pharmacy will have an agreement with a wholesaler where they order the drugs that they need every day, and one specific person shows up with several totes of medications. They show up at the same place every day, they have a standard protocol that's written into the contract that says how they are to go about bringing the drugs, when they have to bring them by, who they have to get to sign for the drugs, how they're going to store and handle the drugs.
Kyle Robb (07:21):
None of those things exist in white bagging. It is really just a common package carrier delivering as if it's any other package. There are countless stories about drugs, packages being left at loading docks delivered to the wrong clinics, just delivered generally to the wrong place within the health system, because a lot of health systems are rather large.
Kyle Robb (07:39):
Even if we do receive the drugs and they don't show obvious signs of tampering or mishandling, and they are received at their appropriate location, the receiving health system still has no access to the drug pedigree information as mandated by the Drug Supply Chain and Security Act, commonly known as DSCSA. They don't know where these drugs came from fundamentally. Really all they can do is visually inspect and try to get an idea of whether or not the package was mishandled. But even then, they're not going to have the same security in the drugs that they're receiving, the same way they would if they were ordering through normal wholesaler channels.
Kyle Robb (08:13):
Another thing is delays in treatment can result from white bagging in a number of different ways. There could be drugs that are sitting on the shelf at the health system pharmacy that maybe the white bagging pharmacy, the plan-affiliated pharmacy, doesn't have access to because there is a recent drug shortage of it, or they use a different wholesaler or supplier and they don't have access to these drugs. In that case, even though the drug is sitting on the shelf at the office where the patient receives the infusion, that health system can't use that drug. They have to wait around for the plan pharmacy to resolve the shortage and send the drug.
Kyle Robb (08:47):
I love Amazon Prime. I order stuff from Amazon all the time. They say it gets there in two days. Usually it does get there in two days, but sometimes it doesn't. Sometimes there's delays. We go extra days without having to the package, and that's fine. I can wait a couple of extra days for cat food, but I don't think a lot of these patients can wait a couple extra days for these infusion medications.
Kyle Robb (09:04):
Beyond shipping delays, white bagging also disrupts the administrative facility's ability to make just-in-time treatment decisions. So a lot of the patients that receive these infused drugs, these clinician-administered drugs are patients with chronic conditions that have extremely complicated health conditions and require the most complicated care. That means that they oftentimes have to get same-day lab draws and their condition constantly has to be reassessed to see if their therapy is appropriate.
Kyle Robb (09:32):
White bagging doesn't really allow for adjustments in therapy on the same day as treatment. White bagging can result in delayed hospital discharges because the patient might have one or two more doses of infusion drug that they could potentially receive just in an outpatient clinic.
Kyle Robb (09:48):
The flip side of that coin is white bagging can also cause unnecessary admissions. Again, a lot of these complicated patients have delays in treatment. Sometimes they can't wait that extra couple of days for the package to arrive or for the drug to become available. That results in them having to be admitted to the hospital to receive the same drug that was on the shelf the entire time.
David Glendinning (10:08):
I'm starting to comprehend some of the patient safety concerns that people have about payer-mandated white bagging. Many of our listeners work in or with 340B pharmacies. So if a 340B pharmacy receives a white-bagged drug, can it get 340B discounts on that medication?
Kyle Robb (10:28):
The answer to that question is no. Traditionally, if we're going through a buy-and-bill or through a clear bagging process, then this drug would be supplied through the health system's existing wholesaler channels, which they would use to order products at the 340B ceiling price. Then there would be reimbursed by the same price of the plan.
Kyle Robb (10:44):
In the situation of white bagging, the drug is not purchased by the health system itself. It's purchased by the plan affiliate-specialty pharmacy, which is not a 340B entity. So in this respect, why bagging can bypass the 340B program in many situations.
David Glendinning (11:00):
Are there other financial, or I guess I'll put it resource-related issues for a hospital pharmacy's cost by white bagging?
Kyle Robb (11:09):
These hospitals still have to store and prepare these drugs prior to administration and bear all the costs associated with storage and handling of these drugs. At the point when the medication is shipped, it is actually the property of that patient and not of the health system that is receiving it.
Kyle Robb (11:24):
That's important for a number of reasons. That means that these health systems, when they do receive these drugs, they have to keep them in separate patient-specific segregated stock. A lot of these drugs do have very special and specific stores and handling requirements, so that can actually be a rather complicated and costly thing for a health system to have to do.
