The Generous Benefits Podcast · 2026-03-12 · 26 min
Key moments - from our scoring
Substance score
71 / 100
Five dimensions, 20 points each
The high cost of infusible and injectable drugs in employer health plans stems largely from misaligned vendor incentives and lack of transparency on the medical side of benefits. Ali Goodwin, Senior Director of Marketing at TrueScripts, breaks down the mechanics: drugs billed as J-codes under medical benefits face charge-master pricing and buy-and-bill spreads that can inflate costs dramatically (the same Remicade infusion might cost $18,000 in a hospital, $7,000 at an infusion center, or $3,000 at home). Moving these drugs to the pharmacy benefit - J-code conversion - requires both the TPA to adopt a medical exclusionary formulary and the PBM to secure drug procurement and negotiate site of care. However, TPAs often resist because medical spend drives their revenue, and providers resist because buy-and-bill margins represent significant profit. Goodwin details white bagging, brown bagging, and clear bagging procurement methods, explains why independent PBMs without vertical integration perform better on these conversions, and emphasizes that without TPA-PBM alignment, conversion strategies fail entirely. The episode is essential for benefits leaders and brokers managing high-cost specialty pharmacy populations.
Infusions are administered directly into the vein, typically as a slow drip in a hospital, clinic, or home setting by a nurse. Injections are quick shots under the skin or into muscle, often self-administered. Both can be classified as J-codes and billed as medical expenses rather than pharmacy expenses.
The same drug can cost vastly different amounts depending on where it's administered due to facility fees and buy-and-bill profit spreads; for example, Remicade might cost $18,000 in a hospital, $7,000 at an infusion center, and $3,000 at home.
J-code conversion moves drugs from medical to pharmacy benefits where the PBM has more control and transparency. It requires the TPA to formally exclude those drugs from medical coverage via a medical exclusionary formulary; without this, providers will submit claims directly and the conversion strategy fails.
White bagging is when the PBM's specialty pharmacy ships the drug directly to the provider or facility; brown bagging is when the drug ships to the patient who then brings it to the provider. White bagging is more common and gives the PBM more control.
Ask directly whether the PBM has a J-code conversion program and whether the TPA is willing to adopt a medical exclusionary formulary. If either vendor resists or cannot explain why, it signals misaligned incentives and is a red flag to consider switching vendors.
Our reviewer’s read on each dimension, with quotes from the episode.
The episode delivers concrete, operationally relevant insights about J-code conversions, site-of-care optimization, and vendor incentive misalignment that a benefits operator would not encounter in typical benefits literature. The Remicade example ($18K hospital vs $7K infusion center vs $3K home) and detailed explanation of buy-and-bill spreads, white/brown/clear bagging, and medical exclusionary formularies provide substantive, actionable knowledge. However, some segments involve basic definitional work that slightly dilutes density.
if you look at a Remicade infusion, for example, it might cost $18,000 in a hospital setting, $7,000 in an infusion center, and then maybe $3,000 at home. So, same drug, same bag, same IV. Different wallpaper.
The TPA partnership is really required for success because those J-code conversions are dependent upon the TPA adopting our medical exclusionary formulary.
The episode articulates the vendor misalignment problem clearly and emphasizes incentive structure as root cause, which is somewhat contrarian in benefits discourse. However, the core frameworks - site-of-care optimization, benefit design, PBM transparency - are established practices in the industry. The insight that TPAs lose revenue when drugs move from medical to pharmacy and thus lack incentive to cooperate is useful but not groundbreaking. The episode lacks counterintuitive claims or fresh angles on these mechanics.
if that, if your TPA is resisting exclusions, it usually means one of two things. They either don't want to do the additional work that is required, or they don't want that drug spin leaving the medical side.
the confusion through complexity is a real marketing tactic. And if we can clear some of that up and help everyone be better consumers, we can really change things.
Ali Goodwin is a practitioner with six years in PBM operations at TrueScripts, a vendor that specializes in J-code management. She demonstrates real operational knowledge and speaks with credibility about implementation barriers. However, she is a vendor representative, not an independent operator or plan sponsor, which introduces some structural bias. She is knowledgeable but positioned as selling a service rather than offering neutral expertise on the landscape.
