In my column in the July 16-29 NH Business Review (“Hospital Specialty Pharmacies: Follow the Money”), I set out how hospital specialty pharmacy is a huge business. This follow-up article is not about a hypothetical but an actual proposed ban with real-life patient impacts.

The hospital lobby recently filed a petition to ban “brown” and “white” bagging with the state’s Board of Medicine, Board of Nursing and Board of Pharmacy. They seek to eliminate the well-established practice of safely delivering specialty prescription drugs at lower costs than what hospitals charge in the hospital setting.

One Nursing Board member stated during a recent meeting that a patient of hers faced $15,000 to $20,000 more for her chemo drugs because the facility would not allow white-bagging. We do not know the name of this facility. However, hospitals should not be putting their specialty pharmacy profit centers ahead of affordable, quality care for patients.

That is exactly what a ban on brown- and white-bagging would do. This harms New Hampshire patients as well as employers and residents who pay health insurance premiums.

The hospital lobby wants the boards to ban white-bagging and brown-bagging because of patient safety concerns. Wink. Wink. It isn’t the money, they say. Keep reading and then make up your own mind.

Let’s look at the “safety issue.” URAC accreditation, a well-respected national seal of approval, is promoted by Dartmouth-Hitchcock’s specialty pharmacy as evidence of its own specialty pharmacy’s “commitment to quality care ... and better patient outcomes.”

One nonprofit’s work up of URAC data shows that out of over 30 million specialty drugs dispensed and distributed by accredited special pharmacies during the review period, the zero-error rate was 99.98% and 99.96%, respectively. The hospital lobby wants to ban white-bagging and brownbagging by non-hospital-owned specialty pharmacies even though these pharmacies are accredited by the exact same organization that accredited the hospitals’ specialty pharmacies. The targets of the proposed ban, namely the independent specialty pharmacies, have, in the words of the large local incumbent, demonstrated through the identical form of URAC accreditation “commitment to quality care ... and better patient outcomes.” The only apparent difference, then, between these two types of specialty pharmacies (hospital-owned and non-hospital-owned), is that one is generating substantial profits for the hospitals and the other is providing much-needed competition that lowers costs for healthcare consumers and health insurance premium payers — in other words, you and your employers and fellow taxpayers.

A 2018 study by The Moran Company found “on average, hospitals charge 479% of their cost for drugs nationwide.” The study goes on to report that “most hospitals (83%) charge patients and insurers more than double their acquisition cost for medicine, marking up the medicines 200% or more. The majority of hospitals (53%) mark up medicines between 200% to 400%, on average. A small share of hospitals — one in six (17%) — charge seven times the price of the medicine ... One out of every 12 hospitals (8%) has average charge markups greater than 1000%.” (Hospital Charges and Reimbursement for Medicines: Analysis of Cost-to-Charge Ratios for Medicines) Let that data sink in. Turning again to New Hampshire, the Valley News reported on June 20 that Dartmouth-Hitchcock Health’s financial improvement had “been bolstered by the continued expansion of (its) contract and specialty pharmacy business.” Similarly, on March 3, it reported that federal stimulus payments “combined with growth in its contract and specialty pharmacy business, resulted in a $111.1 million increase in revenue” for Dartmouth-Hitchcock Health over the prior year’s same six-month period.

On Aug. 28, 2020, the Valley News also reported that despite losses in 2020, total revenue and incoming money grew to $2.35 billion thanks to $88.7 million in CARES funds and “growth in D-HH’s specialty pharmacy program,” citing a then-current D-HH bond filing.

According to a Valley News report of Sept. 3, 2019, “all areas of operating revenue have grown, especially D-HH’s contract and specialty pharmacy business, which grew $61.8 million or 41.5% compared with 2018.”

But hey — what’s a mere extra $15,000 to $20,000 when we say it’s for your safety? Wink. Wink.

As a proud insurance lawyer/lobbyist, I know — thou not always saintly — but let’s not forget the providers know their way around the collection plate!

Attorney Donald Pfundstein, a shareholder and director of Gallagher Callahan & Gartrell, represents insurers, financial institutions and other businesses on insurance law issues.