EX-10.62 4 dex1062.htm DIALYSIS ORGANIZATION AGREEMENT BETWEEN DAVITA INC. AND AMGEN USA INC. Confidential Treatment Dialysis Organization Agreement Information Sheet

Affiliates. Only purchases of Products made by Dialysis Center, its Designated Affiliates and Managed Centers shall be eligible for the pricing, discounts and/or rebates granted pursuant to this Agreement. Dialysis Center shall have the right to remove its Affiliates from the list of Designated Affiliates and to remove Managed Centers from the list of Managed Centers by thirty (30) days prior written notice to Amgen. Dialysis Center shall have the right to add its Affiliates and Managed Centers to the list of Designated Affiliates or Managed Centers as appropriate with prior written notice to Amgen and upon Amgen’s approval, which shall not be unreasonably conditioned, withheld or delayed, it being understood that Dialysis Center shall use its commercially reasonable best efforts to provide Amgen and the applicable Authorized Wholesaler with at least thirty (30) days prior written notice in situations involving de nova clinics and at least fifteen (15) days prior written notice in the case of clinics that are acquired by Dialysis Center or that enter into management or administrative service agreements with Dialysis Center. In the event Dialysis Center provides fifteen (15) or fewer days prior written notice, Dialysis Center agrees to coordinate with Dialysis Center’s Authorized Wholesaler to ensure purchases made by such Affiliates and/or Managed Centers are credited to Dialysis Center upon the date Amgen adds such Affiliates and/or Managed Centers to this Agreement. Amgen shall restrict the dissemination of information pertaining to new Affiliates and Managed Centers to its employees, agents and contractors that have a need to know such information. So long as Dialysis Center has used its commercially reasonable best efforts to provide such advance notice to Amgen, such new Affiliates and Managed Centers shall be added to the lists of Designated Affiliates or Managed Centers, as appropriate, as of the date of acquisition by Dialysis Center or the commencement of the management relationship between Dialysis Center and Managed Center or such later date specified by Dialysis Center. All purchases of Products made on and after the date such Designated Affiliates and Managed Centers are added to this Agreement shall constitute “Qualified Gross Purchases” under this Agreement and shall be included for purposes of calculating each and every

rebate provided hereunder and in Exhibit 3.1 (which is incorporated by reference hereto and made a part of this Agreement), including the [DELETED]. Amgen shall pay all such rebates to Dialysis Center unless Amgen can demonstrate to Dialysis Center that it is obligated to pay such rebates to any person or entity other than Dialysis Center, which rebates results from (and is equivalent in amount to those rebates payable to Dialysis Center hereunder with respect to) those purchases of Product attributed to Dialysis Center. In the event of a change to information regarding a Designated Affiliate or Managed Center (such as address), Dialysis Center shall promptly notify Amgen and Amgen shall update the relevant list. Amgen shall reserve the right in its reasonable discretion to remove Designated Affiliates or Managed Centers from the list of Designated Affiliates and Managed Centers in accordance with the following: termination of any Designated Affiliate or Managed Center by Amgen shall be effective (a) immediately in instances in which Amgen determines, in its sole discretion, that such immediate termination is required by law or order of any court or regulatory agency or as a result of negligence or willful misconduct in the use or administration of Products by such Designated Affiliate or Managed Center, or (b) upon thirty (30) days prior written notice to Dialysis Center in all other instances; provided, however, that Dialysis Center shall have the right to object to the removal of a Designated Affiliate or Managed Center other than if required by law or order of any court or regulatory agency, but must notify Amgen within five (5) business days of such objection, explaining the basis for such objection; and provided further, that such termination shall be effective before the expiration of such thirty (30) days where Dialysis Center requests or consents to such earlier termination. Dialysis Center shall ensure compliance with the terms and conditions of this Agreement applying to Dialysis Center by its Designated Affiliates and Managed Centers. Dialysis Center shall be liable for the acts and omissions of its Designated Affiliates and Managed Centers, and Amgen shall have the right (but not the obligation) to proceed directly against Dialysis Center in the event of a breach of this Agreement by any such Designated Affiliate or Managed Center, without first proceeding against such Designated Affiliate or Managed Center.

