Company: OCEA
Filing Date: 2025-04-08
Form Type: 10-K
Source: 0001641172-25-003155
Chunk: 2158

Company: Ocean Biomedical, Inc.
Filing Date: 2025-04-08
Form: 10-K
Item: Item 1A
Chunk 2158
---

covered Part D drugs, and each drug plan can develop its own drug formulary that identifies which drugs it will cover and at what tier
or level. However, Part D prescription drug formularies must include drugs within each therapeutic category and class of covered Part
D drugs, though not necessarily all the drugs in each category or class. Any formulary used by a Part D prescription drug plan must be
developed and reviewed by a pharmacy and therapeutic committee. Government payment for some of the costs of prescription drugs may increase
demand for drugs for which we obtain marketing approval. Any negotiated prices for any of our products covered by a Part D prescription
drug plan will likely be lower than the prices we might otherwise obtain. Moreover, while the MMA applies only to drug benefits for Medicare
beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own payment rates. Any reduction
in payment that results from the MMA may result in a similar reduction in payments from non-governmental payors.

65

For
a drug product to receive federal reimbursement under the Medicaid or Medicare Part B programs or to be sold directly to United States
government agencies, the manufacturer must extend discounts to entities eligible to participate in the 340B drug pricing program. The
required 340B discount on a given product is calculated based on the average manufacturer price, or AMP, and Medicaid rebate amounts
reported by the manufacturer. As of 2010, the ACA expanded the types of entities eligible to receive discounted 340B pricing, although
under the current state of the law these newly eligible entities (with the exception of children’s hospitals) will not be eligible
to receive discounted 340B pricing on orphan drugs. As 340B drug pricing is determined based on AMP and Medicaid rebate data, the revisions
to the Medicaid rebate formula and AMP definition described above could cause the required 340B discount to increase. The American Recovery
and Reinvestment Act of 2009 provides funding for the federal government to compare the effectiveness of different treatments for the
same illness. The plan for the research was published in 2012 by HHS, the Agency for Healthcare Research and Quality and the National
Institutes for Health, and periodic reports on the status of the research and related expenditures are made to Congress. Although the
results of the comparative effectiveness studies are not intended to mandate coverage policies for public or private payors, it is not
clear what effect, if any, the research will have on the sales of our