I got here by happenstance, but I stayed because now I'm pissed off with a purpose. It's when you learn about the PBM world, it's like, I got to stay and see this one through.
And TrueScripts, as a PBM, I'm really fortunate to have gotten to grow up with them and learn how to do things the right way.
The episode provides strong specific examples: the Remicade pricing tiers by site of care, J code terminology, white/brown/clear bagging definitions, and the mechanics of medical exclusionary formularies. The explanation of buy-and-bill spreads and PAP enrollment is concrete. However, the episode lacks quantified impact data (e.g., typical savings percentages from conversions, frequency of conversion success, average rebate amounts), named companies beyond TrueScripts, and timelines for implementation. Mostly definitional specificity rather than outcome specificity.
if you look at a Remicade infusion, for example, it might cost $18,000 in a hospital setting, $7,000 in an infusion center, and then maybe $3,000 at home.
So white bagging is when we would procure the drug through a specialty pharmacy. That specialty pharmacy ships the drug directly to that administering provider or facility for that patient.
Amanda asks solid setup questions and follows logical threads through the topic (medical vs pharmacy, site of care, vendor alignment). She does ask clarifying follow-ups on bagging terminology and vendor selection criteria. However, she rarely pushes back or challenges Ali's claims; the conversation is largely confirmatory. She does not probe incentive conflicts deeply, ask about failure rates or limitations, or test Ali's assertions with skeptical questions. The closing question about the single biggest change is good but the overall dynamic favors soft affirmation over rigorous examination.
So it's almost like forced good stewardship. If you can get them to exclude it, then you force the providers into being a little bit more thoughtful about how it gets carried out.
you don't want your program to be the exception. You want it to be what culturally and operationally they would normally do. Because if it's the exception, it's going to fall apart.
Computed from the transcript - who did the talking, and the words that came up most.
Host Amanda Brummitt interviews Ali Goodwin of TrueScripts on the complexities and costs of infusible and injectable drugs in employer health plans. Ali explains the difference between infusion and injection drugs, why site of care matters, what J‑code conversion is, and how pharmacy benefit managers, third party administrators, providers, and brokers must coordinate to steer care, capture savings, and improve patient access. The episode also defines white/brown/clear bagging, and concludes with a practical recommendation for employers: align incentives by carving out pharmacy to an independent, transparent pharmacy benefit manager to enable better cost control and access.
Transcribed and scored by The B2B Podcast Index.
Welcome to the Generous Benefits Podcast, where we talk about building benefits that actually help people and still make business sense. I'm your host, Amanda Brummitt. Today, we're tackling a complex and expensive area of employer-sponsored health plans, infusion and injectable drugs. These therapies are critical for employees, yet costs can feel unpredictable and very expensive.
Our guest today is Ali Goodwin of TrueScripts. She sees firsthand how much depends on third-party administrators and pharmacy benefit managers working together and what happens when they don't. We are going to break down infusible versus injectable drugs, explain why side of care matters so much, talk about benefit placement, and most importantly, discuss what employers can actually do to improve access and control costs. Let's jump in.
Well, Allie, thank you so much for being here today. I know a lot of the people in the industry know you because your name comes up all the time when I ask about great people in the pharmacy benefit management space. Can you start by just telling us who you are and how you found yourself in this industry? Sure.
So thank you so much for that. And yeah, I don't know how I've been in this industry coming up on six years now. And like so many of us just got here by total happenstance. My background is in marketing.
The closest thing I've ever been to the PBM world was a very short stint working as a pharmacy tech in college. Right. Oh, hey, well, that means, you know, a lot of the baseline, at least nomenclature. Oh, a bit.
And that was, you know, I had no, I wasn't working towards the PBM world. So I wasn't, you know, actively retaining that information. I was just, you know, my way through college trying to, you know, make some money. So, yeah, I graduated college.
I got my first real job as a marketing director for a QSR franchise. And so the president and CEO of that company at the time, we became really good friends, and he later went on to become the president of TrueScripts. And so he eventually reached out and said, you know, we're looking to bring on some marketing here. You know, you should check out this company.
