Company: SCLXW
Filing Date: 2025-05-14
Form Type: 424B3
Source: 0001193125-25-119831
Chunk: 137

Company: Scilex Holding Co
Filing Date: 2025-05-14
Form: 424B3
Chunk 137
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. In addition, potential policy changes by the new administration may introduce
additional uncertainty for our business, including changes to the level of scrutiny applied by the HRSA to enforce non-compliance with the 340B program, new price restrictions on products we sell to Medicaid,
Medicare or other government purchasers, or other regulatory changes impacting reimbursement or competitive dynamics in multisource markets. Any such policy shifts could significantly impact our business and operations.

Manufacturers have obligations to report the average sales price for certain of drugs to the Medicare program as a part of the agreement to
participate in the Medicaid Drug Rebate program. For calendar quarters beginning January 1, 2022, manufacturers are required to report the average sales price for certain drugs under the Medicare program regardless of whether they participate
in the Medicaid Drug Rebate program. Statutory or regulatory changes or CMS guidance could affect the average sales price calculations for products and the resulting Medicare payment rate, and could negatively affect results of operations. Starting
in 2023, manufacturers must pay refunds to Medicare for single source drugs or biologics, or biosimilar biological products, reimbursed under Medicare Part B and packaged in single-dose containers or
single-use packages, for units of discarded drug reimbursed by Medicare Part B in excess of 10% of total allowed charges under Medicare Part B for that drug. Manufacturers that fail to pay refunds could be
subject to civil monetary penalties of 125% of the refund amount. Congress further could enact a Medicare Part B inflation rebate, under which manufacturers would owe additional rebates if the average sales price of a drug were to increase faster
than the pace of inflation.

HRSA issued a final regulation regarding the calculation of the 340B ceiling price and the imposition of
civil monetary penalties on manufacturers that knowingly and intentionally overcharge covered entities, which became effective on January 1, 2019. Implementation of this regulation has affected manufacturer obligations and potential liability
under the 340B program. Manufacturers are also required to report the 340B ceiling prices for covered outpatient drugs to HRSA, which then publishes them to 340B covered entities. Any charge by HRSA that a manufacturer has violated the requirements
of the program or the regulation could negatively affect financial results. Moreover, under a final regulation effective January 13, 2021, HRSA newly established an administrative dispute resolution (“ADR”) process for claims by
covered entities that a manufacturer has engaged in overcharging, and by manufacturers that a covered entity violated the prohibitions against diversion