CO-PROMOTION AGREEMENTPromotion Agreement |
|
|
You are currently viewing: This Promotion Agreement involves
CEPHALON INC | McNEIL-PPC, INC.. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
|
|
|
|
EXHIBIT 10.1
CO-PROMOTION AGREEMENT
dated as of August 31, 2005
by and between
CEPHALON, INC.
and
McNEIL CONSUMER & SPECIALTY
TABLE OF CONTENTS
i
ii
iii
CO-PROMOTION AGREEMENT
This CO-PROMOTION AGREEMENT (“ Agreement ”) dated as of August 31, 2005 (the “ Effective Date ”), is made by and between McNEIL CONSUMER & SPECIALTY PHARMACEUTICALS, a division of McNEIL-PPC, Inc., a New Jersey corporation having its principal office at 7050 Camp Hill Road, Fort Washington, Pennsylvania 19034 (“ McNeil ”) and CEPHALON, INC., a Delaware corporation having its principal office at 41 Moores Road, Frazer, Pennsylvania 19355 (“ Cephalon ”). McNeil and Cephalon may be referred to as a “ Party ” or together as the “ Parties ”.
RECITALS
WHEREAS, Cephalon is awaiting Marketing Authorization (as hereinafter defined) to market and sell the Product (as hereinafter defined) in the Territory (as hereinafter defined);
WHEREAS, McNeil is interested in Co-Promoting (as hereinafter defined) and Detailing (as hereinafter defined) the Product in the Territory; and
WHEREAS, Cephalon desires to appoint McNeil as an independent party for the purposes of exclusively (together with Cephalon) Co-Promoting and Detailing the Product in the Territory and McNeil desires to be so appointed by Cephalon.
NOW, THEREFORE, in consideration of the foregoing premises and the representations, covenants and agreements contained herein, McNeil and Cephalon, intending to be legally bound, hereby agree as follows:
For purposes of this Agreement, the following initially capitalized terms, whether used in the singular or plural, shall have the following meanings:
1.1 “ ADD ” means attention deficit disorder.
1.2 “ ADHD ” means attention deficit hyperactivity disorder.
1.3 “ Adverse Drug Experience ” means any of: an “adverse drug experience,” a “life-threatening adverse drug experience,” a “serious adverse drug experience,” or an “unexpected adverse drug experience,” as those terms are defined at either 21 C.F.R. § 312.32 or 21 C.F.R. § 314.80.
1.4 “ Affiliate ” means, with respect to a Party, any Person, whether de jure or de facto , which directly or indirectly controls, is controlled by, or is under common control with such Person for so long as such control exists, where “control” means the decision-making authority as to such Person and, further, where such control shall be presumed to exist where a Person owns more than fifty percent (50%) of the equity having the power to vote on or direct the affairs of the entity.
1.5 “ Agreement Year ” means the period commencing on the first day of the first month following the First Commercial Sale and ending twelve (12) consecutive calendar months later, and each successive twelve (12) consecutive calendar months period; provided, however, that the first Agreement Year shall include the period beginning on the date of the First Commercial Sale and prior to the first day of the first Agreement Year if such first day does not occur on the first day of a month.
1.6 “ Annual Net Sales ” means the Net Sales during a particular Agreement Year.
1.7
“ Anti-Kickback Statute
” means the Medicare and Medicaid Anti-Kickback Statute set
forth at 42 U.S.C.
1.8 “ Applicable Commercial Practices Policies ” means the portions as identified by a Party of the Commercial Practices Policies of such Party applicable to the marketing, sale, promotion and detailing of pharmaceutical products, as amended or supplemented from time to time. Copies of Cephalon’s Applicable Commercial Practices Policies and McNeil’s Applicable Commercial Practices Policies are attached to this Agreement as Schedule 1.8 and may be updated in writing by one Party to the other Party from time to time.
1.9 “ Base Sunset Commission Fees ” shall have the meaning set forth in Section 5.1.3.
1.10 “ Calendar Quarter ” means each of the three month periods ending March 31, June 30, September 30 and December 31; provided, however, that the first calendar quarter for the first Calendar Year shall extend from the date of the First Commercial Sale to the end of the first complete calendar quarter thereafter.
1.11 “ Call ” means (a) with respect to a McNeil Sales Representative, a personal visit by a McNeil Sales Representative to a member of the Target Audience during which such McNeil Sales Representative Details the Product, and (b) with respect to a Cephalon Sales Representative, a personal visit by a Cephalon Sales Representative to a physician with authority to prescribe a pharmaceutical product or issue hospital orders for a pharmaceutical product in the United States during which such Cephalon Sales Representative Details the Product.
1.12 “ Cephalon’s Medical Education Grants Committee ” or “ CMEGC ” means the committee formed by Cephalon to address issues related to medical education grants or any successor committee thereto.
