EXHIBIT 10.9
AMGEN EPOGEN-R- FREESTANDING DIALYSIS CENTER AGREEMENT
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THIS FREESTANDING DIALYSIS CENTER AGREEMENT, between AMGEN INC. ("Amgen")
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and VIVRA, INCORPORATED, including the freestanding dialysis center affiliate(s)
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listed on Appendix A, (collectively, "Dialysis Center"), sets forth the terms
and conditions for the purchase of EPOGEN-R- (Epoetin alfa) by Dialysis Center.
1. Term of Agreement. This Agreement shall commence on February 1, 1996
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and shall terminate on ********** ("Term").
2. Qualifying Purchases. All terms contained herein apply only to
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purchases made hereunder, by the dialysis center affiliate(s) listed on Appendix
A attached hereto ("Affiliates"), through wholesalers authorized by Amgen to
participate in this program ("Authorized Wholesalers") or directly from Amgen.
Amgen requires all Authorized Wholesalers to submit product sales information to
a third-party sales reporting organization approved by Amgen.
3. Contract Pricing. Amgen guarantees Dialysis Center the prices listed
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below for EPOGEN-R- purchased during the Term, whether purchased directly from
Amgen or through Authorized Wholesalers. Notwithstanding the foregoing,
EPOGEN-R- purchased directly from Amgen must be in full case quantities or may
be subject to additional service charges.
Price per
Item Number (NDC) Description Box
----------------- ----------- ---
00000-000-00 2,000 Units/mL, 1mL vial, 10 vials/box, 10 $ *****
boxes/case
00000-000-00 3,000 Units/mL, 1mL vial, 10 vials/box, 10 $ *****
boxes/case
00000-000-00 4,000 Units/mL, 1mL vial, 10 vials/box, 10 $ *****
boxes/case
00000-000-00 10,000 Units/mL, 1mL vial, 10 vials/box, $ *****
10 boxes/case
00000-000-00 20,000 Unit (Multidose) vial, 10,000 $ *****
Units/mL, 2mL vial, 10 vials/box, 4
boxes/case
4. Payment Terms. During the Term, Amgen grants Dialysis Center payment
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terms of ********** for EPOGEN-R- purchased through Authorized Wholesalers, or
********** for EPOGEN-R- purchased directly from Amgen, subject to the right of
Amgen to reasonably modify these terms in the event of a material adverse change
in the financial condition of Dialysis Center, as determined by Amgen in its
sole discretion. Option to purchase on a direct basis from Amgen is subject to
receipt and approval of an "Application for Direct Ship Account."
5. Discount. Dialysis Center is eligible to receive a discount in
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accordance with the schedule and terms set forth in Appendix B attached hereto.
Agreement No. 953429 -1- Ver. 1/22/96
AMGEN
EPOGEN-R- FREESTANDING DIALYSIS CENTER AGREEMENT
6. Payment of Discount. Any discount hereunder shall be calculated in
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accordance with Amgen's discount calculation policies, based on purchases at the
calculation price of $********** per ********** units, except as otherwise
provided. Any discount shall be paid, at Amgen's discretion, either in the form
of a check payable to Dialysis Center's corporate headquarters or a purchase
credit against future purchases of EPOGEN-R- by Dialysis Center, except as
otherwise provided. Amgen will attempt to reasonably accommodate Dialysis
Center's preference for method of payment. Purchase credits are available only
for accounts purchasing directly from Amgen, are not transferable, and may not
be used for the purchase of any product other than EPOGEN-R-. Upon vesting,
Amgen will use its best efforts to make such discount available within sixty
(60) days following receipt by Amgen of data, in a form acceptable to Amgen,
detailing Dialysis Center's EPOGEN-R- purchases for the relevant period along
with any other data required by the terms of Appendix B. Final determination of
purchases eligible hereunder will be made by Amgen. Payment amounts, as
calculated by Amgen, must equal or exceed $********** for the relevant period to
qualify. Subject to the section entitled "Breach of Agreement," in the event
that Amgen is notified in writing that Vivra, Incorporated and/or any Affiliates
(the "Acquiree") is acquired by another entity or a change of control otherwise
occurs with respect to the Acquiree, any discount which may have been earned
hereunder shall be paid in the form of a check payable to the Acquiree's
corporate headquarters subject to the conditions described herein.
