EDUCATION GRANTS, CHARITABLE CONTRIBUTIONS, AND PRODUCT DONATIONS

Education Grants

DePuy Spine supports a variety of educational programs that are of interest to the Company, including continuing medical education (CME) events hosted by providers accredited by the Accreditation Council for Continuing Medical Education (“ACCME”); non-CME events that avoid “off-label” discussion of DePuy Spine products; fellowship grants; travel grants for spine fellows and qualifying residents; grand rounds; and other programs. Each request is evaluated on the individual program’s merits, and all requests must be reviewed by the DePuy Spine Education Grant Committee for approval.
 
Requests for funding must be submitted by an accredited CME provider or a not-for-profit institution, outlining the amount requested, the proposed use of funding and a detailed budget. The requests should provide details about the program, indicate whether it will be CME-eligible, and include an agenda of topics to be covered and any other relevant information. Requests should be submitted to the company at least six weeks before the program and may be submitted via our online application.

All requests for funding are reviewed by the DePuy Spine Education Grant Committee, which generally meets once per month. Voting members of the committee include senior management from Medical Affairs, Regulatory Affairs, Health Care Compliance, and the Law Department. Company associates from Sales and Marketing may provide input and background information on submitted requests but do not have a vote in award decisions. No employee or independent sales representative is authorized to commit grant funding without the approval of the Education Grant Committee.
Factors our committee considers as part of the review process include the following:

• North American Spine Society
• Cervical Spine Research Society
• American Academy of Orthopaedic Surgeons
• Orthopaedic Research Society
• American Association of Neurological Surgeons
• Congress of Neurological Surgeons
• Scoliosis Research Society
• Pediatric Orthopaedic Society of North America

• Bethesda Spine Workshop
• Cleveland Clinic Spine Review
• Courses sponsored by St. Louis University Practical Anatomy Workshop

• The name, date, and location of the course
• The check designee (the name of the institution or foundation)
• The address where the check should be sent
• Additional details as deemed necessary by the institution

DePuy Spine may provide a donation to an IRS 501(c)(3) not-for-profit organization to fulfill its charitable objectives. A request for funding must be made in writing on the organization’s letterhead, outlining the amount requested, the proposed use of funds and other relevant information about the request and/or the requesting organization. The request should be submitted to the DePuy Spine Vice President for Human Resources, 325 Paramount Drive, Raynham, MA 02767.

All requests for contributions from health care providers are reviewed by the DePuy Spine Education Grant Committee, which generally meets once per month. Voting members of the committee include senior management from Medical Affairs, Regulatory Affairs, Health Care Compliance, and the Law Department. No company employee or independent sales representative is authorized to commit charitable funding to a health care provider without the approval of the Education Grant Committee.

The committee considers the nature of the donation and assesses the request for health care compliance.

Internal budget considerations may impact the availability of charitable funding. The company generally will not provide funding for capital campaigns or endowments and will not consider requests for multi-year commitments. Depending on the circumstances, the company also may apply more stringent criteria when considering a charitable contribution to an entity controlled by, or at the direction of, a surgeon customer.

If the request is approved, the Human Resources department will work with the requestor to obtain a copy of its “IRS Determination Letter”, confirming its tax-exempt status. The requestor must sign a contribution agreement prior to receipt of the funding, and an IRS OBRA Form also will be required.

If a request is rejected, a written response will be provided to the requestor with an appropriate explanation for the decision.

Product Donations

DePuy Spine may provide free product for indigent patient care to US patients who lack any insurance coverage or as part of an overseas “missionary” trip. A qualifying not-for-profit institution must submit a written request at least eight weeks before the planned surgery or trip, outlining the nature of the surgery to be performed, information about the requesting institution, and a detailed listing of the specific product(s) requested. The request should be submitted to DePuy Spine’s Health Care Compliance Analyst, 325 Paramount Drive, Raynham, MA 02767.

Requests for free product are considered on a case-by-case basis by the company’s Education Grant Committee as per the approval process outlined under Charitable Contributions above. The company will not consider requests for multi-year commitments or for multiple overseas trips, nor will free product be provided for underinsured patients.

If the request is approved, the company will request a copy of the organization’s “IRS Determination Letter”, confirming its tax-exempt status. The requestor must sign a contribution agreement prior to receipt of the donated product, and an IRS OBRA Form also will be required. The surgeon and institution must certify in writing that they will not seek third party reimbursement for the procedure(s), and any unused product must be returned to the company.

If a request is rejected, a written response will be provided to the requestor with an appropriate explanation for the decision.

