Amgen 2010 Annual Report Download - page 57

Item 1A. RISK FACTORS
This report and other documents we file with the SEC contain forward looking statements that are based on
current expectations, estimates, forecasts and projections about us, our future performance, our business or others
on our behalf, our beliefs and our management’s assumptions. These statements are not guarantees of future
performance and involve certain risks, uncertainties and assumptions that are difficult to predict. You should
carefully consider the risks and uncertainties facing our business. The risks described below are not the only ones
facing us. Our business is also subject to the risks that affect many other companies, such as employment relations,
general economic conditions, geopolitical events and international operations. Further, additional risks not
currently known to us or that we currently believe are immaterial also may impair our business, operations,
liquidity and stock price materially and adversely.
Our sales depend on coverage and reimbursement from third-party payers.
Sales of all of our principal products are dependent on the availability and extent of coverage and reim-
bursement from third-party payers, including government healthcare programs and private insurance plans.
Governments and private payers may regulate prices, reimbursement levels and/or access to our products to
control costs or to affect levels of use of our products. We rely in large part on the reimbursement of our principal
products through government programs such as Medicare and Medicaid in the United States and similar programs
in foreign countries and a reduction in the coverage and/or reimbursement for our products could have a material
adverse effect on our product sales and results of operations.
The government-sponsored healthcare systems in Europe and many other foreign countries are the primary
payers for healthcare expenditures, including payment for drugs and biologics, in those regions. While mandatory
price reductions have been a recurring aspect of business for the pharmaceutical and biotechnology industries in
Europe, given the current worldwide economic conditions, certain European country governments have increased
the frequency and size of such mandatory price reductions to extract further cost savings. For example, in 2010
countries such as Greece announced price reductions and/or mandated rebates for certain pharmaceutical and
biological products that substantially exceeded prior levels. We expect that other countries may follow and/or take
similar or more extensive actions to reduce expenditure on drugs and biologics, including mandatory price
reductions, preference for biosimilar products or reduction in the amount of reimbursement. While we cannot fully
predict the extent of further price reductions by countries in Europe or the impact such price reductions will have on
our business, such reductions in price and/or the coverage and reimbursement for our products in European
countries could have a material adverse effect on our product sales and results of operations.
In March 2010 the United States adopted significant healthcare reform through the enactment of the PPACA
and the Heathcare and Education Reconciliation Act. (See Reimbursement — U.S. Healthcare Reform.) A major
goal of the new healthcare reform law is to provide greater access to healthcare coverage for more Americans.
Accordingly, the new healthcare reform law requires individual U.S. citizens and legal residents to maintain
qualifying health coverage, imposes certain requirements on employers with respect to offering health coverage to
employees, amends insurance regulations regarding when coverage can be provided and denied to individuals, and
expands existing government healthcare coverage programs to more individuals in more situations, with most of
these changes going into effect in January 2014. We do not expect a significant increase in sales of our products as a
result of the 2014 expansions in healthcare coverage. The new healthcare reform law does have several components,
with varied implementation dates that began in 2010, that have and are expected to continue to adversely impact our
business. While we cannot fully predict the ultimate impact the new healthcare reform law will have on us, we
expect that the new law will continue to have a material adverse effect on our business and results of operations.
Public and private insurers have pursued, and continue to pursue, aggressive cost containment initiatives,
including increased focus on comparing the effectiveness, benefits and costs of similar treatments, which could
result in lower reimbursement rates for our products. A substantial portion of our U.S. business relies on
reimbursement under Medicare Part B coverage. Any deterioration in the timeliness or certainty of payment
from CMS to physicians, including as a result of changes in policy or regulations, or as a result of operational
difficulties, could negatively impact the willingness of physicians to prescribe our products for patients relying on
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