7. Treatment of Discount. Dialysis Center agrees that it will account
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for any discount earned hereunder in a way that complies with all applicable
federal, state, and local laws and regulations, including without limitation,
Section 1128B(b) of the Social Security Act and its implementing regulations,
and (a) claim the benefit of such discount received, in whatever form, in the
fiscal year in which such discount was earned or the year after, (b) fully and
accurately report the value of such discount in any cost reports filed under
Title XVIII or Title XIX of the Social Security Act, or a state health care
program, and (c) provide, upon request by the U.S. Department of Health and
Human Services or a state agency or any other federally funded state health care
program, the information furnished by Amgen concerning the amount or value of
such discount. Dialysis Center's corporate headquarters agrees that it will
advise all Affiliates, in writing, of any discount received by Dialysis Center's
corporate headquarters hereunder with respect to purchases made by such
Affiliates and that said Affiliates will account for any such discount in
accordance with the above stated requirements.
8. Discount limitation. Notwithstanding anything contained herein to the
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contrary, the amount of any discount available to Dialysis Center from Amgen,
under this Agreement or otherwise, shall be limited only to the extent that the
resulting net price paid by Dialysis Center for each dosage form and strength of
EPOGEN-R- is less than the price used to determine the relevant quarter's
Medicaid Rebate for each dosage form and strength of EPOGEN-R- under the
Medicaid Best Price Rebate Legislation, taking into account the aggregate value
of all discounts ultimately available to Dialysis Center for the relevant
quarter.
9. Commitment to Purchase. Dialysis Center agrees to purchase EPOGEN-R-
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for all of its dialysis use requirements for recombinant human erythropoietin.
Dialysis Center may purchase another brand of recombinant human erythropoietin
for its dialysis use requirements only for the time, and only to the extent,
that Amgen has notified Dialysis Center's corporate headquarters in writing that
Amgen cannot supply EPOGEN-R- within and for the time period reasonably required
by Dialysis Center.
Agreement No. 953429 -2- Ver. 1/22/96
AMGEN
EPOGEN-R- FREESTANDING DIALYSIS CENTER AGREEMENT
10. Own Use. Dialysis Center hereby certifies that EPOGEN-R- purchased
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hereunder shall be for Dialysis Center's "own use."
11. Designated Wholesalers List. Dialysis Center agrees to provide Amgen
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with a complete list of its current designated wholesalers, through whom
Dialysis Center may purchase EPOGEN-R- hereunder, on or before the date this
Agreement is signed by Dialysis Center. Such list must include the name and
complete address of each designated wholesaler. Dialysis Center agrees to
promptly provide Amgen with any additions, deletions, or changes to the initial
wholesaler list. Amgen requires no less than thirty (30) days notice before the
effective date of change for any addition or deletion of designated wholesalers
hereunder. The initial list of designated wholesalers, and any changes thereto,
must be in writing and are subject to approval by Amgen.
12. Dialysis Center Affiliates. Modifications to Appendix A hereto may be
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made pursuant to the request of Dialysis Center's corporate headquarters and are
subject to approval and acknowledgement by Amgen in writing. Amgen requires no
less than thirty (30) days notice before the effective date of change for any
addition or deletion of Affiliates hereunder. Amgen reserves the right in its
sole discretion to accept or reject any Affiliates with regard to participation
in this Agreement.
13. Breach of Agreement. Either party may terminate this Agreement for
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breach upon thirty (30) days advance written notice. In addition, in the event
that Dialysis Center breaches any provision of this Agreement, Amgen shall have
no obligation to continue to offer the terms described herein or pay any further
discounts to Dialysis Center.
14. Confidentiality. Both Amgen and Dialysis Center agree that this
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Agreement represents and contains confidential information which shall not be
disclosed to any third party, or otherwise made public, without prior written
authorization of the other party, except where such disclosure is contemplated
hereunder or required by law.