No employee or independent sales representative is authorized to commit free product without the approval of the Education Grant Committee.

RESEARCH FUNDING

DePuy Spine funds a variety of investigator-initiated and company-initiated clinical and scientific research studies that promote the generation or analysis of data in furtherance of patient care. Such funding may be either for Clinical studies or Pre-Clinical Research studies.

Clinical Studies

The company may fund either company-initiated or investigator-initiated clinical research studies that are of interest to the company. Investigator-initiated studies are clinical research study protocols proposed by a health care provider who requests company assistance in funding the study. Under company-initiated studies, DePuy Spine will proactively seek and sponsor outcome studies to evaluate the cleared or approved use of a company’s device.

Investigator-initiated prospective studies related to “off label” uses of DePuy Spine product require the institution to obtain an Investigational Device Exemption (IDE) from the US Food & Drug Administration.

Investigator requests for funding for clinical studies should be made in writing on the institution’s letterhead to the DePuy Spine Director of Clinical Affairs, 325 Paramount Drive, Raynham, MA 02767. The company will assess each funding request on a case-by-case basis. The following information is generally required as part of an institution’s or investigator’s request:

• Study design (e.g., retrospective or prospective, randomized or not, etc.)
• Length of study
• Number of subjects and duration of follow-up
• Study endpoints (e.g., changes in work status)

• Direct costs related to research/clinical staff on study-related activities
• Initial start-up costs prior to first enrolled subject
• Study specific fees
• Indirect costs

FEE FOR SERVICE CONSULTING ACTIVITIES

Consistent with its Principles of Collaboration, DePuy Spine believes that formal engagement with health care providers is essential to further advances in safe and effective spine treatment for patients. The company engages a number of appropriately qualified health care providers, primarily spine surgeons, to perform a variety of necessary and bona fide services, including new product development, professional education, sales training, and activities relating to clinical studies and market research. In this formal capacity such health care providers are generally termed “Consultants.”

The company outlines necessary Consulting services in advance during its annual Needs Assessment process. The Needs Assessment outlines the nature and quantity of these necessary and planned services and must be approved by senior management. The Needs Assessment is closely tied to the company’s annual budget for such activities, and the company looks to see that any proposed agreement has been captured in its approved Needs Assessment prior to execution.

All requests for new fee-for-service Consulting arrangements are presented to the company’s Consulting Contract Review Committee. This committee is comprised of a cross-functional group of senior managers, and all contracts must be approved by this committee before a consulting agreement will be executed. A similar committee is in place to review all requests for product development agreements and royalties; this committee also includes senior management from R&D and the company’s in-house patent counsel.

With limited exception, the following functional groups or their designee are the only ones authorized to engage a Consultant to perform a billable activity:
·  Medical Education – The company’s Medical Education Department administers all professional education programs, including DePuy Spine product training courses for health care professionals, Operating Room Visitations, and other peer-to-peer training. Medical Education will identify the appropriate faculty for such educational programs and coordinate the planning and execution.
·  Sales Training – Our Sales Training Department oversees all company-sponsored training of sales representatives. In cases where a Consultant is to be engaged for such activities, the Sales Training Department must approve the event and Consultant selection in advance of the activity. Local field sales management is not authorized to initiate any billable activities with a Consultant.
·  Research & Development – The R&D Department is primarily responsible for overseeing new product development efforts. All requests for Consulting services and final selection of the Consultant must have the approval in advance of an R&D Director. Marketing associates generally are closely tied in to the development process and work with the R&D Directors on many aspects of these efforts.
·  Strategic Marketing & New Business Development – This group coordinates the various DePuy Spine Surgeon Advisory Councils and administers all market research activities, including product focus group meetings. The Surgeon Advisory Councils generally meet once or twice per year and provide input on various strategic initiatives for our franchises. ·  Clinical and Scientific Affairs – The company’s Clinical and Scientific Affairs Departments oversee all clinical studies and liaise with various study groups supported by DePuy Spine, both of which are covered under an appropriate clinical study agreement. In other instances the Clinical or Scientific Affairs Department may engage a Consultant to provide necessary fee-for-service Consulting services outside the scope of a clinical study, such as protocol or manuscript review, participation in FDA panel meetings, and other relevant services.