They're great. You know, the culture is phenomenal. You would love this company. I'm like, OK, you know, that sounds great.
There's just one problem. I don't know what the heck a PBM is. He's like, it's fine. Just come check them out.
And, you know, we'll teach you what you need to know. and, So I took the interview and thought, wow, you know, this this company does sound phenomenal. But again, how can I possibly do marketing for you when I have no idea what you do? And the HR director even she said, you know, it's fine.
You know, 90 percent of our workforce does not come from this background. We want to find the right kind of person and then we'll teach you what you need to know. So, yeah, fast forward, I have just drank from the PBM fire hose for the past six years. But it's been phenomenal.
You know, like I said, it got here by happenstance, but I stayed because now I'm pissed off with a purpose. It's when you learn about the PBM world, it's like, I got to stay and see this one through. You know, it's such a volatile industry. It changes every day.
And TrueScripts, as a PBM, I'm really fortunate to have gotten to grow up with them and learn how to do things the right way. And they truly are just a phenomenal company. So it's been an awesome ride. Oh, that's amazing.
So before we dive into how it all works, can you first explain infusible medications versus injectable medications? Sure. So, you know, fairly simple there. Infusions are administered directly into the vein, typically not a slow drip, and those are usually done in a, hospital or clinic setting or possibly even by a home nurse.
Whereas injections, those are just, you know, the quick shots under the skin or into a muscle, those can be done in a clinical setting or oftentimes even just self-administered. But the topic that we're diving in today, the J codes, both the infusions and injectable drugs, those can both be classified under that technical term J code, which is really just a medical billing code that's used to identify those non-oral medications that are billed through the benefits plan as a medical expense rather than a pharmacy expense.
And then does it matter if the drug is administered in the hospital, infusion center, physician office, pharmacy, or at home? Yes. So everything you're referring to there is the site of care, which is literally just where the drug is administered, what building it is. So everything that you just mentioned, infusion center.
Home infusion, physician's office, or even a hospital outpatient department, it does matter because just like retail drug prices vary from pharmacy to pharmacy, even when it's the exact same drug, the costs also vary based on where that drug is given or administered. So, for example, if you look at a Remicade infusion, for example, it might cost $18,000 in a hospital setting, $7,000 in an infusion center, and then maybe $3,000 at home. So, same drug, same bag, same IV. Different wallpaper.
So it's, you know, drugs hitting the medical side are unfortunately under this charge master pricing structure of whatever we feel like, whatever price we want to charge. You know, and those costs, they do vary because of things like facility fees and then buy and bill profit spreads is a big one. And buy and bill is, you know, where the spread there is where the provider acquires the drug for one cost and then receives a higher reimbursement amount from the payer, and then they pocket that differential or that spread.
That's why, you know, insurers and employers and us as the PBM, you know, we're often using that side of care optimization to help direct patients to those lower cost settings. You know, typically that hospital outpatient setting is what you want to avoid the most. So we're trying to find the facility that works best for them and then can also help deliver the lowest cost for that drug. And then is buy-in bill, is that the same as white bagging?
No, that's pretty much the opposite of white bagging. So we would like to achieve bagging of some sort, you know, helping to procure and source the drug on the pharmacy side. The buy-in bill is strictly on the medical side. The provider is...
Keeping the, you know, the full life cycle of the drug under their wheelhouse. And so they're controlling all of that. And that's when it stays on the medical side and they can really charge whatever they want. Gotcha.
Okay. And then what is the deciding factor in whether a drug is under your medical benefits or your pharmacy benefits? So the line between medical versus pharmacy isn't necessarily clinical, which, you know, you would tend to think that, but it's really mostly how the drug is administered. Billed, or maybe how the plan chooses to manage it.
So on the pharmacy benefit side, drugs are picked up at a retail pharmacy or even maybe delivered from a specialty pharmacy and then typically, you know, self-administered at home. Whereas on the medical benefit. Those drugs are administered by a provider in a clinical setting and then billed with that medical claims code. And then the plan can pull some weight in helping to decide which bucket those drugs fall under, which is, you know, again, you know, what we're talking about when we say J-code conversion.
