definiens: shall mean, in respect of a Product, the cost to [COMPANY] or its Affiliate in whose name the ANDA is registered ( the ) to manufacture ( including quality control and testing ) and package such Product including, without limitation, the landed cost of raw materials and packaging materials ( including, without limitation, the cost to manufacture the active ingredient used in the manufacture such Product, determined in accordance with the costing methods currently employed by [COMPANY] or such Manufacturer in the manufacture of all products produced 146503.2 CONFIDENTIAL TREATMENT -9 - in the facility or facilities in which active ingredient is so manufactured ), component costs, energy, labor ( salmy and benefits ) and reasonable overhead charges relating to the manufacture ofa specified quantity of such Product, and other direct and allocable indirect costs to manufacture such Product including, but not limited, to manufacturing charges for material adjustments, for off grade or defective material, handling losses, physical adjustments, salvage and start - up costs, consistently applied in accordance with the costing methods currently employed by such manufacturer in the manufacture of all products produced in the facility or facilities in which such Product is manufactured . If all or any portion of the manufacturing or packaging of such Product is subcontracted by [COMPANY] or the Manufacturer to any person the Manufacturing Costs shall include the amount paid to such person . The Manufacturing Cost of the Product shall be established on the date that the ANDA for such Product is acquired by [COMPANY] or the Manufacturer and on the first day of each calendar quarter thereafter, which amount shall be used to determine the Transfer Price of such Product manufactured by [COMPANY] or the Manufacturer for [COMPANY] during the period until the next Manufacturing Cost determination date . Provided that where, during a period between Manufacturing Cost determination dates, the variable costs incurred by [COMPANY] or the Manufacturer to manufacture such Product ( and which are included in the Manufacturing Cost ) have, in the aggregate, increased or decreased by more than 5 %, a pro rata adjustment will be made to the Manufacturing Cost of such Product manufactured during such period as agreed upon by [COMPANY] and [COMPANY] or, failing agreement, as determined by arbitration between [COMPANY] and [COMPANY] ( and/or the Manufacturer ) pursuant to the Fifteen Product Agreement . In determining changes in Manufacturing Cost due to changesin the variable costs incurred by [COMPANY] or the Manufacturer for raw materials and components including active ingredient, such materials shall be used and costed on a first in, first out basis in accordance with Canadian ( in the case of [COMPANY] ) or other applicable ( in the case of a Manufacturer ) generally accepted accounting principles, consistently applied, and no adjustment herein contemplated will prejUdice [COMPANY] or the Manufacturer in respect of active ingredient or work in progress manufactured or in the process of being manufactured by [COMPANY] or the Manufacturer