Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 238

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1A
Chunk 238
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 gain market share or achieve sustained profitability.

Concentration of sales
at certain of our wholesaler distributors and consolidation of private payors may negatively affect our business.

Certain of our distributors,
customers and payors have substantial purchasing leverage, due to the volume of our products they purchase or the number of patient lives
for which they provide coverage. The substantial majority of our U.S. branded product sales are made through four pharmaceutical product
wholesaler distributors: McKesson Corporation, AmerisourceBergen Corporation, Western Wellness and Cardinal Health, Inc. These distributors,
in turn, sell our products to their customers, which include physicians or their clinics, ambulatory surgical centers, hospitals and
pharmacies. Similarly, as discussed above, there has been significant consolidation in the health insurance industry, including that
a small number of PBMs now oversee a substantial percentage of total covered lives in the U.S. See the risk factor Our sales depend
on coverage and reimbursement from government and commercial third-party payors, and pricing and reimbursement pressures have affected,
and are likely to continue to affect, our profitability. The three largest PBMs in the U.S. are now part of major health insurance
providers. The growing concentration of purchasing and negotiating power by these entities has, and may continue to, put pressure on
our pricing due to their ability to extract price discounts on our branded products, fees for other services or rebates, negatively affecting
our bargaining position, sales and/or profit margins. In addition, decisions by these entities to purchase or cover less or none of our
branded products in favor of competing products could have a material adverse effect on our branded product sales, business and results
of operations due to their purchasing volume. Further, if one of our significant wholesale distributors encounters financial or other
difficulties and becomes unable or unwilling to pay us all amounts that such distributor owes us on a timely basis, or at all, it could
negatively affect our business and results of operations. In addition, if one of our significant wholesale distributors becomes insolvent
or otherwise unable to continue its commercial relationship with us in its present form, it could significantly disrupt our business
and adversely affect our product sales, our business and results of operations unless suitable alternatives are timely found or lost
sales are absorbed by another distributor.

 35 

If we are unable to protect our proprietary
rights, we may not be able to prevent others from using our intellectual property, which may reduce the competitiveness and value of
the related assets.

Our