Okay. And then what happens, say I'm the patient, I've ordered the drug from the specialty pharmacy, it's delivered to my house, but a home health agency sends a home infusion nurse to administer it. Then which one does it go under? So we would like to have that under the pharmacy side.
If it's coming from the specialty pharmacy, if we are able to control that aspect of it, we would have that on the pharmacy side. And then ideally, we would be able to choose which specialty pharmacy had the best pricing for that drug. So that's ideally the direction we would love to go. And then, you know, home infusion center, the patients like that best as well.
Sure. Yeah. OK, so when employers hear J-code conversion or moving it under the pharmacy benefit, can you break that down, what that means? And then most importantly, what has to happen between the third party administrator and the pharmacy benefit manager to make it happen?
Sure. So I'm going to break that down in those two segments. When you hear J-code conversion, that simply means that we, the PBM, are attempting to take the drugs that are currently being billed under the medical benefit and to the pharmacy benefit where we have more control and transparency of that drug pricing. You know, there's just a severe lack of transparency in medical drug cost billing.
It just allows, you know, hospitals, doctors' offices, even carriers are significantly marking up those drug costs and then oftentimes keeping that buy-in bill spread. And also, drugs on the medical side mean missed rebates for the client. Those rebates are not coming through like they are on the pharmacy side. So on the pharmacy side, we are, you know, we're capturing those rebates, passing them through to the client, at least TrueScripts is.
And there are other PBMs that maybe aren't full pass-through. But also, once we have fully accomplished that J-code conversion and we have it on the pharmacy side, we're also at that point then able to apply our cost containment programs for additional savings. So whether that's PAP through a patient assistance program, co-pay cards, international, what have you. That's the J-code conversion piece.
And then the second part of your question, you know, what, you know, why does the TPA, the third party administrator, need to align with the PBM for this to all work? The TPA... Partnership is really required for success because those J-code conversions are dependent upon the TPA adopting our medical exclusionary formulary. And so what that formulary is, is just a list of certain, you know, those J-code or provider-administered drugs that the TPA is going to agree not to cover under the medical benefit, which in turn reroutes the drug pharmacy benefit, where then we can secure better pricing and, you know, help control costs, apply our programs, everything that, you know, I just mentioned.
Unfortunately, if the TPA isn't willing to adopt that formulary and they're not going to formally exclude the drug on the medical side. You know, providers will just, you know, do the buy-in bill anyway, submit the J code and, you know, they get paid and completely bypass the PBM. So then all that conversion strategy talk kind of goes out the window along with the savings potential. Yeah, so it's almost like forced good stewardship.
If you can get them to exclude it, then you force the providers into being a little bit more thoughtful about how it gets carried out. And then I assume there's not a great venue for, oh, if it comes through the first time, then, oh, we'll catch it on the back end and then try to renegotiate because that bad behavior has already been established? Not necessarily. You know, sometimes that's how we become aware of it.
It comes through on the medical side. We don't always have awareness of it until it comes through. You know, the TPA catches it. The plan sponsor catches it.
We have awareness of it. You know, maybe the broker advisor is made aware of it. And so then we work to make that conversion. Okay.
And how much communication is there normally between the broker, the TPA, the PBM? There needs to be quite a bit. There's a lot of moving pieces. A lot of stars need to align.
And one really important factor you left out of that equation is the provider as well. The PBMs might be in very close communication with them as well. Providers don't necessarily want to allow the outsourcing, you know, they stand to, it's easier for them and they stand to make more from the buy-in bill. So there's potential lost revenue there by allowing us to source the medication.
So yeah, it does. It takes an extreme amount of communication. We need to be quick, nimble. If the provider is going to allow us to handle things, it needs to be seamless and they need to just say, hey, cool, this drug showed up, it's handled.
If things get bumpy, they're not, they're going to be even less incentivized to allow us to handle things. Most definitely. And then as the, you know, as the margins get bigger, the potential profit for the provider gets bigger, but the risk also does, because these are often really high cost drugs. Are you ever able to convert them because they want to avoid risk?
