OBJECTIVES: White/brown-bagging of physician-administered (Part B) drugs occurs when drugs are purchased from a pharmacy and paid for under the pharmacy rather than medical benefit. There is no empirical research on the use of white/brown-bagging in Medicare, even though in commercial plans an estimated one-third of physician-administered drugs are obtained in this manner. We sought to answer: 1) What was the rate of white/brown-bagging in Medicare from 2013-2017?, 2) How does white/brown-bagging compare for beneficiaries with Medicare Advantage (MA) vs fee-for-service (FFS) coverage?, 3) How does white/brown-bagging affect spending and out-of-pocket costs?

METHODS: Retrospective analysis using a 20% sample of Medicare Part D claims from 2013-2017 for 8,211,576 beneficiaries age 65+.

RESULTS: From 2013-2017, white/brown-bagging increased by 15% for FFS beneficiaries and 22% for MA beneficiaries. MA had 4.3% more white/brown-bagging claims per beneficiary than FFS.

For the 20 physician-administered drugs with the highest Part B expenditures, differences in total payment ranged from a median of $2,280 less per dose for eculizumab to $2,275 more per dose for certolizumab pegol when purchased through white/brown-bagging.

For beneficiaries who did not receive the low-income subsidy, median out-of-pocket spending when comparing Part D out-of-pocket costs to the 20% co-pay for Part B ranged from $5 lower for denosumab to $5,563 lower for eculizumab; however, beneficiaries may have supplemental insurance that would reduce their Part B out-of-pocket costs. While median out-of-pockets costs were lower under white/brown-bagging, for 32% of the white/brown-bagging claims non-low-income-subsidy beneficiaries paid more under Part D than the 20% Part B co-insurance.

CONCLUSIONS: For beneficiaries who receive physician-administered drugs, selecting a Part D plan with a low co-pay for their drug regimen can offer savings compared to the 20% Part B co-insurance; however, white/brown-bagging places burden on beneficiaries to transport their drugs to an infusion center and may increase program spending.