definiens: means the gross sales invoiced by [COMPANY], its Affi liates or sublicensees for Product to Third Parties other than sublicensees, less deducti ons, calculated in accordance with International Financial Reporting Standards ( ) and [COMPANY] ’s standard business practices, consistently applied, of : ( a ) Returns ( actually paid ) including withdrawals and r ecalls ; ( b ) Customer rebates ( actually paid and changes to accruals ), such as volume ( quantity ) discounts or price reductions ; 1 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHA NGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 193 4, AS AMENDED ( c ) Governmental price reductions ( actually paid an d changes to accruals ), such as rebates to managed care organizations or social and welfare sy stems and government mandated rebates ( including Medicaid and similar types of rebates ) ; ( d ) Contract pricing chargebacks ( actually paid ) su ch as to trade customers, managed health care organizations, pharmaceutical benefit managers, gro up purchasing organizations and national, state, or local government ; ( e ) Discounts ( actually paid and cha nges to accruals ) granted at the time of invoicing ; and ( f ) Sales taxes and other taxes ( actually paid and chan ges to accruals ) directly linked to and included in the gross sales amount as computed on a product by product basis for the countries conc erned ( hereinafter referred to as ) . For the avoidance of doubt, only actual payments for items ( a ) and ( d ) above shall be deducted from gros s sales ; whereas for items ( b ), ( c ), ( e ) and ( f ) ab ove both actual payments and changes in accruals shall be added to, or deducted from, gross sales . For fur ther clarity, any annual fee payable to the United State s government pursuant to Section 9008 of the Patien t Protection and Affordable Care Act, Pub . L. No . 111 -148 ( as may be amended ) shall not be deducted from gross invoiced sales . Changes in accruals shall be based on [COMPANY] ’s good faith estimates and made in accordance with IFRS and [COMPANY] ’s standard practices used in preparing its audited financial statements . ” 1.2 Royalty Payment ; Adjustments . The first paragra ph of Section 5.3 ( Royalty Payments ; Adjustments ) o f the Agreement is hereby deleted in its entirety and replaced with the following : “ 5.3 Royalty Payment ; Adjustments ( a ) Royalty on Products . Royalty payment for Qualified Reserve Program Rev enue shall be made by [COMPANY] to [COMPANY] in accordance with Section 5.3(h ) . [COMPANY] shall pay [COMPANY] a royalty payment on Net Sal es of Product sold by [COMPANY], its Affiliates or license es ( the ) according to the following rates, as adjusted in accordance with subsections ( c ), ( e ) an d ( f ) below : ” 1.3 Reporting . Section 8.1 ( Payment, Report ) of the Agreement is hereby deleted in its entirety an d replaced with the following : “ 8.1 Payment ; Report . All amounts payable to either party under this Ag reement shall be paid in U.S