Authorized Wholesalers. Only Products purchased from Authorized Wholesalers or directly from Amgen pursuant to this Section 2.3 shall be eligible for the pricing, discounts and/or rebates granted pursuant to this Agreement. Dialysis Center shall have the right to remove wholesalers from the list of Authorized Wholesalers by thirty (30) days prior written notice to Amgen, and shall have the right to add wholesalers to the list of Authorized Wholesalers by thirty (30) days notice to Amgen upon ▇▇▇▇▇’s approval, which approval shall not be unreasonably withheld or delayed. Amgen shall have the right, in its reasonable discretion, to add wholesalers to the list of Authorized Wholesalers by thirty (30) days prior written notice to Dialysis Center. Additionally, Amgen shall have the right, in its reasonable discretion to remove wholesalers from the list of Authorized Wholesalers by thirty (30) days prior written notice to Dialysis Center, so long as (a) Amgen rejects or terminates such wholesaler with respect to providing Products to any and all purchasers of Products, or (b) such wholesaler independently requests Amgen to remove it as an Authorized Wholesaler for Dialysis Center. In the event Amgen terminates any Authorized Wholesaler from which Dialysis Center is purchasing Products, Amgen shall work with Dialysis Center to transition Dialysis Center’s purchasing to an Authorized Wholesaler and shall use reasonable efforts to establish a direct purchasing relationship in any interim period between the removal of the removed Authorized Wholesaler and the initiation of purchases from a new Authorized Wholesaler, if no alternative Authorized Wholesaler exists at such time, which) in no event shall exceed sixty

(60) days. Any such relationship shall be subject to credit qualification and the approval by Amgen of an application for direct ship account. If Dialysis Center purchases directly from Amgen as contemplated immediately above, all purchases made from Amgen shall be deemed “Qualified Gross Purchases” and all such purchases shall be eligible for all of the discounts, and/or rebates provided for in this Agreement and Exhibit 3.1.

2.5.

Product License Agreement. Amgen has publicly disclosed that it is a party to a product license agreement with Ortho Pharmaceutical Corporation. Amgen hereby represents to Dialysis Center that, under such product license agreement: (a) Amgen has the exclusive right to promote and sell Epoetin alfa, in the United States, under the trade name EPOGEN® for use with dialysis patients, (b) Amgen has licensed Ortho, as Amgen’s distributor, the exclusive right to promote and sell Epoetin alfa in the United States under the trade name PROCRIT® for non-dialysis uses only and (c) Ortho is not authorized to promote or sell PROCRIT® in the United States for dialysis use. Consistent with the terms of such product license agreement and so long as such agreement remains in effect, Dialysis Center, its Designated Affiliates and its Managed Centers shall not use PROCRIT® for use with dialysis patients.

Data Submission. Subject to the requirements set forth elsewhere in this Agreement, including Exhibit 3.1, Dialysis Center shall provide certain patient and product data, as specified on Schedule 4.1 (the “Data”) to Amgen (or to a data collection vendor specified and paid for by Amgen) on a calendar [DELETED] basis by the last day of the following calendar [DELETED] (or the next business day if such last day is not a business day). To the extent Amgen requests that Dialysis Center deliver the Data to a designated data collection vendor instead of Amgen directly, Dialysis Center’s delivery of the Data to such data collection vendor shall be considered delivery to Amgen for purposes of this Agreement. Data shall be submitted by Dialysis Center in the format set forth on Schedule 4.1. To the extent Amgen requests that Dialysis Center deliver the Data to a designated data collection vendor, Amgen agrees to cause any such designated data collection vendor to adhere to and be bound by all of the requirements relating

to the confidentiality, use and disclosure of the Data hereunder as applicable to Amgen, and any failure by any such designated data collection vendor to act in accordance with such requirements shall be the sole responsibility of Amgen, and Amgen shall be directly liable to Dialysis Center as if Amgen had directly breached any of its obligations or the requirements related to the confidentiality, use or disclosure of the Data as set forth herein.

Invalid Certification. In the event that the Statistician determines that a Certification is no longer valid, the parties agree to use their reasonable best efforts to work together in good faith and take such actions as may be necessary to cause a valid Certification to be issued to Dialysis Center such that the delivery of the Data hereunder to Amgen may be resumed as quickly as possible, with the intent of preserving as many of the Data elements set forth in Schedules 4.1 as possible. In the event that a change in applicable laws, rules or regulations is the cause for the Certification becoming invalid, each party shall have the right,

