Hospital groups are growing more concerned about white bagging—the payer practice of requiring them to obtain specialty drugs, often for cancer treatment, from the payer's chosen specialty pharmacies. | Shutterstock

Hospital Groups Want FDA to Curtail Specialty Drug White Bagging

The American Hospital Association (AHA) and ASHP (the American Society of Health-System Pharmacists) want the U.S. Food and Drug Administration (FDA) to “take appropriate action” against white bagging—the health care payer requirement that hospitals obtain specialty drugs for insured patients from the payer’s chosen specialty pharmacy or pharmacies, not from the hospital’s in-house or contract specialty pharmacies.

White bagging jeopardizes patient safety and compromises prescription drug supply chain security, AHA and ASHP told FDA Acting Administrator Janet Woodcock in a recent letter. While not mentioned in the letter, white bagging also deprives hospitals of 340B revenue, because the payer’s chosen specialty pharmacy is the drug’s buyer, not the hospital. The practice takes away a 340B hospital’s ability to buy specialty drugs at a discount and bill payers at a rate above acquisition cost. The targeted drugs often are for outpatient cancer treatment, and the margins for 340B hospitals can be significant.

The American Hospital Association (AHA) and ASHP (the American Society of Health-System Pharmacists) want the U.S. Food and Drug Administration (FDA) to “take appropriate action” against white bagging—the health care payer requirement that hospitals obtain specialty drugs for insured patients from the payer’s chosen specialty pharmacy or pharmacies, not from the hospital’s in-house or contract specialty pharmacies.

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