Common use of Generic Reduction Clause in Contracts

Generic Reduction. (i) If, in any country in the Territory during the Royalty Term for a Licensed Product, unit sales of all Generic Products with respect to such Licensed Product in such country in a calendar quarter exceed [**] percent ([**]%) of the sum of unit sales of such Licensed Product plus unit sales of all such Generic Products in such country, then the royalty rate for such Licensed Product in such country shall be reduced to [**] percent ([**]%) of the royalty rates (in each tier) that would otherwise have been applicable under Section 6.5(a) or 6.5(c)(i) for Net Sales of such Licensed Product in such country. (ii) If, in any country in the Territory during the Royalty Term for a Licensed Product, unit sales of all Generic Products with respect to such Licensed Product in such country in a calendar quarter exceed [**] percent ([**]%) of the sum of unit sales of such Licensed Product plus unit sales of all such Generic Products in such country, then no royalties shall be due for Net Sales of such Licensed Product in such country during such calendar quarter and such Net Sales shall not be included when calculating the royalty tier thresholds in Section 6.5(a). (iii) All such determinations of unit sales under this Section 6.5(d) shall be based upon a mutually acceptable calculation method using market share data provided by a reputable and mutually agreed upon provider, such as IMS Health.