1.13 “ Cephalon Sales Representative ” means a field based sales representative engaged or employed by Cephalon and deployed by Cephalon to Co-Promote and Detail the Product.
1.14 “ Claims ” means all charges, complaints, actions, suits, proceedings, hearings, investigations, claims and demands.
1.15 “ Commission Fees ” shall have the meaning set forth in Section 5.1.1.
2
1.16 “ CONCERTA® ” means the finished product of McNeil’s ADHD formulation of methylphenidate HCl in all package sizes and dosage forms, including all improvements, line extensions and formulations thereto.
1.17 “ Confidential Information ” means all secret, confidential or proprietary information or data, whether provided in written, oral, graphic, video, computer or other form, provided by one Party (the “ Disclosing Party ”) to the other Party (the “ Receiving Party ”) pursuant to this Agreement or generated pursuant to this Agreement, including but not limited to, information relating to the Disclosing Party’s existing or proposed research, development efforts, patent applications, business or products, the terms of this Agreement and any other materials that have not been made available by the Disclosing Party to the general public. Notwithstanding the foregoing sentence, Confidential Information shall not include any information or materials that:
1.17.1 were already known to the Receiving Party (other than under an obligation of confidentiality), at the time of disclosure by the Disclosing Party to the extent such Receiving Party has documentary evidence to that effect;
1.17.2 were generally available to the public or otherwise part of the public domain at the time of its disclosure to the Receiving Party;
1.17.3 became generally available to the public or otherwise part of the public domain after its disclosure or development, as the case may be, and other than through any act or omission of a Party in breach of such Party’s confidentiality obligations under this Agreement;
1.17.4 were disclosed to a Party under an obligation of confidentiality that has subsequently expired;
1.17.5 were disclosed to a Party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the Disclosing Party not to disclose such information to others; or
1.17.6 were independently discovered or developed by or on behalf of the Receiving Party without the use of the Confidential Information belonging to the other Party and the Receiving Party has documentary evidence to that effect.
1.18 “ Co-Promotion ” means those promotional activities undertaken by a pharmaceutical company’s sales force in concert with at least one other pharmaceutical company’s sales force to implement the marketing and sales plans with respect to a particular prescription pharmaceutical product under a single trademark. When used as a verb, “ Co-Promote ” shall mean to engage in such activities.
1.19 “ Continuing Product Employee ” shall have the meaning set forth in Section 10.3.5.
1.20 “ Detail ” or “ Detailing ” means, with respect to the Product, the communication by a Sales Representative during a Call (a) involving face-to-face contact, (b) describing in a fair
3
and balanced manner, the FDA-approved indicated uses, and other relevant characteristics of the Product, (c) using the Promotional Materials in an effort to educate the prescriber concerning the Product and its FDA-approved indicated uses and (d) made at the Target Audience member’s office. For the avoidance of doubt, discussions at conventions shall not constitute “Details” or “Detailing”.
1.21 “ Designated Senior Officer ” means the senior officer designated by a Party to have final decision-making authority over certain disputes which, unless otherwise notified, shall be the President or Chief Executive officer of the Party; provided that the Designated Senior Officer of Cephalon shall not be the Chair of the JCC.
1.22 “ Detail Requirements ” shall have the meaning set forth in Section 2.2.
1.23 “ Disputed Matters ” shall have the meaning set forth in Section 3.7.
1.24 “ FDA ” means the United States Food and Drug Administration and any successor agency thereto.
1.25 “ FD&C Act ” means the United States Federal Food, Drug, and Cosmetic Act, as amended, and the regulations promulgated thereunder from time to time.
1.26 “ First Commercial Sale ” means the first shipment of commercial quantities of the Product sold to a Third Party by Cephalon or its sublicensees in the Territory after receipt of Marketing Authorization for the Product in the Territory. Sales for test marketing, sampling and promotional uses, clinical trial purposes or compassionate or similar uses shall not be considered to constitute a First Commercial Sale.
1.27 “ First Position Detail ” means a Detail for the Product in the first (or only) position.
1.28 “ Governmental Authority ” means any court, tribunal, arbitrator, agency, legislative body, commission, official or other instrumentality of (a) any government of any country, (b) a federal, state, province, county, city or other political subdivision thereof or (c) any supranational body.
1.29 “ Incentive Compensation ” means the total sales performance incentive compensation for a product or all products, as applicable, available to be earned by a Sales Representative pursuant to the terms of the then current incentive compensation plan for such Sales Representative.
1.30 “ Joint Commercial Committee ” or “ JCC ” shall have the meaning set forth in Section 3.1.
1.31 “ Laws ” means all laws, statutes, rules, regulations, ordinances and other pronouncements having the binding effect of law of any Governmental Authority.
