Company: TAK
Filing Date: 2025-06-25
Form Type: 20-F
Source: 0001395064-25-000095
Chunk: 6

Company: TAKEDA PHARMACEUTICAL CO LTD
Filing Date: 2025-06-25
Form: 20-F
Item: Item 3
Chunk 6
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, potentially increasing the proportion of our U. S. sales that are subject to such mandatory discounts. In addition, in 2022, Congress passed the Inflation Reduction Act (the “ IRA”), which significantly changes the compensation terms for drugs under the Medicare program, including by imposing penalties on manufacturers who raise drug prices faster than inflation, instituting a cap on out-of-pocket expenditures by Medicare beneficiaries and allowing the federal government to set prices for certain drugs covered under Medicare beginning in 2026. We expect the IRA to negatively impact profits due to changes in design of the Part D program and future price negotiation of Takeda products. The IRA may also lead to further political pressure or legislative, regulatory or other efforts to introduce lower prices, reduce spending on the Medicare and Medicaid programs, expand and strengthen the Affordable Care Act, and lower the overall spending by the government on prescription medicines. In May 2025, the U. S. administration issued an executive order intended to encourage or impose the use of “ Most Favored Nation” (MFN) pricing in the U. S. market. MFN is a price-setting mechanism, which would tie U. S. prescription drug prices to the lowest price available in selected “comparably developed nations.” While complete details regarding the implementation of the order are not yet available and the actual impact cannot be estimated with certainty, if fully implemented, MFN pricing in the U. S. market could, among other things, result in the reduction of the prices of our products in the U. S., which could in turn materially and adversely impact our business, financial condition and results of operations. Various state legislatures and regulators have also enacted, or are pursuing, policy changes that could further increase pricing pressure on our products (e. g., prescription drug affordability boards). As a result, we expect the healthcare industry in the U. S. will continue to be subject to increased pricing and spending pressure and our products could face adverse impacts on pricing in the U. S.

In Japan, manufacturers of pharmaceutical products must have new products listed on the National Health Insurance (the “ NHI”) Drug Price Standard, a price list published by the MHLW (the “ NHI price list”). The NHI price list provides rates for calculating the price of pharmaceutical products used in medical services provided under various public medical care insurance systems. Prices on the NHI price list have been previously subject to revisions based on the actual prices and amounts by which the pharmaceutical products are purchased by medical institutions in Japan, and the average