Company: PTHS
Filing Date: 2025-05-27
Form Type: DEFM14C
Source: 0001140361-25-020509
Chunk: 72

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-05-27
Form: DEFM14C
Chunk 72
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 adversely affect its revenue and results of operations.

Channel expects that coverage and reimbursement of pharmaceutical costs may be increasingly restricted both in the U.S. and internationally. The escalating cost of health care has led to increased pressure on the health care industry to reduce costs. Drug pricing by pharmaceutical companies recently has come under increased scrutiny and continues to be subject to intense political and public debate in the U.S. and abroad. Government and private third-party payors have proposed health care reforms and cost reductions. A number of federal and state proposals to control the cost of health care, including the cost of drug treatments, have been made in the U.S. Specifically, there have been several recent U.S. Congressional inquiries and proposed bills designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for drugs. In some international markets, the government controls the pricing, which can affect the profitability of drugs. Current government regulations and possible future legislation regarding health care may affect coverage and reimbursement for medical treatment by third-party payors, which may render Channel’s compounds, if approved, not commercially viable or may adversely affect its anticipated future revenues and gross margins.

Channel cannot predict the extent to which its business may be affected by these or other potential future legislative or regulatory developments. However, future price controls or other changes in pricing regulation or**

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negative publicity related to the pricing of pharmaceutical drugs generally could restrict the amount that Channel is able to charge for its future products, which would adversely affect its anticipated revenue and results of operations. The insurance coverage and reimbursement status of newly approved products is uncertain. Failure to obtain or maintain adequate coverage and reimbursement for Channel’s products, if approved, could limit its ability to market those products and decrease its ability to generate product revenue. Channel expects that coverage and reimbursement by government and private payors will be essential for most patients to be able to afford these treatments. Accordingly, sales of Channel’s compounds will depend substantially, both domestically and abroad, on the extent to which the costs of its compounds will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or will be reimbursed by government authorities, private health coverage insurers and other third-party payors. Coverage and reimbursement by a third- party payor may depend upon several factors, including the third-party payor’s determination that use of a product is:

| • | a covered benefit under its health plan; |

| • |