after attempting to negotiate changes to the Agreement as contemplated above, to terminate this Agreement upon thirty (30) days written notice with no requirement that Dialysis Center deliver the Data and no right of Dialysis Center to receive the rebates set forth in Exhibit 3.1. In the event Dialysis Center is the cause of such Certification becoming invalid, Amgen shall have the right, after working together in good faith to take such actions as may be necessary to cause a valid Certification to be issued as contemplated above, to terminate this Agreement upon thirty (30) days prior written notice to Dialysis Center. In connection with any such termination, Amgen shall pay to Dialysis Center, in accordance with Exhibit 3.1, the appropriate proportion of any rebates earned up to the dates covered in the last data submission by Dialysis Center and thereafter Dialysis Center shall have no obligation to deliver any Data. If Amgen is the cause of such Certification becoming invalid, Dialysis Center shall promptly notify Amgen of that fact and the parties shall work together in good faith to take such actions as may be necessary to cause a valid Certification to be issued as contemplated above. If a replacement Certification is not obtained within seventy five (75) days of the date that Dialysis Center sent the notice stating that the Certification was invalidated, either party may terminate this Agreement effective as of the ninetieth (90th) day after Dialysis Center transmitted the notice that the Certification was invalidated. From the date Dialysis Center sends the notice to Amgen that the Certification was invalidated until the time that a new Certification is issued or the time that this Agreement is terminated, which period shall not exceed ninety (90) days from the date that Dialysis Center sent the notice of invalidation, Dialysis Center may suspend the delivery of the Data without losing the ability to earn rebates through the date this Agreement is terminated. To the extent the Data necessary for Amgen to calculate any outcomes based rebate described in Exhibit 3.1 is not delivered as a result of a Certification becoming invalid, Dialysis Center shall calculate such outcomes based rebates and shall provide the results of such calculations to Amgen until the delivery of the Data hereunder to Amgen can be resumed. In connection with the foregoing, Amgen shall be permitted to audit any such calculations of outcomes made by Dialysis Center, either directly or through a third party selected by Amgen, subject to the execution and delivery of appropriate agreements regarding confidentiality and compliance with laws, including HIPAA.

Amgen Activities; Permitted Data Elements. Amgen represents, warrants, covenants and agrees that (i) absent the express written consent from Dialysis Center and other than linking with fields of information that contain only Permitted Data Elements (as defined below), Amgen will not link the Data with any other data elements; (ii) Amgen will delete, purge or eliminate from any database that will hold the Data, all data elements identified in the safe harbor at 45 C.F.R. Section 164.514(b)(2)(i), other than any data element that constitutes a Permitted Data Element, and (iii) Amgen will not create any reports that contain Patient Level Data (as defined below) or permit access to the Data by any person who otherwise has access to Patient Level Data for patients of Dialysis Center. For purposes of the foregoing and this Agreement, the following definitions shall apply: (A) ”Patient Level Data” shall mean any data elements attributable to a particular patient; and (B) ”Permitted Data Element” shall mean the data elements comprising the Data, together with any other data element that identifies dates of service (including admission dates and discharge dates), gender, age or ICD-9 diagnosis and procedure codes for any individual patient. Furthermore, Amgen represents, warrants, covenants and agrees that throughout the term of this Agreement it will maintain and enforce such policies, standards or procedures, including those regarding various physical, technical and procedural safeguards, as necessary for Amgen to comply with the restrictions on use and disclosure of the Data by Amgen that are set forth herein. To the extent that

Amgen desires to link with any data element not included in the list of Permitted Data Elements, Amgen shall so inform Dialysis Center in writing and identify the additional data elements desired to be included as a Permitted Data Element hereunder. Upon receipt of such notice, Dialysis Center will promptly engage, at ▇▇▇▇▇’s expense, a Statistician to render a written Certification to Dialysis Center with respect to the Data, taking into account the desired linking of the additional data to be included as a Permitted Data Element hereunder. In connection with the foregoing, such Statistician shall provide a timeline to both Dialysis Center and Amgen setting forth the required time and any additional information necessary for such Statistician to conduct an appropriate review of such new desired Permitted Data Elements, and inform the parties whether a Certification can be rendered within thirty (30) days. To the extent that such Statistician determines that such Certification cannot be rendered within such thirty (30) day time period, Dialysis Center and Amgen shall work together in good faith to identify a mutually acceptable alternate solution.

Clinical Research Studies. Dialysis Center and Amgen acknowledge that Dialysis Center, either directly or through DaVita Clinical Research, Inc., an Affiliate of Dialysis Center, may from time to time be engaged in research studies in which patients of Dialysis Center or its Affiliates, including its Designated Affiliates and/or Managed Centers, may serve as clinical trial

subjects (a “Research Study”). Accordingly, and notwithstanding any obligation of Dialysis Center in this Agreement to the contrary, including any requirement in Section 3.1 or Exhibit 3.1, Dialysis Center [DELETED] for only those patients of Dialysis Center or its Affiliates, including its Designated Affiliates and/or Managed Center utilizing the Products, that is [DELETED], but shall continue without limitation to be eligible for, and if earned receive, all rebates granted pursuant to this Agreement, so long as (i) Dialysis Center notifies Amgen of the [DELETED] by Dialysis Center to Amgen as otherwise required by this Agreement as a result of such [DELETED], and (ii) the [DELETED] whose [DELETED] Dialysis Center does not exceed the [DELETED]. For purposes of the foregoing, “[DELETED]” means [DELETED] of the aggregate number of persons receiving treatment from Dialysis Center or any of its Affiliates (including its Designated Affiliates and/or Managed Centers) in any calendar [DELETED].

