Company: LNAI
Filing Date: 2025-02-19
Form Type: 10-K/A
Source: 0001731122-25-000252
Chunk: 26

Company: Lunai Bioworks Inc.
Filing Date: 2025-02-19
Form: 10-K/A
Chunk 26
---
 coverage for a drug product does not assure that
other payors will also provide coverage for the drug product.

Further, third-party payers are
increasingly challenging the price of medical products and services, and there is increasing pressure on biotechnology companies to reduce
healthcare costs. If purchasers or users of our products are not able to obtain adequate reimbursement for the cost of using our products,
they may forgo or reduce their use. Significant uncertainty exists as to the reimbursement status of newly approved healthcare products,
and whether adequate third-party coverage will be available. Our inability to promptly obtain coverage and profitable payment rates from
both government funded and private payors for future products we develop could have a material adverse effect on our operating results,
our ability to raise capital needed to commercialize potential products, and our overall financial condition.

<div align='center'>19</div>

Healthcare Reform

In March 2010, former President
Obama signed into law The Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act
of 2010 (collectively, the “Affordable Care Act”), which substantially changed the way healthcare is financed by both governmental
and private insurers in the United States, and significantly affected the pharmaceutical industry. The Affordable Care Act contains a
number of provisions, including those governing enrollments in federal healthcare programs, reimbursement adjustments and fraud and abuse
changes. Additionally, the Affordable Care Act increases the minimum level of Medicaid rebates payable by manufacturers of brand name
drugs; requires collection of rebates for drugs paid by Medicaid managed care organizations; requires manufacturers to participate in
a coverage gap discount program, under which they must agree to offer point-of-sale discounts off negotiated prices of applicable brand
drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered
under Medicare Part D; and imposes a non-deductible annual fee on pharmaceutical manufacturers or importers who sell “branded
prescription drugs” to specified federal government programs.

Since its enactment, there have
been judicial and Congressional challenges to certain aspects of the Affordable Care Act, and we expect there will be additional challenges
and amendments to the Affordable Care Act in the future. Other legislative changes have been proposed and adopted since the Affordable
Care Act was enacted, including aggregate reductions of Medicare payments to providers and reduced payments to several types of Medicare
providers. Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their
marketed products