Amgen 2009 Annual Report Download - page 42

quarters, depending on the direction of the correction. In addition to retroactive rebates, if we were found to have
knowingly submitted false information to the government, in addition to other penalties available to the govern-
ment, the statute provides for civil monetary penalties in the amount of $100,000 per item of false information.
There are also proposals related to both the Medicaid drug rebate program and the PHS drug pricing program as
part of healthcare reform which could significantly alter the programs.
We also make our products available to authorized users of the Federal Supply Schedule (“FSS”) of the Gen-
eral Services Administration. Since 1993, as a result of the Veterans Health Care Act of 1992 (the “VHC Act”),
federal law has required that we offer deeply discounted FSS contract pricing for purchases by the Department of
Veterans Affairs, the Department of Defense, the Coast Guard and the PHS (including the Indian Health Service)
in order for federal funding to be available for reimbursement of our products under the Medicaid program or
purchase of our products by these four federal agencies and certain federal grantees. FSS pricing to these four
federal agencies must be equal to or less than the Federal Ceiling Price (“FCP”), which is 24% below the
Non-Federal Average Manufacturer Price (“Non-FAMP”) for the prior fiscal year. The accuracy of our reported
Non-FAMPs, FCPs and our FSS contract prices may be audited by the government under applicable federal pro-
curement laws and the terms of our FSS contract. Among the remedies available to the government for
inaccuracies in calculation of Non-FAMPs and FCPs is recoupment of any overcharges to the four specified Fed-
eral agencies based on those inaccuracies. Also, if we were found to have knowingly reported a false
Non-FAMP, in addition to other penalties available to the government, the VHC Act provides for civil monetary
penalties of $100,000 per item that is incorrect. Finally, we are required to disclose in our FSS contract proposal
all commercial pricing that is equal to or less than our proposed FSS pricing, and subsequent to award of an FSS
contract, we are required to monitor certain commercial price reductions and extend commensurate price reduc-
tions to the government, under the terms of the FSS contract Price Reductions Clause. Among the remedies
available to the government for any failure to properly disclose commercial pricing and/or to extend FSS contract
price reductions is recoupment of any FSS overcharges that may result from such omissions.
We are also subject to regulation under the Occupational Safety and Health Act, the Toxic Substances Con-
trol Act, the Resource Conservation and Recovery Act and other current and potential future federal, state or
local laws, rules and/or regulations. Our R&D activities involve the controlled use of hazardous materials, chem-
icals, biological materials and various radioactive compounds. We believe that our procedures comply with the
standards prescribed by federal, state or local laws, rules and/or regulations; however, the risk of injury or acci-
dental contamination cannot be completely eliminated. While we are not required to do so, we strive to conduct
our research and manufacturing activities in a manner that meets the intents and purposes of the National In-
stitutes of Health Guidelines for Recombinant DNA Research.
Additionally, the U.S. Foreign Corrupt Practices Act (“FCPA”) prohibits U.S. corporations and their representa-
tives from offering, promising, authorizing or making payments to any foreign government official, government
staff member, political party or political candidate in an attempt to obtain or retain business abroad. The scope of the
FCPA would include interactions with certain healthcare professionals in many countries. Our present and future
business has been and will continue to be subject to various other U.S. and foreign laws, rules and/or regulations.
Research and Development and Selected Product Candidates
Our vision is to deliver therapeutics that can make a meaningful difference in patients’ lives. Therefore, we
focus our R&D on novel human therapeutics for the treatment of grievous illness in the areas of oncology, hema-
tology, inflammation, bone, nephrology and general medicine, which includes cardiology and neurology. We
take a modality-independent approach to R&D — that is, we identify targets, and then choose the modality best
suited to address a specific target. As such, our discovery research programs may yield targets that lead to the
development of human therapeutics delivered as large molecules (such as proteins, antibodies and peptibodies) or
small molecules.
To execute our clinical trial programs, we need to maintain an effective development organization and asso-
ciated R&D support organizations. We conduct clinical trial activities with both our internal staff and third-party
contract clinical trial service providers. In order to increase the number of patients available for enrollment for
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