What changed in this filing

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Item 1A. Risk Factors

2025-11-04 compared with 2025-08-06 · 119 added, 1 removed, 41 unchanged (75% of the section changed)

39 unchanged sentences

series of risks related to climate change” previously disclosed in our 2024 10-K.

If any of these events occurs, our business

If any of these events occur , our business

could be adversely affected .

The impact of healthcare reform legislation and other proposed or future changes impacting the healthcare

industry and healthcare spending on us is currently unknown, but may adversely affect our business, financial

condition and results of operations.

Our revenue is dependent on the healthcare industry and could be affected by changes in healthcare spending and

The healthcare industry is subject to changing political, regulatory and other influences.

The Affordable Care Act (the

“ACA”), enacted in March 2010, made major changes in how healthcare is delivered and reimbursed, and increased access

to health insurance benefits to the uninsured and underinsured population of the United States.

The ACA, among other

things, increased the number of individuals with Medicaid and private insurance coverage, implemented reimbursement

policies that tie payment to quality, facilitated the creation of accountable care organizations that may use capitation and

other alternative payment methodologies, strengthened enforcement of fraud and abuse laws and encouraged the use of

information technology.

New and changing laws, regulations, executive orders and other governmental actions, particularly from the new

presidential administration, may also create uncertainty about how laws and regulations will be interpreted and applied.

Such changes can adversely affect our business by increasing our costs, reducing spending by our customers, limiting the

Company’s ability to pursue or offer new offerings, and requiring changes to our business.

Regulatory changes and other

actions that materially adversely affect our business may be announced with little or no advance notice and we may not be

able to effectively mitigate all adverse impacts from such measures.

Differing interpretations of such legal obligations can

expose us to significant fines, government investigations, litigation and reputational harm.

If we are found to have violated

laws, regulations, or executive orders, it could materially adversely affect our business, reputation, results of operations and

financial condition.

In addition, recently there has been heightened governmental scrutiny of the manner in which pharma manufacturers

set prices for their marketed products, which has resulted in several U.S.

congressional inquiries and proposed and enacted

federal and state legislation designed to, among other things, bring more transparency to medication pricing, reduce the cost

of prescription medications under government payor programs, and review the relationship between pricing and

manufacturer patient programs.

For example, in August 2022, former President Biden signed the Inflation Reduction Act of

2022 (the “IRA”) into law.

This statute marks the most significant action by Congress with respect to the pharmaceutical

industry since adoption of the ACA in 2010.

Among other things, the IRA requires manufacturers of certain drugs to engage

in price negotiations with Medicare, with prices that can be negotiated subject to a cap;

imposes rebates under Medicare

Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023);

redesigns the Medicare Part

D benefit (beginning in 2024);

and replaces the Part D coverage gap discount program with a new manufacturer discounting

program (beginning in 2025).

The Centers for Medicare & Medicaid Services has published the negotiated prices for the

initial ten drugs, which will first be effective in 2026, and has published the list of the subsequent 15 drugs that will be subject

to negotiation.

The IRA permits the Secretary of the Department of Health and Human Services ("HHS") to implement many

of these provisions through guidance, as opposed to regulation, for the initial years.

HHS has and will continue to issue and

update guidance as these programs are implemented, although the drug price negotiation program is currently subject to

legal challenges.

In addition, the IRA delayed the final rule removing safe harbor protection for price reductions given by

pharmaceutical manufacturers to plan sponsors under Part D, either directly or through PBMs, unless the price reduction is

required by law, until 2032.

In July 2025, the government enacted the One Big Beautiful Bill Act (the “OBBBA”), which

included reforms to programs such as Medicaid and restrictions for certain groups to access the Affordable Care Act

These changes may result in an increase in the number of individuals who are unable to access health

insurance benefits and medical care, and their ability to receive prescriptions and certain prescribed medications.

impact of the IRA and OBBBA on our business and the pharmaceutical industry cannot yet be fully determined but is likely to

be significant.

More recently, the current presidential administration has proposed the imposition of a 100% tariff on branded or

patented pharmaceutical product produced outside of the United States.

Such tariff may increase costs to our customers

and decrease demand for pharmaceutical products and consequently our offerings, which could have a material adverse

effect on our business, financial condition and results of operations.

Certain major drug producers and manufacturers are in

negotiations with the administration to receive relief from such tariff.

As a result of these negotiations, certain manufacturers

have announced their participation in a new government sponsored direct-to-consumer platform called “TrumpRx.gov,”

designed to offer consumers discounts on their products and some specialty brands.

Details regarding this government

sponsored platform, as well as any potential positive or negative impact on our business, offerings or results of operations,

are unclear at this time but may be significant.

Our ability to realize the benefits of opportunities that we elect to pursue, such as initiatives related to TrumpRx.gov,

may be limited, and we may be unable to fully achieve related business goals.

At the same time, ongoing changes and shifts

in healthcare policy, or changes in applicable legal standards, may reduce or even eliminate opportunities we may wish to

As a result, any returns on our investment in developing these opportunities are uncertain and the failure to achieve

related business goals may adversely affect our financial condition and results of operations.

Congress has and is likely to continue to scrutinize key participants in the healthcare industry, including PBMs.

number of bills have been introduced in Congress that would further regulate PBMs and impose additional requirements.

The Federal Trade Commission (the "FTC") has issued statements about PBMs and conducted a study of PBMs that

resulted in two published reports, which could motivate further actions by Congress with respect to PBM regulation.

findings in the report may motivate further actions by Congress with respect to PBM regulation.

In September 2024, the FTC

filed an administrative complaint against the three largest PBMs and their affiliated group purchasing organizations alleging

that the PBMs engaged in anti-competitive and unfair practices that increased costs for insulin medication.

It is unclear what

the results of this matter will be, and what impact this will have on the PBM industry and our business, financial condition

and results of operations.

See our risk factor titled “We are, and may become in the future, subject to various legal

proceedings and claims that arise in or outside the ordinary course of business, which may require significant management

time and attention, result in significant legal expenses and may result in unfavorable outcomes, which may have a material

adverse effect on our business, operating results and financial condition, and negatively affect the price of our Class A

common stock ” previously disclosed in our 2024 10-K.

Individual states in the United States have also increasingly passed legislation and implemented regulations designed

to control medication pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product

access, disclosure, transparency and reporting requirements to regulatory agencies regarding marketing costs and

discounts provided to patients, such as those provided through our prescription transactions offering and subscription

offerings, for prescription medications dispensed by pharmacies, and, in some cases, designed to encourage importation

from other countries and bulk purchasing.

Some states have enacted legislation creating so-called prescription drug

affordability boards, which ultimately may attempt to impose price limits on certain drugs in these states.

In addition, the

Supreme Court held in December 2020 in Rutledge v.

Pharmaceutical Care Management that ERISA, a federal statute, did

not preempt an Arkansas state law that regulates PBM reimbursements to network pharmacies and other standards for

PBMs’ reimbursements to network pharmacies.

As a result of this holding, some states have passed, and other states may

pass similar legislation or may otherwise attempt to regulate PBMs, which could have impacts on the healthcare industry.

Further, we may see heightened regulatory scrutiny from state regulators related to our integrated savings programs,

particularly with respect to insurance laws.

These regulatory requirements and related scrutiny may impose timing and

expense constraints on us or our industry partners that could adversely affect our partnerships or our operations.

We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could

impact the amounts that federal and state governments and other third-party payors will pay for healthcare products and

services or require us to restructure our existing arrangements with PBMs and pharma manufacturers, any of which could

adversely affect our business, financial condition and results of operations.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors