Amgen 2009 Annual Report Download - page 29

We had product sales to three large wholesaler customers each accounting for more than 10% of total rev-
enues for the years ended December 31, 2009, 2008 and 2007. On a combined basis, these distributors accounted
for 71% and 88% of worldwide gross revenues and U.S. gross product sales, respectively, for 2009, as noted in
the following table (dollar amounts in millions):
Years ended December 31,
2009 2008 2007
AmerisourceBergen Corporation:
Gross product sales ................................................... $7,179 $7,099 $6,124
% of total gross revenues .............................................. 37% 37% 31%
% of U.S. gross product sales ........................................... 46% 46% 39%
McKesson Corporation:
Gross product sales ................................................... $3,694 $3,594 $2,398
% of total gross revenues .............................................. 19% 19% 12%
% of U.S. gross product sales ........................................... 24% 23% 15%
Cardinal Health, Inc.:
Gross product sales ................................................... $2,841 $2,823 $2,715
% of total gross revenues .............................................. 15% 15% 14%
% of U.S. gross product sales ........................................... 18% 18% 17%
We have entered into certain co-promotion agreements to market our products in certain geographic areas.
These agreements generally require us to share profits on product sales. Under a co-promotion agreement, we
and Pfizer market ENBREL in the United States and Canada for all approved indications. Under a co-promotion
agreement with GSK, we and GSK will commercialize Amgen’s Prolia™in Europe, Australia, New Zealand and
Mexico, and GSK will commercialize denosumab, for all indications in countries where we do not currently have
a commercial presence (see “Business Relationships – GlaxoSmithKline plc”). Additionally, we have entered into
agreements with third-parties to market certain of our products, including Aranesp®, Neulasta®and NEUP-
OGEN®in certain geographic areas outside of the United States and to assist in marketing ENBREL in the
United States. In addition, we have granted J&J a license to commercialize recombinant human erythropoietin as
a human therapeutic in the United States in all markets other than dialysis (see “Business Relationships — John-
son & Johnson”). We have also granted Daiichi Sankyo Company, Limited (“Daiichi Sankyo”) a license to
develop and commercialize denosumab in Japan in PMO, oncology and certain other indications (see “Business
Relationships — Daiichi Sankyo Company, Limited”).
See “Government Regulation — FDA Regulation of Product Marketing and Promotion” for a discussion of
the government regulation over product marketing and promotion.
Reimbursement
Sales of all of our principal products are dependent, in part, on the availability and extent of coverage and
reimbursement from third-party payers, including government and private insurance plans. Most patients receiv-
ing our products are covered by government healthcare programs or private insurers. Governments may regulate
coverage, reimbursement and/or pricing of our products to control costs or to affect levels of use of our products,
and private insurers may adopt or be influenced by government coverage and reimbursement methodologies.
Worldwide use of our products may be affected by cost containment pressures and cost shifting from govern-
ments and private insurers to healthcare providers or patients in response to ongoing initiatives to reduce or
reallocate healthcare expenditures. An increasing worldwide focus on patient access controls and cost contain-
ment by public and private insurers has resulted, and may continue to result, in reduced reimbursement rates for
our products. In addition, we believe that ongoing healthcare reform efforts will include long-term changes to the
coverage and reimbursement of our products which may have a significant impact on our business.
U.S. Reimbursement System
Our principal products are predominantly sold in the United States and healthcare providers, including doc-
tors, hospitals and other healthcare professionals and providers are reimbursed for their services by the
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