FOR REFERENCE ONLY. Document Change Record: COR NUMBER INITIATOR DESCRIPTION OF CHANGE DATE OF CHANGE REV #
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1 Title: Relationships with Health Care Professionals Document Change Record: REV # DATE OF CHANGE COR NUMBER INITIATOR OF CHANGE DESCRIPTION OF CHANGE 0 9/18/ Cheryl Garvin Initial Release Quality Manual Ref: N/A GMP Ref: N/A ISO Ref: N/A Procedure #: CO- 402 Revision #: 0 SOP Effective Date:9/18/09 Page 1 of 8
2 Procedure #: CO-402 Revision #: 0 SOP Effective Date: 9/18/09 Procedure Title: Relationships with Health Care Professionals 1. PURPOSE and GUIDING PRINCIPLES 1.1 DJO, LLC ( Company ) is committed to following the highest ethical standards as well as all legal requirements in its interactions with the medical community. It is Company policy that all Company Personnel interactions with Health Care Professionals (HCPs) that are made on behalf of the Company are consistent with ethical business practices and socially responsible industry conduct. Towards that end, DJO has adopted a Sales and Marketing Code of Conduct and is committed to compliance with the AdvaMed Code of Ethics and all applicable state laws. 1.2 No grants, scholarships, subsidies, support, consulting contracts, educational items or invitations to company sponsored meetings or training may be provided or offered to an HCP as an unlawful inducement to purchase, use, order or recommend DJO products or to reward an HCP for past purchase, use, order or recommendation of DJO products. 1.3 DJO s sales personnel may provide input about the suitability of a proposed grant recipient, but may not control the decision of whether a particular HCP or institution will receive a grant; nor may they determine the amount of such grant or donation. 1.4 DJO s sales personnel may provide recommendations on proposed HCP consultants, but may not control the decision of whether a particular HCP will be engaged by the Company; nor may they determine or negotiate contracted HCP hourly rates. 1.5 Any evidence that a grant, scholarship, subsidy, support, educational item, etc. is conditioned upon an explicit or implicit agreement to use, order, recommend or purchase DJO s products will result in the rejection of the request. 1.6 Any evidence that a grant, scholarship, subsidy, support, educational item, etc. is tied in any way to the past, present, or future use, order or recommendation to purchase DJO s products will result in the rejection of the request. 1.7 No Company Personnel may make an oral or written commitment for DJO to sponsor or fund any of the events or activities included in this policy without advance approval from the Professional Relations Committee (PRC). 1.8 No Company Personnel may make an oral or written commitment for DJO to engage an HCP consultant without advance approval from the PRC. 1.9 Anyone who raises a concern about a possible violation of this policy or the DJO Sales and Marketing Code of Conduct in good faith will be supported by DJO management, and will not be subject to retaliation. Any failure to comply with this policy, the DJO Code of Conduct or the DJO Sales and Marketing Code of Conduct will be fully investigated and appropriate action taken. 2. SCOPE 2.1 This policy applies to all Company Personnel, including DJO s distributors and indirect sales force. Procedure #: CO- 402 Revision #: 0 SOP Effective Date:9/18/09 Page 2 of 8
3 3. RESPONSIBILITIES 3.1 It is the responsibility of the PRC, Corporate Compliance, and the DJO Core Leadership Team and their designees to ensure compliance with this policy. 4. RELATED DOCUMENTS, REFERENCES, AND FORMS NOTE: All documents below are current revision unless otherwise stated. 4.1 Code of Ethics on Interactions with Health Care Professionals originally adopted by the Advanced Technology Association, September 3, 2003 and revised as of July 1, DJO Sales and Marketing Code of Conduct 4.3 DJO Code of Conduct 4.4 Massachusetts Pharmaceutical and Medical Device Manufacturer Code of Conduct (Mass. Gen. Laws ch. 111N), August The California Marketing Compliance Law, Cal. Health & Safety Code (S.B. 1765), 4.6 Office of Inspector General (OIG) Compliance Guidance for Pharmaceutical Manufacturers 4.7 Deferred Prosecution Agreements: Zimmer, Biomet, J&J, and Smith & Nephew 4.8 Medical Group Management Association (MGMA) Guidelines Physician Compensation and Production Survey 4.9 Healthcare Provider Individual Contributors Compensation Survey 4.10 Accreditation Council for Continuing Medical Education (ACCME) Standards for Commercial Support of Continuing Medical Education 5. DEFINITION OF TERMS 5.1 Company Personnel: Company directors, officers, employees, sales associates, contractors and agents including all directors, officers, employees, sales associates, and agents of subsidiaries, operating divisions, and units of the Company that conduct business on DJO s behalf. 5.2 AdvaMed Code of Ethics: The Advanced Medical Technology Association ( AdvaMed ) has adopted a voluntary Code of Ethics, (effective January 1, 2004, and updated effective July 1, 2009) to facilitate the ethical interactions between its members and Health Care Professionals. 5.3 Health Care Professional (HCP): Under the AdvaMed Guidelines, HCPs are individuals or entities that purchase, lease, recommend, use, arrange for the purchase or lease of, or prescribe medical devices in the United States. HCPs include both clinical and non-clinical individuals who are in the position to make product related decisions. For purposes of this policy, HCPs include, but are not limited to: Physicians Physician Assistants Podiatrists Athletic Trainers Ortho Techs Orthotists Procedure #: CO- 402 Revision #: 0 SOP Effective Date:9/18/09 Page 3 of 8
