Company: SNY
Filing Date: 2025-02-13
Form Type: 20-F
Source: 0001121404-25-000010
Chunk: 107

Company: Sanofi
Filing Date: 2025-02-13
Form: 20-F
Chunk 107
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 well as such coverage for beneficiaries enrolled in Part C. The most impactful provision in the IRA is the introduction of Medicare price negotiations affecting the prices of drugs with high budget impact on Medicare Part B and Part D, starting with 10 drugs with high Part D expenditures whose negotiated pricing will take effect in 2026, up to 15 additional high-expenditure Part D drugs whose pricing will take effect in 2027, and up to 15 more drugs with high expenditures under Parts Part B and/or Part D whose negotiated pricing will take effect in 2028. From 2029 and beyond, up to 20 more drugs with high Part B and/or Part D expenditures will be selected for negotiated pricing taking effect each year. No Sanofi product was selected for the first round of price negotiations which resulted in steep discounts ranging from 60% to 80% of the list price on the selected drugs. The IRA also imposes inflation penalties applied to Medicare volumes in Medicare Part B and D if prices rise faster than inflation (based on the consumer price index, CPI), beginning in October 2022 for Part D and January 2023 for Part B.

| 44 | SANOFIFORM 20-F2024 |

| PART I                             |
| ITEM 4. Information on the Company |

Other measures of the IRA redesign the Medicare Part D benefit, including a monthly $35 insulin cap in 2023 and an annual $2,000 out-of-pocket (OOP) spending cap in 2025 for Medicare beneficiaries. Altogether, the IRA was initially expected to reduce federal drug spending by about $290 billion through 2031 according to estimates from the Congressional Budget Office (CBO). The legislation is also likely to have a negative impact on industry revenue growth and future innovation, although significant uncertainties remain over the process and methods of Medicare price negotiations. In addition to the IRA, the industry is exposed to increased price pressure from continuing vertical integration and consolidation wit hin the US health insurance market . With the three largest PBM-owned group purchasing organizations (GPOs) Ascent, Zinc and Emisar now covering over 85% of US prescription drug claims, consolidation has increased payers’ bargaining power when negotiating discounted prices, leading to stricter formulary management and a dramatic increase in product exclusions over the past five years. Europe In Europe, economic pressures stemming from rising inflation and slow economic growth are resulting in a heightened focus on cost-containment across healthcare systems and a growing tension between affordability and innovation. On April 26 202