Amgen 2015 Annual Report Download - page 37

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assessments of the value and pricing of pharmaceutical products. These assessments may come from private organizations, such
as the Institute for Clinical and Economic Review, who publish their findings and offer recommendations relating to the products’
reimbursement by government and private payers. In addition, government HTA organizations, such as the National Institute for
Health and Clinical Excellence in the United Kingdom (UK) and the Canadian Agency for Drugs and Technologies in Health,
make reimbursement recommendations to payers in their jurisdictions based on the clinical effectiveness, cost-effectiveness and
service impact of new, emerging and existing medicines and treatments. Any recommendations or guidelines that result in decreased
use, dosage or reimbursement of our products could have a material adverse effect on our product sales, business and results of
operations. In addition, the perception by the investment community or stockholders that such recommendations or guidelines
will result in decreased use and dosage of our products could adversely affect the market price for our common stock.
The adoption of new tax legislation or exposure to additional tax liabilities could affect our profitability.
We are subject to income and other taxes in the United States and other jurisdictions in which we do business. As a result,
our provision for income taxes is derived from a combination of applicable tax rates in the various places we operate. Significant
judgment is required for determining our provision for income tax and our tax returns are periodically examined by various tax
authorities. We believe our accrual for income tax liabilities is appropriate based on past experience, interpretations of tax law,
and judgments about potential actions by tax authorities; however, due to the complexity of the provision for income taxes, the
ultimate resolution of any tax matters may result in payments greater or less than amounts accrued. Our provision for income taxes
and results of operations in the future could be adversely affected by changes to our operating structure, changes in the mix of
income and expenses in countries with differing tax rates, changes in the valuation of deferred tax assets and liabilities, and changes
in applicable tax laws, regulations or administrative interpretations thereof. A change to the U.S. tax system, such as a change to
the taxation of income earned outside the United States including credits allowed for foreign taxes, a change to the tax system in
a jurisdiction where we have significant operations, such as Puerto Rico, or changes in tax law in the United States or other
jurisdictions where we do business, could have a material and adverse effect on our business and on the results of our operations.
We rely on third-party suppliers for certain of our raw materials, medical devices and components.
We rely on unaffiliated third-party suppliers for certain raw materials, medical devices and components necessary for the
manufacturing of our commercial and clinical products. Certain of those 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 that specific sole source or sources and could not be obtained from another supplier
unless and until the regulatory agency approved such supplier. For example, Insulet Corporation is our single source of the on-
body injector for our Neulasta® Onpro™ kit. Also, 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, bovine
serum and human serum albumin.
Among the reasons we may be unable to obtain these raw materials, medical devices and components include:
• regulatory requirements or action by regulatory agencies or others;
• adverse financial or other strategic developments at or affecting the supplier, including bankruptcy;
• unexpected demand for or shortage of raw materials, medical devices or components;
• failure to comply with our quality standards which results in quality and product failures, product contamination and/or
recall;
• a material shortage, contamination, recall and/or restrictions on the use of certain biologically derived substances or other
raw materials;
• discovery of previously unknown or undetected imperfections in raw materials, medical devices or components; and
• labor disputes or shortages, including the effects of health emergencies, natural disasters, or otherwise.
These events could negatively impact our ability to satisfy demand for our products, which could have a material adverse
effect on our product use and sales and our business and results of operations. For example, in prior years we have experienced
shortages in certain components necessary for the formulation, fill and finish of certain of our products in our Puerto Rico facility.
Further quality issues which result in unexpected additional demand for certain components may lead to shortages of required raw
materials or components (such as we have experienced with EPOGEN® glass vials). We may experience or continue to experience
these or other shortages in the future resulting in delayed shipments, supply constraints, contract disputes and/or stock-outs of our
products.