Company: DAWN
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001193125-25-264649
Chunk: 54

Company: Day One Biopharmaceuticals, Inc.
Filing Date: 2025-11-04
Form: 10-Q
Item: Item 3
Chunk 54
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 to several providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. In July 2025, the One Big Beautiful Bill Act, or the OBBBA, was signed into law, which reduces funding to federal healthcare programs and imposes additional requirements to be eligible for healthcare. These laws may result in additional reductions in Medicare and other healthcare funding. Further, there has been heightened governmental scrutiny recently over the manner in which drug manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for drug products. At the federal level, recent presidential administrations were focused on drug pricing and have used several means to propose or implement drug pricing reform, including through federal budget proposals, executive orders and policy initiatives. For example, on September 9, 2021, the Biden administration published a wide-ranging list of policy proposals to lower prescription drug prices, including by allowing Medicare to negotiate prices and disincentivizing price increases, and to support market changes that strengthen supply chains, promote biosimilars and generic drugs and increase price transparency. These initiatives recently culminated in the enactment of the Inflation Reduction Act, or IRA, in August 2022, which will, among other things, allow the U.S. Department of Health and Human Services, or HHS, to negotiate the price of certain drugs and biologics that CMS reimburses under Medicare Part B and Part D. The IRA’s negotiation program will apply to high-expenditure single-source drugs that have been approved for at least 7 years (11 years for biologics), among other negotiation selection criteria. One statutory exemption from the negotiation program is for a drug that has only a single orphan drug designation and is approved only for an indication or indications within the scope of such designation. The negotiated prices, which for the first round of selected drugs announced August 29, 2023 will become effective in 2026, will be capped at a statutorily-determined ceiling price. The IRA also penalizes drug manufacturers that increase prices of Medicare Part B and Part D drugs at a rate greater than the rate of inflation. In addition, the law eliminates the “donut hole” under Medicare Part D beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and requiring manufacturers to subsidize, through a newly established manufacturer