Amgen 2011 Annual Report Download - page 20

(EU), there is already an established regulatory pathway for biosimilars and we are facing increasing competition
from biosimilars. In the United States after patent expiration, we expect to face greater competition, including
from manufacturers with biosimilar products approved in Europe that may seek to quickly obtain U.S. approval.
Upon patent expiration for small molecule products, there is typically intense competition from generics
manufacturers, which generally leads to significant and rapid declines in sales of the branded product. Given that
our principal products are biologics, we do not believe the impact of biosimilar competition will be as significant
as with small molecule products in part because successful competitors must have a broad range of specialized
skills and capabilities unique to biologics, including significant regulatory, clinical and manufacturing expertise,
and since the products are similar, but not identical, the biosimilars will have to compete against a product with
an established efficacy and safety record. In some cases we may experience additional competition prior to the
expiration of our patents as a result of agreements we have made in connection with the settlement of patent
litigation with companies developing potentially competing products. (See, e.g., the discussions of Neulasta®/
NEUPOGEN®and Aranesp®later in this section).
Further, the introduction of new products or the development of new processes or technologies by
competitors or new information about existing products may result in increased competition for our marketed
products, even for those protected by patents, or in a reduction of price that we receive from selling our products.
In addition, the development of new treatment options or standards of care may reduce the use of our products or
may limit the utility and application of ongoing clinical trials for our product candidates.
In addition to the challenges presented by competition, our existing products and product candidates are
also subject to increasing regulatory compliance requirements that could be imposed as conditions of approval or
after a product has been approved. This is increasingly true of new therapies with novel mechanisms of action.
While such therapies may offer important benefits and/or better treatment alternatives, they may also involve
relatively new or higher levels of scientific complexity and may therefore generate increased safety concerns. We
design and implement comprehensive proactive pharmacovigilance programs for all of our products to help
ensure the detection, assessment and communication of adverse effects. When deemed necessary and
appropriate, additional measures for risk communication and mitigation are designed and implemented in
consultation with regulatory agencies. As a condition of approval or due to safety concerns after a product has
been approved, we may be required to perform additional clinical trials or studies, including postmarketing
requirements (PMRs) and postmarketing commitments (PMCs). A PMR is a trial or study that a sponsor
company is required by statute or regulation to conduct. A PMC is a trial or study that a sponsor company agrees
to in writing, but is not required by law, to conduct. In addition, we may be required to implement risk
management plans for our products in the various regions in which they are approved. For example, in 2008 the
FDA began requiring risk evaluation and mitigation strategies (REMS) for various approved products to ensure
that the benefits of the drugs outweigh the risks. A REMS may also be imposed as a condition of approval or
after a product has been on the market. A REMS may include a medication guide or a patient package insert, a
healthcare provider communication plan or elements to assure safe use that the FDA deems necessary. While the
elements of REMS may vary, all REMS require the sponsor company to submit periodic assessment reports to
the FDA to demonstrate that the goals of the REMS are being met. The FDA evaluates such assessments and
may require additional modifications to the REMS elements. REMS may also be modified as the FDA and
companies gain more experience with REMS and how they are implemented, operated and monitored. We
currently have REMS for a number of our marketed products. (See discussion on PMRs, PMCs and REMS in
Government Regulation.)
Most patients receiving our principal products for approved indications are covered by either government or
private payer healthcare programs, which influence demand. The reimbursement environment continues to evolve
with greater emphasis on both cost containment and demonstration of the economic value of products. In addition,
the current worldwide economic conditions have also contributed to increasing pressures on cost containment.
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