1.32 “ Losses ” means any and all damages, awards, deficiencies, settlement amounts, defaults, assessments, fines, dues, penalties, costs, fees, liabilities, obligations, taxes, liens, losses
4
and expenses (including without limitation court costs, interest and reasonable fees of attorneys, accountants and other experts) incurred by or awarded to Third Parties and required to be paid to Third Parties with respect to a Claim by reason of any judgment, order, decree, stipulation or injunction, or any settlement entered into in accordance with the provisions of this Agreement, together with all documented reasonable out-of-pocket costs and expenses incurred in complying with any judgments, orders, decrees, stipulations and injunctions that arise from or relate to a Claim of a Third Party (including, without limitation, court costs, interest and reasonable fees of attorneys, accountants and other experts).
1.33 “ Lost CONCERTA® Market Exclusivity ” shall occur if a drug product, that contains the same active ingredient as CONCERTA® (inactive ingredients may vary), is approved by the FDA in the Territory and designated by the FDA as “A/B Rated,” or the bioequivalent of, CONCERTA® and obtains sales in the Territory for sixty (60) days, which generic drug product sales are evidenced by independent market data (where available), such as that published by IMS.
1.34 “ Marketing Authorization ” means, with respect to the Territory, the regulatory authorization required to market and sell the Product in the Territory as granted by the FDA.
1.35 “ Marketing Budget ” means the annual marketing budget for the Product prepared by Cephalon and distributed by Cephalon to the JCC at least thirty (30) days prior to the beginning of any Agreement Year. A copy of the Marketing Budget for the First Agreement Year is attached to this Agreement as Schedule 1.35.
1.36 “ McNeil ADHD Sales Force ” means those McNeil sales representatives whose primary responsibility is the detailing and selling of CONCERTA® on the Effective Date.
1.37 “ McNeil Medical Science Liaisons ” means independent contractors of McNeil who provide medical and scientific information to meet the needs of the medical community.
1.38 “ McNeil Sales Representative ” means a field based sales representative engaged or employed by McNeil to conduct, among other sales responsibilities, Detailing and other promotional efforts with respect to products of McNeil including CONCERTA® for so long as McNeil continues to Detail CONCERTA®, and the Product.
1.39 “ McNeil Termination Date ” shall have the meaning set forth in Section 10.3.3.
1.40 “ Net Sales ” means the aggregate amount invoiced on account of sales of the Product by Cephalon or any of its Affiliates or their sublicensees to a Third Party in the Territory (but not including sales between Cephalon and its Affiliates where the Product is intended for resale) less the following relating to such sales: (a) trade, quantity and cash discounts or rebates actually allowed and taken, which are not already reflected in the amount invoiced; (b) any adjustments or allowances on account of price adjustments, billing errors, rejected goods, damaged goods and returns; (c) credits, volume rebates, charge-back and prime vendor rebates, fees, reimbursements or similar payments granted or given to wholesalers and other distributors, buying groups, health care insurance carriers, pharmacy benefit management companies, health maintenance organizations or other institutions or health care organizations, which are not
5
already reflected in the amount invoiced; (d) any tax, tariff, customs duty, excise or other duty or other governmental charge (other than a tax on income) levied on the sale, transportation or delivery of the Product and borne by the seller thereof, itemized on the applicable invoice and remitted to the applicable taxing authority; (e) payments or rebates paid in connection with sales of the Product to any governmental or regulatory authority in respect of any state or federal Medicare, Medicaid or similar programs, which are not already reflected in the amount invoiced; and (f) any invoiced charge for freight, insurance or other transportation costs charged to the customer. For purposes of this definition, the Product shall be considered “sold” when so recorded in Cephalon’s financial statements audited in accordance with generally accepted accounting principles, consistently applied.
1.41 “ PDMA ” means the Prescription Drug Marketing Act of 1987, as amended, and the regulations promulgated thereunder from time to time.
1.42 “ Person ” means any natural person, corporation, general partnership, limited partnership, joint venture, proprietorship or other business organization.
1.43 “ PhRMA Code ” means the PhRMA Code on Interactions with Health Care Professionals, as amended.
1.44 “ Plans ” means the strategic and tactical plans developed by Cephalon related to the marketing, promotion, sampling and sale of the Product in the Territory, which may be amended by Cephalon from time to time during the Term.
1.45 “ PRC ” means the committee formed by Cephalon to review Promotional Materials, which committee shall incorporate at least one representative of McNeil as a member with respect to the review of Promotional Materials.
1.46 “ Primary Detail Equivalents ” or “ PDEs ” means a numerical amount that scores the value of Details performed by Sales Representatives as follows: [**] for each First Position Detail and [**] for each Second Position Detail.
1.47 “ Product ” means the finished product of Cephalon’s ADHD formulation of modafinil in all package sizes and dosage forms, including all improvements, line extensions and new approved indications (including, without limitation, ADD).