15. Warranties. Each party represents and warrants to the other that this
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Agreement (a) has been duly authorized, executed, and delivered by it, (b)
constitutes a valid, legal, and binding agreement enforceable against it in
accordance with the terms contained herein, and (c) does not conflict with or
violate any of its other contractual obligations, expressed or implied, to which
is a party or by which it may be bound. The party executing this Agreement on
behalf of Dialysis Center specifically warrants and represents to Amgen that it
is authorized to execute this Agreement on behalf of and has the power to bind
the Affiliates to the terms contained herein, including without limitation, the
sections entitled "Payment of Discount," "Treatment of Discount," and "Discount
Limitation."
16. Governing Law. This Agreement shall be governed by the laws of the
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State of California and the parties submit to the jurisdiction of the California
courts, both state and federal.
17. Notices. Any notice or other communication required or permitted
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hereunder shall be in writing and shall be deemed given or made when delivered
in person or when sent to the other party by first class mail or other means of
written communication at the respective party's address set forth below or at
such other address as the party shall have furnished to the other in accordance
with this provision.
Agreement No. 953429 -3- Ver. 1/22/96
AMGEN
EPOGEN-R- FREESTANDING DIALYSIS CENTER AGREEMENT
18. Health Care Pricing Legislation. Notwithstanding anything contained
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herein to the contrary, at any time following the enactment of any federal,
state, or local law or regulation that in any manner reforms, modifies, alters,
restricts, or otherwise affects the pricing of or reimbursement available for
EPOGEN-R-, Amgen may, in its sole discretion, upon thirty (30) days written
notice (a) terminate this Agreement, or (b) exclude any Affiliates from
participating in this Agreement.
19. Miscellaneous. No modification of this Agreement shall be effective
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unless made in writing and signed by a duly authorized representative of each
party, except as otherwise provided hereunder. This Agreement constitutes the
entire agreement of the parties pertaining to the subject matter hereof and
supersedes all prior written and oral agreements and understandings pertaining
hereto. Neither party shall have the right to assign this Agreement to a third
party without the prior written consent of the other party. Neither party shall
be liable for delays in performance and nonperformance of this Agreement or any
covenant contained herein caused by fire, flood, storm, earthquake or other act
of God, war, rebellion, riot, failure of carriers to furnish transportation,
strike, lockout or other labor disturbances, act of government authority,
inability to obtain material or equipment, or any other cause of like or
different nature beyond the control of such party. The parties shall execute
and deliver all documents, provide all information, and take or refrain from
taking action as may be necessary or appropriate to achieve the purposes of this
Agreement. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement. Amgen reserves the right to rescind this
offer if the parties fail to execute this Agreement within thirty (30) days from
the date of its offering.
The parties executed this Agreement as of the dates set forth below.
AMGEN, INC. VIVRA, INCORPORATED
a Delaware corporation a California corporation
0000 XxXxxxxxxxx Xxxxx 2 Mareblu
Xxxxxxxx Xxxx, XX 00000-0000 Xxxxxx Xxxxx, XX 00000
Signature: Signature:
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Print Name: Print Name:
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Print Title: Print Title:
------------------ --------------------
Date: Date:
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Agreement No. 953429 -4- Ver. 1/22/96
AMGEN
EPOGEN-R- FREESTANDING DIALYSIS CENTER AGREEMENT
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APPENDIX A: LIST OF DIALYSIS CENTER AFFILIATE(S)
See Contract List for EPOGEN-R- dated 12/4/95 (Enclosed)
Agreement No. 953429 -5- Ver. 1/22/96
AMGEN
EPOGEN-R- FREESTANDING DIALYSIS CENTER AGREEMENT
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APPENDIX B: DISCOUNT SCHEDULE AND TERMS
1. Commitment Incentive.
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(a) Calculation: Dialysis Center's Commitment Incentive ("CI") shall be
calculated in accordance with the following formula:
CI = A x B
where
A = Dialysis Center's aggregate EPOGEN-R- purchases
for the Term.
