Company: LBRX
Filing Date: 2025-07-23
Form Type: DRS/A
Source: 0000950123-25-006557
Chunk: 104

Company: LB PHARMACEUTICALS INC
Filing Date: 2025-07-23
Form: DRS/A
Chunk 104
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 This includes aggregate reductions to Medicare payments to providers of, on average, 2% per fiscal year until 2032 unless Congress takes additional action. Additionally, the American Rescue Plan Act of 2021 eliminated the statutory
Medicaid drug rebate cap, previously set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, effective January 1, 2024.

Recently, there has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing
practices. Specifically, there have been several recent U.S. presidential executive orders, congressional inquiries and legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under
Medicare, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for drugs. For example, at the federal level, the IRA, among other things, (1) directs the HHS to
negotiate the price of certain high-expenditure,

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single-source drugs covered under Medicare that have been on the market for at least 7 years, or the “Medicare Drug Price Negotiation Program, and (2) imposes rebates under Medicare
Part B and Medicare Part D to penalize price increases that outpace inflation.

These provisions took effect progressively starting in
fiscal year 2023. On August 15, 2024, HHS announced the agreed-upon prices of the first ten drugs that were subject to price negotiations, although the Medicare Drug Price Negotiation Program is currently subject to legal challenges. On
January 17, 2025, HHS selected fifteen additional drugs covered under Part D for price negotiation in 2025. Each year thereafter more Part B and Part D products will become subject to the Medicare Drug Price Negotiation Program. On
February 14, 2023, HHS released a report outlining three new models for testing by the Center for Medicare and Medicaid Innovation which will be evaluated on their ability to lower the cost of drugs, promote accessibility, and improve
quality of care. It is unclear whether the models will be utilized in any health reform measures in the future.

Further, in 2023, an
initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act was announced. Also in 2023, the National Institute of Standards and Technology published
for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights, which for