Amgen 2010 Annual Report Download - page 42

use third-party distributors to supplement distribution of our commercial and clinical products in certain areas of the
world.
Other
In addition to the manufacturing and distribution activities noted above, our operations in the United States,
Puerto Rico and the Netherlands perform key manufacturing support functions, including quality control, process
development, procurement, distribution and production scheduling. Certain of those manufacturing and distribution
activities are highly regulated by the FDA as well as other international regulatory agencies. (See Government
Regulation — FDA Regulation of Manufacturing Standards.)
Manufacturing Initiatives
We have multiple ongoing initiatives that are designed to optimize our manufacturing network and mitigate
risks while continuing to ensure adequate supply of our commercial products. For example, we are completing the
construction and qualification of a new formulation and filling facility at our Puerto Rico site in order to mitigate the
risk associated with the majority of our formulation and fill operations being performed in a single facility and we
are qualifying the expansion of our existing bulk protein facilities at our Puerto Rico site in order to maintain supply
and to satisfy anticipated future demand for denosumab. Upon completion, the facilities will require licensure by
the various regulatory authorities.
We have also entered into an agreement with Boehringer Ingelheim (“BI”) for the divestiture of our
manufacturing facility in Fremont, California to further optimize our manufacturing network.
In addition to these projects, we have initiatives designed to operate our facilities at appropriate production
capacity over the next few years, further optimize manufacturing asset utilization, continue our use of third-party
contract manufacturers and maintain a state of regulatory compliance. (See Item 1A. Risk Factors — Manufacturing
difficulties, disruptions or delays could limit supply of our products and limit our product sales.)
Raw Materials and Medical Devices
Certain raw materials necessary for the commercial and clinical bulk manufacturing of our products are
provided by unaffiliated third-party suppliers, certain of which may be our only source for such materials. Also,
certain medical devices and components necessary for the formulation, fill and finish of our products are provided
by unaffiliated third-party suppliers, certain of which may be the sole source. Certain of the raw materials, medical
devices and components are the proprietary products of those unaffiliated third-party suppliers and are specifically
cited in our drug application with regulatory agencies so that they must be obtained from the specific sole source or
sources and could not be obtained from another supplier unless and until the regulatory agency approved such
supplier. We currently attempt to manage the risk associated with such suppliers by inventory management,
relationship management and evaluation of alternative sources when feasible. We also monitor the financial
condition of certain suppliers, their ability to supply our needs and the market conditions for these items.
Certain of the raw materials required in the commercial and clinical manufacturing of our products are sourced
from other countries and/or derived from biological sources, including mammalian tissues. In addition, one of our
marketed products also uses bovine serum and human serum albumin (“HSA”). Some countries in which we market
our products may restrict the use of certain biologically derived substances in the manufacture of drugs. We
continue to investigate alternatives to certain biological sources and alternative manufacturing processes that do not
require the use of certain biologically derived substances because such raw materials may be subject to contam-
ination and/or recall. A material shortage, contamination, recall and/or restriction of the use of certain biologically
derived substances or other raw materials, which may be sourced from other countries and that are used in the
manufacture of our products could adversely impact or disrupt the commercial manufacturing of our products or
could result in a mandated withdrawal of our products from the market. (See Item 1A. Risk Factors — We rely on
third-party suppliers for certain of our raw materials, medical devices and components.)
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