Exhibit 10.17
Pages or exhibits where confidential treatment has been requested are stamped
"Confidential portions omitted and filed separately with the commission." The
appreciate section has been marked at the appropriate place with an "*".
July 3, 1995 [LETTERHEAD OF DEPUY APPEARS HERE]
Columbia/HCA Healthcare Corporation
Attn: Mr. James C. Olsen
V.P. Materials Management Systems
One Park Plaza
Nashville, TN 37202
CAPITATED PRICING
Revisions & Extremities
Dear Jim:
As discussed last week,.... administratively we have had a problem with the
additional products offered under the hip and knee contract. We proposed a
capitated structure to simplify the tracking of cost under Revisions and
Extremities, however, I should have touched a few additional bases internally to
insure the proper support.
After reviewing my intent, we are suggesting the attachment, to meet the intent
of capitation. You will note the pricing for Revision Hips had an increase and
we deleted the Cemented System. This allowed us to focus on a price for our
SOLUTION REVISION SYSTEM and treat all other long stems (used in revisions)
under our base discounted price list. The pricing for the Revision Knees has
been reduced for Complex Revision and various adjustments for Add-On Pricing.
The Extremity Pricing remained the same.
Jim, if this is acceptable to you, please sign below and return fax to me.
Sincerely,
/s/ William P. McIlhargey
William P. McIlhargey
Director, Sales & Contract Services
Accepted by: /s/ James C. Olsen
-------------------------------- [LOGO OF CORANGE]
James C. Olsen
VP, Materials Management Systems
7/10/95
-------------------------------
Date
EXHIBIT 1
Primary Hip and Knee Pricing
Our discount structure is intended to incent the Division to limit their choice
of vendors. The first level is offered should the Division utilize *
suppliers, while the second level will support any Division that chooses not to
have a *
CONTRACTED MANUFACTURER DISCOUNT
----------------------- --------
* * %
* * %
Depuy will also provide a *% discounted invoice for the first * months of the
contract. This discount is based on Columbia/HCA obtaining total contracted
sales of $* during the first *. Should this volume not be achieved, the
discounted invoice will be discontinued.
In addition, Depuy will develop a "Capitated Program" for Columbia/HCA,
facilities, no later than the third year-end of the contract. This shared risk
approach will be structured under "Demand and Product Utilization" protocols.
* Confidential portions omitted and filed separately with the Commission.
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EXHIBIT 1
Revision Hip System Pricing
*
Cementless System...................................................$ *
Includes any size, fully coated Solution or Solution Calcar
Stem and Cobalt Chrome Ball, with any Duraloc/R/ Acetabular
Shell and Enduron/TM/ Liner.
The above includes any screws, cementralizers, etc. needed to implant the
prosthesis.
*
Cementless Long Stems.........................................$ *
Includes fully coated Solution Stem or Solution Calcar Stem
and Cobalt Chrome Head.
Solution Cups.................................................$ *
*
Hylamer Inserts...............................................$ *
Additional charge to substitute Hylamer liners.
Solution Cups.................................................$ *
Additional charge to substitute standard or deep profile Solution
shell and Enduron liner.
Ceramic Head..................................................$ *
Additional charge to substitute ceramic head.
* Confidential portions omitted and filed separately with the commission.
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EXHIBIT 1
Revision Knee System Pricing
*
Simple Revision..........................................$ *
Includes: AMK(R) P/S Femoral Component
AMK(R) P/S Enduron Insert
CRT Tibial tray with cemented stem extension
Complex Revision.........................................$ *
Includes: CRT Femoral Component
AMK(R) P/S Enduron Insert
CRT Tibial Tray* with cemented stem extension
*May use any of 4 Tibial trays 4mm & 10mm flat and 1/2 and full wedge
*
All Poly Patella $ *
Femoral Wedge Augment $ *
Tibial Cemented Stem Extension-additional $ *
Tibial Press-Fit Fluted Stem-additional $ *
Tibial Press-Fit Fluted Stem-replacement $ *
VVC Hylamer-M Insert $ *
* Confidential portions omitted and filed separately with the Commission.
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EXHIBIT 1
EXTREMITY PRICING
SHOULDER
*
Total Shoulder...........................$ *
Includes Modular Humeral Component, Humeral
Head and Hylamer Glenoid.
Hemi - Shoulder..........................$ *
Includes Modular Humeral Component and
Humeral Head.
Fracture Shoulder........................$ *
Includes a one piece humeral component.
OTHER EXTREMITIES
*
Extremities..............................$ *
Includes any semi or unconstrained elbow,
biax wrist or Mayo or Agility* ankle.
*Agility ankle is limited to surgeons who
visit and are trained by designing
surgeon (Dr. Alvine).
* Confidential portions omitted and filed separately with the Commission.
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