1.48 “ Promotion ” means those promotional activities undertaken by a pharmaceutical company’s sales force to implement the marketing and sales plans with respect to a particular prescription product under a single trademark. When used as a verb, “Promote” shall mean to engage in such activities.
1.49 “ Promotional Materials ” means all written, printed, video or graphic advertising, promotional, training and communication materials (other than Product labeling) for marketing, advertising, promotion and sale of the Product for use in the Territory by (a) Sales Representatives or (b) advertisements or direct mail pieces.
**Portions of the Exhibit have been omitted and have been filed separately pursuant to an application for confidential treatment filed with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
6
1.50 “ Sales Representative ” means a McNeil Sales Representative or a Cephalon Sales Representative. Sales Representatives means McNeil Sales Representatives and Cephalon Sales Representatives.
1.51 “ Second Position Detail ” means a Detail for the Product in the second position.
1.52 “ Target Audience ” means for the Product the current prescribing audience for CONCERTA®, including but not limited to the specialties set forth on Schedule 1.52, with authority to prescribe a pharmaceutical product or issue hospital orders for a pharmaceutical product in the United States.
1.53 “ Term ” means the period of time from the Effective Date through the third anniversary of the First Commercial Sale, provided that the First Commercial Sale occurs on or prior to [**], and provided further that if the First Commercial Sale does not occur on or prior to [**], “Term” means the period from the Effective Date through [**], unless terminated earlier pursuant to the terms of this Agreement.
1.54 “ Termination Date ” shall have the meaning set forth in Section 10.3.2.
1.55 “ Territory ” means the United States, its territories and possessions.
1.56 “ Third Party ” means a Person who is not a Party or an Affiliate of a Party.
1.57 “ Upside Sunset Commission Fees ” shall have the meaning set forth in Section 5.1.4.
ARTICLE 2
2.1 Grant of Rights . Subject to the terms of this Agreement, Cephalon grants to McNeil, on an exclusive basis together with Cephalon, the non-sublicensable right to Co-Promote and Detail the Product to the Target Audience in the Territory during the Term. For the avoidance of doubt, the Parties acknowledge that, in addition to the Target Audience, Cephalon retains the right to Co-Promote and Detail the Product to all other health care professionals (including, without limitation, primary care physicians, neurologists and psychiatrists) to whom the Product may be Detailed in compliance with all applicable Laws. Cephalon shall not enter into any other co-promotion or similar arrangement with a Third Party regarding the Detailing of the Product in the Territory during the Term.
2.2 McNeil Duties and Obligations .
2.2.1 On and as of the First Commercial Sale and thereafter during the Term, McNeil shall use its commercially reasonable efforts to Co-Promote and Detail the Product within the Territory in accordance with the terms of this Agreement, the Plans as directed by the Joint Commercial Committee, the PhRMA Code, the Applicable Commercial Practices Policies and all applicable Laws, including, without limitation, the FD&C Act, the Anti-Kickback Statute and the PDMA. McNeil shall cause the McNeil Sales Representatives to conduct the total Details required (the “ Detail Requirements ”) to be performed by the McNeil Sales
**Portions of the Exhibit have been omitted and have been filed separately pursuant to an application for confidential treatment filed with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
7
Representatives during the Term as set forth on Schedule 2.2.1. Notwithstanding anything to the contrary contained in this Agreement, if the FDA or any Federal health authority imposes or requires additional or modified restrictions or safety measures in relation to the use of the Product or with respect to its labeling, including, without limitation, warnings, contraindications or special precautions, which would place the safety profile of the Product at a materially competitive disadvantage when objectively compared with other products in the ADHD market, then the Parties will promptly negotiate in good faith to determine whether a reduction in, or elimination of, the Parties’ Detail Requirements and the Parties’ other obligations under this Agreement is appropriate.
2.2.2 Except as otherwise agreed, McNeil shall be responsible for providing its own management, equipment, automobiles, offices and fixtures, working facilities, and such other facilities and services as may be required for the McNeil Sales Representatives at its own expense.
2.2.3 McNeil shall not make any representation or statement, written or otherwise, concerning prices, terms of delivery, terms of payment or conditions of sale for the Product except and to the extent that the same is authorized by Cephalon. McNeil shall have no right or authority to make any price guarantees, offer or agree to any discounts and/or accept any orders on Cephalon’s behalf.
2.2.4 McNeil shall be responsible for planning and conducting all training for the McNeil Sales Representatives, subject to timely (i) receipt of all training materials from Cephalon and (ii) training of McNeil’s trainers by Cephalon. Subject to the timely provision by Cephalon of applicable training and accompanying training materials, McNeil shall be responsible for causing each McNeil Sales Representative to attend and successfully complete a training program with respect to the Promotional Materials regarding the Product provided by Cephalon prior to such McNeil Sales Representative Co-Promoting and Detailing the Product in the Territory.
