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Laws and regulations have been enacted by the
federal government and various states to regulate the
sales and marketing practices of pharmaceutical
manufacturers. The laws and regulations generally
limit financial interactions between manufacturers and
health care providers or require disclosure to the
government and public of such interactions. The laws
include federal “sunshine” provisions. The sunshine
provisions apply to pharmaceutical manufacturers
with products reimbursed under certain government
programs and require those manufacturers to
disclose annually to the federal government (for re-
disclosure to the public) certain payments made to
physicians and certain other healthcare practitioners
or to teaching hospitals. State laws may also require
disclosure of pharmaceutical pricing information and
marketing expenditures. Many of these laws and
regulations contain ambiguous requirements. Given
the lack of clarity in laws and their implementation,
our reporting actions could be subject to the penalty
provisions of the pertinent
federal and state laws and
regulations. Outside the U.S., other countries have
implemented requirements for disclosure of financial
interactions with healthcare providers and additional
countries may consider or implement such laws.
Other Regulations
Foreign Anti-Corruption
We are subject to various federal and foreign
laws that govern our international business practices
with respect to payments to government officials.
Those laws include the U.S. Foreign Corrupt Practices
Act (FCPA), which prohibits U.S. companies and their
representatives from paying, offering to pay, promising
to pay or authorizing the payment of anything of value
to any foreign government official, government staff
member, political party or political candidate for the
purpose of obtaining or retaining business or to
otherwise obtain favorable treatment or influence a
person working in an official capacity. In many
countries, the health care professionals we regularly
interact with may meet the FCPA's definition of a
foreign government official. The FCPA also requires
public companies
to make and keep books and
records that accurately and fairly reflect their
transactions and to devise and maintain an adequate
system of internal accounting controls.
The laws to which we are subject also include
the U.K. Bribery Act 2010 (Bribery Act), which
proscribes giving and receiving bribes in the public
and private sectors, bribing a foreign public official
and failing to have adequate procedures to prevent
employees and other agents from giving bribes. U.S.
companies that conduct business in the U.K.
generally will be subject to the Bribery Act. Penalties
under the Bribery Act include significant fines for
companies and criminal sanctions for corporate
officers under certain circumstances.
NIH Guidelines
We seek to conduct research at our U.S.
facilities in compliance with the current U.S. National
Institutes of Health Guidelines for Research Involving
Recombinant DNA Molecules (NIH Guidelines). By
local ordinance, we are required to, among other
things, comply with the NIH Guidelines in relation to
our facilities in Research Triangle Park (RTP), NC and
are required to operate pursuant to certain permits.
Other Laws
Our present and future business has been and
will continue to be subject to various other laws and
regulations.
Various laws, regulations and
recommendations relating to data privacy and
protection, safe working conditions, laboratory
practices, the experimental use of animals and the
purchase, storage, movement, import, export and use
and disposal of hazardous or potentially hazardous
substances, including radioactive compounds and
infectious disease agents, used in connection with
our research work are or may be applicable to our
activities. Certain agreements entered into by us
involving exclusive license rights may be subject to
national or international antitrust regulatory control,
the effect of which cannot be predicted. The extent of
government regulation, which might result from future
legislation or administrative action, cannot accurately
be predicted.
The European Parliament and the Council of the
European Union adopted
a comprehensive general
data privacy regulation (GDPR) in 2016 to replace the
current E.U. Data Protection Directive and related
country-specific legislation. The GDPR will take effect
in May 2018 and governs the collection and use of
personal data in the E.U. The GDPR, which is wide-
ranging in scope, will impose several requirements
relating to the consent of the individuals to whom the
personal data relates, the information provided to the
individuals, the security and confidentiality of the
personal data, data breach notification and the use of
third party processors in connection with the
processing of the personal data. The GDPR will also
impose strict rules on the transfer of personal data
out of the E.U. to the U.S., will provide an
enforcement authority and will impose large penalties
for noncompliance, including
the potential for fines of
up to €20 million or 4% of the annual global revenues
of the infringer, whichever is greater.
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Environmental Matters
We strive to comply in all material respects with
applicable laws and regulations concerning the
environment. While it is impossible to predict
accurately the future costs associated with
environmental compliance and potential remediation
activities, compliance with environmental laws is not
expected to require significant capital expenditures
and has not had, and is not expected to have, a
material adverse effect on our operations or
competitive position.
Manufacturing
We are committed to ensuring an uninterrupted
supply of medicines to patients around the world. To
that end, we continually review our manufacturing
capacity, capabilities, processes and facilities. We
believe that our manufacturing facilities, together with
the third-party contract manufacturing organizations
we outsource to, currently
provide sufficient capacity
for our products and the contract manufacturing
services we provide to Samsung Bioepis, our joint
venture that develops, manufactures and markets
biosimilars, and other strategic contract
manufacturing partners. In light of the development of
our pipeline, we are expanding our production capacity
by building a large-scale biologics manufacturing
facility in Solothurn, Switzerland. We expect this
facility to be operational by the end of the decade.
Manufacturing Facilities
Our drug substance manufacturing facilities
include:
Facility
Drug Substance Manufactured
RTP, North Carolina
ALPROLIX
AVONEX
ELOCTATE
PLEGRIDY
TYSABRI
ZINBRYTA
Other*
Hillerød, Denmark
TYSABRI
Biosimilars
* Other includes products manufactured for contract
manufacturing partners
In addition to our drug substance manufacturing
facilities, we have
a drug product manufacturing
facility and supporting infrastructure in RTP, NC
including a parenteral facility and an oral solid dose
products manufacturing facility.
The parenteral facility adds capabilities and
capacity for filling biologics into vials and is principally
used for filling product candidates. The oral solid
dose products facility supplements our outsourced
small molecule manufacturing capabilities, including
the manufacture of TECFIDERA.
We also have a new oligonucleotide synthesis
manufacturing (OSM) facility in RTP, NC. This facility
gives us the capability to manufacture ASO drugs like
SPINRAZA as well as our other ASO candidates
currently in our clinical pipeline.
During the first quarter of 2016 we purchased
land in Solothurn, Switzerland and are building a
large-scale biologics manufacturing facility at this site.
We expect this facility to be operational by the end of
the decade.
Genentech is responsible for all worldwide
manufacturing activities for bulk RITUXAN and GAZYVA
and has sourced the
manufacture of certain bulk
RITUXAN and GAZYVA requirements to a third party.
Acorda supplies FAMPYRA to us pursuant to its supply
agreement with Alkermes, Inc. and Ionis supplies the
active pharmaceutical ingredient (API) for SPINRAZA.
Third-Party Suppliers and Manufacturers
We principally use third parties to manufacture
the API and the final product for our small molecule
products and product candidates, including
TECFIDERA and FUMADERM, and the final drug
product for our large molecule products and, to a
lesser extent, product candidates.
We source all of our fill-finish and the majority of
final product assembly and storage operations for our
products, along with a substantial part of our
packaging operations, to a concentrated group of
third-party contract manufacturing organizations. We
have internal label and packaging capability for clinical
and commercial products at our Hillerød facility. Raw
materials, delivery devices, such as syringes and
auto-injectors, and other supplies required for the
production of our products
and product candidates
are procured from various third-party suppliers and
manufacturers in quantities adequate to meet our
needs. Continuity of supply of such raw materials,
devices and supplies is assured using a strategy of
dual sourcing where possible or by a risk-based
inventory strategy. Our third-party service providers,
suppliers and manufacturers may be subject to
routine cGMP inspections by the FDA or comparable
agencies in other jurisdictions and undergo
assessment and certification by our quality
management group.