4 5.3.7 Prosthetists Purchasing and materials management staff Group Purchasing Organizations ( GPOs ) Physician Staff Hospital Staff 5.4 HCP Consultant: An HCP Consultant is an individual that has a contractual relationship with the Company for specific services. These individuals are sometimes referred to as Key Opinion Leaders (KOLs). 5.5 Professional Relations Committee (PRC): The PRC consists of employees from the DJO Corporate Compliance Department and the DJO Legal Department, including, but not limited to, the General Counsel, the VP of Corporate Compliance, the Director of HCP Compliance, the Senior Contracts Administrator, and the Grants Administrator. The PRC oversees Company relations with HCPs to help ensure compliance with the AdvaMed Code of Ethics, DJO Code of Conduct, DJO Sale s and Marketing Code of Conduct and this policy, CO Fair Market Value ( FMV ) - The value in an arm's-length transaction, consistent with the general market value. 6.0 Procedure Special restrictions apply to HCPs who are licensed or work in the States of Massachusetts and/or Vermont (see the DJO Sales and Marketing Code of Conduct) 6.1 DJO Sponsored Product Training and Education Company Personnel may provide training and education to HCPs on the safe and effective use of DJO products. These training and education programs and events may include, but are not limited to, product demonstrations, cadaver labs, lectures, and webcasts Programs and events must be conducted in clinical, educational, conference or other settings conducive to such training. Locations may not be selected based on their value as a resort location or for their entertainment value The focus of DJO sponsored events must be on HCP education of appropriate disease states and the safe and effective use of DJO products. It is not appropriate to use such events as an opportunity to promote DJO products to the event attendees DJO will pay for reasonable travel and modest lodging costs incurred by attending HCPs where the need for out-of-town travel is supported by objective reasons DJO will pay for modest meals associated with the event, but the meal must be subordinate in time and focus to the training and education and in accordance with DJO policies DJO may not, pay for meals, travel, lodging or other expenses associated with any person (including spouses, children or other guests) who does not have a legitimate professional interest in the information being shared at a meeting DJO facility tours are permissible in order to give HCPs an opportunity to learn about DJO s manufacturing process and products. All of the conditions listed above apply in relation to such tours. Procedure #: CO- 402 Revision #: 0 SOP Effective Date:9/18/09 Page 4 of 8
5 6.2 Sales, Promotional and Other Business Meetings DJO may conduct sales, promotional or other business meetings with HCPs to discuss product features, contract negotiations, and/or sales terms in locations that are conducive to business discussion. Such meetings may not be scheduled in locations based on their value as a resort or their entertainment value DJO will pay for modest meals associated with the meeting, but the meals must be subordinate in time and focus to the meeting s business purpose and be in accordance with DJO policies Only those individuals with a legitimate business reason for attending the meeting may attend, and DJO will not pay for meals for any guests of HCPs, including spouses, children, or other guests DJO may sponsor an off-site sales, promotional or other business meeting that is ancillary to a third-party educational conference, provided that there is a legitimate business purpose and the event complies with the conference sponsor s guidelines. 6.3 DJO Support of Third Party Educational Conferences DJO may provide support for bona fide independent, educational, scientific, or policymaking conferences that promote scientific knowledge, medical advancement and the delivery of effective health care. These typically include conferences sponsored by national, regional or specialty medical associations and conferences sponsored by accredited continuing medical education providers DJO may support such conferences by way of an educational grant to reduce overall conference costs for the attendees, but the grant may not be used to pay for the expenses of a particular attendee DJO may not determine or be involved in the conference s educational content, faculty, attendees, methods or materials DJO s grant may be made to the conference sponsor to allow for attendance by HCPs in training (i.e., medical students, residents, fellows) if: The meeting is primarily dedicated to promoting objective scientific and educational activities and discourse; and The conference sponsor selects the attending HCPs who are in training DJO s grant may be used only to reimburse the legitimate expenses for bona fide educational activities (e.g. honoraria and expenses for faculty, meeting space, A/V costs, etc.) and must be consistent with the standards established by the conference sponsor and any accrediting entity. A legitimate expense includes meals and refreshments for all attendees in accordance with the conference sponsor s guidelines. Meals must be modest in time, value and focus to the purpose of the conference, and clearly separate from the CME portion of the conference DJO may not directly reimburse the faculty members or designate a grant for a specific member of the faculty to receive funds for their time and/or expenses. Procedure #: CO- 402 Revision #: 0 SOP Effective Date:9/18/09 Page 5 of 8