2.2.5 McNeil shall cause at least [**] McNeil Medical Science Liaisons to [**] with respect to the Product. The McNeil Medical Science Liaisons shall ensure the appropriate dissemination of information, scientific knowledge and services in a timely and ethical manner. A member of McNeil’s regulatory and/or medical departments agrees to meet with one or more members of Cephalon’s regulatory and/or medical departments on a quarterly basis to discuss the prior and future activities by the McNeil Medical Science Liaisons related to the Product during the Term. Continuing medical education activities relating to the Product shall be determined and conducted independently by the CMEGC in the sole discretion of Cephalon.
2.2.6 Promptly after the First Commercial Sale and to the extent that it is legally permitted to do so, McNeil shall use its commercially reasonable efforts to provide Cephalon with an electronic file listing of physician targets, including hospitals, physicians and other prescribers; number of Calls and type of Details (listed by First Position Details and Second Position Details) completed by prescriber on a weekly basis; and such other information as Cephalon may reasonably request. In addition, McNeil shall provide to Cephalon within [**] an electronic file containing monthly call data including number of Calls and types of Details at an individual prescriber level. McNeil shall provide to Cephalon, [**], reports of actual aggregate
**Portions of the Exhibit have been omitted and have been filed separately pursuant to an application for confidential treatment filed with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
8
Incentive Compensation received by the McNeil Sales Representatives with respect to the Product in form and format agreed to by the Parties.
2.3 Cephalon Duties and Obligations .
2.3.1 Cephalon shall be responsible for timely conducting all training for McNeil’s training managers who will provide the training required pursuant to Section 2.2.4. Cephalon’s training managers shall attend all training programs required pursuant to Section 2.2.4 solely to the extent that such training programs relate to the Product; provided that Cephalon shall fund all travel, lodging and other out-of-pocket costs associated with its training managers attending such training programs.
2.3.2 Cephalon shall be responsible for planning and conducting all training for the Cephalon Sales Representatives. Cephalon shall be responsible for causing each Cephalon Sales Representative to attend and successfully complete a training program with respect to medical and technical information regarding the Product prior to such Cephalon Sales Representative Co-Promoting and Detailing the Product in the Territory.
2.3.3 On and as of the First Commercial Sale and thereafter during the Term Cephalon will use commercially reasonable efforts to ensure that at least [**] Cephalon Sales Representatives Co-Promote and Detail the Product within the Territory in accordance with the terms of this Agreement, the Plans as directed by the Joint Commercial Committee, the PhRMA Code, the Applicable Commercial Practices Policies and all applicable Laws, including without limitation, the FD&C Act, the Anti-Kickback Statute and the PDMA. Cephalon shall cause the Cephalon Sales Representative to conduct the Detail Requirements to be performed by the Cephalon Sales Representatives during the Term as set forth on Schedule 2.2.1.
2.3.4 Unless otherwise mutually agreed to by the Parties pursuant to Section 3.5.9, Cephalon shall be responsible for initiating and funding all advisory boards and speaker training programs, market research, clinical studies and collaborative research trials, if any, with respect to the Product.
2.3.5 Cephalon shall use its commercially reasonable efforts to spend not less than [**] percent ([**]%) of the total aggregate amounts set forth in the Marketing Budget and agrees, in any event, not to spend less than $[**] in brand marketing expenses in support of the Product during the First Agreement Year.
2.4 Ownership . McNeil shall not represent to any Third Party that is has any proprietary or property right or interest in the Product, except for such rights granted to McNeil under this Agreement.
ARTICLE 3
3.1 Members; Officers . Within ten (10) days after the Effective Date, the Parties shall establish a commercialization committee (the “ Joint Commercial Committee ” or “ JCC ”), and Cephalon and McNeil shall designate an equal number of representatives, up to a maximum
**Portions of the Exhibit have been omitted and have been filed separately pursuant to an application for confidential treatment filed with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
9
total of [**] members on the JCC. The Chair of the JCC shall be selected by Cephalon from among Cephalon’s JCC members. Each of Cephalon and McNeil may replace any or all of its representatives on the JCC at any time upon written notice to the other. Such representatives shall include individuals who have experience and expertise in pharmaceutical product marketing, sales and regulatory matters. At least [**] percent ([**]%) of the JCC members from each of the Parties shall hold positions of reasonable seniority in their respective organizations, as reasonably determined by the Party designating its own JCC members. A Party may designate a substitute to temporarily attend and perform the functions of such Party’s designee at any meeting of the JCC. Cephalon and McNeil each may, upon prior written notice to the other Party, invite non-member representatives of such Party to attend meetings of the JCC. The Chair shall prepare the agenda for each meeting of the JCC (which agenda shall be distributed to the JCC members at least five (5) days, or such shorter period if five (5) days is not practical as may be mutually agreed upon by the Parties from time to time, prior to any scheduled meeting) and shall appoint a secretary of the JCC for such meeting, who shall be a representative of McNeil.