B = **********%
(b) Vesting: Dialysis Center's CI shall vest **********.
2. 1996 Freestanding Dialysis Center Volume Performance Incentive.
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(a) Calculation: Dialysis Center's 1996 Freestanding Dialysis Center
Volume Performance Incentive ("VPI") shall be
calculated in accordance with the following formula:
VPI = A x B
where
A = Dialysis Center's aggregate EPOGEN-R- purchases
for the Term.
B = A percent in accordance with the table listed
below.
C = Aggregate EPOGEN-R- purchases for the Term, by
all Affiliates as listed at the beginning of the
Term.
D = Aggregate EPOGEN-R- purchases by those same
Affiliates for the same time period during the
previous year.
Percent Growth B
(C - D)/D
****% - **** ****%
****% - ****% ****%
****% - ****% ****%
****% - ****% ****%
****% - ****% ****%
and where, for the relevant period,
Agreement No. 953429 -6- Ver. 1/22/96
AMGEN
EPOGEN-R- FREESTANDING DIALYSIS CENTER AGREEMENT
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APPENDIX B: DISCOUNT SCHEDULE AND TERMS (CONTINUED)
(i) Notwithstanding the definition of "C" above, if
any Affiliates are added to or deleted from this
Agreement during either of the periods used for
comparison, Amgen reserves the right in its sole
discretion to appropriately adjust Dialysis
Center's purchases for the relevant periods, for
purposes of comparison, by including or
excluding any purchases made by those Affiliates
during either of those periods, and
(ii) Quarterly payments shall be estimated by
Amgen using Amgen's discount calculation
policies, and the VPI will be reconciled
at the end of the Term.
(b) Vesting: Dialysis Center's VPI shall vest **********.
3. Volume Achievement Incentive.
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(a) Calculation: Dialysis Center's Volume Achievement Incentive ("VAI")
shall be calculated in accordance with the following
formula:
VAI = A x B
where
A = Dialysis Center's aggregate EPOGEN-R- purchases
for the Term by all Affiliates as listed at the
beginning of the Term.
B = A percent in accordance with the table listed
below.
VOLUME
AGGREGATE EPOGEN-R- PURCHASES FOR THE ACHIEVEMENT
TERM BY ALL AFFILIATES AS LISTED AT THE INCENTIVE
BEGINNING OF THE TERM PERCENTAGE
$********* - ********* ***%
$********* - ********* ***%
$********* - ********* ***%
$********* - ********* ***%
$********* - ********* ***%
$********* - ********* ***%
$********* - ********* ***%
$********* - ********* ***%
and where, for the relevant period,
Agreement No. 953429 -7- Ver. 1/22/96
AMGEN
EPOGEN-R- FREESTANDING DIALYSIS CENTER AGREEMENT
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APPENDIX B: DISCOUNT SCHEDULE AND TERMS (CONTINUED)
(i) The maximum payment available under this
incentive will be $********** and
(ii) Dialysis Center will not receive any
payment under the VAI until the
Affiliates listed at the beginning of
the Term have met the minimum purchase
requirement of $********** outlined
above. At such time as this minimum
purchase requirement is met, Amgen will
reconcile the VAI for any previous
unpaid quarters and will continue to
reconcile the VAI until the end of the
Term, and
(iii) Aggregate EPOGEN-R- purchases for the
Term, by all Affiliates as listed at the
beginning of the Term, must equal or
exceed the aggregate purchases by those
same Affiliates for the same time period
during the previous year to qualify for
any VAI, and
(iv) if any Affiliates are added to or
deleted from this Agreement during
either of the periods used for
comparison, Amgen reserves the right in
its sole discretion to appropriately
adjust Dialysis Center's purchases for
the relevant periods, for purposes of
comparison, by including or excluding
any purchases made by those Affiliates
during either of those periods.
(b) Vesting: Dialysis Center's VAI shall vest **********.
