Company: CERO
Filing Date: 2025-08-22
Form Type: 10-Q
Source: 0001213900-25-079898
Chunk: 386

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-08-22
Form: 10-Q
Item: Item 4
Chunk 386
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 Reform” in the Annual Report on Form 10-K for the year ended December 31,
2024.

42

For example, the Medicare
Drug Price Negotiation Program, administered by CMS as part of the Inflation Reduction Act of 2022, commonly referred to as the IRA,
may apply to our products if they are selected for negotiation, which could materially reduce the amount of revenue we can generate from
our products if they are approved. Prior to the enactment of the One Big Beautiful Bill Act of 2025 (“OBBBA”), orphan drugs
were exempt from Medicare price negotiation under the IRA only if they had received a single orphan designation and were approved solely
for the corresponding rare disease or condition. The OBBBA amended this exemption to apply more broadly: now, any orphan-designated drug
is exempt from price negotiation, regardless of the number of orphan designations it has received, provided the drug’s approved
indications are exclusively for those rare diseases. The OBBBA also included significant reforms to Medicaid, including an estimated
$1 trillion in reduced federal Medicaid spending from 2025 through 2034, the imposition of work requirements for certain adult enrollees,
more frequent eligibility redeterminations, and increased cost-sharing for beneficiaries. These changes are expected to reduce overall
Medicaid enrollment and access to care. Although the effect on our future product candidates or business is unknown, any decrease in
the number of insured patients or reimbursement levels for our products could adversely affect our potential for revenue and our commercial
prospects.

In
addition, multiple executive actions in the first half of 2025 signal the federal government’s increasing focus on lowering prescription
drug prices, adding to the uncertainty surrounding future drug pricing and reimbursement frameworks. For example:

●On
                                            May 12, 2025, President Trump signed the executive order titled “Delivering
Most-Favored-Nation Prescription Drug Pricing,” which directs the Secretary of Health and Human Services (“HHS”) to
identify and communicate most-favored-nation price targets for prescription drugs and to propose a rulemaking plan to impose such pricing
if “significant progress” is not made. The order also directs the federal government to explore regulatory pathways that would
facilitate direct-to-patient sales for manufacturers that meet these price targets. Additionally, it signals potential further action
against manufacturers that fail to offer most-favored-nation pricing, including evaluating whether to modify or rescind marketing approvals
or allow individual drug importation waivers. In