3.2 Quorum; Voting; Decisions . At each JCC meeting, the presence in person of at least one (1) member designated by each of Cephalon and McNeil shall constitute a quorum. All decisions of the JCC shall be made by majority vote; provided, that, any member designated by either Cephalon or McNeil shall have the right to cast the votes of any of such Party’s member of the JCC who are absent from the meeting. Alternatively, the JCC may act by written consent signed by all members designated by each of Cephalon and McNeil. Whenever any action by the JCC is called for hereunder during a time period in which the JCC is not scheduled to meet, the Chair shall cause the JCC to take the action in the requested time period by calling a special meeting or by circulating a written consent.
3.3 Minutes . The JCC shall keep minutes of its meetings that record, in reasonable detail, all decisions and all actions recommended or taken. Drafts of the minutes shall be prepared and circulated to the members of the JCC within a reasonable time after the meeting, and McNeil shall be responsible for the preparation and circulation of draft minutes. The draft minutes shall be approved, disapproved and revised as necessary at the next JCC meeting. Upon approval, final minutes of each meeting shall be circulated to the members of the JCC by the Chair.
3.4 Expenses . Each Party shall bear all expenses of their respective JCC representatives related to their participation on the JCC and attendance at JCC meetings.
3.5 Responsibilities . The JCC shall perform the following functions with the objective of maximizing Net Sales and profitability of the Product, subject to applicable Laws and the Applicable Commercial Practices Policies:
3.5.1 Discuss the manner in which McNeil Sales Representatives and Cephalon Sales Representatives will Promote and Detail the Product in the ADHD marketplace based on the available information and data regarding the safety and efficacy of the Product;
3.5.2 Coordinate the Co-Promotion and Detailing activities related to the Product of the Cephalon Sales Representatives and McNeil Sales Representatives in the Territory;
**Portions of the Exhibit have been omitted and have been filed separately pursuant to an application for confidential treatment filed with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
10
3.5.3 Discuss the state of the markets for the Product in the Territory and opportunities and issues concerning the Co-Promotion and Detailing of the Product in the Territory;
3.5.4 Discuss marketing support for the Product;
3.5.5 Discuss the pricing of the Product in a manner whereby Cephalon agrees to consider in good faith any McNeil suggestions with respect to such matters, but Cephalon retains sole discretion with respect to all final pricing decisions relating to the Product;
3.5.6 Discuss issues raised by Sales Representatives relating to Co-Promotion and Detailing of the Product in the Territory;
3.5.7 Discuss incentive compensation programs for the Sales Representatives;
3.5.8 Discuss the Plans and the Marketing Budget in a manner whereby Cephalon agrees to consider in good faith any McNeil suggestions with respect to such matters, but, subject to Sections 2.3.5, 3.7, 6.4 and 6.6, Cephalon retains final decision-making authority with respect to the Plans and the Marketing Budget;
3.5.9 Discuss [**]; and
3.5.10 Having such other responsibilities as may be mutually agreed upon by the Parties from time to time; provided that the JCC shall not have responsibility for (a) any aspect of the marketing, sale or promotion of CONCERTA®, or (b) with respect to the Product, any interactions with customers concerning rebating or discounting of any type or, subject to Section 3.5.5, other terms or conditions of sale or the development or implementation of strategies for the managed care market.
3.6 Meetings . Unless otherwise agreed to by the Parties, the JCC shall meet at least [**] during every Calendar Quarter, and more frequently as Cephalon and McNeil mutually deem appropriate, on such dates, and at such places and times, as such Parties shall agree; provided that the Parties shall endeavor to have the first meeting of the JCC within thirty (30) days after the establishment of the JCC. Meetings of the JCC that are held in person shall alternate between the United States offices of Cephalon and McNeil, or such other nearby place as the Party hosting the meeting may reasonably designate. The first meeting of the JCC shall be held at Cephalon’s offices. The members of the JCC also may convene or be polled or consulted from time to time by means of telecommunications, video conferences, electronic mail or correspondence, as deemed necessary or appropriate.
