Episode Details

So, this is a 400-level episode in specialty pharmacy options for plan sponsors, meaning here are your prerequisites: You gotta know what buy and bill is, and you gotta know what pharmacy bagging is, meaning white bagging, for example. If you do not, I would listen to Encore! EP282 with Aaron Mitchell, MD, MPH, where we go deep on buy and bill. And then listen to EP369 for the skinny on pharmacy bagging. If you already know what buy and bill is and you already know what white bagging is, then not only do you know more than 98% of the people in the healthcare industry, but also, you're going to get as much out of this conversation with Erik Davis and Autumn Yongchu as I did.

Last week's show was also with Erik Davis and Autumn Yongchu. Last week, we talked about how some hospitals and cancer centers are managing to ring up up to six times the cost of an expensive-already injected or infused drug through buy and bill. This is why pharmacy bagging became a thing, if we want to talk about this in historical perspective. It's a direct market response to buy and bill. Hospital systems start making egregious amounts of money marking up drugs that already cost hundreds of thousands of dollars, and their markups are hundreds of thousands of dollars on top of that. Hospital starts making a fortune off of drug markups. Plan sponsors need an alternative, and … enter pharmacy bagging (ie, carving out specialty pharmacy drugs to a PBM [pharmacy benefit manager]).

In this show, we compare the potential benefits and problematic loopholes and/or patient concerns for plan sponsors who are trying to figure out whether to carve out specialty pharmacy benefits to a PBM or grin and bear it with the buy and bill. Or, as another option, whether to steer patients to specific infusion centers or specific provider organizations that might have more favorable contract terms for the plan sponsor. Or, hooking up with a home infusion company, again, who is willing to negotiate terms that might be far better for said plan sponsor than just letting some hospital have their way with employees and the health plan. As another alternative, of course, plan sponsors could consider medical travel, which some certainly are.

My biggest takeaway from this whole conversation and from the episodes that we have had in this, dare I call it, series about pharmacy benefits, starting with the show with Scott Haas (EP365) where we talked about PBM contracts, moving to the show with Dr. Aaron Mitchell (Encore! EP282) where we talked about buy and bill, then going to the show with Keith Hartman (EP369) where we talked about pharmacy bagging, then last week's show how hospitals manage to buy and bill at 6x the price of these expensive pharmaceuticals … my takeaway from this whole specialty drug extravaganza is that specialty drug procurement is very different than retail drug procurement. Retail drugs, you worry about them en masse at scale almost at the population level. Specialty drugs? You can have one patient on a specialty drug, and that one patient costs as much as the entire rest of the member population combined. So, managing specialty drugs and their administration becomes almost a case-by-case operation. What drug is it? Where is the patient? What options are available? It's possible to save hundreds of thousands of dollars on that one patient, for that one patient's care, and get better patient outcomes by getting the right patient on the right drug that is adminis