Company: OCEA
Filing Date: 2025-04-08
Form Type: 10-K
Source: 0001641172-25-003155
Chunk: 2157

Company: Ocean Biomedical, Inc.
Filing Date: 2025-04-08
Form: 10-K
Item: Item 1A
Chunk 2157
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 Sales of drug products depend substantially, both domestically and abroad, on the extent to which
the costs of drugs products are paid for by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations,
or reimbursed by government health administration authorities, private health coverage insurers and other third-party payors.

A
primary trend in the United States healthcare industry and elsewhere is cost containment. Government authorities and third-party payors
have attempted to control costs by limiting coverage and the amount of reimbursement for particular drug products. In many countries,
the prices of drug products are subject to varying price control mechanisms as part of national health systems. In general, the prices
of drug products under such systems are substantially lower than in the United States. Other countries allow companies to fix their own
prices for drug products, but monitor and control company profits. Accordingly, in markets outside the United States, the reimbursement
for drug products may be reduced compared with the United States.

In
the United States, the principal decisions about reimbursement for new drug products are typically made by CMS, an agency within the
HHS. CMS decides whether and to what extent a new drug product will be covered and reimbursed under Medicare, and private payors tend
to follow CMS to a substantial degree. However, no uniform policy of coverage and reimbursement for drug products exists among third-party
payors and coverage and reimbursement levels for drug products can differ significantly from payor to payor. As a result, the coverage
determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for
the use of our product candidates to each payor separately, with no assurance that coverage and adequate reimbursement will be applied
consistently or obtained in the first instance.

The
Medicare Prescription Drug, Improvement, and Modernization Act of 2003, or the MMA, established the Medicare Part D program to provide
a voluntary prescription drug benefit to Medicare beneficiaries. Under Part D, Medicare beneficiaries may enroll in prescription drug
plans offered by private entities that provide coverage of outpatient prescription drugs. Unlike Medicare Parts A and B, Part D coverage
is not standardized. Part D prescription drug plan sponsors are not required to pay for all covered Part D drugs, and each drug plan
can develop its own drug formulary that identifies which drugs it will cover and at what tier or level. While all Medicare drug plans
must give at least a standard level of coverage set by Medicare, Part D prescription drug plan sponsors are not required to pay for all