3.7 Dispute Resolution . The JCC members shall use reasonable efforts to reach agreement on any and all matters. In the event that, despite such reasonable efforts, agreement on a particular matter cannot be reached by the JCC within thirty (30) days after the JCC first meets to consider such matter (each such matter, a “ Disputed Matter ”), then the Chair of the JCC shall refer such Disputed Matter to the Designated Senior Officers of Cephalon and McNeil, who shall promptly initiate discussions in good faith to resolve such Disputed Matter. If such Disputed Matter is not resolved by such Designated Senior Officers within thirty (30) days of the
**Portions of the Exhibit have been omitted and have been filed separately pursuant to an application for confidential treatment filed with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
11
date that the matter was referred to such Designated Senior Officers, then the Designated Senior Officer of Cephalon shall have the right to make the final decision on any Disputed Matter relating directly to the Promotion and sale of the Product, but such Designated Senior Officer shall only exercise such right in good faith after full consideration of the positions of both Parties. Notwithstanding the foregoing, (a) neither Party shall have final decision-making authority regarding the interpretation, or alleged breaches, of this Agreement, including a determination as to whether McNeil or Cephalon has fulfilled its obligations under this Agreement, (b) no decision or action requiring the consent or approval of one Party or both Parties pursuant to the terms of this Agreement shall be taken without the consent or approval of such Party or Parties, (c) the dispute resolution procedure set forth in this Section 3.7 shall not in any way limit either Party’s right to exercise any right of termination it may have under this Agreement and (d) McNeil shall not be required to implement any Plans or other marketing plans, or use any materials or engage in any activity which, in any case, references CONCERTA® or which McNeil reasonably believes to be in violation of any Laws or the Applicable Commercial Practices Policies of McNeil.
ARTICLE 4
4.1 Marketing Activities and Expenses for the Product . Except for the responsibilities set forth in Section 2.2, the Parties acknowledge and agree that McNeil will have no other duties and obligations with respect to the Product, and McNeil will not, without the prior written consent of Cephalon, initiate any advisory boards, speaker training programs or any other programs as part of its services herein where compensation is paid to a healthcare provider, provide any grants, or conduct any market research, in each case, solely with respect to the Product.
4.2 McNeil Sales Representative Requirements .
4.2.1 McNeil represents and warrants to Cephalon that during the Term, McNeil will not knowingly hire or employ an Ineligible Person to Co-Promote and Detail the Product as provided in this Agreement. For the purposes of this Section 4.2, an “ Ineligible Person ” means an individual who (x) is currently excluded, debarred, suspended or otherwise ineligible to participate in a federal health care program or in federal procurement or nonprocurement programs, or (y) has been convicted of a criminal offense that falls within the ambit of 42 U.S.C. §1320a-7(a), but has not yet been excluded, debarred, suspended or otherwise declared ineligible. If McNeil has actual notice that one of the McNeil Sales Representatives has become or is likely to become an Ineligible Person, McNeil will remove such person from any responsibility associated with any Co-Promotion or Detailing of the Product in the Territory or this Agreement. Subject to applicable Laws, McNeil will promptly provide Cephalon with any data required by Cephalon for the purposes of complying with disclosure, reporting or compliance obligations under federal and state laws relating to reporting obligations for Ineligible Persons.
4.2.2 McNeil will use commercially reasonable efforts to ensure that during the Term (a) there are at least three hundred (300) McNeil Sales Representatives, (b) each of the McNeil Sales Representatives shall have received training and education of a quality substantially similar to
12
that required and provided to the McNeil ADHD Sales Force and (c) the McNeil Sales Representatives, as a whole, shall have on average at least [**] years experience conducting sales responsibilities for ADHD products.
4.3 McNeil Sales Representatives . For the avoidance of doubt, McNeil Sales Representatives will not be, and will not be considered or deemed to be, employees of Cephalon for any purpose. Cephalon will not have any responsibility for the hiring, termination, compensation, benefits or other conditions of employment of the employees of McNeil for any reason.
4.4 Cephalon Benefit Plans . Subject to Article 10, McNeil Sales Representatives are not eligible to participate in any benefit programs offered by Cephalon to its employees, or in any pension plans, profit sharing plans, insurance plans or any other employee benefit plans offered from time to time by Cephalon to its employees. McNeil acknowledges and agrees that Cephalon does not, and will not, maintain or procure any workers’ compensation or unemployment compensation insurance for or on behalf of the McNeil’s employees, including, without limitation, McNeil Sales Representatives.
4.5 McNeil Salaries and Wages . Subject to Article 10, McNeil acknowledges and agrees that it will be solely responsible for paying all salaries, wages, benefits and other compensation which its employees, including without limitation the McNeil Sales Representatives, may be entitled to receive in connection with providing services under this Agreement. The Parties acknowledge and McNeil agrees that at all times during the Term, the percentage of the Incentive Compensation available to be earned by McNeil Sales Representatives with respect to the Product will be [**] of Incentive Compensation available to be earned by McNeil Sales Representatives with respect to [**]. The Parties acknowledge and agree that the percentage of Incentive Compensation available to be earned by each McNeil Sales Representatives with respect to the Product shall be at least [**] percent ([**]%) of the total Incentive Compensation available to be earned by such McNeil Sales Representatives. The Parties also acknowledge and agree that the actual percentage of Incentive Compensation earned in the aggregate by the McNeil Sales Representatives with respect to the Product shall be at least [**] percent ([**]%) of the total Incentive Compensation earned by such McNeil Sales Representatives. In addition, at all times during the Term, Incentive Compensation available to be earned by McNeil Sales Representatives as a percentage of total compensation available to be earned by such McNeil Sales Representatives shall not be less than an amount equal to [**] percent ([**]%); provided, however, that Cephalon acknowledges and agrees that McNeil may at any time in its sole discretion [**] to the extent arising out of [**] where such [**] are applied proportionately to [**].
