The Pharmacy Benefit Brief | January 2022

Welcome to the Pharmacy Benefit Brief. This brief is your monthly snapshot of news from America’s prescription drug supply chain including pharmacy benefit managers, independent pharmacies, and drug manufacturers.


Recently, we introduced you to the drug delivery practice known as “white bagging.” To reacquaint you with it, here’s a refresher: It is the practice in which a specialty pharmacy is responsible for the delivery of a prescription drug to a health care provider (ex. physician, hospital) that will administer the drug to a patient, instead of the provider or patient obtaining the medication themselves. “White bagging” helps the patient get the drug they need in a safe, efficient, and cost-effective manner.

It’s an emerging issue in state legislatures, and indeed just recently the Coalition of Wisconsin Employer Groups Concerned about Health Care Costs alerted legislators of their opposition to a bill that would ban health plan sponsors from choosing to deliver drugs through “white bagging.” Citing hospital markups on prescription drugs as a key reason why “white bagging” is an important tool to reduce overall health care costs, this growing group of Wisconsin employers states:

The passage of AB 718/SB 753 would remove an important tool that slows and even sometimes reduces health care costs for employers while maintaining quality health care for their employees and employee families. AB 718/SB 753 would eliminate “white-bagging,” a process health insurers have implemented to deliver clinically administered drugs directly to the clinic/patient when it is safe to do so. This practice is a necessary tool to address significant hospital mark-ups and keep medications reasonably affordable.

Read the Coalition of Wisconsin Employer Groups letter here.

In fact, a review of legislation prohibiting white bagging found that doing so could cost the state $2.1 billion dollars. Click the chart to view the full analysis.

We’re hoping Annie’s optimistic lyrics are applicable to the pharmaceutical companies’ use of orphan drugs. The Orphan Drug Act of 1983 gives drug manufacturers financial incentives to create drugs that treat rare disease, including a seven-year exclusivity period on the market for the drug. Like some best laid plans, the orphan drug designation has gone awry, allowing pharmaceutical companies to use the system to keep their patented drug in an exclusivity period, creating yet more medications that can be too expensive for some patients.
The Health and Human Services Office of Inspector General looked at a set of 40 prescription drugs, 20 in Medicare Part B and 20 drugs in in Medicare Part D and found that 22 of the drugs 40 were designated as orphan drugs. Here’s the rub: 15 of those 22 orphan drugs also had approved non-orphan indications, making them only partial orphan drugs. So, for patients with common diseases, the orphan drug designation may mean it should have gone generic already, or at least cost less than it does.
Take a look here at the OIG report and if interested, and here’s an infographic we put together that simplifies this issue.


Unfortunately, within the prescription drug supply and payment chain, there can be a lot finger pointing and blame for unaffordable prescription drugs. Not surprisingly, pharmaceutical companies are very good at the blame game while not taking any responsibility for the drug prices they alone set and raise.

Check out this Infographic to see how PBMs reduce costs for generics, brand-name drugs, and specialty drugs: PBMs Save on Prescriptions for Patients and Plans 

What is a PBM? Watch the short video here.

America’s pharmacy benefit managers (PBMs). PBMs are advocates for consumers and health plans in the fight to keep prescription drugs accessible and affordable. PBMs administer prescription drug plans for 266 million Americans and have been able to achieve an overall stable cost trend for prescription drugs by innovating consumer-friendly, market-based tools that encourage competition among drug manufacturers and drugstores and incentivize consumers to take the most cost-effective, clinically appropriate medication.