Exhibit 10.1

 

SECOND AMENDMENT TO

COMMERCIAL OUTSOURCING SERVICES AGREEMENT

 

This Second 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 December 1, 2011 (the “Amendment Effective Date”).

 

RECITALS

 

A.           The Company and ICS are parties to a Commercial Outsourcing Services Agreement dated October 29, 2008, as amended by the First Amendment dated April 14, 2011 (collectively, 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.               New Section 3.4.  A new Section 3.4 is added to the Agreement as follows:

 

3.4.          Consumer Price Index Changes.  The fees set forth on Schedule B that are expressed in dollars (but not percentages) shall be adjusted annually to reflect increases in the Consumer Price Index for All Urban Consumers, U.S. City Average, for Merchant Wholesalers, nondurable goods, published by the United States Department of Labor on its website at http://www.bls.gov/cpi (the “CPI-U”).  The adjustment shall be effective on the first day of the month following the publication by the United States Department of Labor after each one year anniversary of the Effective Date and shall not exceed [***] percent ([***]%).  By way of example only, if the Effective Date is January 1, 2011, the adjustment would effective on February 1, 2012 following publication of the CPI-U on or about January 15, 2012.  Each of the fees set forth on Schedule B shall be multiplied by the percent increase in the CPI-U, Merchant Wholesalers, nondurable goods during each prior twelve-month period (for purposes of such calculation, the fees shall be the fees set forth on a revised Schedule B provided to the Company on an annual basis).  An example

 




[***] 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.

 











 

of the calculation of the increase is set forth on Schedule J.  If publication of the CPI-U ceases, or if the CPI-U otherwise becomes unavailable or is altered in such a way as to be unusable, the parties shall agree on the use of an appropriate substitute index published by the Bureau or any successor agency.

 

3.               Term.  Section 4.1 of the Agreement is deleted in its entirety and replaced with the following:

 

Term.  This Agreement will be effective as of the Effective Date and will continue until January 31, 2014 (the “Term”), unless sooner terminated.  The Term may be extended upon written mutual agreement of the parties, such extension to be negotiated in good faith six (6) months prior to the expiration of the Term.

 

4.               Schedule B.  The parties agree that Schedule B to the Agreement is hereby deleted in its entirety and replaced with the attached Revised Schedule B.

 

5.               Schedule J.  The parties agree that attached Schedule J to the Agreement is hereby added to this Agreement.

 

6.               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/ Doug Cook
    	
 
    	
By:
    	
/s/   Frank Thomas
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Doug Cook
    	
 
    	
Name:
    	
Frank   Thomas
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
VP, General Manager
    	
 
    	
Title:
    	
CEO
    


 

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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
    


 




[***] 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.

 

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Fee
    	
 
    	
Amount
    	
 
    	
Description
    
	
Dual Distribution/disaster recovery from Reno   Facility
    	
 
    	
$[***]/month
    	
 
    	
Management   fee for dual distribution and/or disaster recovery from the Reno Facility
    
	
Customer Service Fees
    
	
Order Processing Fee
    	
 
    	
$[***]/order
   MANUAL
    	
 
    	
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.

 
    
	
 
    	
 
    	
$[***]/order
 EDI
    	
 
    	
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)  

 
    	
 
    	
Monthly fee for controlled room temperature pallet   storage.  
    
	
 
    	
 
    	
$[***]/pallet (premium ambient/marketing   materials 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
    	
 
    	
$[***]/order
    	
 
    	
Fee in addition to the per order fee for each   order shipped at the 
    


 




[***] 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.

 

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Fee
    	
 
    	
Amount
    	
 
    	
Description
    
	
Bulk Shipment Fee
    	
 
    	
$[***]/case
    	
 
    	
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.
    
	
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
    	
 
    	
This fee will be assessed for work that is   completed outside the scope of the agreed upon services outlined in the   Services
    


 




[***] 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.

 

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Fee
    	
 
    	
Amount
    	
 
    	
Description
    
	
 
    	
 
    	
$[***]/hour overtime
    	
 
    	
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
    	
 
    	
[***]
    	
 
    	
This is for AMAG requested travel. AMAG must   provide prior approval before travel takes place.
    


 




[***] 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.

 

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SCHEDULE J

EXAMPLE OF PRICE ADJUSTMENT CALCULATION

 

	
Effective Date:
    	
January 1, 2011
    
	
CPI-U for “Merchant Wholesaler, nondurable goods”
    	
January 2009: [***]
    
	
CPI-U for “Merchant Wholesaler, nondurable goods”
    	
January 2010: [***]
    
	
(published on or about January 15, 2012)
    	
 
    
	
 
    	
 
    
	
Change in CPI-U:
    	
[***]
    
	
Percentage change in CPI-U:
    	
[***]
    
	
 
    	
 
    
	
[***]
    	
 
    


 




[***] 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.

 

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