4.6 Cephalon Sales Meetings . McNeil Sales Representatives will be invited to attend and participate in all portions of Cephalon sales meetings that pertain to the Product and shall be required to attend the launch sales meeting prior to the First Commercial Sale, which meeting shall be no more than [**] days in duration. Costs and expenses of the sales meetings shall be borne by Cephalon and costs and expenses of lodging and transportation attributable to individual attendees of McNeil at such sales meetings shall be borne by McNeil.
**Portions of the Exhibit have been omitted and have been filed separately pursuant to an application for confidential treatment filed with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
13
4.7 Non-Compete and Non Solicitation .
4.7.1 McNeil acknowledges and agrees that during the Term, it will not, without the prior written consent of Cephalon, market, sell, offer for sale or import in the Territory any pharmaceutical product that has been approved by the FDA and is indicated in the treatment of ADHD, except for the Product and CONCERTA®.
4.7.2 Cephalon acknowledges and agrees that during the Term, it will not, without the prior written consent of McNeil, market, sell, offer for sale or import in the Territory any pharmaceutical product that has been approved by the FDA and is indicated in the treatment of ADHD, except for the Product.
4.7.3 During the Term, McNeil shall not, directly or indirectly, solicit for employment any Cephalon Sales Representative or Cephalon representative on the JCC, provided that a general solicitation of employment shall not constitute a violation of this Section 4.7.3.
4.7.4 Except as otherwise permitted by Sections 10.3.3 and 10.3.4, during the Term, Cephalon shall not directly or indirectly solicit for employment any McNeil Sales Representative or McNeil representative on the JCC, provided that a general solicitation of employment shall not constitute a violation of this Section 4.7.4.
4.8 Reports and Audit Rights .
4.8.1 McNeil will use its commercially reasonable efforts to keep accurate records in accordance with its customary practices of the number of Calls and type of Details completed solely with respect to the Product and aggregate Incentive Compensation received by the McNeil Sales Representatives during the period for which such Incentive Compensation is paid. McNeil shall keep such records regarding such McNeil Sales Representatives during the Term and for a period of one (1) year thereafter.
4.8.2 Upon the request of Cephalon upon ten (10) days’ prior notice during normal business hours during the Term and for six (6) months thereafter, McNeil will permit an independent third party selected and engaged by Cephalon who undertakes appropriate confidentiality obligations to McNeil and reasonably acceptable to McNeil to inspect, audit and examine only those McNeil records setting out the number of Calls and type of Details completed by the McNeil Sales Representatives and the aggregate Incentive Compensation paid to the McNeil Sales Representatives; provided, however that such audit may not be performed on behalf of Cephalon more than once per Agreement Year and that Cephalon shall not be permitted to audit the same period of time more than once. Such third party shall be instructed not to reveal to Cephalon the details of its review, except for (a) such information as is required to be disclosed under this Agreement and (b) such information presented in a summary fashion as is necessary to report such third party’s conclusions to Cephalon, and all such information shall be deemed Confidential Information of McNeil. Any and all audits undertaken by Cephalon pursuant to this Section 4.8.2 will be performed at the sole and exclusive expense of Cephalon.
4.8.3 Upon the request of McNeil upon ten (10) days’ prior notice during normal business hours during the Term and for six (6) months thereafter, Cephalon will permit an independent third party selected and engaged by McNeil who undertakes appropriate
14
confidentiality obligations to Cephalon and reasonably acceptable to Cephalon to inspect, audit and examine only those Cephalon records setting out the number of Calls and type of Details completed by the Cephalon Sales Representatives; provided, however that such audit may not be performed on behalf of McNeil more than once per Agreement Year and that McNeil shall not be permitted to audit the same period of time more than once. Such third party shall be instructed not to reveal to McNeil the details of its review, except for (a) such information as is required to be disclosed under this Agreement and (b) such information presented in a summary fashion as is necessary to report such third party’s conclusions to McNeil, and all such information shall be deemed Confidential Information of Cephalon. Any and all audits undertaken by McNeil pursuant to this Section 4.8.3 will be performed at the sole and exclusive expense of McNeil.
ARTICLE 5
5.1.1 As reimbursement for McNeil’s Detailing and Co-Promotional activities pursuant to this Agreement, Cephalon shall pay to McNeil within thirty (30) days after the end of each |
AGREEMENTS / CONTRACTS
CLAUSES
| Get Email Updates |
