Company: PTHS
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001753926-25-000503
Chunk: 78

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1
Chunk 78
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 third-party coverage and reimbursement of newly approved products. In the United States,
third-party payors, including government payors such as the Medicare and Medicaid programs, play an important role in determining
the extent to which new drugs and biologics will be covered and reimbursed. The Medicare and Medicaid programs increasingly are
used as models for how private payors and government payors develop their coverage and reimbursement policies.

Outside
the United States, international operations generally are subject to extensive government price controls and other market regulations
and increasing emphasis on cost-containment initiatives in the European Union, Canada and other countries may put pricing pressure
on us. In many countries, the prices of medical products are subject to varying price control mechanisms as part of national health
systems. It also can take a significant amount of time after approval of a product to secure pricing and reimbursement for such
product in many counties outside the United States. In general, the prices of medicines under such systems are substantially lower
than in the United States. Other countries allow companies to fix their own prices for medical products but monitor and control
company profits. Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are
able to charge for our compounds. Accordingly, in markets outside the United States, the reimbursement for our products will be
reduced compared with the United States and may be insufficient to generate commercially reasonable product revenues.

Moreover,
increasing efforts by government and third-party payors in the United States and abroad to cap or reduce healthcare costs may
cause such organizations to limit both coverage and the level of reimbursement for new products approved and, as a result, they
may not cover or provide adequate payment for our compounds. Payors increasingly are considering new metrics as the basis for
reimbursement rates, such as average sales price, average manufacturer price, and Actual Acquisition Cost. The existing data for
reimbursement based on some of these metrics is relatively limited, although certain states have begun to survey acquisition cost
data for the purpose of setting Medicaid reimbursement rates, and CMS has begun making pharmacy National Average Drug Acquisition
Cost and National Average Retail Price data publicly available on at least a monthly basis. Therefore, it may be difficult to
project the impact of these evolving reimbursement metrics on the willingness of payors to cover candidate products that we or
our partners are able to commercialize. We expect to experience pricing pressures in connection with the sale of any of our product
candidates due to the trend toward managed healthcare, the increasing influence of health maintenance