Compliance with Law and Regulation. Amgen and Amgen Inc. shall, and Dialysis Center, its Designated Affiliates and Managed Centers shall, comply with all applicable laws and regulations. Both parties represent and warrant the following (which representations and warranties shall be ongoing representations and warranties during the term of this Agreement), and each party shall promptly notify the other party of any known change in status in respect to the following: (i) that it is not currently named on any of the following lists (A) HHS/OIG List of Excluded Individuals/Entities, (B) GSA List of Parties Excluded from Federal Programs, or (C) OFAC “SDN and Blocked Individuals”; and (ii) that if during the term there is a

change in either party’s status which excludes it from participation in any Federal health care program, the other party may terminate this Agreement immediately upon prior written notice to the other party.

Compliance with or Change in Law or Regulation. Notwithstanding anything contained herein to the contrary, in order to assure compliance with any existing federal, state or local statute, regulation or ordinance, or at any time following the enactment of any federal, state, or local law, regulation, policy, program memorandum or other interpretation, modification or utilization

guideline by any payer that in any material manner reforms, modifies, alters, restricts, or otherwise materially affects the pricing of or reimbursement available for any of the Products, including but not limited to the enactment of any reimbursement rule, guideline, final program memorandum, coverage decision, pricing decision, instruction or the like by the Centers for Medicare and Medicaid Services (“CMS”) or one of its contractors (carriers or fiscal intermediaries), or any change in reimbursement systems that in any material manner reforms, modifies, alters, restricts or otherwise materially affects the reimbursement available to Dialysis Center for the Product, upon [DELETED] prior written notice, (i) either party may terminate this Agreement, (ii) Amgen may, in its sole discretion, modify any pricing, rebate or discount terms contained herein, or (iii) Amgen may, in its sole discretion, exclude any Designated Affiliates or Managed Centers from participating in this Agreement. Without limiting the foregoing, any material change, modification or further clarification to the Medicare Prescription Drug Improvement and Modernization Act of 2003 (“MMA”) relating to the reimbursement of one or more of the Products or any rules or regulations promulgated thereunder, or the Erythropoeitin Claims Monitoring Policy for ESRD Patients that occurs subsequent to the Term Start Date would specifically trigger the right to the termination or modification referenced herein. Additionally, to assure compliance with any existing federal, state or local statute, regulation or ordinance, Amgen reserves the right, in its sole discretion, to exclude any Designated Affiliates or Managed Centers from the pricing, rebate and discount provisions of this Agreement and/or to reasonably modify any pricing, rebate or discount terms contained herein. In the event either party has provided the other party a [DELETED] notice as described in this Section 8.4, the parties agree to meet and, in good faith, negotiate a new agreement or amendment to this Agreement. Any such negotiations shall in no way toll or otherwise impact either party’s rights under this section.

Notices. Any notice or other communication required or permitted hereunder (excluding purchase orders) shall be in writing and shall be deemed given or made five (5) days after deposit in the United States mail with proper postage for first-class registered or certified mail prepaid, return receipt requested, or when delivered personally or by facsimile (as shown by concurrent written transmission confirmation and confirmed by overnight mail), or one (1) day following traceable delivery to a nationally

recognized overnight delivery service with instructions for overnight delivery, in each case addressed to the address set forth below, or at such designated address that either party shall have furnished to the other in accordance with this Section 9.12:

If to Amgen:

Amgen USA Inc.

One Amgen Center Drive, M/S ▇▇-▇-▇

▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-1789

Attn: Specialist, Contracts & Pricing – Nephrology Business Unit

Fax: (▇▇▇) ▇▇▇-▇▇▇▇

with a copy to:

Amgen USA Inc.

One Amgen Center Drive, M/S ▇▇-▇-▇

▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-1789

Attn: General Counsel

Fax: (▇▇▇) ▇▇▇-▇▇▇▇

If to Amgen Inc.:

Amgen Inc.

One Amgen Center Drive, M/S ▇▇-▇-▇

▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-1789

Attn:

Fax No.:

If to Dialysis Center:

DaVita Inc.

▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇

▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇

Attn: Senior Vice-President of Purchasing

Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇

with a copy to:

DaVita Inc.

▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇

▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇

Attn: General Counsel

Fax No: (▇▇▇) ▇▇▇-▇▇▇▇

Confidentiality. By the nature, terms and performance of this Agreement, Amgen and Dialysis Center acknowledge and agree that the parties will exchange confidential and proprietary information (including business and clinical practices and protocols and patient information, “Confidential Information”). Confidential Information includes not only written information but also information transferred orally, visually, electronically, in a machine readable format or by any other means and includes all notes, analyses, compilations, studies and summaries thereof containing or based on, in whole or in part, any Confidential Information. Confidential Information does not include any information which the receiving party can show was publicly available prior to the receipt of such information by the receiving party, or thereafter became publicly available other than by any breach of this Agreement by the receiving party, additionally, for Dialysis Center only, Confidential Information does not include the Data. Information shall be deemed “publicly available” if it is a matter of public knowledge or is contained in materials available to the public. Accordingly, the parties agree (a) to hold all such Confidential Information (including the terms of this Agreement) received from the other in confidence and to use such Confidential Information solely for the purposes set forth in this Agreement; and (b) to not disclose any such Confidential Information received from the other, or the terms of

this Agreement, to any third party (including Amgen Inc. or any other affiliate of Amgen), or otherwise make such information public without prior written authorization of the other party, except where such disclosure is contemplated hereunder or required by law or pursuant to subpoena or court or administrative order, and then only upon prior written notification to the other party (giving such party an adequate opportunity to take whatever steps it deems necessary to prevent, limit the scope of or contest the disclosure). Any party which seeks to prevent disclosure or to contest or limit the scope of any such disclosure by the other party shall pay all of the costs and expenses incurred by the other party directly related thereto, and such other party shall not unreasonably object to or interfere with the objecting party’s actions it deems necessary to undertake. For purposes of the foregoing, any Confidential Information received by any employee, partner, agent, affiliate, consultant, advisor, data collection vendor or other representative (in any case, a “representative”) of a party to this Agreement pursuant to the terms of this Agreement shall be deemed received by such party to this Agreement, and any breach by any such representative of the foregoing confidentiality provisions shall be deemed a breach by the respective party to this Agreement.

Access. Unless otherwise agreed by the parties, Amgen acknowledges, agrees and understands that absent an applicable Services Agreement (as defined in Section 9.16 above), none of its agents, representatives or employees shall be permitted access at any time to Dialysis Center, its Designated Affiliates and/or Managed Centers for any reason whatsoever. In each situation in which a Services Agreement is executed and delivered, Amgen may be granted access solely for the purposes described in such Services Agreement(s). If Dialysis Center or any of its designated Affiliates or Managed Centers changes their general policies concerning vendors accessing their clinics, Dialysis Center shall use its commercially reasonable efforts to provide Amgen with at least fifteen (15) days notice in advance of the effective date of such change. If Dialysis Center or any of its Designated Affiliates or Managed Centers denies Amgen access to any of its clinics, Dialysis Center shall provide Amgen with a written explanation of the reason for such denial within fifteen (15) days after such denial. Without limitation of the foregoing, Amgen agrees that it and its agents, representatives and employees shall at all times comply with all applicable laws and regulations, [DELETED] and that Amgen’s discussion of the products shall be in compliance with [DELETED] all applicable laws and regulations. Furthermore, Amgen acknowledges, agrees and understands that it must obtain Dialysis Center’s prior written approval of all proposed educational, marketing and promotional materials, including, but not limited to,

all proposed presentations relating to anemia management, any of the Products, any other Amgen product or otherwise, whether directed toward Dialysis Center employees or any patient of Dialysis Center. Such approval may be given only by Dialysis Center’s Vice President, Clinical Operations or his authorized representative. Dialysis Center’s Vice President, Clinical Operations or his authorized representative agree to notify ▇▇▇▇▇’s National Account Manager of his decision within ten (10) business days after receipt of such program, material or presentation request, otherwise such request will be deemed denied. If Dialysis Center or any of its Designated Affiliates or Managed Centers determines that any previously approved Amgen materials are no longer appropriate for use in such facilities, Dialysis Center shall provide Amgen with written notice of such determination promptly so that Amgen can notify its personnel of such determination and understand the reason therefore.

AMGEN USA INC.

By:

/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇

/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇

Name (print):

Title:

Date:

Amgen Inc.

/s/ ▇▇▇▇▇ ▇▇▇▇▇▇

DaVita Inc.

Schedule 1.4

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