Company: GIFLF
Filing Date: 2025-04-11
Form Type: 20-F
Source: 0001104659-25-034245
Chunk: 139

Company: Grifols SA
Filing Date: 2025-04-11
Form: 20-F
Item: Item 4
Chunk 139
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 for certain drugs falling within a beneficiary’s coverage gap. However, as of January 1, 2025, under the federal Inflation Reduction Act of 2022, CMS eliminated the coverage gap design and Coverage Gap Discount, and implemented a “Manufacturer Discount Program” under which, after beneficiaries meet their Medicare Part D deductible, drug manufacturers generally must provide discounts of 10% on applicable drugs during an initial coverage phase and 20% during a catastrophic coverage phase. Because this new design is expected to decrease Medicare beneficiaries’ out-of-pocket costs, manufacturers’ share of those costs may increase. Consequently, our net revenue, beginning in 2025, may be adversely affected.
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Additionally, the Inflation Reduction Act of 2022 provides Medicare, for the first time, with the ability to negotiate drug prices directly with drug manufacturers to determine the price Medicare will pay for certain drugs covered under Medicare Part D (effective as of 2026) and Medicare Part B (effective as of 2028). Certain drugs are excluded from the negotiation process, such as drugs with an orphan designation as their only FDA-approved indication and certain plasma-derived drugs. To the extent our drugs fall within any of the aforementioned excluded categories, Medicare would not have the ability to negotiate our prices for those drugs. Manufacturers that fail to comply with program requirements may be subject to civil monetary penalties and excise taxes.
Also under the Inflation Reduction Act of 2022, if a manufacturer increases the prices generally for brand name prescription drugs and biologicals covered under Medicare Part B or certain drugs and biologicals covered under Medicare Part D, in each case at a higher rate than the applicable inflation rate for such products, then such manufacturer will be required to pay rebates to Medicare. If our products are used by Medicare beneficiaries, we will be required to pay rebates to Medicare or potentially face fines representing the difference between the actual and the inflated prices. And, beginning in 2025, this law modifies a manufacturer’s liability relating to Medicare’s spending above a beneficiary’s out-of-pocket cap. In a December 13, 2023 guidance document, CMS generally outlined its calculation methodologies and processes, including certain adjustments (such as in the event of drug shortages, with, for example, certain greater reductions provided for plasma-derived products). CMS issued final rulemaking for the Medicare Prescription Drug Inflation Rebate Program on November 1, 2024, including to codify these programs. Beginning in 2025, CMS is required to begin issuing invoices to drug manufacturers