Amgen 2009 Annual Report Download - page 59

ESRD clearly (i) demonstrates the benefits and risks of ESA therapy, (ii) supports a baseline Hb range or (iii) jus-
tifies a dose response or maximum dose. CMS will decide whether more evidence is needed to determine
whether ESA treatment is reasonable and necessary to support continued Medicare coverage. CMS may consider
initiating a NCA or a NCD following the MEDCAC and a NCD for ESAs in the renal setting, which may include
non-coverage and/or new dosing and treatment restrictions, could negatively affect use, reimbursement and
coverage, and product sales of our ESA products. Also included in the initial potential future NCD topic list is
the category of thrombopoiesis stimulating agents (platelet growth factors), the category of drugs that includes
Nplate®although CMS has not announced whether it will proceed with a NCD related to thrombopoiesis
stimulating agents.
Additional initiatives addressing the coverage or reimbursement of our products could result in less ex-
tensive coverage or lower reimbursement, which could negatively affect sales of our products. For example, on
September 15, 2009, CMS released its proposed rule to implement a bundled prospective payment system for
ESRD facilities as required by the MIPPA. Although we cannot predict what the final rule on the bundled pay-
ment system for ESRD facilities will include, implementation of the rule as proposed could have a material
adverse impact on the coverage and reimbursement, use and sales of EPOGEN®and Sensipar®. Healthcare pro-
viders may narrow the circumstances in which they prescribe or administer our products if reimbursement rates
are reduced or in anticipation of reimbursement being reduced, which could reduce the use and/or price of our
products. A reduction in the use or price of our products could have a material adverse effect on us and our re-
sults of operations.
If our intellectual property positions are challenged, invalidated, circumvented or expire, or if we fail to pre-
vail in present and future intellectual property litigation, our business could be adversely affected.
Our success depends in part on our ability to obtain and defend patent rights and other intellectual property
rights that are important to the commercialization of our products and product candidates. The patent positions of
pharmaceutical and biotechnology companies can be highly uncertain and often involve complex legal, scientific
and factual questions. Third parties may challenge, invalidate or circumvent our patents and patent applications
relating to our products, product candidates and technologies. In addition, our patent positions might not protect
us against competitors with similar products or technologies because competing products or technologies may
not infringe our patents. For certain of our product candidates, there are third parties who have patents or pending
patent applications that they may claim necessitate payment of a royalty or prevent us from commercializing
these product candidates in certain territories. Patent disputes are frequent, costly and can preclude, delay or in-
crease the cost of commercialization of products. We are currently, and in the future may be, involved in patent
litigation. A patent dispute or litigation may not discourage a potential violator from bringing the product that is
alleged to infringe to market and we may be subject to competition during certain periods of litigation. Further,
under the Hatch-Waxman Act, products approved by the FDA under a NDA may be the subject of patent liti-
gation with generic competitors before the five year period of data exclusivity provided for under the Hatch-
Waxman Act has expired and prior to the expiration of the patents listed for the product. Moreover, if we lose or
settle current or future litigations at certain stages or entirely, we could be subject to competition and/or sig-
nificant liabilities; be required to enter into third-party licenses for the infringed product or technology or be
required to cease using the technology or product in dispute. In addition, we cannot guarantee that such licenses
will be available on terms acceptable to us, or at all.
In recent years, policymakers have proposed reforming U.S. patent laws and regulations. For example, pat-
ent reform legislation was introduced in both houses of the U.S. Congress in 2009, and the Senate Judiciary
Committee approved a patent reform bill on April 2, 2009. In general, the proposed legislation attempts to ad-
dress issues surrounding the increase in patent litigation by, among other things, establishing new procedures for
challenging patents. While we cannot predict what form any new patent reform laws or regulations ultimately
may take, final legislation could introduce new substantive rules and procedures for challenging patents, and cer-
tain reforms that make it easier for competitors to challenge our patents could have a material adverse effect on
our business.
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