Company: CERO
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032134
Chunk: 152

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1
Chunk 152
---
 by the legislation.
From time to time, legislation is drafted, introduced, and passed that could significantly change the statutory provisions governing coverage,
reimbursement, pricing, and marketing of medical device products. In addition, third-party payor coverage and reimbursement policies are
often revised or interpreted in ways that may significantly affect our business and our products.

Further legislative and regulatory
changes under the Affordable Care Act remain possible, and it is unknown what form any such changes or any law would take, and how or
whether it may affect our business in the future. We expect that changes or additions to the Affordable Care Act, the Medicare and Medicaid
programs, changes allowing the federal government to directly negotiate drug prices, and changes stemming from other healthcare reform
measures, especially with regard to healthcare access, financing or other legislation in individual states, could have a material adverse
effect on the healthcare industry.

The Affordable Care Act requires
pharmaceutical manufacturers to provide a 50% discount (increased by subsequent legislation to a 70% discount) off the negotiated price
of prescriptions filled by beneficiaries in the Medicare Part D coverage gap, referred to as the “donut hole.” The Inflation
Reduction Act of 2022 (“IRA”) includes provisions that reduce the out-of-pocket spending cap for Medicare Part D beneficiaries
from $7,050 to $2,000 starting in 2025, thereby effectively eliminating the donut hole. The IRA also requires pharmaceutical manufacturers
to provide a 10% discount of all biosimilar and brand name prescription drugs covered under the Medicare Part D plan benefit during the
initial coverage period before the beneficiary reaches the $2,000 out-of-pocket spending cap. Once the patient reaches the out-of-pocket
spending cap, they enter catastrophic coverage and drug manufacturer liability for biosimilar and brand name drugs increases to 20%. Furthermore,
the IRA allows the U.S. government to negotiate Medicare Part B and Part D price caps for certain high-cost drugs and biologics without
generic or biosimilar competition; requires companies to pay rebates to Medicare for certain drug prices that increase faster than inflation;
and delays until January 1, 2032 the implementation of a U.S. Department of Health and Human Service (“HHS”) rebate rule that
would have limited the fees that pharmacy benefit managers can charge.

The Affordable Care Act also
expanded the Public Health Service’s 340B drug pricing program, which requires participating manufacturers to agree to charge statutorily
defined covered entities no more than the