Amgen 2011 Annual Report Download - page 168

AMGEN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(alternatively referred to as peg-EPO or MIRCERA®) into the United States as Amgen believes that importation
of peg-EPO is unlawful because peg-EPO, and the method of its manufacture, are covered by Amgen’s EPO
patents. Amgen asked the ITC to issue a permanent exclusion order that would prohibit importation of peg-EPO
into the United States. The ITC instituted an investigation naming Roche Holding Ltd., F. Hoffmann-La Roche
Ltd., Roche Diagnostics GmbH, and Hoffmann-La Roche Inc. (collectively, Roche) as respondents in the
investigation. On July 7, 2006, the Administrative Law Judge (ALJ) at the ITC issued a summary determination
that Roche’s importation and use of peg-EPO in the United States had been subject to a clinical trial exemption
to patent infringement under 35 U.S.C. 271(e)(1). On August 31, 2006, the ITC adopted the ALJ’s summary
determination terminating the investigation.
On October 11, 2006, Amgen filed a petition for review of the ITC’s decision with the U.S. Court of
Appeals for the Federal Circuit (the Federal Circuit Court). On March 19, 2008, the Federal Circuit Court
reversed the ITC’s dismissal of the investigation on jurisdictional grounds. In response to Roche’s request for
rehearing, on April 30, 2009, the Federal Circuit Court vacated the ITC’s dismissal of the ITC investigation for
non-infringement. The Federal Circuit Court remanded the case back to the ITC for further proceedings to
determine if patent infringement had occurred and to provide a remedy, if appropriate.
Amgen had previously filed a separate lawsuit in November 2006 in the U.S. District Court for the District
of Massachusetts (the Massachusetts District Court) against F. Hoffmann-La Roche Ltd., Roche Diagnostics
GmbH and Hoffmann-La Roche Inc. (collectively, Roche Defendants) seeking a declaration by the
Massachusetts District Court that the importation, use, sale or offer to sell peg-EPO infringes Amgen’s EPO
patents, specifically U.S. Patent Nos. 5,547,933; 5,621,080; 5,955,422; 5,756,349; 5,618,698 and 5,441,868.
After a jury trial and an appeal, on December 22, 2009, the Massachusetts District Court entered final judgment
and a permanent injunction against the Roche Defendants prohibiting the Roche Defendants from infringing the
five Amgen patents-in-suit. The judgment was accompanied by the Roche Defendants’ admission that the patents
involved in the lawsuit are valid, enforceable and infringed by the Roche Defendant’s peg-EPO product, and by
Amgen allowing Roche to begin selling peg-EPO in the United States in mid-2014 under terms of a limited
license agreement. The settlement terms did not include any financial payments between the parties. Thereafter,
in the ITC matter Amgen filed a motion for summary determination of violation with a request for entry of a
limited exclusion order. The Roche respondents notified the ITC that they were not opposing Amgen’s motion.
On March 11, 2011, the ITC issued an order to show cause why the investigation should not be terminated
without a determination of violation or by way of consent order in view of the resolution of the Massachusetts
District Court proceedings. In response, on April 21, 2011, the parties filed a joint response requesting
termination of the investigation on the basis of a proposed Consent Order and Stipulation. On October 17, 2011,
the ITC terminated the investigation without entry of a consent order on the basis of the December 2009
settlement between the parties and resolution of the parallel litigation in the Massachusetts District Court.
Average Wholesale Price (AWP) Litigation
Amgen and its wholly owned subsidiary Immunex Inc. are named as defendants, either separately or
together, in numerous civil actions broadly alleging that they, together with many other pharmaceutical
manufacturers, reported prices for certain products in a manner that allegedly inflated reimbursement under
Medicare and/or Medicaid programs and commercial insurance plans, including co-payments paid to providers
who prescribe and administer the products. The complaints generally assert varying claims under the Medicare
and Medicaid statutes, as well as state law claims for deceptive trade practices, common law fraud and various
related state law claims. The complaints seek an undetermined amount of damages, as well as other relief,
including declaratory and injunctive relief.
The AWP litigation was commenced against Amgen and Immunex on December 19, 2001 with the filing of
Citizens for Consumer Justice, et al. v. Abbott Laboratories, Inc., et al. Additional cases have been filed since
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