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Hospitals and health system pharmacists urge FDA to take a closer look at 'white bagging'

Under white bagging, the specialty pharmacy is reimbursed by the payer, while the physician is paid only a drug administration fee.

Susan Morse, Managing Editor

(Photo by Kathrin Ziegler/Getty Images)(Photo by Kathrin Ziegler/Getty Images)

The practice known as "white bagging" is exacerbating supply chain security challenges and jeopardizing patient safety, the American Society of Health-System Pharmacists and the American Hospital Association told acting Food and Drug commissioner Dr. Janet Woodcock in a March 31 letter.

ASHP and AHA strongly encouraged the FDA to consider the patient safety and supply chain security risks of white bagging, and take appropriate enforcement action, according to the March 31 letter sent by AHA executive vice president Thomas P. Nickels and Tom Kraus, vice president of government relations for the American Society of Health-System Pharmacists.

WHY THIS MATTERS

At stake for hospitals is reimbursement.

White bagging is a method of delivery by which physician-administered drugs are dispensed by a specialty pharmacy for a specific patient, shipped to the physician for administration and generally paid under the pharmacy benefit rather than the medical benefit, according to obroncololgy.

The specialty pharmacy is reimbursed by the payer for the drug, while the physician is only paid a drug administration fee.

ASHP and AHA said payers are using white bagging to circumvent hospital supply chain controls by requiring patient medications be distributed through a narrow network of specialty pharmacies that are often directly affiliated with the payer. This disregards the Drug Supply Chain Security Act's requirements for wholesale distribution of drugs, they said. 

The Drug Supply Chain Security Act, enacted by Congress in 2013, outlines steps to build an electronic, interoperable system to identify and trace certain prescription drugs as they are distributed in the United States, according to the FDA.

THE LARGER TREND

White bagging has surged in frequency over the past decade, creating what amounts to a shadow inventory that hospitals and health systems do not legally own, and which exists largely outside of the Act's track-and-trace requirements, said the AHA and ASHP,  which represents pharmacists who serve as patient care providers in hospitals, health systems, ambulatory clinics and other healthcare settings.  

A Drug Channels report found that in 2019, nearly a third of infusion drugs provided in hospital outpatient departments were distributed via white bagging, according to the organizations. Given the growing use of payer-mandated white bagging, the ASHP and AHA said they are concerned this practice threatens the Drug Supply Chain Security Act's underlying goals. 

Further, because hospitals do not have legal title to white-bagged medications, and the drugs are delivered outside of hospital-established supply chains, white bagging can raise additional patient safety risks by enabling diversion and heightening the possibility of drug spoilage and waste, they said. 

In addition, since white-bagged drugs bypass established supply chain channels, they also disrupt and significantly complicate the ability to respond to FDA drug recalls.
 

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com