Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 641

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 3
Chunk 641
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 government programs are Medicaid and Medicare.

We participate in the Medicaid
Drug Rebate Program and pay rebates to the states related on Medicaid beneficiary utilization of our products. Medicaid rebates
are billed within 60-90 days of the end of the quarter in which the product was dispensed to a Medicaid beneficiary. Medicaid rebate
amounts per product unit are established by law, based on the Average Manufacturer Price (“AMP”), which is reported on a
monthly and quarterly basis, and, in the case of branded products, best price, which is reported on a quarterly basis. Medicaid reserves
are based on expected claims from state Medicaid programs. Estimates for expected claims are driven by patient usage, sales mix, calculated
AMP or best price, as well as inventory in the distribution channel that will be subject to a Medicaid rebate. As a result of the delay
between selling the products, dispensing the products and rebate billing, the Medicaid rebate reserve includes both an estimate of outstanding
claims for end-customer sales that have occurred but for which the related claim has not been billed, as well as an estimate for future
claims that will be made when inventory in the distribution channel is sold through to plan participants. Many of the Company’s
branded products are also covered under Medicare. We participate in the Coverage Gap Discount Program in order for its branded products
to be covered by Medicare Part D and must provide a rebate for any products sold under NDAs dispensed to Medicare Part D beneficiaries
while the beneficiaries are in the Coverage Gap phase of the benefit. This applies to all products sold under NDAs. Estimates for these
discounts are based on historical experience with Medicare rebates for products. Medicare rebates are billed quarterly for drugs dispensed
to Medicare beneficiaries in the prior quarter, which is typically 120 days after the product is shipped. As a result of the delay between
selling the products, dispensing the products and rebate billing, Medicare rebate reserve includes both an estimate of outstanding claims
for end-customer sales that have occurred but for which the related claim has not been billed, as well as an estimate for future claims
that will be made when inventory in the distribution channel is sold through to Medicare Part D participants.

To evaluate the adequacy of the
government rebate reserves, reserves are reviewed on a quarterly basis against actual claims data to ensure the liability is fairly stated.
We continually monitor the government rebate reserve and adjust estimates if it is expected that actual government rebates may differ
from established accruals. Accrual