NON EXCLUSIVE - SOURCING AND SUPPLY AGREEMENT-Nov 2011 is JUST FIXED PRICE FOR SUPPLY where as the Prescription to USE EPOGEN or other alternative is at sole discretion of DOCTORS. Meaning Doctor in Dialysis at Fresenius Medical Care & DaVita Inc can use Epogen on a nonexclusive basis for fixed price for 7 YEARS. Whereas to use EPOGEN or other alternative still remains OPEN.
While understanding Amgen's move (SOURCING AND SUPPLY AGREEMENT-Nov 2011), it is clear that AMGEN does that for following reasons.
1. Fear of Competition from peginesatide- Affymax INC.
Amgen foresee that Dialysis Market ($2.9Billion) would be lost completely for ONCE A MONTH Peginesatide, while Epogen, Amgen's other anemia drug Aranesp and another anemia treatment made by Johnson & Johnson must be taken more frequently. With Omontys, doctors and patients will have access to a once-monthly alternative for the treatment of anemia in adult CKD patients on dialysis
2. Roche Holding start selling similar drugs in generic, or "biosimilar," versions of such erythropoiesis-stimulating agents reach the market.
3. Confuse the market and Buy the time..so that they can process EPOGEN NDA for Once month Indication.
Read this agreement....
This Sourcing and Supply Agreement (this “Agreement”) is made by and between Amgen USA Inc. (“Amgen”), a wholly-owned subsidiary of Amgen Inc., and DaVita Inc. (“Dialysis Center”) to set forth the terms and conditions upon which Dialysis Center Purchasers shall purchase EPOGEN® (Epoetin alfa) and Amgen shall provide discounts and pay rebates to Dialysis Center on EPOGEN. Each of Amgen and Dialysis Center are referred to herein as a “Party” and together as the “Parties”. Amgen Inc. is a party to this Agreement for the purposes set forth in Sections 3.1, 8.2, 9.4, 9.5.1, and 11.14 of this Agreement. Capitalized terms used herein and not otherwise defined herein shall have the meaning set forth in Section 1.
WHEREAS, Amgen is a leading innovator in the field of ESAs with expertise in the field of anemia management and the ability to manufacture and supply safe and efficacious ESAs for the treatment of dialysis patients;
WHEREAS, Dialysis Center is a leading provider of dialysis services in the Territory with expertise in establishing and delivering state-of-the-art, quality-of-care standards, practices and procedures for the care of patients undergoing dialysis;
WHEREAS, Dialysis Center desires to select one ESA supplier to meet its primary ESA needs on a long term basis for patients undergoing dialysis;
WHEREAS, Dialysis Center has evaluated the ESAs available for commercial use and those in clinical development, including potential [*] ESAs, and has determined that EPOGEN® (Epoetin alfa) will be its preferred ESA for managing anemia for patients undergoing dialysis;
oting that the studies showed Omontys was as safe and effective as epoetin, Richard Pazdur, director of the Office of Hematology and Oncology Products in the FDA’s Center for Drug Evaluation and Research, noted that the drug is "represents the first new FDA-approved and marketed ESA for this condition since 2001”. He added that it offers "patients and health care providers the convenience of receiving ESA therapy just once per month instead of more frequent injections".
It has been one of the most lucrative monopolies of all time, yielding the biotechnology company Amgen roughly $40 billion in sales over 23 years.
“We have suffered under a monopoly now for many years, and Amgen has done pretty much whatever they’ve pleased,” said Dr. John H. Sadler, chief executive of the Independent Dialysis Foundation, a small nonprofit dialysis provider in Baltimore.
The prices dialysis providers negotiate with Amgen help determine their profitability, he and other dialysis industry executives say. Without competition, Amgen has been free to set prices and recently raised them significantly, according to some of the executives.