Company: LBRX
Filing Date: 2025-09-08
Form Type: S-1/A
Source: 0001193125-25-197877
Chunk: 106

Company: LB PHARMACEUTICALS INC
Filing Date: 2025-09-08
Form: S-1/A
Chunk 106
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 2021 eliminated the statutory Medicaid drug rebate cap, previously set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, effective
January 1, 2024.

Recently, there has been increasing legislative and enforcement interest in the United States with respect to
specialty drug pricing practices. Specifically, there have been several recent U.S. presidential executive orders, congressional inquiries and legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of
prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for drugs. For example, at the federal level, the IRA, among other things,
(1) directs the HHS to negotiate the price of certain high-expenditure, single-source drugs covered under Medicare that have been on the market for at least 7 years, or the “Medicare Drug Price Negotiation Program, and (2) imposes
rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.

These provisions took effect
progressively starting in fiscal year 2023. On August 15, 2024, HHS announced the agreed-upon prices of the first ten drugs that were subject to price negotiations, although the Medicare Drug Price Negotiation Program is currently subject to
legal challenges. On January 17, 2025, HHS selected fifteen additional drugs covered under Part D for price negotiation in 2025. Each year thereafter more Part B and Part D products will become subject to the Medicare Drug Price Negotiation
Program. On February 14, 2023, HHS released a report outlining three new models for testing by the Center for Medicare and Medicaid Innovation which will be evaluated on their ability to lower the cost of drugs, promote accessibility, and
improve quality of care. It is unclear whether the models will be utilized in any health reform measures in the future.

Further, in 2023,
an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act was announced. Also in 2023, the National Institute of Standards and Technology
published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights, which for the first time includes the price of a product as one factor an agency can use when
deciding to exercise march-in rights. While march-in rights have not previously been exercised, it is uncertain if that will continue under the