June 3, 2021

Caroline D. Juran

Executive Director

Virginia Board of Pharmacy

9960 Maryland Drive, Suite 300

Henrico, VA 23233

VIA EMAIL

Dear Ms. Juran: 

In response to the letters dated April 5, May 11, and comments posted on Virginia Townhall from the Virginia Hospital and Healthcare Association (VHHA) in the matter of 18 VAC 110-20 to the Board of Pharmacy regarding “white bagging,” the Virginia Association of Health Plans (VAHP) would like to share the following information.

White bagging focuses on reducing the cost of certain specialty medications covered under a member’s medical benefit and is part of health plan’s long-term objective to reduce health care costs for the Virginian’s we serve. Health plans cover the vast majority of these costs and play a vital role in helping ensure members can access affordable specialty medications. Some health plans have implemented white bagging programs through designated specialty pharmacy networks. Whatever the approach, the programs ultimately afford the member with significant cost savings while ensuring the safety and efficacy of the medications provided to patients through white bagging.

The high costs of certain complex specialty medications administered in the office setting and hospital outpatient setting are the largest driver of rising costs for health plans and can cause members to quickly reach their deductible and out-of-pocket maximums. White bagging seeks to address the out-of-pocket costs members pay for specialty medications and allows the out-of-pocket costs to be more spread out than they otherwise would be before members reach their deductible or out-of-pocket maximum. Currently, the cost of certain specialty medications administered in the hospital outpatient setting can be approximately 200 to 300% more than when the same drug is administered in an office-based setting, with some providers charging over 500% more. Specialty drugs account for only 2% of drugs dispensed but represent nearly 45% of all prescription drug spending, a figure expected to rise to 52% by 2024. The health plan seeks to lower the overall cost of certain speciality medications and reduce out-of-pocket costs for its members.

As you know, the issue of “white bagging” has been discussed by the Board of Pharmacy for several years. VAHP appreciates the Board’s commitment to ensuring Virginia’s white bagging programs are safely providing patients with access to specialty medications beginning with  your  initial development of regulations in 2017 through the conclusion of the final adoption period on June 9, 2021. VAHP also appreciates and recognizes the Board’s responsiveness to questions and concerns raised throughout the regulatory process. We agree with the Board’s response to comments suggesting that regulations already include language to establish “any willing provider” requirements that the, “the Board (of Pharmacy) does not have the authority to regulate insurance companies or pharmacy benefit managers and the Board’s statement that “white bagging may assist patients access to medication when delivered in a restricted manner.” Finally, we agree with the Board’s statement in its Agency Background Document developed on March 22, 2019 and posted on Virginia Town Hall on April 1, 2019  during the Proposed Stage of the regulatory process that the, “Board cannot prevent insurance companies or pharmacy benefit managers from requiring a patient to obtain the drug from a specialty pharmacy, but it can place requirements on the pharmacy for how those drugs must be delivered to the patient,” in response to comments submitted to the Board by Premier Health Care Association.

To our knowledge, the Board has not found health plans with existing specialty pharmacy programs in violation of existing requirements.

The health plans are in compliance with applicable laws and regulations. Section F of the Virginia regulation, 18VAC110-20-275, specifically applies to most health plan’s white bagging programs in which the specialty pharmacy will deliver member’s specialty drugs to the hospital pharmacy as the alternate delivery site.  These will not be “routine” deliveries, and instead will only deliver to the hospital pharmacy as required by the member’s need for a specialty drug.  The coordination, delivery and chain of custody of the specialty medication will be managed by the specialty pharmacy well in advance of the member’s administration of the drug as described above.  As the Board of Pharmacy noted in response to the revisions to 18VAC110-20-275, the intent of the regulation was to make access to important specialty medications more accessible to Virginians.  Accordingly, the health plans are critical partners to ensure quality and safe administration of the specialty drugs under their respective Programs while trying to improve the affordability for members.

Regarding concerns about the handling of white bagging drugs presenting unnecessary safety risks, a speciality pharmacy used by a number of health plans in Virginia does not mix or compound any of the drugs that are shipped to hospitals.  All drugs that are shipped from the speciality pharmacy are in their original manufacturer’s packaging similar to how they are currently receiving their drugs from distributors and manufacturers.  Responsibility for preparing/compounding these drugs remains with the hospitals giving them flexibility to make any last minute dose adjustments.  The specialty pharmacy’s dedicated team of professionals will work closely with hospitals to determine the drug/dosage that is needed, shipping information and member’s appointment date so arrangements can be made to have the drug delivered to the hospital in advance of the member’s appointment.  Drugs that require special handling (i.e. refrigeration) are shipped in thermal containers with sufficient frozen gel packs to maintain the drug’s integrity during transit.

In the event of a last minute dose increase and the quantity of drug shipped is insufficient to prepare the dosage needed (and the speciality pharmacy is unable to ship additional quantities in time for the member’s appointment), an exception process exists that will allow the hospital to be reimbursed for using their own supply of the drug.  This same exception process may be utilized in instances where a drug arrives damaged or unusable, last-minute change in drug regimen or if the drug does not arrive on-time despite the best efforts of the hospital to obtain the drug.  This exception process will help eliminate any potential impact to a member’s course of treatment and ensure the member receives timely administration of the drug.

Since the drugs that are shipped to the hospitals are in their original manufacturer’s packaging, any concerns regarding errors or patient harm should not be any greater than if the drug was purchased directly from a distributor or manufacturer. 

We appreciate your attention to this matter. Please let me know if you have any questions.

Sincerely,

Doug Gray

Executive Director

Virginia Association of Health Plans