AMCP encourages policymakers to support efforts by managed care organizations (MCOs) to improve health outcomes while managing escalating drug costs using innovative drug distribution models. For provider-administered drugs, providers traditionally purchased medications, administered them to patients, and billed the MCO for reimbursement. MCOs are changing this approach, using bagging models for certain medications to better control drug costs.
The pharmaceutical dispensing model known as white bagging involves delivering specialty medications directly to the healthcare professional for administration.1 The goal of this model is to reduce drug costs by streamlining pharmaceutical distribution and negotiating better terms with manufacturers. For example, white bagging shifts coverage from the medical benefit to the pharmacy benefit, which is likely to allow greater access to manufacturer rebates. By facilitating direct shipments from specialty pharmacies to providers, MCOs can streamline the medication delivery process, reduce administrative burdens, and mitigate potential disruptions in treatment plans. White bagging also fosters collaboration between MCOs and specialty pharmacies, promoting a more integrated and patient-focused approach to care.
AMCP supports a regulatory environment that encourages efficient and secure medication distribution channels. Policies should ensure the integrity and safety of the pharmaceutical supply chain, emphasizing adherence to stringent quality standards and oversight mechanisms. Collaboration between MCOs and regulatory bodies is essential to establish guidelines that safeguard patient safety and privacy while optimizing the delivery of specialty medications.
Brown bagging policies allow patients to pick up their prescribed drugs at a specialty pharmacy or have the drugs delivered to them. Then the patient brings the drug to the healthcare provider for administration. MCOs supporting brown bagging can leverage the retail pharmacy network, potentially reducing overall healthcare costs while providing patients with the flexibility to choose pharmacies that align with their preferences and needs. Although not ideal for medications which require special handling, brown bagging may nonetheless be a useful tool for lowering drug costs.
Brown bagging encourages patient empowerment, engagement, and drug education. It enables thorough medication reviews, assisting medical professionals and enhancing patient care. Brown bagging also shifts coverage from the medical benefit to the pharmacy benefit, which is likely to allow greater access to manufacturer rebates, further lowering costs.
Legislative and regulatory policies should balance patient empowerment with the need for robust oversight to guarantee the authenticity, safety, and efficacy of medications. Measures should be in place to ensure that retail pharmacies adhere to established quality standards, and MCOs should be encouraged to actively engage in partnerships that prioritize patient education and safety.
Clear bagging is the distribution model involving a healthcare system’s internal specialty pharmacy dispensing the drug and delivering it to the healthcare provider for administration.2 The approach minimizes waste by distributing the medication to the patient only when it is being administered. Because the drug is dispensed in-house, treatment delays will also be minimized, potentially improving outcomes.3
Regulatory frameworks should encourage MCOs to adopt standardized reporting practices, providing both providers and patients with comprehensive information on drug pricing, efficacy, and available alternatives. Policymakers can contribute to fostering a culture of transparency by promoting industry-wide standards and incentivizing adherence to clear bagging practices.
Gold bagging, characterized by the use of preferred specialty pharmacies for high-cost medications, is the distribution model where a health system oversees the entire process, including prescribing, dispensing, and administering.4 Gold bagging is touted as a more controlled approach with fewer potential failure points.5 However, this approach allows health systems to use their in-house specialty pharmacy to retain profits for the health system and prevents MCOs from negotiating favorable terms, optimizing patient outcomes, and managing costs effectively. By strategically partnering with specific specialty pharmacies, MCOs would be able to ensure the provision of high-quality medications while containing expenses.
AMCP opposes legislative and regulatory policy that encourages greater use of this distribution model. Instead, policymakers should promote efforts to manage costs as well as industry standards for reporting and transparency.
In conclusion, AMCP supports the use of bagging models where they reduce rising drug costs. The development of a regulatory framework that supports these practices requires a delicate balance between encouraging innovation and ensuring patient safety, privacy, and fair competition. These programs can improve healthcare quality, by boosting medicine safety, encouraging patient interaction, and simplifying distribution. To fully capitalize on bagging procedures' advantages, a harmonious balance between their advantages and difficulties is required. Managed care pharmacies can benefit from these procedures by embracing innovation, encouraging good communication, and upholding strict control to build a healthcare ecosystem that is safer, more effective, and patient focused.
See also:
AMCP Legislative and Regulatory Positions
Revised by the AMCP Board of Directors, February 2024
1 NABP, White and Brown Bagging Emerging Practices, Emerging Regulation (Apr 2018) https://nabp.pharmacy/wp-content/uploads/2018/04/White-Bagging-and-Brown-Bagging-Report-2018_Final-1.pdf
2 https://www.healthcare-economist.com/2023/04/25/white-vs-brown-vs-clear-bagging/
4 DeMarrais, L. (2023). Benefits and Challenges of White, Brown, Clear, and Gold Bagging | Prescribed Perspectives. https://www.mckesson.com/Pharmacy-Management/Health-Systems/Prescribed-Perspectives/Benefits-and-Challenges-of-White-Brown-Clear-and-Gold-Bagging/
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