4. Optional Hematocrit Incentive.
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(a) Description: Dialysis Center can qualify for the Optional
Hematocrit Incentive ("OHN"), as described herein,
provided Dialysis Center can obtain the information
and data ("Data") listed in the Sample Report on
Attachment #1 to this Agreement from their clinical
laboratory, for each Affiliate, and provide the Data
and Certification Letter attached hereto as Attachment
#2 to Amgen as described herein, at the address listed
on Attachment #1. Certification Letters will be
mailed to Dialysis Center's corporate headquarters for
signature prior to each period for which the Data is
required. Amgen shall have the right to utilize the
Data for any purpose, and reserves the right to audit
the Data. The identity of the account submitting the
Data and any association with the Data will remain
confidential. A Sample Letter to the clinical
laboratory which describes the Data requirements is
also included on Attachment #3 to assist Dialysis
Center in obtaining the Data.
Agreement No. 953429 -8- Ver. 1/22/96
AMGEN
EPOGEN-R- FREESTANDING DIALYSIS CENTER AGREEMENT
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APPENDIX B: DISCOUNT SCHEDULE AND TERMS (CONTINUED)
(b) Reports: Hematocrit results reported must be from samples taken
immediately prior to the dialysis treatment
(pre-dialysis) using Xxxxxxx-Counter or Technicon
Measurement System testing methods, and shall be
reported to the nearest tenth of a percent. Data for
the month of February 1996 shall be provided to Amgen
in a report no later than March 31, 1996. Data for
the month of May 1996 shall be provided to Amgen in a
report no later than June 30, 1996. Data for the
month of August 1996 shall be provided to
Amgen in a report no later than September 30, 1996.
Data for the month of November 1996 shall be provided
to Amgen in a report no later than December 31, 1996.
Dialysis Center shall cause each report to be
submitted in a format acceptable to Amgen with a
signed copy of the Certification Letter.
(c) Calculation: Dialysis Center's OHI shall be calculated and paid on
two separate occasions, following receipt by Amgen of
the Data and Certification Letter described herein, in
accordance with the schedule listed below. The first
payment shall be based on Data for the month of May
1996, and shall equal a percentage of Dialysis
Center's aggregate EPOGEN-R- purchases during the
period consisting of February 1, 1996 through July 31,
1996 ("First Component"). The second payment shall be
based on Data for the month of November 1996, and
shall equal a percentage of Dialysis Center's
aggregate EPOGEN-R- purchases during the period
consisting of August 1, 1996 through January 31, 1997
(second Component").
Percentage of all Dialysis
Patients with Hematocrit
Levels greater than or equal Optional
to ***% (Please direct your Hematocrit
attention to the EPOGEN-R- Incentive
package insert) Percentage
85.0% - Over ***%
90.0% - 84.9% ***%
75.0% - 79.9% ***%
70.0% - 74.9% ***%
65.0% - 69.9% ***%
where,
(i) Amgen will calculate the OHI based on corporate
performance in accordance with Amgen's discount
calculation policies, and
Agreement No. 953429 -9- Ver. 1/22/96
AMGEN
EPOGEN-R- FREESTANDING DIALYSIS CENTER AGREEMENT
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APPENDIX B: DISCOUNT SCHEDULE AND TERMS (CONTINUED)
(ii) if Dialysis Center is unable to provide the Data
and Certification Letter for the required reports
within the specified time period, Dialysis Center
will not qualify for the OHI during the
corresponding period, and
(iii) Dialysis Center agrees to provide Amgen
with information detailing purchases for
each Affiliate during the Term, if so
requested by Amgen.
(d) Vesting: The First Component of the OHI shall vest on
**********.
The Second Component of the OHI shall vest on
**********.
Agreement No. 953429 -10- Ver. 1/22/96
AMGEN
Attachment #1 to Agreement No. 953429
Sample Report
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XYZ Dialysis Xxxx
Xxxxxx Xxxxxxx
Xxxx, XX Zip
(800) 966-XXXX
HEMATOCRIT INCENTIVE REPORT
All Patient/Test Hematocrit Lab Results for the Relevant Period
Patient ID Date Hematocrit
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1022 2/21/96 29.8
1134 2/23/96 35.0
4ACC3 2/23/96 28.6
1-456 2/21/96 33.2
HAB 2/21/96 21.9
(Black out any patient names or confidential identifiers.)
