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Exhibit 10.54(a)  

 
 

AMENDMENT TO DISTRIBUTION SERVICES AGREEMENT    
    

THIS
AMENDMENT TO DISTRIBUTION SERVICES AGREEMENT (this "Amendment") is effective on February 28, 2007 (the "Effective
Date") regardless of the date of execution by and between Reliant Pharmaceuticals, Inc. ("Reliant" or "Customer") and
Cardinal Health(1) ("Cardinal Health" or "Service Supplier"). Reliant and Cardinal Health entered into a
Distribution Services Agreement, dated February 1, 2005 (the "Agreement") and desire to amend the Agreement in the manner set forth in this
Amendment. Capitalized terms not otherwise defined herein shall have the meaning ascribed to such terms in the Agreement. 

	(1)
	*The term "Cardinal Health" shall include the following affiliated operating companies: Cardinal Health 110, Inc., formerly known as Whitmire
Distribution Corporation, a Delaware corporation (Folsom, California); Cardinal Health 106, Inc., formerly known as James W. Daly, Inc., a Massachusetts corporation (Peabody, Massachusetts); Cardinal
Health 103, Inc., formerly known as Cardinal Southeast, Inc., a Mississippi corporation (Richland, Mississippi); Cardinal Health 100, Inc., formerly known as Bindley Western Industries, Inc., an
Indiana corporation (Indianapolis, Indiana); Cardinal Health 104, LP f/k/a Service Supplier Distribution, L.P., an Ohio limited partnership (Dublin, Ohio) Cardinal Health 107, Inc., formerly known as
National Pharmpak Services, Inc., an Ohio corporation, and any other subsidiary of Cardinal Health, Inc., an Ohio corporation ("CHI"), as may be designated by CHI and The Cardinal Trading Company. 

 
 

AGREEMENT    
    

For
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 

	1.
	Section 3.1 of the Agreement is hereby deleted and replaced in its entirety with the following:

	3.1
	Term and Termination. This Agreement shall remain in full force and effect through February 28,
2009, unless earlier terminated by either Reliant or Cardinal in accordance with this Section 3.1 (the "Initial Term"). At the expiration of the
Initial Term, this Agreement shall renew automatically for successive one-year periods upon the same terms and conditions, unless either party gives the other party written notice within
ninety (90) days of the expiration Term. Any reference to the "term of this Agreement" shall include the Initial Term and any such renewal periods. Notwithstanding the foregoing, this Agreement
may be terminated upon (a) the mutual written agreement of the Parties, (b) (60) days advanced written notice from either party, or(c) a breach by Reliant or Cardinal Health of
any of the terms of this Agreement which have not been cured within thirty (30) days of written notification thereof by the non-breaching party. If either party, in its reasonable
discretion, determines that any of the terms hereunder violate any new or existing law, rule or regulation, then such party reserves the right to: terminate this Agreement upon written notice to the
other. In the event that either party takes an action pursuant to the immediately preceding sentence of this Section 3.1, both Parties agree to
use their reasonable best efforts to negotiate and execute a distribution services agreement that will meet, in all material respects, the economic and business expectations of the Parties with
respect to this Agreement to the extent permitted by law.

	2.
	The
contents of Schedule A of the Agreement are hereby deleted and replaced in their entirety with the following:

	

	Total Fee:    The Total Fee (according to the charts set forth below including
service fee & data fee) will be calculated and paid quarterly based on the total value of all Product invoiced 

[***]  Certain
information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the
omitted portions. 

to
Cardinal Health less direct returns during the quarter, including brokerage and drop ship, from Reliant valued at Reliant's WAC at the time the Product was purchased (the "Invoiced Value").
Commencing with the first calendar quarter of 2008, the Service Fee portion of the Total Fee shall be calculated quarterly based upon the cumulative Invoiced Value for the immediately preceding four
calendar quarters. If the [***] sales are below [***], the service fee rate will be maintained at
[***]% + [***]%. By way of example, following the [***], should Cardinal Health's Invoiced Value during the period
of [***] through [***] be greater than [***], but less than $[***], the applicable Service Fee for the
[***] shall be [***]% as reflected in the table below. The rate will be re-evaluated at the close of each quarter, and adjusted (up or down)
accordingly based on the sales volume for the previous 12 month period. 