Kyle Robb (11:43):
In addition to that, the idea that this is the patient's property presents a number of other issues associated with white bagging. It means that white bagging is often associated with more waste of medications. Think about it. If a drug comes in a single dose vial of 10 milliliters and the patient's treatment plan only calls for you to use three of those milliliters, under a traditional buy-and-bill model, you would puncture the vial, you'd use 3 milliliters for Patient A, you'd use 3 milliliters for Patient B, you'd use 4 milliliters for Patient C, and you wouldn't have to waste anything.
Kyle Robb (12:15):
Under the white bagging model, Patient A's drug arrives in the mail that is Patient A's property. You have to use 3 milliliters for Patient A and then throw those other 7 mils in the trash. If we destroy it, well, you're destroying the patient's property, it's not your own property. So does the hospital have the ability to destroy that drug?
Kyle Robb (12:31):
Existing laws around mailing prescription drugs say they can only be sent directly to the patients at the address that is on the package. So then is it against the law for that health system to move it from one physical address to another address within the health system? There are just a lot of financial and resource-related questions or sort of a lot of ways that white bagging consumes additional resources for these hospitals.
David Glendinning (12:55):
I know patient's safety is paramount, the issues we talked about before, when it comes to concerns about mandated white bagging. Are there some best practices for pharmacists to keep patients safe if they have one of these white bagging problems?
Kyle Robb (13:10):
Fundamentally, payer-mandated white bagging models are an inherently-flawed practice because, again, focus on the first half of that term, payer-mandated. We're seeing situations in which the hospital never agreed to receive drugs via this manner. This way of receiving drugs is being forced on these facilities.
Kyle Robb (13:28):
Traditionally, the practice of distributing drugs via what we now know as white bagging or brown bagging was only used in very rare and very exceptional cases to ensure that patients had access to these medications. When this is occurring on a very small scale or in very rare scenarios, then we can afford to devote extra attention, extra care to making sure that nothing bad happens because we're doing things outside of the sort of normal protocol.
Kyle Robb (13:55):
I think it's important to mention that ASHP's position on this is that we are against payer-mandated white bagging. We aren't against the idea of white bagging. We understand there might be certain unusual situations in which a provider and a patient would duly agree that it's better for them to receive a medication via this sort of distribution model. But that being said, we want that to always be a choice. We want them to be able to do this in a manner that everybody agrees is safe. And if there's any sort of disagreement about what is safe, that they should be able to acquire it via an alternative method of distribution that they think is more safe.
David Glendinning (14:29):
Can a hospital pharmacy refuse to participate in white bagging?
Kyle Robb (14:35):
Yes, to answer your question. A hospital could, and sometimes they do say that we do not accept white-bagged drugs. But that being said, everybody will tell you that is not an ideal scenario.
Kyle Robb (14:47):
Really it's putting the patient in the middle of this dispute over what is safe practices, and we don't want to do anything that really jeopardizes patient care. Again, that's why ASHP is advocating for provider and patient choice. If a plan tries to mandate white bagging, we want the hospital to have recourse to receive the drugs via alternative distribution methods and not have to turn away patients.
David Glendinning (15:11):
With all these concerns that you've laid out, why are more payers requiring white bagging of drugs?
Kyle Robb (15:19):
Fundamentally, payers believe that white bagging saves them money. Insurance advocates will be quick to point out that when they switch reimbursement of these drugs from the medical benefits side to the pharmacy benefit side and from plan-affiliated pharmacies, that they see reduction in the amount of money they spend on these drugs on a per-unit basis or per-milligram basis.
Kyle Robb (15:39):
ASHP would respond that those cost savings are an illusion, and instead of savings, there actually is just a shift in cost and not actual savings. The savings that are being "realized" by the insurers are simply being shifted on the providers in the form of uncompensated services around the preparation and administration of the drugs.
Kyle Robb (15:59):
Another component of this that is important to mention is vertical integration. If plans can mandate white bagging, rather than having these drugs be purchased through the health systems that are administering, they can mandate that these drugs be purchased by specialty pharmacies that are also owned by the PDM, that are also owned by the plan. So if these plans can keep these drug distribution channels through purely vertically-integrated setups then we can capture more of the reimbursements and service fees associated with supplying these drugs, rather than allowing the health systems to get those fees.