Yeah. Or are they generally willing to take it? If you have the right partners. Yeah, absolutely.
And especially if, you know, stop loss can be involved because you think of how much risk we are mitigating there. Just some of the sheer pricing differences from the medical side to the pharmacy side for the exact same drug can be wildly significant. Yeah. Okay.
Can you give me a scenario where everything works perfect? The provider, the TPA, the PBM, the broker, even the stop-loss carrier, if it gets to that point, what would that look like? Sure. So for starters, the PBM and the TPA, they both have to agree, you know, which drugs are pharmacy only or, you know, which drugs, which J-codes are going to be redirected.
And then for that J-code conversion to work, again, the TPA has to agree to stop paying for that drug on the medical side, and the PBM has to make it really easy to get that drug through pharmacy. Both of those have to happen together. And, you know, if a TPA pushes back, it is unfortunately rarely about clinical concern. So a TPA maybe won't adopt that medical exclusion formulary when it makes their life harder or reduces their revenue.
So, you know, yeah, unfortunately, a lot of TPAs, they make significant money on the medical spend. So if medical spend dropped because drugs moved to pharmacy, their revenue drops as well. And, you know, also they get a lot of pressure from the providers because, again, those exclusions kill the buy and bill profits. So, and, you know, when the administering provider is no longer able to manage, again, that medication's entire life cycle in-house, they lose out on the ability to generate revenue, from that buy-in bill spread pricing that we discussed.
So there's things to lose on each side. So when we're talking about all of the stars aligning, you need, on the PBM side, a partner who can assist with drug procurement, site of care optimization. Cost savings programs, and then rebates. And again, to be fair, many PBMs may be willing to do all of those things, But it's just those several stars need to align in order for us to be successful.
And some of those stars are unfortunately out of our hands. On the drug procurement piece, again, we, the PBM, we must be able to find an administering provider who will allow the drug to be purchased through the PBM channel rather through the buy-in bill through the provider. And that's where those terms, white bagging, brown bagging, clear bagging, all come into play. Okay.
And again, you know, many providers, they're hesitant to allow that outside drug procurement because it conflicts with, you know, maybe their standard processes or their ability to generate additional revenue. So that's why the PBM also needs to be able to assist with side of care optimization. And not only to just find what works best for the patient, but maybe also to find a facility that will allow us to ship from, you know, an outside specialty pharmacy into the facility.
So once we, you know, if we get across those barriers and the drug is officially being handled on the pharmacy side, then at that point in time, we are, we're going to go after PAP. If there's a patient assistance program available for that drug. Like from the manufacturer? Yes.
Like you'll actually do it? Nice. Yeah. And so we enroll the member and that's always the route we want to go first because that's, that allows the member to get their drug for $0.
That is the biggest savings every time. If there is not a patient assistance program available, we will look at another route. You know, is there a copay card? Can we get this drug via international?
What have you. We'll look at the rebates and make sure those get passed back to the client. So that's the ideal situation. All the stars align.
We get over those barriers, cross those humps, and get onto the pharmacy side. And we're maximizing the savings programs. And members happy, providers happy, TPAs playing ball with us. That's what you're looking for every time.
Okay. Yeah, that does sound like a lot of work to make that happen. And Allie, you mentioned white bagging, brown bagging, clear bagging. Can you define what those are?
Sure. So white bagging is when we would procure the drug through a specialty pharmacy. That specialty pharmacy ships the drug directly to that administering provider or facility for that patient. That's the most common and most controllable, usually the direction that we want to go.
Brown bagging is when the drug would be shipped to the patient who then brings it into the provider. This is more common when you're maybe leveraging something like international sourcing. It works, but it is much less common. Providers tend to have more fear over this method.
Sure. Has it been kept at the right temperature? Yeah. Right.
And then clear bagging is also great. That's when a drug is dispensed by the specialty pharmacy that is, owned by or embedded within the health system that's administering the J-code drug. So less friction there and, you know, more easy for the PBM to kind of compromise and coordinate with that hospital and their pharmacy. Yeah.
And then in that clear bagging scenario, yeah, are you often able to get that entity to work with you guys on a competitive price? Yes, we are. One of our strongest verticals is the healthcare entities. And part of that is because we don't own pharmacies of our own.