	QUARTER
 
	 	SERVICE FEE
	 	DATA FEE
	 	NLC FEE*
	 	TOTAL FEE

	[***]	 	[***]%	 	[***]%	 	 	 	[***]%
	[***]	 	[***]%	 	[***]%	 	 	 	[***]%
	[***]	 	[***]%	 	[***]%	 	[***]%	 	[***]%
	[***]	 	[***]%	 	[***]%	 	[***]%	 	[***]%

	Post 2007 Sales Volume Fee Adjustment Schedule ($000's)

	
 
	
 	

Service Fee
 
	
 	

Data
	
 	

NLC*
	
 	

Total

	$[***] to $[***]	 	[***]%	 	[***]%	 	[***]%	 	[***]%
	$[***] to $[***]	 	[***]%	 	[***]%	 	[***]%	 	[***]%
	$[***] to $[***]	 	[***]%	 	[***]%	 	[***]%	 	[***]%
	$[***] to $[***]	 	[***]%	 	[***]%	 	[***]%	 	[***]%
	$[***] to $[***]	 	[***]%	 	[***]%	 	[***]%	 	[***]%
	Over $[***]	 	[***]%	 	[***]%	 	[***]%	 	[***]%

*
= If applicable 

Reliant
shall pay the Total Fee no later than thirty (30) days following the end of each calendar quarter. The Total Fee will be paid to Cardinal Health in the form of a credit memo. For
purposes of this Agreement a "calendar quarter" shall mean the following consecutive three calendar month periods: January 1—March 31,
April 1—June 30, July 1—September 30 and October 1—December 31. 

        Service Fee Credits:    Reliant will receive credit towards Total Fee for the following items: 

	a.
	[***]

	b.
	[***]

	3.
	The
contents of section 2.2 (A) are hereby deleted and replaced in entirety with the following:

	

	2.2 Additional Inventory Management Services

	(A)
	Inventory
Levels. During the term of this Agreement, but not commencing until inventory levels then-existing as of the effective date of this Agreement have been worked
down to the levels set forth in this Paragraph (A), Service Supplier will use best efforts to maintain Aggregate Inventory Levels (for each Product) of no less than
[***] and no more than [***] on all Products as calculated on Average Weekly Movement, or as reasonably requested by Reliant and agreed up by Service
Supplier. New Product launches will be excluded from this requirement for the first twelve (12) months from initial launch and quantities will be mutually agreed upon between the parties. In
the 

[***]  Certain
information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the
omitted portions. 

event
that Service Supplier fails to maintain Aggregate Invenotry levels as set forth in this Section 2.2(A), Customer shall not be required to pay [***] Service Fee,
as it relates to that Product, (as defined in revised version of Schedule A) to Service Supplier for the calendar quarter in which such failure occurs. Service Supplier shall be required to
redistribute Customer's Products according to and using a First-In, First-Out ("FIFO") methodology. 

	4.
	The
remaining provisions of the Agreement shall remain in full force and effect as though fully set forth in this Amendment. Any conflict between the provisions of this Amendment and
the Agreement shall be resolved in favor of this Amendment. 

The
Parties have duly executed this Amendment as of the date first written above. 

	

 CARDINAL HEALTH, INC.	

 	

RELIANT PHARMACEUTICALS, INC.
	

By:	

	
 	

By:	

	

Name:	

Brandon L. Miller
	
 	

Name:	

Vincent Angotti

	

Title:	

VP Strategic Purchasing
	
 	

Title:	

Sr. VP Sales & Marketing

[***]  Certain
information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the
omitted portions. 

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AMENDMENT TO DISTRIBUTION SERVICES AGREEMENT

AGREEMENTExhibit
10.55

 

McKesson Corporation 

Core Distribution Agreement

 

This agreement (“Agreement”) is entered into
between McKesson Corporation (“McKesson”), a pharmaceutical distributor, and Reliant Pharmaceuticals, Inc. (“Manufacturer”),
a pharmaceutical manufacturer.

 

McKesson performs certain Core Services (as
hereinafter defined) in connection with the distribution of pharmaceutical
products manufactured by Manufacturer.  The
parties now wish to define more precisely the amount and manner of payment of
the consideration to be received by McKesson for its performance of the Core
Services.

 

Now, therefore, McKesson and Manufacturer
agree as follows:

 

I.                                         Obligations of McKesson

 

a.                                       McKesson agrees to provide the
following core distribution services to the extent customarily performed by a
full-range pharmaceutical distributor consistent with then current industry
practices (“Core Services”):  Pick, pack,
and ship Manufacturer’s product to McKesson’s customers upon their orders
therefore; transmit monthly 852 data including inventory levels on hand and on
order in addition to aggregate sales out; perform back-end administrative
services to support the distribution of Manufacturer’s product and the
maintenance of efficient inventory levels for servicing customers.

