ICER Finds ‘Legitimate Reasons’ for White Bagging, Recommends New Policies

Apr 27
Apr 27, 2023

A new report by the Institute for Clinical and Economic Review (ICER) argues that “white bagging,” if used appropriately, could save health plans enough money to slow premium growth, but it stipulates that policy reforms and clinical guidelines are necessary to make the practice fair to patients. Health care insiders tell AIS Health, a division of MMIT, that in their view, the white paper correctly and fairly identifies both the challenges and opportunities presented by the white bagging trend.

White bagging is a payer practice that significantly changes the customary dispensing and billing arrangements around specialty drugs. Until recently, nearly every specialty pharmacy transaction involved the so-called “buy-and-bill” framework. In buy-and-bill transactions, which still account for the vast majority of specialty pharmacy care, providers purchase a specialty drug, stock it in their facility and charge a payer for it after administering the drug to a patient. White bagging, on the other hand, involves a payer purchasing a drug directly from the manufacturer, distributor, or specialty pharmacy and arranging for the drug to be delivered to the site of care. In a similar practice also covered by the ICER report, “brown bagging,” payers also purchase the specialty drug directly, but have it delivered to the patient’s home instead of the provider’s facility.
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Peter Johnson

Peter has worked as a journalist since 2011 and has covered health care since 2020. At AIS Health, Peter covers trends in finance, business and policy that affect the health insurance and pharma sectors. For Health Plan Weekly, he covers all aspects of the U.S. health insurance sector, including employer-sponsored insurance, Medicaid managed care, Medicare Advantage and the Affordable Care Act individual marketplaces. In Radar on Drug Benefits, Peter covers the operations of (and conflicts between) pharmacy benefit managers and pharmaceutical manufacturers, with a particular focus on pricing dynamics and market access. Before joining AIS Health, Peter covered transportation, public safety and local government for various outlets in Seattle, his hometown and current place of residence. He graduated with a B.A. from Colby College.