40 Moreover, there has been heightened governmental scrutiny in the United States of pharmaceutical pricing practices in light of the rising cost of prescription drugs r and biologics. Such scrutiny has resulted in several recent congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufac f turer patient programs, and reform government program reimbursement methodologies. At the federal level, in July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,” with multiple provisions aimed at prescription drugs r . In response to Biden’s executive order, on September 9, 2021, the U.S. Department of Health and Human Services, or HHS released a Comprehensive Plan for Addressing High Drug r Prices that outlines principles for drug r pricing reform and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles. In addition, the IRA, R among other things, (i) directs HHS to negotiate the price of certain high-expenditure, single-source drugs r and biologics covered under Medicare, and subj u ect drug r manufact f ur t ers to civil monetary penalties and a potential excise tax by offe f ring a price that is not equal to or less than the negotiated “maximum fair price” for such drugs r and biologics under the law, and (ii) imposes rebates with respect to certain drugs r and biologics covered under Medicare Part B or Medicare Part D to penalize price increases that outpa t ce inflation. The IRA R permits 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. These provisions take effe f ct progressively starting in fiscal year 2023. On August 29, 2023, HHS announced the list of the first ten drugs r that will be subj u ect to price negotiations, although the Medicare drug r price negotiation program is currently subj u ect to legal challenges. It is currently unclear how the IRA R will be implemented but is likely to have a significant impact on the pharmaceutical industry. r In response to the Biden administration’s October 2022 executive order, on Februa r ry 14, 2023, HHS released a report outlining three new models for testing by the Center for Medicare and Medicaid Innovation which will be evaluated on their ability to lower the cost of drugs r , promote accessibility, and improve quality of care. It is unclear whether the models will be utilized in any health reform measures in the future. Further, on December 7, 2023, the Biden administration announced an initiative to control the price of prescription drugs r through the use of march-in rights under the Bayh-Dole Act. On December 8, 2023, the National Institute of Standards and Technology published for comment a Draftf Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights. While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework. At the state level, legislatur t es have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. For example, on January 5, 2024, the FDA approved Florida’s Section 804 Importation Program (SIP) proposal to import certain drugs r from Canada for specific state healthcare programs. It is unclear how this program will be implemented, including which drugs r will be chosen, and whether it will be subj u ect to legal challenges in the United States or Canada. Other states have also subm u itted SIP proposals that are pending review by the FDA. We expect that the ACA, the IRA, R as well as other healthcare reform measures that may be adopted in the future, may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, lower reimbursement and new payment methodologies. This could lower the price that we receive for any approved product. Any denial in coverage or reduction in reimbursement from Medicare or other government-funded programs may result in a similar denial or reduction in payments from private payors, which may prevent us from being able to generate sufficient revenue, attain profita f bi a lity or commercialize our product candidates, if approved.