CNS Therapeutics adopts this voluntary Comprehensive Compliance Program (CCP) to comply with the law in its interactions with healthcare professionals and other customers. CNS Therapeutics has modeled its Compliance Program after the “Compliance Program Guidance for Pharmaceutical Manufacturers” issued by the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) on April 2003. The OIG Guidance focuses on three potential risk areas for manufacturers including: (1) the integrity of data used by state and federal governments to establish payment; (2) kickbacks and other illegal remuneration, and (3) in the case of pharmaceutical companies, compliance with laws regulating drug samples. CNS Therapeutics also followed the spirit of the PhRMA and AdvaMed Codes on Interactions with Healthcare Professionals in establishing this Policy. CNS Therapeutics is adopting its own Compliance Program in response to the complex issues and the responsibilities involved in interacting with healthcare customers. The compliance measures CNS Therapeutics has and will adopt are unique to its business and the unique environment and size of the company. This compliance program is internal to CNS Therapeutics and is not intended to convey any legal rights upon any customer, shareholder or other third party. It is solely a statement of intention and aspiration for CNS Therapeutics. The ultimate responsibility for compliance lies not with the designated Compliance Officer, but extends to the CNS Therapeutics executive management team.
The CCP incorporates the following elements:
Four primary federal laws govern the interaction between health care professionals and pharmaceutical companies including the advertising and promotion regulations and guidance documents promulgated under and pursuant to the Food, Drug and Cosmetic Act (FDCA), the Anti-kickback Statute, the False Claims Act and the Prescription Drug Marketing Act (PDMA). These statutes are intertwined and sometimes all apply to the myriad of advertising and promotional programs that companies conduct as well as in the many other ways that companies interface with health care professionals. Some examples of how companies interact with health care professionals are in conducting market research, using advisory boards, providing reimbursement advice, offering drug samples, providing grants for medical education and symposia, consulting with physicians, and supporting physician-initiated clinical trials. The regulatory environment in this arena is complex and this Policy will not cover every conceivable program or circumstance, but it provides some operating principles and a framework for analyzing and addressing issues.
FDA’s advertising and promotion laws and regulations address the claims a company can lawfully make about its products. These claims may be direct, indirect, express or implied. CNS Therapeutics will be truthful, not misleading, fair and balanced in all product claims. The promotional arena for product claims has been impacted by some court cases, the most notable of which is the Washington Legal Foundation (WLF) case, where WLF challenged three FDA Guidance documents. WLF alleged the guidance documents limited First Amendment commercial free speech. The FDA, in large measure, lost the WLF case. This case and others have limited the way FDA regulates such things as a) the dissemination of information about off-label uses of a company’s products, b) a company’s ability to sponsor continuing medical education courses on off-label uses, and c) a company’s ability to provide financial support for physician-initiated clinical trials on off-label uses. At all times, CNS Therapeutics will endeavor to keep all claims made in our product advertising and promotion fully substantiated, within the approved product labeling and compliant with the law.
In complying with FDA’s advertising and promotional law, CNS Therapeutics shall promote its prescription products consistent with the cleared or approved labeling for its products. CNS Therapeutics shall be truthful, not misleading, fair and balanced in the claims it makes about its products and all claims shall be substantiated. If off-label information is shared with health care providers, it will be done appropriately and lawfully.
Federal and some state laws impose criminal and civil penalties for offering or receiving any form of improper “inducement” to purchase, order or recommend a healthcare item or service. The major purpose of these laws (often referred to as “anti-kickback” laws) is to ensure the purchase or prescription of a product reimbursed by the government is based upon patient benefit, price, quality, service and similar considerations. A purchase or prescription should not be based upon providing personal benefit to a customer that could compromise the purchase or prescription from being made in the best interest of the patient. These laws are also intended to discourage the ordering or purchasing of medically unnecessary items or services. In addition, the federal government has become concerned that the increasing costs associated with sales “inducements” have an inflationary, and therefore harmful, effect on the nation’s healthcare budget.
The Anti-kickback Statute is designed to address paying “remuneration” to induce the purchase, prescription, or referrals to do the same, of goods or services reimbursed by the federal or a state government under Medicare, Medicaid or a similar state or federal program. In addition to preventing improper inducements, here are some of the other principal purposes behind the statute: a) to prevent the over-utilization of goods and services reimbursed by the government, b) to level the competitive playing field to prevent distortions in the marketplace by competitors who do not abide by the law, and c) to ensure the government pays the true acquisition cost for goods and services and is the beneficiary of all discounts, whether explicitly disclosed or hidden.
The Anti-kickback Statute does have “safe harbors” protecting certain types of conduct that actually fall under the scope of the statute and, but for the safe harbor, would be considered a violation of the law. The safe harbors, if followed, ensure that the conduct in question will not be the subject of a prosecution, hence the term “safe harbor.”
CNS Therapeutics will insist on ethical business practices and socially responsible industry conduct and shall not use any unlawful inducement, i.e. remuneration, to induce the purchase, prescription, or referrals to do the same, of goods or services.
