Exhibit 10.2

 

THIRD AMENDMENT TO

COMMERCIAL OUTSOURCING SERVICES AGREEMENT

 

This Third Amendment to the Commercial Outsourcing Services Agreement (this
“Amendment”) is between AMAG Pharmaceuticals, Inc. (the “Company”) and
Integrated Commercialization Solutions, Inc. (“ICS”).  This Amendment is
effective as of August 1, 2012 (the “Amendment Effective Date”).

 

RECITALS

 

A.            The Company and ICS are parties to a Commercial Outsourcing
Services Agreement dated October 2008, as amended by the First Amendment dated
April 14, 2011 and the Second Amendment dated December 1, 2011 (as amended, the
“Agreement”);

 

B.            Pursuant to the Agreement, among other things, the Company engaged
ICS to perform commercialization services for certain pharmaceutical products;
and

 

C.            The parties now wish to amend the Agreement in certain respects.

 

AMENDMENT

 

NOW THEREFORE, the parties agree as follows:

 

1.              Defined Terms.  Capitalized terms in this Amendment that are not
defined in this Amendment have the meanings given to them in the Agreement.  If
there is any conflict between the Agreement and any provision of this Amendment,
this Amendment will control.

 

2.              Sample Product Distribution.  The parties agree that beginning
in approximately October or November 2012, when requested by Company, ICS will
distribute Sample Products under the terms of attached Exhibit J and Company
shall pay ICS the Sample Fees identified on Revised Schedule B.  In addition,
the parties agree that if the first month that the new services are provided is
a partial month, then ICS will prorate the applicable fees for such services.

 

3.              No Other Changes.  Except as otherwise provided in this
Amendment, the terms and conditions of the Agreement will continue in full
force.

 

IN WITNESS WHEREOF, the parties have executed this Amendment as of the Amendment
Effective Date.

 

Integrated Commercialization Solutions, Inc.

 

AMAG Pharmaceuticals, Inc.

 

 

 

 

 

 

By:

/s/ Stephen W. McKinnon

 

By:

/s/ Jeffrey B. Hart

 

 

 

 

 

Name:

Stephen W. McKinnon

 

Name:

Jeffrey B. Hart

 

 

 

 

 

Title:

VP, Finance

 

Title:

VP, Commercial Analytics

 

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SCHEDULE B

SUMMARY OF FEES

 

Assumptions:

 

·                  AMAG will ship to wholesalers, specialty distributors, large
clinics and hospitals and specialty pharmacies

 

·                  852/867 Reporting included in Monthly Management Fee for ABC,
McKesson and Cardinal.  Any additional reporting may require additional
management and development fees

 

·                  Standard operation procedures will be followed for all
processes.  If any custom work instructions are required, the fees listed may be
impacted

 

Fee

 

Amount

 

Description

 

 

 

 

 

3PL Services

 

 

 

 

 

 

 

 

 

Monthly Management Fee

 

 

 

 

 

 

 

 

 

Customer Service

 

Warehouse & Distribution

 

Returns Management

 

Finance

 

Contract & Chargeback Management

 

Information Technology & Reporting

 

852/867 Reporting — ABC, MCK, CAH

 

[***]/month

 

Address customer inquiries as AMAG

 

Manage Customer Relationship

 

Account Set Up

 

License Verification

 

Order Processing

 

Returns

 

Product Inquiries

 

Inventory pick, pack and ship from ICS distribution center

 

AMAG-Branded Packing Slips

 

Daily Cycle Counts

 

One Physical Inventory Count per annum

 

Inventory Management

 

Invoicing as AMAG

 

Establish Credit Limits

 

Process Returns

 

Call Triage

 

Accounts Receivable Management

 

Collections

 

Maintenance of government and non-government reports

 

Process chargeback requests from wholesalers

 

Debit memo processing

 

Reconciliation reporting

 

Maintenance of AMAG specific DataMart and web reporting tool

 

Maintenance of Crystal Enterprise for web reporting

 

Future upgrades to ICS’ software

 

Includes two licenses to Crystal Enterprise reporting tool

 

 

 

 

 

Dual Distribution/disaster recovery from Reno Facility

 

[***]

 

Management fee for dual distribution and/or disaster recovery from the Reno
Facility

 

 

 

 

 

Customer Service Fees

 

 

 

 

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

2

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Fee

 

Amount

 

Description

 

 

 

 

 

Order Processing Fee

 

[***]/order MANUAL

 

 

[***]/order

 

EDI

 

Order is defined as a shipment to a unique address that leaves the distribution
center, regardless of the number of cartons or packages that constitute that
shipment and/or the number of inbound requests for said Order.

