Ann: Response to ASX Price Query Letter, page-143

While there’s still significant uncertainty—and therefore heightened risk until this is fully resolved—I believe we need to apply some common sense to the current reaction.

1. Scope of the Policy: The proposed changes primarily apply to inpatient medications under Medicare Part B, many of which are critical, high-cost treatments like those used in cancer care. These are drugs administered in clinical settings, not self-applied treatments like Sofdra.
2. Context of U.S. Healthcare: The U.S. has long been known for exceptionally high drug prices, with access to medication often tied directly to insurance coverage. Without insurance, many Americans simply cannot afford basic healthcare. This policy is being framed as a way to correct systemic price distortions—not as a move toward universal healthcare. Let’s not forget: Trump is not a socialist. This is about reining in excess, not dismantling the system.
3. Intent vs. Impact: While Trump wants to expand access to life-critical drugs by lowering costs under Medicare, there’s no indication he intends to undermine the entire pharmaceutical sector. Destroying pricing power entirely would crush small and mid-cap biotech companies—the very ones responsible for many novel and life-saving innovations. If that happens, these drugs won’t just be cheaper—they’ll cease to exist.
4. Insurance Fallout: A knock-on effect will likely be seen in the insurance sector. If drug prices are forced lower, the perceived value of comprehensive insurance could decline, which may pressure premiums and profitability. This could introduce a different kind of instability in healthcare financing.

All in all, this is a fight for Big Pharma—the large, institutional players whose revenues are deeply tied to Medicare Part B drugs. Companies like BOT (Botanix), with differentiated, self-administered treatments and no material exposure to Medicare pricing structures, are unlikely to be caught in the crossfire.

This issue has a long way to run, and as the details emerge and the political dust settles, I believe the market will come to see that BOT and others in this cohort are largely unaffected.