Company: GIFLF
Filing Date: 2025-04-11
Form Type: 20-F
Source: 0001104659-25-034245
Chunk: 138

Company: Grifols SA
Filing Date: 2025-04-11
Form: 20-F
Item: Item 4
Chunk 138
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-federal AMP for the prior fiscal year.
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90

Medicare and the 340B Program.
The primary Medicare programs that may affect reimbursement for the Grifols Group are Medicare Part B, which covers physician services and outpatient care, and Medicare Part D, which provides a voluntary outpatient prescription drug benefit.
Medicare Part B reimburses providers for certain covered drugs and biologicals furnished in the outpatient setting, such as physician offices and hospital outpatient settings. The rate of reimbursement historically has generally been of average sales price (“ASP”) + 6%. Starting January 1, 2018 a CMS rule reduced Medicare Part B reimbursement to a rate of ASP - 22.5%. Such reduction was ruled unlawful by the U.S. Supreme Court on June 15, 2022, causing CMS to reinstate the general ASP + 6% rate retroactively to January 1, 2018. Following this ruling, CMS issued a new rule on November 8, 2023 determining that affected hospitals will receive a one-time lump-sum amount equivalent to the approximate payment they would have received if the 2018-2022 340B Program payment policy had never existed. The 340B Program remains subject to legal challenges involving litigation that may result in program changes, which creates uncertainty. We believe that we meet the requirements of the 340B Program and are continuing to review and monitor these and other developments affecting the 340B Program. In addition, under the Bipartisan Budget Act of 2013 and subsequent measures, Medicare is subject to a 2% reduction in federal spending, or “sequestration,” including drugs reimbursed under Medicare, for federal fiscal years 2013 through 2032. The full ramifications of this sequestration for Medicare reimbursement remain uncertain, as further Congressional action may reduce, eliminate or otherwise change this payment reduction.
Medicare Part D coverage is administered through private insurers that contract with CMS. To obtain payments under this program, which covers certain of our products, we are required to negotiate prices with private insurers operating pursuant to federal program guidance, and these prices may be lower than we might otherwise obtain. In addition, the Medicare Part D Program had included a coverage gap feature, where once beneficiaries had expended certain amounts for drugs payable under Medicare Part D, Medicare Part D benefits were decreased for a period until certain levels of out-of-pocket spending were incurred by such beneficiaries. Pursuant to this coverage gap, drug manufacturers were required to provide a 70% discount (the “Coverage Gap Discount”)