Distribution Agreements

12 Months Ended

Dec. 31, 2012

Distribution Agreements

Distribution Agreements

15. Distribution Agreements

• U.S.-Based Specialty Pharmaceutical Distributors

        We are party to separate distribution agreements for Remodulin and Tyvaso with each of our three U.S.-based specialty pharmaceutical distributors. The distribution agreements are similar to one another, and generally have one-year terms that renew automatically for additional one-year periods, unless terminated earlier. The agreements contain contractual responsibilities relating to ordering specifications, inventory requirements and exchange rights. These agreements require our distributors to perform certain services on a fee-for-service basis. If any of our distribution agreements expire or terminate, we may be required under certain circumstances to repurchase any unsold inventory held by our distributors. None of our current distribution agreements grant our distributors the distribution rights for oral treprostinil.

• International Distributors

        We currently sell Remodulin internationally through five distributors. The financial terms and conditions relating to these distributor arrangements are structured in a manner substantially similar to those of our U.S. distributor agreements described above.