Corporate Compliance Program

 

I. Introduction

EndoGastric Solutions, Inc. (“EGS” or the “Company”) is committed to compliance with the applicable laws and regulations that govern medical device marketing and selling activities in the United States. EGS's Compliance Program is also consistent with applicable portions of both the voluntary guidelines set forth in the "OIG Compliance Program Guidance for Pharmaceutical Manufacturers" published by the Office of the Inspector General, U.S. Department of Health and Human Services (“OIG Guidance”) and the provisions of the AdvaMed Code of Ethics.

The goal of EGS's Compliance Program is to maintain a culture that promotes the prevention, detection and resolution of potential violations of law or Company policy.

II. The Comprehensive Compliance Program Mission

EGS is committed to upholding the highest standards of business conduct and ethics. In all of its activities, EGS seeks to promote the core principles of good citizenship, regulatory compliance and business integrity.  The Compliance Program has been tailored to fit EGS’s unique environment. The goal of EGS’s Compliance Program is to:

  • Exemplify EGS’s commitment to good corporate citizenship.
  • Develop a process that encourages employees to report potential problems.
  • Monitor adherence to applicable statutes, regulations, and program requirements.
  • Investigate acts of alleged misconduct and initiate corrective action where appropriate.
  • Emphasize the dedication of the Company and the Company’s employees to honesty, integrity, and ethics.

Although the OIG Guidance explicitly recognizes that the implementation of a compliance program may not entirely eliminate improper conduct from the operations of a pharmaceutical or medical device manufacturer, EGS has implemented disciplinary and corrective procedures in an attempt to mitigate and minimize the impact of improper conduct in the event EGS becomes aware of violations of law, regulations, or Company policies.

EGS reviews and enhances its Compliance Program on a periodic basis in order to meet changing needs and demands.

III. Policies, Procedures, and Standards of Conduct

EGS is committed to the highest ethical standards of business conduct and implements policies and procedures validating this commitment. We have implemented written polices and procedures tailored to our operations and regulatory environment to provide guidance to govern the business conduct of EGS’s employees, agents and contractors.

In compliance with the California Health & Safety Code §119402, EGS has established annual spending limits for promotional activities directed toward healthcare professionals in accordance with the OIG Guidance and PhRMA Code. A $1,500 spending limit for California healthcare professionals is monitored and enforced. This limit is a maximum expenditure and does not represent a spending “goal” or an average.

IV. Leadership and Oversight

   The Corporate Compliance Officer

EGS has appointed a Chief Compliance Officer as the focal point of compliance activities. The Chief Compliance Officer oversees the administration and implementation of the Compliance Program and reports directly to the Board of Directors, Compliance Committee. The Chief Compliance Officer may exercise independent judgment and has the authority to lead change in the organization regarding compliance activities.

V. Education and Training

The continual training and education of EGS employees concerning their ethical and legal obligations associated with compliance with policies, procedures, and applicable laws and regulations is a critical component of the Compliance Program. EGS is committed to taking all necessary steps of communicating and implementing the standards, policies and procedures to all affected personnel. We review and modify the training programs as needed and enhance the training to incorporate additional areas of training necessitated by the changing business environment.

VI. Internal Communication

We seek to foster open discourse within and between management and employees. Any employee who has concerns or questions regarding policies, procedures, or particular activity that the employee feels may violate policies or the law is required to report such concerns.

Employees are encouraged to ask questions about compliance issues and urged to make reports of potentially problematic situations and conduct to their managers or directly to the Corporate Compliance Officer.

Company policy prohibits retaliation by any employee against another employee for good faith reports of potential or suspected violations of law, regulations, or company policies.

VII. Auditing and Monitoring

The Compliance Program incorporates efforts to monitor, assess, audit and evaluate compliance with EGS’s policies and procedures. In accordance with the OIG Guidance, the nature, extent, and frequency of EGS’s monitoring, assessing and auditing correlates with a variety of factors including new regulatory requirements and adaptations of business practices as well as other considerations.

EGS uses internal auditing resources. The Chief Compliance Officer works with management to evaluate audit results and implement any training or corrective action deemed necessary resulting from audits and routine monitoring activities.

VIII. Enforcement and Discipline

The Compliance Program’s goal is to prevent violations. However, as the OIG Guidelines recognize, even an effective compliance program may not safeguard against any and all improper conduct. In the event noncompliant conduct does arise, EGS’s Compliance Program sets forth clear disciplinary action to address violations of the law, regulations, and/or company policies. Although each situation is considered on a case-by-case basis, EGS consistently evaluates and implements the appropriate disciplinary action to address inappropriate conduct and deter future violations. Disciplinary action may include termination or other adequate discipline of the individual involved, as well as potential discipline of the supervisor.

IX. Corrective Action Procedure

The Compliance Program requires the company to respond promptly to potential violations of law, regulations, or company policies. In these instances, EGS will take the appropriate disciplinary actions as discussed above.  Furthermore, EGS will take action to prevent future violations from occurring, such as increasing auditing and monitoring procedures, and/or revision of the guidelines, policies and procedures as appropriate.

EGS’s Compliance Program is indicative of the Company’s dedication to and commitment to our Company’s values. We strive for the utmost degree of honesty and integrity. The policies and procedures discussed above represent a responsive program to compliance concerns within the industry, and are representative of our commitment to uphold the highest standards of business conduct and ethics in our relationships with customers, employees, stakeholders and state and federal governments.

X. 2010 California Declaration of Compliance

For the annual period beginning May 1, 2010 and concluding April 30, 2011, EGS set an annual aggregate limit on promotional expenditures provided to California healthcare professionals of $35 per covered healthcare professional. Internal investigation and review indicates that EGS has not exceeded this established limit. To the best of its knowledge, and based on a good faith understanding of California Health & Safety Code §119400-402, EGS is in compliance in all material respects with the requirements described in California SB1765. EGS will continually evaluate and update its Compliance Program as necessary and appropriate given the changing environment and needs.

Any third party who has any concerns regarding the Company’s or any individual employee’s compliance with this Compliance Program is encouraged to call the company at 425.307.9200.

A copy of this document may be obtained by calling 425.307.9200.

Dated: May 26, 2011 

 

NP01928-01B