 

Electronic orders are those that are imported into the system automatically
without manual intervention from customer service.

 

 

 

 

 

Customer Setup Fee

 

[***]/account

 

Assessed for every new account setup completed for an authorized AMAG customer. 
This includes license receipt and verification after initial launch setup.

 

 

 

 

 

Drop Shipment Surcharge

 

$[***]/order

 

Assessed in addition to Per Order fees outlined above, when drop shipments are
requested.  Drop Shipments are defined as shipments that are shipped directly to
an end customer of the wholesaler, and invoiced directly to the wholesaler. 

 

 

 

 

 

Allocation Fee

 

[***]/week

 

Order allocations encompass any inbound orders to ICS that needs to have
original conditions revised and/or altered (i.e. manual intervention) as opposed
to allowing the order to automatically flow through the order process system. 
An example of an allocation would be a backorder situation.

 

 

 

 

 

Rush Order

 

[***]/order

 

Orders that are received and processed between 3pm and 5pm Eastern Time, at the
request of the AMAG. 

 

 

 

 

 

Emergency Order

 

[***]/order

 

Emergency shipments are defined as any order received outside of scheduled
working hours (currently M-F 8am to 5pm Eastern Time) requiring ICS staff to
return to the ICS facility to process the order within the same day.

 

 

 

 

 

International Order

 

[***]/order

 

Fee applied in addition to any order processing fees.

 

 

 

 

 

Warehouse & Distribution Fees

 

 

 

 

 

 

 

 

 

Product Storage

 

[***]/pallet (ambient/marketing materials)

 

[***]/pallet (premium ambient/marketing materials storage

 

Monthly fee for controlled room temperature pallet storage.

 

 

Monthly fee for controlled room temperature pallet storage in Reno.

 

 

 

 

 

Order Processing Fees

 

[***]/order

 

Order is defined as a shipment to a unique address that leaves the distribution
center, regardless of the number of cartons or packages that constitute that
shipment and/or the number of inbound requests for said Order.

 

 

 

 

 

 

 

[***]/unit

 

This fee is in addition to the per order fee for each additional unit that is
shipped in the order.

 

 

 

 

 

Hazardous Material Fee

 

[***]/order

 

Fee in addition to the per order fee for each order that requires hazardous
shipping documentation.

 

 

 

 

 

Case Break Fee

 

Bulk Shipment Fee

 

[***]/order

 

[***]/case

 

Fee in addition to the per order fee for each order shipped at the vial/bottle
level.  Bulk shipments incur an additional surcharge per case.

 

 

 

 

 

Packing Supplies

 

[***]

 

Any packing materials that ICS must provide for the AMAG to ship Commercial and
Non-Commercial Products.

 

 

 

 

 

Freight

 

[***]

 

ICS will share AmerisourceBergen Corporation (ABC) discounted rates with AMAG
with a mark-up of 10%.

 

 

 

 

 

Finance

 

 

 

 

 

 

 

 

 

Invoice Processing

 

[***]/invoice

 

Fee for sending invoice (electronic or paper) to customer, collection efforts
and cash posting.

 

 

 

 

 

Credit/Rebill Transactions

 

[***]/each

 

Any AMAG requested credit or rebill transactions keyed in the system.

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

3

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Fee

 

Amount

 

Description

 

 

 

 

 

Credit Verification Reports — Dun & Bradstreet

 

[***]/report

 

Any AMAG requested credit report. Dun & Bradstreet (D&B) typically tracks
information for corporate customers.

 

 

 

 

 

Credit Verification Reports — Experian

 

[***]/report

 

Any AMAG requested credit report. Experian typically tracks information for
individual customers such as physicians.

 

 

 

 

 

Returns Management

 

 

 

 

 

 

 

 

 

RGA Initiation

 

[***]/RGA

 

RGA: Returned Goods Authorization.

 

Fee for processing return request from customer and sending the customer an RGA.

