EXHIBIT 10.16
****denotes information omitted
pursuant to a request for
confidential treatment under Rule 406
GROUP PURCHASING AGREEMENT
This Agreement entered into by and between INTERNATIONAL PHYSICIAN NETWORKS, LLC
D/B/A/ INTERNATIONAL UROLOGY NETWORK located at World Trade Center, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇, on behalf of itself and on behalf of its
members (hereinafter referred to as "GPO"), and VALERA PHARMACEUTICALS, INC., a
Delaware corporation with offices at ▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(hereinafter referred to as "Valera").
1. TYPE OF PROVIDER: GPO represents and warrants that it is
established as a group purchasing organization as defined in 42 CFR
1001.952 (j), and is authorized to enter into group purchasing
arrangements collectively on behalf of the physician-practice
members of U.S. Urology, LLC, a Texas limited liability
corporation. Such physician-practices also are members of GPO's
group purchasing network ("U.S. Urology Practices").
2. GPO MEMBERS
A. GPO will supply Valera with a list of the current U.S. Urology
Practices and their corresponding addresses, DEA numbers and
authorized specialty distributors or wholesalers. GPO will also list
what type of provider each member is (e.g., clinic, physician
office, etc. . . .). GPO will notify Valera of membership changes on
a monthly basis.
B. At all times, "Eligible Members" shall mean collectively: U.S.
Urology Practices that are members of the GPO or the Pharmacy Member
identified below in Section 2(C) of this Agreement. Only Eligible
Members shall be entitled to purchase Products hereunder. New
Eligible Members added by GPO after execution of this Agreement will
be able to purchase Products under the terms of this Agreement
thirty- (30) days after GPO notifies Valera of this addition.
C. For the purposes of this Agreement, the Pharmacy Member shall be US
Bioservices Corporation, which at all times throughout the term of
this Agreement shall be a licensed mail order or specialty pharmacy
that: (i) in connection with the prescription by a licensed health
care professional dispenses drugs to physicians and patients; (ii)
is willing to dispense Products purchased under this Agreement only
to patients of Eligible Member physicians upon request by a health
care provider, patients, or the patient's payer, and to the extent
permissible under such payer coverage policies, is able and willing
to assume complete financial risk for dispensed Product(s) costs,
including costs related to its infusion by filing claims with the
payer(s) and collecting and accepting any such patients' and payers'
reimbursement as complete payment; and (iii) offers and is able to
provide drug management and patient care support services.
D. Upon execution of this Agreement, GPO shall notify each Eligible
Member about the terms of this Agreement and it shall also notify
new Eligible Members after they join U.S. Urology, LLC.
3. PRODUCTS AND PRICES
A. Attached hereto, as Exhibit A, is a list of the Valera products
("Products") covered by this Agreement and corresponding prices that
shall be available for all purchases of Eligible Members throughout
the term of this Agreement, including the related percentage
reduction provided for hereunder ("Contract Prices"). Eligible
Members may purchase the Products from GPO's designated wholesale
distributor, ▇▇▇▇▇ Medical ("▇▇▇▇▇"), subject to distribution terms
agreed upon by and between ▇▇▇▇▇ and ▇▇▇▇▇▇, or such other
authorized distributor approved by Valera, at a price equal to the
Contract Price, plus any markup. other fee or markdown charged or
allowed to the Eligible Member by such specialty distributor or
wholesaler for its services. The amount of any such markup, fee or
markdown is strictly a matter between the Eligible Member and the
specialty distributor or wholesaler and is not a part of this
Agreement.
B. GPO will supply Valera with a list of the individual facilities (and
corresponding addresses and DEA numbers) where each Eligible Member
will purchase Products.
C. Subsequent to the first contract year the Contract Prices will be
subject to annual price adjustments by Valera; provided, however,
that any discount provided to the Eligible Members pursuant to
Exhibit A of this Agreement, or any other price reductions provided
to the Eligible Members shall not be modified or otherwise adjusted
without the mutual agreement of the parties.