 

•                                          McKesson
will also provide SRC Services

 

b.                                      Services that are not Core Services
(“Value Added Services”), are not included in this Agreement and shall be
priced individually and separate from this Agreement.  Value Added Services include the following:  single point distribution through McKesson’s
Regional Distribution Center (“RDC”), RDC product backhaul, guaranteed service
levels, product recalls, product returns management, electronic 867 sales data
not in violation of McKesson’s contracts with customers, promotional marketing
services, new product launches, and all other services not defined as Core
Services in Section I.a. above.

 

II.                                     Obligations of Manufacturer

 

a.                                       Manufacturer agrees to replenish
McKesson’s inventory orders in a timely and efficient manner.  Manufacturer will utilize purchase order
numbers provided by McKesson when placing orders on behalf of McKesson.

 

b.                                      Manufacturer will use commercially
reasonable efforts to ensure that McKesson’s inventory replenishment is
operational, except for any scheduled down time needed to maintain effective
operations and/or when interruptions are necessary or caused by conditions
outside of Manufacturer’s control.  Furthermore,
in the

 

1

 

event of a Force Majeure (as defined herein)
or supply or manufacturing issue, Manufacturer shall be permitted to apportion
its available production capacity among McKesson and other licensees and/or
distributors of its Products, in its sole discretion.

 

c.                                       In consideration of the Core
Services to be provided pursuant to this Agreement, Manufacturer will pay a fee
to McKesson determined in accordance with Attachment A.

 

III.                                 Additional Terms and Conditions

 

a.                                       Payment calculations are all based
on gross branded pharmaceutical purchases (invoices for product received) by
McKesson.

 

b.                                      All fees hereunder will be due and
payable monthly with respect to any gross receipts (purchases) by McKesson at
the time of McKesson’s payment for such purchases and will be paid in the form
of a credit reflected on the invoice for such products, or if no such credit is
so indicated, by automatic deduction by McKesson.

 

c.                                       In the event any law, rule,
regulation, judicial decree or interpretation invalidates or adversely impacts
the Manufacturer as related to the Service Fee contained in Schedule A, the
Core Services and SRC Services to be provided hereunder by McKesson to
Manufacturer shall continue uninterrupted and the parties shall meet in good
faith to discuss and implement a new fee structure to compensate McKesson for
the Core Services contemplated herein.

 

d.                                      According to the Centers for
Medicare and Medicaid Services (CMS), certain service fees paid to wholesalers
by manufacturers should not be included in the manufacturer’s calculation of
Average Sales Price (ASP).

 

To assist
Manufacturer in determining whether the services fees paid to Wholesaler under
this Agreement should be included in or excluded from the calculation of ASP,
Wholesaler represents and warrants that it does not pass on, in whole or in
part, services fees payable to Wholesaler by Manufacturer under this Agreement
to its clients or customers.

 

Wholesaler
understands that Manufacturer will rely upon this representation when it
calculates ASP for its products subject to ASP reporting and submits those
values to CMS quarterly along with a certification attesting to its good faith
belief in the accuracy and completeness of its ASP calculations.  If Wholesaler elects to change its current
practice with respect to the pass through of service fees to its clients or
customers, Wholesaler will notify Manufacturer of the effective date of the
change within 30 days.

 

Manufacturer
represents and warrants that it will not use Wholesaler’s representation about
its handling of service fees to monitor or enforce any understanding between
the parties regarding Wholesaler’s prices or pricing

 

2

 

practices.  Manufacturer expects Wholesaler to decide
unilaterally whether to pass on all or part of the service fees paid under this
Agreement to its clients or customers.

 

IV.                                 [***]

 

[***]

 

V.                                     Confidentiality and Disclosure

 

This Agreement
and all information which is provided by each party to the other party pursuant
to this Agreement are confidential.  Each
party agrees to maintain all such information confidential and except as may be
required by law or order of any court or governmental agency, not to disclose
to any third party any such information unless such party shall obtain a
written release from the other party.  Each
party further agrees to limit access to such information to only those of its
officers and employees, attorneys, agents and consultants who reasonably need
to know such information.

 

VI.                                 Effective Date

 

a.                                       This Agreement shall become
effective as of January 1, 2005 and shall remain in effect until terminated in
accordance with Section b., below.

 

b.                                      Manufacturer or McKesson may
terminate this Agreement at any time, at the sole and absolute discretion of
either party, upon thirty (30) days’ advance written notice to McKesson or the
other party, without further obligation or penalty hereunder.