6 6.3.7 DJO may purchase advertisements and lease booth space for DJO displays at such conferences. 6.4 DJO Support of Third Party Educational Conferences DJO may provide educational grants for legitimate purposes to conference sponsors or training institutions. DJO may not make educational grants to individual HCPs DJO may make a grant to support the genuine medical education of medical students, residents, and fellows participating in fellowship programs that are charitable or have an academic affiliation DJO may make a grant for the purpose of supporting education of patients or the public about important healthcare topics. 6.5 Charitable Donations DJO may make charitable donations for charitable purposes, such as supporting indigent care, patient education, public educational, or the sponsorships of events where the proceeds are intended for charitable purposes Charitable donations may be made only to those organizations that have tax-exempt status under the Internal Revenue Code DJO will not make charitable donations directly or indirectly to individual HCPs, their practices or a for-profit healthcare organization DJO will not make charitable donations in response to a request from an HCP DJO s sales force may not be involved in the selection of charitable donation recipients. Any inappropriate sales force involvement may potentially disqualify a charitable donation request from consideration 6.6 Prohibition on Entertainment and Recreation DJO will not provide or pay for any entertainment or recreational event or activity for HCPs. Such activities include, but are not limited to, theater, sporting events, golf, skiing, hunting, sporting equipment, and leisure or vacation trips. Such entertainment or recreational events are prohibited regardless of their value, whether the HCP is a consultant for DJO, or whether the entertainment or recreation is secondary to an educational purpose. 6.7 Meals with HCPs DJO may occasionally provide modest meals to HCPs as part of a business interaction The meals must be incidental to the bona fide presentation of scientific, educational or business information and provided in a manner conducive to the presentation of such information Meals may be provided at the HCP s place of business; however, there may be times when that that location is not available for, or conducive to scientific, educational, or business discussions DJO may provide a meal only to those HCPs who actually attend the meeting and all attendees must have a legitimate business purpose to be trained and/or educated on the Procedure #: CO- 402 Revision #: 0 SOP Effective Date:9/18/09 Page 6 of 8
7 information provided (for example: DJO may not provide meals for an entire office staff when only a few members have a true business need to know the information provided) DJO may not provide meals for guests of HCPs (e.g., spouses) All meals must be modest and in accordance with DJO s established meal limits (see the DJO Sales and Marketing Code of Conduct or the April 2009 DJO Compliance Bulletin 6.8 Prohibition on Gifts DJO may occasionally provide items to HCPs that benefit patients or serve a genuine educational function for HCPs Other than textbooks or anatomical models used for educational purposes, any such items should have a fair market value of less than $ DJO will not provide items that are capable of use by the HCP (or his or her family members, office staff or friends) for non-educational or non-patient related purposes, such as a DVD player or MP3 player/i-pod DJO will not give HCPs any type of non-educational branded or non-branded promotional item, even if the item is of minimal value and related to the HCP s work or for the benefit of patients. Examples of these prohibited items include pens, notepads, mugs, and any other items that have the DJO name or logo DJO will not provide HCPs with gifts such as cookies, wine, flowers, chocolates, gift baskets, holiday gifts or cash or cash equivalents. 6.9 Arrangements with Consultants DJO has arrangements with HCPs who serve as consultants by providing bona fide consultant services, such as research, presentations at DJO sponsored training, and product collaboration DJO s consulting arrangements are entered into only where a legitimate need and purpose for the services is identified in advance of the services and documented DJO enters into royalty arrangements with HCPs only where the HCP is expected to make or has made a novel, significant, or innovative contribution to the development of a DJO product, technology, process, or method. All contributions must be appropriately documented DJO s consulting arrangements are written, signed by the parties, and specify all services to be provided When DJO contracts with a consultant for research services, a written protocol is always established DJO s compensation to its consultants is based on fair market value in an arm s length transaction and is not based on the volume or value of a consultant s past, present or anticipated business DJO may pay for documented, reasonable and actual expenses incurred by a consultant that are necessary to carry out the consulting arrangement, such as costs for travel, modest meals, and lodging. Procedure #: CO- 402 Revision #: 0 SOP Effective Date:9/18/09 Page 7 of 8
8 6.9.8 The venue and circumstances for DJO s meetings with its consultants are appropriate to the subject matter of the consultation. These meetings are conducted in clinical, educational, conference, or other settings, including hotel or other commercially available meeting facilities, conducive to the effective exchange of information DJO sponsored meals provided in conjunction with a consultant meeting must be modest in value and subordinate in time and focus to the primary purpose of the meeting. DJO may not provide recreation or entertainment in conjunction with these meetings. 7.0 Records Meals provided for consultants or expenses incurred on their behalf must be in accordance with Section 12 Meals with HCPs. 7.1 All records will be retained in accordance with GP-308, Record Retention Procedure. Procedure #: CO- 402 Revision #: 0 SOP Effective Date:9/18/09 Page 8 of 8
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