If the path to solving the 340B contract pharmacy dispute runs through Congress, "we're prepared to go in that direction,” 340B Health President and CEO Maureen Testoni said today.

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Hospital Group Leader Says “We’re Prepared to Go” in Direction of Federal 340B Contract Pharmacy Legislation

For the first time since the 340B contract pharmacy impasse started over a year and a half ago, the leader of an influential hospital group said publicly today her association is prepared to move in the direction of a federal legislative solution to the stalemate.

Speaking at the 340B Coalition annual winter conference in San Diego, 340B Health President and CEO Maureen Testoni said her group recognizes there will be “more decisions and ongoing lawsuits” over whether the 340B statute prohibits drug manufacturer restrictions on covered entities’ ability to dispense 340B-purchased drugs through contract pharmacies. Two federal district courts have agreed with the government that the statute prohibits such restrictions “and one has sided with the manufacturers,” she said.

“All of these decisions have been appealed,” Testoni said. “We recognize that appeals can take a long time—one year, two years—and there are potentially other avenues.”

“And if one of those pathways leads to Capitol Hill, we’re prepared to go in that direction,” she said.

340B covered entity and manufacturer stakeholders who spoke on condition of anonymity said Testoni’s very public statement about her group being prepared to turn to Congress about contract pharmacy is a major change for 340B hospitals.

“Hospitals historically have opposed any changes to the 340B statute out of fear that opening the statute could open a Pandora’s box,” one covered entity stakeholder said. That hospitals have reached “the tipping point tells me they realize that going through Congress is the most direct route to getting the problem solved” and have concluded that “the potential benefit outweighs the risk.”

It likely will be up to Congress “to ensure that contract pharmacy is protected in statute, just as so many state legislatures are doing now,” another covered entity stakeholder said. “The provider community needs to minimize the risk that the drug industry will insert harmful provisions” into legislation.

While no 340B contract pharmacy legislation has been introduced in Congress yet, House and Senate lawmakers have expressed interest in the idea and reached out to providers, a covered entity stakeholder said. It is not clear how soon a bill might be introduced, the stakeholder said. “It really depends on them. Writing something wouldn’t be a hard lift.”

A manufacturer stakeholder said it is “not surprising to hear” that 340B Health is prepared to move in the direction of a legislative solution to the battle over contract pharmacy. “I don’t think they would actually like the outcome, though,” the stakeholder predicted.

We will be providing more coverage from today’s conference later today including a recap of remarks from Real Admiral Krista Pedley, HRSA’s Director of the Office of Special Health Initiatives, and Michelle Herzog, Acting Director of the Office of Pharmacy Affairs.

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