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The American Society of Health-System Pharmacists (ASHP) is working to end a practice known as "white bagging," officials said.

White bagging is when a payer mandates that providers can only source drugs from a narrow selection of payer-affiliated specialty pharmacies. Under white bagging, health-system pharmacies receive these medications from specialty pharmacies that they must then dispense to the patients. Typically, under the buy-and-bill system, health system pharmacies maintain their own inventories and prepare medications according to electronic health records from physicians.

"We believe at ASHP that this jeopardizes patient care," said Kyle Robb, PharmD, a state policy & advocacy associate at ASHP, during a presentation at the society's Midyear virtual meeting. White bagging blinds clinicians and hospitals to drug supply chains, can cause delays in care, and compromises electronic medical records, he added.

"White bagging has really emerged and accelerated over the past couple years," noted Tom Kraus, MHS, vice president of government relations at ASHP.

In March, the ASHP and the American Hospital Association co-signed a letter to the FDA to call on the agency to enforce the Drug Supply Chain Security Act (DSCSA) -- which mandated that electronic supply chain histories must be kept for all prescription drugs until that drug is dispensed to the patient -- with the goal of ending white bagging.

"Our primary argument with the FDA is that white bagging fundamentally circumvents the DSCSA," Robb said. The DSCSA was passed in 2013 in response to a multi-state meningitis outbreak due to contaminated steroids made in a compounding pharmacy in Massachusetts.

Under white bagging, specialty pharmacies do not share transaction information with providers, meaning that hospitals are in the dark about the supply chain history of white-bagged drugs, he explained.

However, the FDA has yet to take any regulatory action in regards to white bagging, Robb said.

The ASHP has seen more action at the state level for the first time this year, he noted. Prior to 2021, no states had legislation on white bagging and only one state had introduced a bill in 2020. So far this year, 11 states have introduced bills on white bagging. Three states -- Louisiana, Arkansas, and Virginia -- passed laws.

The Louisiana law was passed in June and ensures that plans cannot refuse to pay a provider for supplying clinician-administered drugs and cannot punish patients with extra fees, according to Robb. The law also mandates that white-bagged drugs from specialty pharmacies must come with transaction histories.

In Arkansas, the new legislation takes a different approach to prevent white bagging: it only applies to hematology and oncology patients, though the Arkansas insurance commissioner can expand conditions covered. This law dictates that payers must cover both the medical and pharmacy benefit pathways, and patients and providers can choose which billing pathway works best for them.

In Virginia, plans must allow non-preferred pharmacies to dispense covered drugs at in-network rates and can't increase costs for patients who use non-preferred pharmacies. Virginia's Board of Pharmacy also passed regulations on the storage and tracking of white-bagged medications.

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