 

 

 

 

 

Return Processing

 

[***]/unit

 

Receipt of physical return at the distribution center. Fee includes itemizing
contents of the return

 

 

 

 

 

Return Processing

 

[***]/line

 

Fee applied in addition to Return Processing fee for handling and counting
additional lines.

 

 

 

 

 

Returns Storage

 

[***]/pallet

 

Monthly fee for controlled room temperature pallet storage.

 

 

 

 

 

Contract and Chargeback Management

 

 

 

 

 

 

 

 

 

Chargeback Processing — Manual

 

[***]/line

 

Each SKU is considered a line.  If customers cannot send information
electronically, they will mail information for manual processing.  ICS and
Customer must have copies of contracts in order to process chargebacks without
manual intervention. 

 

 

 

 

 

Chargeback Processing — Electronic

 

[***]/line

 

Each SKU is considered a line.  Customers will typically send chargebacks
electronically according to HDMA standards. 

 

 

 

 

 

Information Technology and Reporting

 

 

 

 

 

 

 

 

 

Custom Reports

 

[***]/hour

 

Fee for reports created that are not part of the standard reports provided by
ICS.  Hourly report creation fees assessed for initial report creation but not
thereafter for running the same report.

 

 

 

 

 

Custom Development Services

 

[***]/hour

 

Fee for customized processes developed at the request of AMAG. Hourly fees will
be assessed and approved by AMAG before development work is to begin.

 

 

 

 

 

Additional Fees

 

 

 

 

 

 

 

 

 

Product Destruction

 

[***]

 

Destruction of product per AMAG’s request and instruction.

 

 

 

 

 

FedEx/UPS/Postage Expenses

 

[***]

 

Freight expenses for shipments of documents or any other shipments related to
daily operations on behalf of AMAG.

 

 

 

 

 

Pre-Approved Assessorial Labor Charge - Warehouse

 

[***]/hour

 

[***]/hour overtime

 

This fee will be assessed for work that is completed outside the scope of the
agreed upon services outlined in the Services Agreement.  AMAG must provide
prior approval before assessorial labor takes place.

 

 

 

 

 

Pre-Approved Assessorial Labor Charge — Office Staff

 

[***]/hour

 

This fee will be assessed for work that is completed outside the scope of the
agreed upon services outlined in the Services Agreement.  AMAG must provide
prior approval before assessorial labor takes place.

 

 

 

 

 

Pre-Approved Assessorial Labor Charge — QC, Management

 

[***]/hour

 

This fee will be assessed for work that is completed outside the scope of the
agreed upon services outlined in the Services Agreement.  AMAG must provide
prior approval before assessorial labor takes place.

 

 

 

 

 

ICS Travel

 

Expenses plus employee time

 

This is for AMAG requested travel.  AMAG must provide prior approval before
travel takes place.

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

4

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Fee

 

Amount

 

Description

 

 

 

 

 

Samples Program

 

 

 

 

 

 

 

 

 

Monthly Management

 

[***]/month

 

 

 

 

 

 

 

Customer Service — Per Order

 

[***] EDI

 

[***] Manual

 

 

 

 

 

 

 

Customer Service — Outbound phone call for sample compliance

 

[***] Manual

 

 

 

 

 

 

 

Customer Service — Acknowledgement of Content from UPS

 

[***] pass through fee from sample sure for AOC

 

 

 

 

 

 

 

Warehouse — Per Order

 

[***]

 

 

 

 

 

 

 

Warehouse — Per Unit

 

[***]

 

 

 

 

 

 

 

Storage

 

[***] Per Pallet

 

 

 

--------------------------------------------------------------------------------

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

5

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EXHIBIT J

 

WAREHOUSING AND DISTRIBUTION OF SAMPLE PRODUCTS

 

The parties will perform the following Services on and after the program launch
date during the Term of the Agreement:

 

1.              Sample Products.  “Sample Products” means
Feraheme® (ferumoxytol) Injection, which is not intended to be sold and is
labeled as such and is given to customers free of charge to promote sales.

 

2.              Storage and Shipment of Samples.  ICS will warehouse, inventory
and distribute Samples and Free Goods consistent with standards for warehousing,
inventory and distribution Services under Exhibit B.  ICS will distribute
Samples by mail or common carrier.  ICS’s obligation to perform Services is
conditioned on the Company’s performance of tasks as specified under Exhibit B.