 

VII.                             General

 

a.                                       This Agreement is in addition to and
shall not supersede any existing agreement in effect between McKesson and
Manufacturer, including but not limited to the McKesson Buying Terms Form and
any Inventory Management Agreement entered into between the parties.

 

b.                                      This Agreement will be governed by
and construed in accordance with the laws of California, without regard to or
application of conflict of law, rules or principles.

 

c.                                       In no event shall McKesson be liable
to Manufacturer for any special, consequential, incidental or indirect damages,
however caused, on any theory of

 

 

 

[***] Certain information on this page has
been omitted and filed separately with the Commission. Confidential treatment
has been requested with respect to the omitted portions.

 

3

 

                                                liability and whether or not
McKesson has been advised of the possibility of such damages.

 

d.                                      The parties to this Agreement are
independent contractors.  Accordingly,
this Agreement does not constitute a partnership or other joint venture between
the parties and neither party shall be deemed to be an agent or representative
of the other.

 

e.                                       The failure of either party to
enforce at any time or for any period of time any one or more of the provisions
hereof shall not be construed to be a waiver of such provisions or of the right
of such party thereafter to enforce each such provision.

 

f.                                         Except for the obligation to pay
money, neither party will be liable to the other party for any failure or delay
in performance caused by reasons beyond such party’s reasonable control,
including but not limited to acts of God, war, riot, acts of terrorism, fire,
shortage of materials or transportation, strikes or acts of civil or military
authorities, provided such party gives prompt written notice thereof to the
other party.

 

g.                                      In the event Manufacturer requires
services (i.e. distribution, pharmacy, marketing or logistics) that McKesson
Specialty can provide, McKesson Specialty will be given the opportunity to bid
on providing these services to Manufacturer at the time they may be put out for
bid, along with any other competitor(s) that Manufacturer may so choose.

 

4

 

	
  For:

  	
  Reliant Pharmaceuticals, Inc.,

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Martin Driscoll

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Martin Driscoll

  	
   

  
	
   

  	
  (Print or
  Type)

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  SVP

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  2/1/05

  	
   

  
	
   

  
	
   

  
	
  For McKesson:

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Robert V. James

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Robert V. James

  	
   

  
	
   

  	
  (Print or Type)

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  V.P. Brand Rx Product

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  2-2-05

  	
   

  
					

 

5

 

Attachment A—

 

McKesson
SRC/Core Distribution Agreement Fee 

Services Fee Schedule

 

Core Services

 

1.                                       Pick, pack, and shipment of product
to customers

 

2.                                       Back end administrative services to
support the distribution of Manufacturer’s product

 

a.                                       Returns processing

 

b.                                      Contract administration

 

c.                                       Chargebacks, etc.

 

3.                                       Maintenance of efficient inventory
levels for servicing customers

 

4.                                       Electronic transmission of monthly
852 data including inventory levels and aggregate sales out by DC

 

* Reliant may audit 852 EDI reports with
respect to the data only, restricted to the previous 12 month period.

 

SRC Services

 

1.                                       Single destination for existing
product line (including items for warehouse business).

 

2.                                       Initial balancing of inventory in
McKesson network.

 

3.                                       Reduced ordering pattern:  one purchase order, one invoice, inventory
visibility, and inventory management of expiration dating.

 

4.                                       SRC will provide quarterly “Hot List
Report” consisting of listing of “short dated” product at the SRC in lieu of a “morgue
report”.

 

5.                                       McKesson agrees to maintain service
levels of [***]% or greater on all Reliant product as long as Reliant agrees to
ship sufficient quantities of product with normal expiration dates in a timely
manner.  For purposes of this Agreement,
the service level percentage will be calculated by dividing total units of each
Product shipped by the number of units of each Product ordered, on a Product by
Product basis.  The following items will
be excluded from the service level calculation: 
recalled and/or discontinued items.

 

Total Annual Fee for Services Provided – [***]%
of Gross Receipts or invoices, billed Monthly
based on the total value of all Products invoiced to McKesson by Manufacturer
during the month, including brokerage and drop ship products.  Manufacturer shall pay such fees no later
than thirty (30) days after the end of each month.

 

Other

 

1.                                       Product Recall Management will fall
under the McKesson Buying Terms Form (BTF) and will be done as agreed under the
HDMA guidelines.

 

2.                                       Credits for Non-Recall Returns will
be at [***]% as negotiated with McKesson Product Management and the Returns
Management team in Carrollton in July 2003.

 

 

[***] Certain information on this page has
been omitted and filed separately with the Commission. Confidential treatment
has been requested with respect to the omitted portions.

 

 

6

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