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Hospitals, pharmacists and insurers clash over 'white bagging' specialty drug rules
Summary
Supporters including hospital pharmacists urged the committee to pass HB 2011 to prevent insurer-mandated 'white bagging' of provider-administered specialty drugs, citing patient safety, waste and cost-shifting; insurers opposed the bill, arguing white-bagging and site-of-care programs can lower costs.
The committee heard sharply divided testimony on House Bill 2011, a proposal to restrict insurer-directed “white bagging” of specialty medications and to extend protections for provider-administered drugs beyond the 2024 law that covered certain settings.
Hospital and system pharmacy representatives, including Michael Millard of the Oregon Society of Health-System Pharmacists and representatives of hospital systems, described safety, timing and waste concerns when specialty medications are shipped by insurer-designated pharmacies for administration by providers. Millard told the committee white-bagging can increase out-of-pocket costs and complicate administration for providers; he cited Federal Trade Commission staff reports and peer-reviewed analyses that show specialty drugs account for a small share of prescriptions but a large share of drug spending.
Insurers and industry groups, including AHIP and major health plans, opposed HB 2011 and argued that white-bagging and site-of-care programs are tools to manage rapid growth in specialty drug costs and to steer patients to lower-cost, clinically appropriate settings. Insurer witnesses said site-of-care programs and careful contracting saved tens of millions of dollars and that banning those tools could preserve higher facility markups for certain drugs. A regional plan provided examples of price differences, saying infusion at a hospital could be billed at 371% of average sales price while a preferred infusion center charged 110%.
Brokers and employer representatives also opposed the bill, arguing it would raise costs for employers and destabilize the small-group market. Some witnesses urged alternatives such as greater price transparency and requiring providers to pass through drug acquisition costs and bill separately for services.
Committee members asked for examples and data on markups; insurers and hospitals said markups vary significantly by setting and by hospital, and that the relationship between site of care, negotiated rates and patient cost-sharing can be complicated. Several witnesses urged more transparency and data collection on prices and markups.
