A Prohibition on White Bagging- a Researched Step in the Wrong Direction

Kate Morthland

Today, many Americans are unable to afford the drugs they need due to their high cost, leaving many individuals taking medicine not as prescribed or forgoing the medication entirely.  Americans have little to no knowledge of the manufacturing, purchasing, and delivery of prescription drugs.  The drug supply chain has sparked interest with many policymakers looking to drive down the cost of drugs to consumers.  However, when crafting said policy changes, it’s paramount to understand each of the entities and their roles in that supply chain.  For example, most consumers probably never heard the term “White Bagging,” but it is likely they know someone who is or has been on the receiving end of this prescription drug distribution process. 

To properly understand what white bagging is, you need to know the players within the distribution process.  Specialty pharmacies are a critical component of this drug delivery process.  A specialty pharmacy is unlike the pharmacy you go to refill basic management prescriptions.  Rather, a specialty pharmacy is designed to store and provide specialty medicines for patients with complex or rare health conditions.[1]  Examples of medications stored at specialty pharmacies include cancer drugs, medication for arthritis, hepatitis C and multiple sclerosis.[2] These complex and often expensive drugs need special storage and containment, often requiring a drug to remain at a specific temperature or condition until it is administered by a physician or a clinician. This process is in place to maintain the integrity and viability of a very expensive but effective drug when utilized properly – and not to simply require processing by a specific pharmacy.

 The process of White Bagging includes a specialty pharmacy and a hospital or physician’s office.  During the white bagging process, the specialty pharmacy receives an order from the hospital or physician’s office and works with both the patient and the physician to prepare the medication.  The specialty pharmacy will check the dosage requirements as well as the patient’s drug interactions when preparing the medication (a process not always checked by the healthcare provider).  Confirming potentially dangerous drug interactions is critical because drugs stored in specialty pharmacies can have serious side effects, requiring more oversight to ensure patient safety.[3] The drug is then delivered with specific handling and temperature-controlled environments, so as to not compromise the drug during the delivery process to the physician or facility to be administered to the patient.

The benefits of utilizing a specialty pharmacy through the white bagging process are found both in the patient’s wellness and their wallet.  A specialty pharmacy’s model is patient-centric, by connecting patients to mediations, providing patient care services required by the medications prescribed, and financially supporting patients with the costs of these often-expensive prescriptions.[4]  These pharmacies are different from the retail pharmacies not only for their specific storage facilities for complex drugs but in their patient monitoring and frequent communication with medical professionals or caregivers of the patient.[5]  The white bagging drug delivery process serves as a cross-check for patient safety.  The benefits of specialty pharmacies go far beyond patient safety, getting at the source of frustration for many patients—drug cost.

In the US, the use of specialty drugs is less than 2%.[6]  However, specialty medications make up 83% of medical drug expenditures![7]  With most of the overall drug costs coming from specialty drugs, processes must be put in place that assists consumers with a cost-effective solution to obtaining the medications they need.  Cue white bagging. 

To reduce the overall cost of the drug to the patient, insurance carriers work with pharmacies utilizing the white bagging process to ensure the lowest out-of-pocket cost to the consumer by submitting the claim through the prescription drug benefit.[8]  With a process in place to promote patient safety and drive expensive drug costs down, what are the logical reasons behind policies seeking to prohibit white bagging? 

Some larger hospitals and outpatient centers prefer the “buy and bill” method of administering and storing complex medications.  The buy and bill process includes hospitals and physicians purchasing the drugs and storing the drugs themselves, cutting out the specialty pharmacy.[9]   While this might work for larger hospitals with the space and finances to adhere to the special storage and handling for these complex drugs, a prohibition on white bagging would leave rural and smaller hospitals and facilities with no process to obtain these important medications, furthering health deserts that are prominent in rural areas of the State. 

Beyond storage concerns for rural hospitals, research has shown that hospitals significantly mark up the medications when utilizing the buy and bill method.[10]  The Journal of the American Medical Association (JAMA) recently shed light on the mark up hospitals place on cancer drugs.  The study concluded that hospitals mark up cancer therapies anywhere from 120% to 630%.[11] Additionally, in a study conducted by Milliman regarding consumer drug costs to treat multiple sclerosis, patients had the lowest out-of-pocket cost when the drug was obtained from the pharmacy using the plan’s prescription drug benefit.[12] When the physician, hospital, or facility purchases and stores the drug to administer to the patient without working with the specialty pharmacy, the claim is billed to the patient’s medical insurance, often at a much higher cost.[13] It is clear from the research that prohibiting white bagging would allow the continuance of excessive hospital price markups for complex drugs used by patients with rare and serious medical conditions.

The cost of drugs is skyrocketing.  Illinois needs a process that ensures consumer safety and cost-efficiency.  Prohibiting white bagging would harm patient safety as well as drain the pocketbooks of many struggling Illinoisians.  A prohibition on white bagging is a researched step in the wrong direction. 

[1] Specialty Pharmacies Help Improve Health Care Affordability, New Research Confirms; Newsworthy; Specialty Pharmacies Help Improve Health Care Affordability, New Research Confirms | Cigna Newsroom (Accessed Jun. 28, 2022)

[2] What are Specialty Pharmacies; ThienLy Neal and Joshua Murdock; Good Rx Health; What Are Specialty Pharmacies, and Why Do They Exist? - GoodRx  (Oct 26, 2021).

[3] Id.

[4] What is a Specialty Pharmacy?; National Association of Specialty Pharmacy; What-Is-Specialty-Pharmacy-090718.pdf (naspnet.org) (Accessed Jun. 28, 2022)

[5] Id.

[6] Id.

[7] Appendix: White Bagging Dispensing, Assumptions and Methodology for National White Bagging Savings Estimates; PCMA;  APPENDIX-White-Bagging-Dispensing.pdf (pcmanet.org) (Accessed Jun. 28, 2022).

[8] The Pharmacy Benefit Brief; PCMA;  The Pharmacy Benefit Brief | November 2021 | PCMA (pcmanet.org) (Nov. 18, 2021).

[9] Id. at 8 and Hospital- Administered Cancer Therapy Prices for Patients with Private Health Insurance; Xiao R, Ross JS, Gross CP, Dusetzina SB, McWilliams JM, Sethi RKV, Rathi VK; JAMA Intern Med. 2022 Jun 1;182(6):603-611. doi: 10.1001/jamainternmed.2022.1022. PMID: 35435948; PMCID: PMC9016607.

[10] Hospital- Administered Cancer Therapy Prices for Patients with Private Health Insurance; Xiao R, Ross JS, Gross CP, Dusetzina SB, McWilliams JM, Sethi RKV, Rathi VK; JAMA Intern Med. 2022 Jun 1;182(6):603-611. doi: 10.1001/jamainternmed.2022.1022. PMID: 35435948; PMCID: PMC9016607.

[11] Id.

[12] Site of Service and Cost Dispersion of Infused Drugs, a case study of patients with multiple sclerosis; Gabriela Dieguez, Tyler Engel, and Nathaniel Jacobson; Milliman White Paper; Site of Service and Cost Dispersion of Infused Drugs (milliman.com) (Dec. 2019).

[13]Id.