All approved Consulting activities are covered under a written contract with the Consultant. The agreement is generally for a one-year term (except for approved one-time honoraria), identifies the specific activities to be performed, specifies compensation for the services to be performed by the Consultant, and includes other terms and conditions as appropriate. Compensation must represent a fair market value exchange for the services being performed. In certain instances – primarily new product development, assessing new technologies, and medical writing where intellectual property or copyrightable material will be created – the Consultant must obtain the express written consent of his/her institution (e.g., a hospital or university) prior to entering into the agreement. The company encourages the Consultant to disclose the existence of the agreement with his/her patients and institution, if not already mandated.

No DePuy Spine employee may engage a health care professional to participate in a billable Consulting activity before a fully executed contract is in place to cover such activity, and no company associate is authorized to commit that a contract is forthcoming without the express approval of the appropriate committee. Professionals in DePuy Spine’s field sales organization are not authorized to engage a Consultant without approval or remit a Consulting fee to a health care provider.

Each individual request to perform services must be pre-authorized by the company’s Medical Affairs Department who provides an invoice to the Consultant.  Once the service is performed, the Consultant signs the invoice and submits it to  the company’s Medical Affairs Department (SpineMedicalAffairs@its.jnj.com). Medical Affairs verifies all aspects of the invoice and independently confirms the activity with the appropriate company employee prior to payment.

In addition to receiving fair compensation for services rendered, the company reimburses the Consultant for necessary travel expenses associated with the consulting work. Such reimbursement must be in accordance with the company’s Travel Policy for Health Care Professionals.

Product development agreements with Consultants generally involve the creation or contribution of intellectual property (“IP”), whether patented or not (unpatented “know how”), featured in the newly developed products. In exchange for the Consultant’s assignment or contribution of IP to the company, DePuy Spine may pay a royalty on sales of the new product(s) covered by the IP. Represented as a percentage of the net sales of the products developed, such royalty payments are limited to the fair market value of the IP, as estimated by DePuy Spine, and are paid over a limited number of years. Royalties are not paid to a US Consultant on his/her own purchases of the royalty-bearing products or the purchases of other surgeons at the same institution.

MEALS, ENTERTAINMENT, GIFTS AND TRAVEL

 Meals

It is permissible for a company associate to conduct business-related discussions over a meal or at a reception with a health care professional. Such meals are generally part of a sales call or company-sponsored training event or meeting. In all such instances the meal must be modest in nature and held at an appropriate venue for business discussions. Company associates must also abide by any policies established at a customer location if applicable.   Individual institution policies and/or state legislation may impose stricter limits.  The stricter policy applies.

The company has established the following modest per-person meal limits for its employees and independent sales representatives:

Government employees are subject to more stringent guidelines related to where and when meals are provided and the amount allowed.  Each situation must be reviewed to make sure J&J guidelines as well as individual facility vendor guidelines are followed.  Please contact Stephanie Potts, DePuy Government Contract Manager with any questions.

 A company associate may not pay the cost of health care provider’s spouse or guest unless they have a bona fide business reason for participating in the meal.

In line with this Code of Ethics, entertainment is prohibited, including golf outings, theater or ball park tickets, and the like. Such events are not generally conducive to appropriate business discussions and can lead to a perceived conflict of interest.
Gifts are also prohibited including branded and unbranded items.  However, educational items to HCPs may be provided occasionally and must benefit patients or serve a genuine educational function for the HCP.


A medical textbook made be provided by the company’s Medical Education Department to a fellow or qualifying resident (in his/her last or second-to-last year of neuro or ortho residency). Please contact MedicalEducation@its.jnj.com for more information.

Travel

The company generally provides travel arrangements for health care providers who participate in DePuy Spine Medical Education events, including training courses on company products. Registrants will be contacted by Medical Education with information related to travel for such events.

DePuy Spine will cover the necessary travel expenses of Consultants who perform services for the company. Consultants’ travel expenses may be arranged directly by the company, though it is more common for the Consultant to invoice the company for his/her out-of-pocket travel expenses.

Regardless of the method of payment or the nature of the activity, highlights of DePuy Spine’s travel policy include the following:
·  Hotel accommodations must be modest and appropriate for the specific event. The company may not host events with health care providers at resort locations.
·  Air travel must generally be in coach class, except transoceanic flights over six (6) hours may be in business class which must be approved in advance or outlined in a Consulting agreement.
·  The company will not reimburse the travel expenses of a spouse or guest unless there is a bona fide reason for their participation, which must be approved by the company in advance of the trip.
·  Non-business related expenses, such as movie rental fees or personal items, will not be reimbursed by the company.