The False Claims Act is designed to ensure the integrity of information provided to the government for the reimbursement of products. The statute applies when health care professionals submit claims for reimbursement to the government for products they have prescribed. A manufacturer is deemed liable for a False Claims Act violation if it somehow participates in a false claim for reimbursement being made by a health care provider where, for example, the health care provider upcodes, miscodes, sells drug samples or otherwise seeks government reimbursement where no payment or a lower payment for reimbursement is due. In addition to inappropriate reimbursement payments, the False Claims act is triggered if there is an anti-kickback violation. The theory is that a party seeking reimbursement impliedly certifies that they are in compliance with all laws, such as the Anti-kickback statute, and if they are not, they are not entitled to reimbursement.
CNS Therapeutics shall ensure its promotional activities and role in providing reimbursement advice to health care professionals is in compliance with the law and does not encourage inappropriate reimbursement for its products.
The PDMA governs the provision of drug samples by a pharmaceutical company to a health care professional. The statute was enacted to prevent, among other things, the sale of free samples to purchasers who would then bill the government for them at full price. The PDMA has very specific requirements for the handling of drug samples.
CNS Therapeutics shall ensure it has policies and systems in place to comply with the PDMA.
Any employee who violates this CCP and any manager who knowingly permits or directs a subordinate to do so, will be disciplined accordingly, up to and including termination of employment. Any employee who suspects a violation of this policy is encouraged to discuss the matter with his or her supervisor. Employees may also contact the CNS Therapeutics Compliance Officer or they may call the anonymous Compliance hotline (877-754-2995).
This portion of the CCP addresses appropriate CNS Therapeutics employee interactions with United States. health care professionals and other customers. Contractors conducting business on behalf of CNS Therapeutics must also comply with this CCP. Employees and contractors interacting with customers outside of the United States should refer to the CNS Therapeutics policy applicable to their country for guidance on conducting business in their respective jurisdiction. These policies apply to any expenditure by CNS Therapeutics employees or contractors, regardless of whether the expenditure is reimbursed by the Company. In other words, any “personal” money given to or spent for the benefit of a CNS Therapeutics customer is considered money given or spent by the Company.
As used in this CCP, the term “customer” means any individual or organization that purchases, recommends, uses, or prescribes products manufactured or distributed by CNS Therapeutics, or an individual who is in a position to determine whether a CNS Therapeutics product is purchased, recommended, used, or prescribed, if any of those products are reimbursed under a federal or state healthcare program. This can include (but is not limited to) physicians, nurses, physician assistants, medical assistants, office administrators, pharmacists, purchasing agents, hospitals, clinical practices, MCOs, HMOs, PBMs, GPOs, etc.
As described above, the following general standards and principles should at all times guide our interactions with customers:
Items primarily for the health or education of all of a customer’s patients may be offered to customers or prospective customers if they are of modest value. For example, an anatomical model for use in an examination room is primarily for the medical education benefit of the patient, whereas a DVD or CD player is not. Other than the gift of medical textbooks or anatomical models used for educational purposes, items should not typically exceed a value of $100. Gifts of a personal nature (e.g., bereavement acknowledgement, birth of baby, engagement, etc.) and/or entertainment may not be offered to customers in California. Items should not be offered on more than an occasional basis, even if each individual item is appropriate. The amounts stated in this paragraph may be subject to change.
In California, branded promotional items of minimal value related to the customer’s work or for the benefit of patients (such as pens, notepads, and similar “reminder” items with company or product logos) may no longer be offered to a customer for the purpose of brand marketing.
Also in California, items for the personal benefit of health care professionals (such as floral arrangements, artwork, music CDs or tickets to a sporting event) should not be offered. Entertainment or gifts may not be provided to customers even if they part of a bona fide consulting arrangement. Any meals or gifts will be included in the $1,000 per year per customer limitation.
Payments in cash should never be offered to customers. Payment in cash equivalents (such as gift certificates) should not be offered to customers or prospective customers either directly or indirectly except as compensation for bona fide services. Cash or equivalent payments of any kind create a potential appearance of impropriety or conflict of interest.
CNS Therapeutics may not offer entertainment and recreation to healthcare professionals. In California, meals may be provided to customers as part of a training and education or professional meetings if subordinate in terms of time and emphasis to the program/event and the provision of such meals complies with the PhRMA Code. Meals will also be included in the $1,000 per year per customer limitation.
Exceptions to this Corporate Policy should be infrequent. All exceptions must be approved by the Compliance Officer and Compliance Committee with regular reports to the Board of Directors. All deviations must be supported by written justification for the deviation and must comply with applicable laws and regulations.
Copies of this Compliance Program and the Annual Declaration of Compliance can be obtained by calling CNS Therapeutics at 651-207-6959. The Company has also established an Ethics Hotline that is available 24 hours a day, 7 days a week at 1-877-754-2995 for making anonymous reports.