David Glendinning (16:35):
You've laid the debate out really well here. So what is ASHP doing about mandated white bagging and, moreover, how can those in the 340B community get involved?
Kyle Robb (16:47):
ASHP is taking a number of measures to address the issue of payer-mandated white bagging at the federal and state level.
Kyle Robb (16:55):
At the federal level, primarily we've been engaged with the Food and Drug Administration over the Drug Supply Chain Security Act that was mentioned earlier. We sent a letter to FDA along with AHA. We also sent a nearly identical letter that was co-signed by 61 health systems that outlined our concerns relating to white bagging and DSCSA and urging the FDA to take action to make sure that in any scenario, no matter how these drugs are distributed, that the end facility that is administering these drugs does have access to drug pedigree information.
Kyle Robb (17:29):
We're also engaged in the state level with both state legislators and state boards of pharmacy. Chief among questions for the board of pharmacy are really who is responsible for replacing mishandled and adulterated product? Under the white bagging model, if a medication does arrive at the final facility and by the time it arrives it's duly agreed upon that the medication was mishandled, left out on hot dock on 100-degree temperature for 12 hours and it's clearly been exposed to unsafe conditions, when that happens, who's responsible for that?
Kyle Robb (18:03):
Because in practice, oftentimes all three parties involved, being the specialty pharmacy, the carrier and the receiving facility, everybody adopts the Shaggy defense. By that, I mean shrugging their shoulders and saying, "It wasn't me," and there's no legal process to resolve that dispute and actually get that drug to the patient. But one thing that is clear to everybody is that you can't administer this drug to the patient and we need to replace this drug. So who has to replace that drug?
Kyle Robb (18:27):
Further, if there is, as we mentioned in the many of these scenarios, if there is a delay in therapy due to lack of coordination between patient, prescriber and pharmacy that's leading to adverse outcomes for patients, who's responsible for that?
Kyle Robb (18:41):
Those are some of the several questions that we're bringing up to boards of pharmacy across the country and asking them to address from a patient safety perspective.
Kyle Robb (18:50):
Fundamentally, this practice is emerging because insurance carriers are saying as the terms of their plan, that this is the only way that these drugs can be distributed or can be acquired by patients and providers. So we are lobbying state legislators to pass patient choice protections to say that insurance companies can't do that.
Kyle Robb (19:11):
Further, we want legislators to pass laws that say plans cannot require brown bagging of any drug. So we're advocating for that across several states, and we're very involved in a lot of our state organizations.
Kyle Robb (19:25):
Louisiana on May 19th passed a bill and it's Louisiana Senate Bill 191, which has actually prohibited many elements of payer-mandated white bagging. So under Louisiana Senate Bill 191, health insurance plans and PBMs cannot refuse to authorize, approve or pay any end-network provider for providing a covered clinician-administered drug to a covered person. Additionally, if drugs are white bagged in Louisiana after this law is enacted, those drugs must meet supply chain security controls as set forth by DSCSA.
David Glendinning (20:01):
Well, I know our listeners are going to be happy to hear about that progress on the advocacy side.
David Glendinning (20:06):
Kyle, I'd certainly learned a lot today about white bagging and payer-mandated white bagging, and I'm sure our listeners who already know about the concept learned a good deal more about what ASHP is doing on it and potentially how they can get involved. Thank you for joining us today.
Kyle Robb (20:22):
Thank you, David.
David Glendinning (20:23):
Our thanks again to Kyle Robb for giving us the definitive white bagging primer and getting us up-to-speed on the latest advocacy activity in that area. We value our partnership with ASHP and appreciate the opportunity to collaborate on an issue of such shared interest between our organizations.
David Glendinning (20:41):
Do you still have questions about payer-mandated white bagging that we didn't cover? Please email us at podcast@340Bhealth.org. We also welcome your episode ideas and feedback at that email address. We'll be back in a few weeks. As always, thanks for listening and be well.
Speaker 1 (21:05):
Thanks for listening to 340B Insight. Subscribe and rate us on Apple Podcasts, Google Play, Spotify or wherever you listen to podcasts. For more information, visit our website at 340Bpodcast.org. You can also follow us on Twitter at 340Bhealth and submit a question or idea to the show by emailing us at podcast@340Bhealth.org.