The buy-and-bill squeeze
Under buy-and-bill, providers purchase the drug, administer it, and bill the payer — earning a spread over acquisition cost plus an administration fee. Commercial payers increasingly reference average sales price (ASP) methodology and press on the spread, while requiring more prior authorization. The margin that once made office infusion economics work is compressing.
If your infusion economics depend on the buy-and-bill spread, they depend on a number payers are actively working to shrink. Model the margin drug-by-drug, not as a blended average.
Site-of-care steering and bagging
Payers are steering infusions away from hospital outpatient departments toward physician offices, ambulatory sites, and the home, and are mandating white bagging (specialty pharmacy ships the drug) or brown bagging in some cases. Each of these removes the buy-and-bill margin and shifts drug sourcing away from the provider — a direct economic hit that must be planned for, not absorbed.
The policy overlay
- 340B. For eligible entities, 340B acquisition changes the economics and draws payer and manufacturer scrutiny and reporting requirements.
- Inflation rebates & IRA. Federal drug-pricing policy affects ASP trajectories and manufacturer behavior over time.
- Discarded-drug refunds. Reporting and refund requirements on discarded amounts add administrative and financial exposure.
- Biosimilars. Uptake shifts the reference economics on major biologics.
Protecting infusion margin
| Force | Effect on margin | Response |
|---|---|---|
| Buy-and-bill compression | Negative | Drug-level margin modeling; renegotiate admin fees |
| White/brown bagging | Removes drug margin | Negotiate against mandates; protect administration fees |
| Site-of-care steering | Shifts volume/margin | Reprice by site; consider office/ambulatory capacity |
| 340B | Variable | Compliance and reporting discipline |
Illustrative; specifics depend on drug mix, entity type, and payer.