Company: CMND
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005490
Chunk: 53

Company: Clearmind Medicine Inc.
Filing Date: 2025-01-22
Form: 20-F
Item: Item 3
Chunk 53
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 rebates owed by manufacturers under the Medicaid
Drug Rebate Program and extends the rebate program to individuals enrolled in Medicaid managed care organizations, establishes annual
fees and taxes on manufacturers of certain branded prescription drugs, and creates a new Medicare Part D coverage gap discount program,
in which manufacturers must agree to offer 70 percent (effective as of 2019) point-of-sale discounts off negotiated prices of applicable
brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to
be covered under Medicare Part D.

Payment methodologies may be subject to changes
in healthcare legislation and regulatory challenges. For example, in order for a drug product to receive federal reimbursement under the
Medicaid or Medicare Part B programs or to be sold directly to U. S. government agencies, the manufacturer must extend discounts to entities
eligible to participate in the 340B drug pricing program. For the 2018 and 2019 fiscal years, CMS altered the reimbursement formula from
Average Sale Price, or ASP, plus 6 percent to ASP minus 22.5 percent on specified covered outpatient drugs, or SCODs, but did so without
issuing a formal notice of proposed rulemaking. On December 27, 2018, the District Court for the District of Columbia invalidated that
formula change, ruling the change was not an “adjustment” that was within the Secretary’s discretion to make but was
instead a fundamental change in the reimbursement calculation, and such a dramatic change was beyond the scope of the Secretary’s
authority. On July 31, 2020, the U. S. Court of Appeals for the District of Columbia reversed the District Court’s decision. Based
on the D. C. Circuit’s decision, CMS proposed for calendar year 2021 and subsequent years to pay for drugs acquired under the 340B
program at ASP minus 34.7 percent, plus an add-on, for a net payment rate of ASP minus 28.7, or continue to pay ASP minus 22.5 percent.
In December 2020, CMS instead finalized its current policy of paying ASP minus 22.5 percent for 340B-acquired drugs, effective January
1, 2021. It is unclear how future changes to the payment methodology may affect pharmaceutical manufacturers and hospitals who purchase
their products now and in the future.

There have been a number of significant changes
to the ACA and its implementation. The Tax Cuts and Jobs Act of 2017,