Company: CERO
Filing Date: 2025-02-07
Form Type: 424B3
Source: 0001213900-25-011071
Chunk: 207

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-02-07
Form: 424B3
Chunk 207
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 or interpreted in ways that may significantly affect our business and our
products.

Further legislative and
regulatory changes under the Affordable Care Act remain possible, and it is unknown what form any such changes or any law would take,
and how or whether it may affect our business in the future. We expect that changes or additions to the Affordable Care Act, the Medicare
and Medicaid programs, changes allowing the federal government to directly negotiate drug prices, and changes stemming from other healthcare
reform measures, especially with regard to healthcare access, financing or other legislation in individual states, could have a material
adverse effect on the healthcare industry.

The Affordable Care Act
requires pharmaceutical manufacturers of branded prescription drugs and biologics to pay a branded prescription drug fee to the federal
government. Each individual pharmaceutical manufacturer pays a prorated share of the branded prescription drug fee, based on the dollar
value of its branded prescription drug sales to certain federal programs identified in the law. Furthermore, the law requires manufacturers
to provide a 50% discount (increased by subsequent legislation to a 70% discount) off the negotiated price of prescriptions filled by
beneficiaries in the Medicare Part D coverage gap, referred to as the “donut hole.” The Inflation Reduction Act of 2022
(“IR Act”) includes several provisions that may impact our business to varying degrees. The IR Act also includes provisions
that reduce the out-of-pocket spending cap for Medicare Part D beneficiaries from $7,050 to $2,000 starting in 2025, thereby effectively
eliminating the donut hole. Pharmaceutical manufacturers will be required to provide a 10% discount of all biosimilar and brand name
prescription drugs covered under the Medicare Part D plan benefit during the initial coverage period before the beneficiary reaches
the $2,000 out-of-pocket spending cap. Once the patient reaches the out-of-pocket spending cap, they enter catastrophic coverage and
drug manufacture liability for biosimilar and brand name drugs increases to 20%. Furthermore, the IR Act allows the U.S. government
to negotiate Medicare Part B and Part D price caps for certain high-cost drugs and biologics without generic or biosimilar
competition; requires companies to pay rebates to Medicare for certain drug prices that increase faster than inflation; and delays until
January 1, 2032 the implementation U.S. Department of Health and Human Service (“HHS”) rebate rule that would have
limited the fees that pharmacy benefit managers can charge.

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