D. GPO will receive fees from Valera as set forth on Exhibit B, a copy
of which is attached hereto and incorporated herein by reference.
GPO represents and warrants that it has entered into a written
agreement with its Eligible Members and that such agreement
describes the fee that GPO will receive hereunder from Valera to the
extent required under applicable laws and regulations. GPO furthers
represents and warrants that it will disclose in writing to each of
its Eligible Members, at least annually, the amount GPO received
from Valera with respect to purchases made by or on behalf of such
Eligible Member.
4. PRODUCT STATUS
GPO shall inform the Eligible Members about this arrangement and the
Products covered by the terms of this Agreement, including providing its
Eligible Members the appropriate clinical and scientific information
regarding the Products. The provision of such clinical and/or scientific
information shall occur through various venues subject to the limitations
set forth on Exhibit B, Paragraph B (iv) of this Agreement, including at
least the programs, meetings, and communications consistent with the
obligations set forth on Exhibit B of this Agreement. The parties
understand and agree that nothing herein shall require any of the Eligible
Members to purchase any of the Products and/or Valera's
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Valera GPO Agreement for U.S. Urology Page 2
services, and that nothing herein is intended to interfere with all
Eligible Members' utilization of their independent medical judgment in
prescribing Products.
5. CONTRACT PERIOD
The term of this Agreement will be effective as of December 1, 2004, and
will expire on November 30, 2005.
6. TERMINATION
A. Either Party may terminate this Agreement if the other Party
breaches any of its obligations or provisions of this Agreement;
provided however, that the defaulting Party will be given not less
than thirty- (30) days' prior written notice of such default and the
opportunity to cure the default during such period.
B. In addition, Valera may immediately terminate any Eligible Member's
ability to participate in this Agreement in the event it determines
that such Eligible Member has violated any material terms and
condition of such Eligible Member's participation hereunder.
7. PRODUCT AVAILABILITY
This Agreement is subject to Product availability. It is understood that
in situations of short supply, orders of Eligible Members may have to be
reduced. Valera will take reasonable steps to provide Products in short
supply to all of its customers, including Eligible Members, on an
equitable basis.
8. RETURNED GOODS
Products may be returned under the standard Valera Returned Goods Policy,
a copy of which will be supplied to GPO upon request.
9. CONFIDENTIALITY
The parties will keep all the terms, conditions, and prices in this
Agreement confidential.
10. GENERAL TERMS AND CONDITIONS
A. GPO and Eligible Members agree to provide complete information
concerning the discounted prices on the Products available under
this Agreement, including any rebate which may be applicable, to
representatives of Medicare, Medicaid, and other Federal health care
programs (as defined in 42 U.S.C.Section 1320a-7b(f)) upon request.
If GPO or any Eligible Member is a cost reporting entity, it will
fully and accurately report the amount of the discount, including
any rebates earned, under
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Valera GPO Agreement for U.S. Urology Page 3
this Agreement as a discount on Medicare, Medicaid and other Federal
health care program cost reports.
B. The obligations of either Party hereunder will be suspended in the
event that such Party is hindered or prevented from complying
therewith because of labor disturbances (including strikes and
lockouts), wars, fires, storms, accidents, or interference or any
other cause beyond such Party's reasonable control.
C. Any failure of either Party to require the other Party to comply
with any provision of this Agreement will not be deemed a waiver of
such provision or any other provision of this Agreement.
D. Each Party represents that its performance under this Agreement will
be in full compliance with any and all applicable laws and
regulations. GPO and Eligible Members shall comply with all
applicable laws relating to the dispensing of Products purchased
under this Agreement, including without limitation any state and/or
local laws and regulations relating to drug product selection and
consumer protection, and will fully advise consumers, if required,
of the basis on which any product selection has been made, including
the existence of this Agreement.