 

3.              Recipients.  For purposes of sending Samples, the Company will,
from time to time, provide ICS with a current and accurate list of recipients
authorized to receive Sample Products (“Recipients”), including additions,
corrections, and deletions.  At a minimum, the list will include the name and
ship-to address of each Recipient.  ICS will adhere to its standard operating
procedures for distribution of Sample Products to Recipients, as well as all
Requirements of Law, including without limitation the PDMA, pertaining to
distribution of samples to Recipients. ICS shall not ship Sample Products to any
recipient unless authorized by Company.

 

4.                          Physician Recipients.  Prior to each delivery of
Sample Product by ICS to a Physician Recipient, the Company will provide ICS
with a completed sample request form in a form mutually agreed upon by the
Parties, which must be signed by the physician making the request for Sample
Products (the “Sample Request Form”).  The Sample Request Form will contain the
following information:

 

4.1  The applicable state license or authorization number (or DEA number where a
controlled substance is requested) for the physician authorized to receive
Samples Products;

 

4.2  The name, address, professional title and signature of the physician making
the request;

 

4.3  The proprietary or established name and strength of the Sample Product
requested;

 

4.4  The amount of Sample Product requested;

 

4.5             The date of the request;

 

4.6             The full names of the Company and ICS; and

 

4.7  Any other information required by § 203.30 or other applicable law for the
distribution of Sample Products to a physician.

 

4.8                   Pharmacy or Hospital Recipients.  Prior to each delivery
of Sample Product by ICS to pharmacy or hospital Recipient, the Company will
provide ICS with a completed Sample Request Form, which is signed by the
physician making the request.  The Sample Request Form must contain all of the
information listed in Sections 4.1-4.7 and must also include the name and
address of the pharmacy or hospital to which the Sample Product will be
delivered.

 

6

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5.              Receipts for Sample Products.  Upon delivery of the Sample
Product, ICS will obtain a receipt that contains the following information:

 

5.1                   Physician Recipient.  If the Recipient is a physician, the
receipt will include at a minimum: (a) the signature of the physician or the
physician’s authorized designee acknowledging delivery of the Sample Product;
(b) the physician’s name, address, professional title; (c) the proprietary or
established name and strength of the Sample Product; (d) the quantity of the
Sample Product delivered; and (e) the date of delivery.

 

5.2                   Pharmacy or Hospital Recipients.  If the Recipient is a
Pharmacy or Hospital, the receipt will include at a minimum: (a) the name and
address of the licensed physician requesting the Sample Product; (b) the name
and address of the pharmacy or hospital designated to receive the Sample
Product; (c) the name, address, professional title and signature of the person
acknowledging delivery of the Sample Product; (d) the proprietary or established
name and strength of the Sample Product; (e) the quantity of the Sample Product
requested; and (vi) the date of delivery.

 

6.       Reconciliation of Sample Product Requests and Receipts; Losses.  ICS
will be responsible for reconciling sample requests, receipts and inventory of
Sample Products as mutually agreed by the parties and consistent with all
Requirements of Law.  ICS will report all discrepancies, thefts and losses
involving Sample Products to the Company.  The Company will develop an
appropriate definition for “Significant Loss,” and will be responsible for
determining whether any discrepancy, theft or loss constitutes a Significant
Loss.  If the Company in its discretion determines that a Significant Loss
exists, the Company will notify the FDA of the loss consistent with PDMA
requirements.

 

7.        Record Keeping Requirements.  The Company and ICS will create and
maintain all applicable forms and records required by all Requirements of Law
applicable to warehousing and distribution of Samples and Free Goods including
PDMA, Rules and Controlled Substance Laws.  Before the distribution of any
Samples or Free Goods, the Company and ICS will identify in a separate written
procedure the specific forms and records each will maintain so that distribution
of Samples and Free Goods will comply with all Requirements of Law.  The Company
and ICS will permit the other, upon reasonable advance notice, to audit and
inspect all such forms and records it creates or maintains in distributing
Samples Products.  The Company and ICS will cooperate and assist with, and will
provide the other with access to and copies of, such forms and records as may be
useful in responding to, regulatory agency inspections or requests for such
forms or records.

 

7

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