So working with hospitals or healthcare entities that have their own in-house pharmacies, our model is very appealing to them because we are incentivized to help them increase the utilization of their in-house pharmacy rather than trying to get members to use our own for our benefit. But sure. So we work really well with them in that sense. OK.
So if people are looking for a TPA and a PBM, how do they go about that to make sure that that coordination happens on the front end? Yeah. So, again, the on the PBM side, you're looking for someone who can assist with drug procurement, site of care. Those are the main things.
And again, those are the two boundaries. Big roadblocks you need to get over in order to bring the drug onto the pharmacy side. So you need to be, you know, ask the question directly, are you willing, do you have a J-code conversion program? Not every PBM does, especially those vertically integrated PBMs that, you know, are owned by the health carriers.
They don't have an incentive to bring that over to the pharmacy side. So, you know, directly asking that question is important. And then on the TPA side, looking for a partner who is willing to accept the medical exclusion formulary. And again, you know, if that, if your TPA is resisting exclusions, it usually means one of two things.
They either don't want to do the additional work that is required, or they don't want that drug spin leaving the medical side. And either way, it's just an alignment issue. And that is exactly why I say a strong TPA partnership is required. Because without it, the strategy isn't just weaker.
It literally cannot function. Okay, that makes sense. And then let's assume an employer already has both a TPA and a PBM, and they're not cooperating. It's not working well.
What can they do to help address that you gotta fire them i am you gotta fire them you're gone is threatening to fire them good enough, I think, you know, OK, because it requires operational effort and sometimes reduces the medical claim revenue, some vendors just they just don't have strong incentives to cooperate unless the employer specifically asked them to. So, you know, they should be doing this. Yes. Is everyone doing it?
No. So as a plan sponsor, I would just encourage, you know, have the conversation with your vendor partners. Ask if they are doing it. Ask if they're not doing it.
Will they do it? If they won't, why? And if you're met with resistance after having that conversation, well, that's a pretty big red flag. Yeah, yeah, yeah.
You don't want your program to be the exception. You want it to be what culturally and operationally they would normally do. Because if it's the exception, it's going to fall apart. And if some of these, I mean, some of these plant sponsors could see the differences in drug costs from the medical side to the pharmacy side, you would be sick.
Yeah. Yeah. Well, that Remicade example in and of itself, I mean, that's a pretty big spread. Yeah.
And that was a pretty big spread. And that was all still on one side of things, just different sites of care. All right. Well, you've given us lots of good information today.
If there was just one change that you would recommend the employer make this year to have the biggest positive impact on access to care, but sustainable drug costs, what would it be? And you're welcome to leave infusible and injectable drugs if you want. Okay. I love this question.
And I think if we're just, if we're talking one change this year, biggest impact and most realistic to implement, my honest take is you have to align your incentives. And I know that can encompass a lot of things, but I think aligning your incentives by carving pharmacy out to a truly transparent, independent PBN. You know, if you fix nothing else, fix alignment, because almost every other problem, you know, the high drug costs, poor service, breach of fiduciary duty, all of it traces back to misaligned incentives.
And that's my mic drop. I love it. I love it. Well, Allie, thank you for your time.
Thank you for your transparency and just no-nonsense approach to this really complicated topic. No, thank you. You know, it's fun to dig into these things because there's the good, the bad, and the ugly. You just have to find the good.
So hopefully I've learned a lot over my past six years in this industry. And it's fun being able to share that. And, you know, the confusion through complexity is a real marketing tactic. And if we can clear some of that up and help everyone be better consumers, we can really change things.
That was Allie Goodwin with TrueScripts. Here is the takeaway for employers. Infusion drug costs are not just about pricing. They're about benefit design, site of care, and whether your vendors are aligned or operating in silos.
When TPAs and PBMs communicate, employers can identify opportunities earlier, steer care to appropriate settings, and create a better experience for employees who depend on these therapies. When they don't, costs rise and employees feel the impact. If today's conversation highlighted gaps in how your vendors work together, that awareness alone is a powerful first step toward improvement.
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