E. GPO, Eligible Members, ▇▇▇▇▇, and any other designated specialty
distributors/wholesalers will not be deemed agents of Valera.
F. The Contract Prices and terms of this Agreement shall apply only to
those facilities of Eligible Members located in the continental
U.S., Alaska and Hawaii.
G. This Agreement will be construed in accordance with the laws of the
State of Delaware with the exception of its choice of law
principles. Any clause, section or paragraph of this Agreement which
is determined by a court of competent jurisdiction to be illegal,
invalid or unenforceable will be deemed severed from the remainder
of the Agreement and will have no effect on the legality, validity,
or enforceability of the remaining provisions.
H. Original copies of all notices hereunder will be hand-delivered,
sent by first class mail or overnight mail to the addresses
specified in this Agreement. Notice will be deemed given on the date
of mailing.
I. GPO or Eligible Members may not assign the rights or obligations
contained in this Agreement except with the prior written consent of
Valera.
J. This Agreement and the Exhibits referenced herein represent the
entire understanding between the parties with respect to the subject
matter hereof, and supersedes any previous agreements entered into
by the Parties relating to the subject matter hereof. Any amendment
or renewal of this Agreement or any Exhibit shall be in writing and
signed by both parties.
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Valera GPO Agreement for U.S. Urology Page 4
K. Execution of this Agreement by the Parties indicates acceptance of
the terms and conditions herein on behalf of itself and on behalf of
its members.
Each of the signatories represents that he/she is duly authorized to sign this
Agreement, and this Agreement is a binding obligation of the party on whose
behalf it is signed.
AGREED AND ACCEPTED:
VALERA PHARMACEUTICALS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Title: President and CEO
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Date: 3/18/2005
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INTERNATIONAL PHYSICIAN NETWORKS, L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Title: President, GM IPN
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Date: 3-21-05
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Valera GPO Agreement for U.S. Urology Page 5
EXHIBIT A
A. PRODUCTS COVERED BY THIS AGREEMENT AND RELATED CONTRACT PRICE(1)
Q1/05
VANTAS CONTRACT PRICE DISCOUNT OF WAC
------ -------------- ---------------
U.S. Urology Practices **** ****
US Bioservices Corporation **** ****
Q2/05 DISCOUNT OF WAC
VANTAS CONTRACT PRICE
------ -------------- ---------------
U.S. Urology Practices **** ****
U.S. Bioservices Corporation **** ****
--------
(1) The parties will determine the Contract Price and related discounts for Q3
and Q4 2005 upon the calculation and configuration of the Products Average
Sales Price.
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Valera GPO Agreement for U.S. Urology Page 6
EXHIBIT B
A. ADMINISTRATIVE FEES
GPO shall receive a **** administrative fee on aggregate sales of the
Products to Eligible Members at the Contract Price.
The fees provided for above shall be paid by Valera to GPO quarterly,
within sixty- (60) days after each three- (3) month period during the
term of this Agreement. Valera agrees to provide GPO with reasonable
access to all materials and documents that may be necessary to ensure the
accuracy of any fees paid hereunder.
B. ADMINISTRATIVE ASSISTANCE
GPO will provide Valera the following administrative assistance subject to
the limitations set forth below:
i. Provide Eligible Member data at physician level on utilization
(de-identified as to patient identity as required by law).
ii. Inform Eligible Members about the terms of this Agreement, including
the distribution services available through ▇▇▇▇▇, and otherwise
administer the terms of this Agreement on behalf of Valera.
iii. Allow Valera representatives the opportunity to attend certain
designated meetings of U.S. Urology Practices during the term
of this Agreement.
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Valera GPO Agreement for U.S. Urology Page 7
ATTACHMENT 1
Designated
Specialty
Clinic or Physician Distributor or
Office DEA # Address Phone # Wholesaler/Address
------ ----- ------- ------- ------------------
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