the application on the basis of foreign data alone unless the following are true: the data are applicable to the United States
population and United States medical practice; the studies were performed by clinical investigators of recognized competence;
and the data are considered valid without the need for an on-site inspection by the FDA or, if the FDA considers such an inspection
to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means. Additionally,
the FDA’s clinical study requirements, including sufficient size of patient populations and statistical powering, must be
met. Many foreign regulatory bodies have similar requirements. In addition, such foreign studies would be subject to the applicable
local laws of the foreign jurisdictions where the studies are conducted. There can be no assurance that the FDA or any applicable
foreign regulatory authority will accept data from studies conducted outside of the United States or the applicable jurisdiction.
If the FDA or any applicable foreign regulatory authority does not accept such data, it would result in the need for additional
studies, which would be costly and time-consuming and delay aspects of our business plan, and which may result in our drugs or
drug candidates not receiving approval or clearance for commercialization in the applicable jurisdiction.
Enacted and future legislation may increase
the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and may affect the prices
we may set.
In the United States and the European Union,
there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system. These changes
could prevent or delay marketing approval of our product candidates and restrict or regulate post-approval activities and affect
our ability to profitably sell any products for which we obtain marketing approval.
In the United States, the Medicare Prescription
Drug, Improvement, and Modernization Act of 2003, or the Medicare Modernization Act, changed the way Medicare covers and pays for
pharmaceutical products. The legislation expanded Medicare coverage for drug purchases by the elderly and introduced a new reimbursement
methodology based on average sale prices for physician-administered drugs. In addition, this legislation provided authority for
limiting the number of drugs that will be covered in any therapeutic class. Cost-reduction initiatives and other provisions of
this legislation could decrease the coverage and price that we receive for any approved products. While the Medicare Modernization
Act applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment
limitations in setting their own reimbursement rates. Therefore, any reduction in reimbursement that results from the Medicare
Modernization Act may result in a similar reduction in payments from private payors.
In March 2010, former President Obama signed
into law the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively,
the Health Care Reform Law, a sweeping law intended to broaden access to health insurance, reduce or constrain the growth of healthcare
spending, enhance remedies against fraud and abuse, add new transparency requirements for health care and health insurance industries,
impose new taxes and fees on the health industry and impose additional health policy reforms. The Health Care Reform Law, among
other things, increased rebates a manufacturer must pay to the Medicaid program, addressed a new methodology by which rebates owed
by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted
or injected, established a new Medicare Part D coverage gap discount program, in which manufacturers must provide 50% point-of-sale
discounts on products covered under Part D and implemented payment system reforms including a national pilot program on payment
bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain
healthcare services through bundled payment models. Further, the new law imposed a significant annual fee on companies that manufacture
or import branded prescription drug products. Substantial new provisions affecting compliance were enacted, which may affect our
business practices with health care practitioners.
In 2018, we continue to face uncertainties
because of continued U.S. federal legislative and administrative efforts to repeal, substantially modify or invalidate some or
all of the provisions of the Health Care Reform Law. In January 2017, Congress voted to adopt a budget resolution for fiscal year
2017, or the Budget Resolution, that authorized the implementation of legislation that would repeal portions of the Health Care
Reform Law. Further, on January 20, 2017, President Trump signed an Executive Order directing federal agencies with authorities
and responsibilities under Health Care Reform Law to waive, defer, grant exemptions from, or delay the implementation of any provision
of Health Care Reform Law that would impose a fiscal or regulatory burden on states, individuals, healthcare providers, health
insurers, or manufacturers of pharmaceuticals or medical devices. The practical implications of that order are unclear, and the
future of the Health Care Reform Law is uncertain. Congress also could consider subsequent legislation to replace elements of the
Health Care Reform Law that are repealed. There is no assurance that the Health Care Reform Law, as currently enacted or as amended
in the future, will not adversely affect our business and financial results, and we cannot predict how future federal or state
legislative or administrative changes relating to healthcare reform will affect our business.