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SELECT PATIENT HEMATOCRIT LAB RESULTS FOR THE RELEVANT PERIOD
SORTED FOR ALL PATIENT/TEST LAB RESULTS WITH
HEMATOCRIT LEVELS GREATER THAN OR EQUAL TO ***%
Patient ID Date Hematocrit
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1024 2/21/96 30.8
1134 2/23/96 35.0
3BCC2 2/23/96 31.6
1-456 2J21/96 33.2
FWB 2/21/96 32.9
(Black out any patient names or confidential identifiers.)
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HEMATOCRIT LAB RESULTS FOR THE RELEVANT PERIOD
Total Hematocrit Tests: 198
Percentage of Patients/Tests with Hematocrit Levels greater than or equal to
***%: 85%
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Hematocrit results reported must be from samples taken immediately
prior to the dialysis treatment (pre-dialysis) using
Xxxxxxx-Counter or Technicon Measurement System testing
methods, and shall be reported to the nearest tenth of a percent.
Reports are to be provided to Amgen at the address listed below:
EPOGEN-R- Marketing Department - FSDC
Amgen Inc.
0000 XxXxxxxxxxx Xxxxx
Xxxxxxxx Xxxx, XX 00000-0000
Mail Stop: 26-1-B
Agreement No. 953429 Ver. 1/22/96
AMGEN
Attachment #2 to Agreement No. 953429
Sample Certification Letter
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Month X, 199X
FSDC Legal Name
Xxxxxx Xxxxxxx
Xxxx, XX Xxx
Xxxx: _________
RE: EPOGEN-R- Freestanding Dialysis Center Agreement No. 9XXXXX
Dear _________:
Thank you for your participation in the Optional Hematocrit Incentive Program.
In order for us to enroll you, we require that a duly authorized representative
of your organization sign the certification below.
Upon receipt of this signed document, we will calculate the value of your
incentive. If we do not receive the signed certification, we cannot provide you
with this incentive.
If you have any questions regarding this letter please contact me at (805)
000-0000. Thank you for your assistance in returning this certification.
Sincerely,
Xxxxx Xxxx
FSDC Marketing Segment Manager
CERTIFICATION:
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On behalf of FSDC Legal Name and all eligible affiliates participating in the
Optional Hematocrit Incentive Program under Agreement No. 9XXXXX, the
undersigned hereby certifies that the hematocrit data submitted for each
eligible affiliate includes the required hematocrit results from all dialysis
patients of such affiliate, and does not include hematocrit results from
non-patients. The party executing this document also represents and warrants
that it (i) has no reason to believe that the submitted hematocrit data is
incorrect and (ii) is authorized to make this certification on behalf of all
eligible affiliates submitting hematocrit data.
FSDC LEGAL NAME
Signature:
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Print Name:
----------------------
Print Title:
---------------------
Date:
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Agreement No. 953429 Ver. 1/22/96
AMGEN
Attachment #3 to Agreement No. 953429
Sample Letter to Laboratory
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Month X, 199X
ABC Laboratory
Xxxxxx Xxxxxxx
Xxxx, XX Xxx
Xxxx: _________
Dear _________:
As a means to monitor quality care, this facility will have future requirements
to report certain patient lab results relating to hematocrit levels for all
patients in the facility at each testing period. Your laboratory has excelled
in meeting our testing needs in the past. I am writing this letter to determine
if your laboratory will be able to meet these future needs.
Enclosure 1 details the format and requirements. The four reports should be
mailed to me four times per year as follows:
Testing Period Covered: Report Submitted on or Before:
---------------------- -----------------------------
February 1 to February 29, 1996 March 15, 1996
May 1 to May 31, 1996 June 15, 1996
August 1 to August 31, 1996 September 15, 1996
November 1 to November 30, 1996 December 15, 1996
I will follow this letter up with a telephone call to you to confirm these
arrangements.
Sincerely,
Renal Administrator
Agreement No. 953429 Ver. 1/22/96
AMGEN