The company authorizes its independent sales representatives to fund the travel expenses of a health care provider who attends a DePuy Spine Medical Education course or WWHQ visit. Sales associates are not permitted to fund directly or indirectly the travel expenses of a Consultant whose travel relates to services being rendered for the company, such as the faculty at a DePuy Spine Medical Education event.

Separate guidelines are in place for Government employees, who may require an ethics officer letter of authorization to attend a company product training event. The letter, which outlines a complete description of the training to be offered, must be sent to the company’s Medical Education Department for review prior to the training.

In accordance with the standards of the Accreditation Council for Continuing Medical Education (ACCME), neither the company nor its independent sales representatives may fund travel expenses or registration fees for a surgeon to attend a continuing medical education (CME) event. The company chooses to apply the same policy to other health care professionals’ continuing education events (e.g., nurses, OR technicians, etc.), even though they may not be governed by the ACCME.

WORLDWIDE HEADQUARTER (WWHQ) VISITS

A health care provider may be invited to the DePuy Spine worldwide headquarters facility in Raynham, Massachusetts, to meet with company personnel, attend product training, and tour the manufacturing and research facilities. Such visits can be an effective way for a health care provider to learn more about the company and its products.

WWHQ visits generally are initiated by a sales representative after hearing of a health care provider’s interest in learning more about the company. The sales representative should contact the Medical Education Department to schedule the meeting, and often the sales representative will accompany the health care provider to Raynham during the visit.

The health care provider’s travel expenses will be covered either by the company or the independent sales representative. In either case the company’s travel policies apply.

Because such visits generally are initiated by a sales associate and do not involve the rendering of bona fide services to the company by the visiting health care provider, they are not considered billable Consulting activities. Accordingly, the company will not pay a fee or honorarium to the health care provider for the visit, and no Consulting services are expected from the health care provider during the visit. If confidential information is to be exchanged or offered by either party, an appropriate confidentiality agreement must be entered into before the date of the visit. Questions regarding such agreements should be discussed with the company’s Medical Education Department during the planning phase of the visit.

INFORMATION REGARDING OFF LABEL USE OF COMPANY PRODUCTS

As a manufacturer of health care products sold in the United States, DePuy Spine’s products must be approved for their intended use by the US Food and Drug Administration. The FDA prohibits a manufacturer from promoting its product for unapproved uses, even though a health care provider may, in his or her judgment, use the products in any manner that he/she sees fit for the patient.

DePuy Spine employees and independent sales representatives may not promote company products for use outside the scope of their FDA approval (commonly referred to as “off label”), nor may the company engage other parties, such as Consultants, to promote such off label use. The Government views such promotion as “misbranding” of the products and not permissible under the law.

During an operating room procedure, a sales representative may respond to an unsolicited request for technical support related to the preparation and operation of the company’s medical device from a physician who, solely within his or her professional judgment, has elected to use that medical device for a use not described in the product labeling. The representative may answer questions only related to the labeled instructions of the device, its operating principles, its performance specifications, and similar technical information about the device.

Because health care providers are not subject to the same restrictions and for purposes of patient safety, there may be occasions when a health care provider wishes to consult with the company about an unapproved use. Requests for off label information about DePuy Spine products, which must be unsolicited and not prompted by any company associate, may be directed to the DePuy Spine Regulatory Affairs Department (tel. 508-880-8100).

REIMBURSEMENT SUPPORT

DePuy Spine’s products are generally purchased by a health care institution (such as a hospital), which then may seek reimbursement from third party payors, including private insurance companies and Government health programs (such as Medicare and Medicaid). The hospital’s reimbursement may or may not include the surgeon’s professional service component, as the surgeon may separately bill the third party payor in some instances.

Regardless of the components of the reimbursement, the health care provider has the sole responsibility for billing the third party insurer, including the complete and accurate preparation of “cost reports” and selection of the appropriate diagnosis related group (DRG) which often drives the amount reimbursed.

The responsibility of DePuy Spine is to provide complete and accurate information on our invoices to customers who rely on this information to bill insurers. Invoices provided by the company will clearly outline the individual products actually purchased and the price paid for each. Any applicable discounts will be prorated to all products on the invoice, and if a rebate is subsequently paid the customer will receive a complete listing of the resulting net price paid for all products during the applicable period.

DePuy Spine associates generally are not experts in the complex area of third party reimbursement. Given the roles and responsibilities described above, our company associates are not authorized to provide any guarantees about product reimbursement or profit to a health care provider, nor may they become involved in patient-specific insurance claims or appeals.

The company may provide reimbursement-related materials on its products for informational purposes only, and DePuy Spine makes no representation, promise or guarantee concerning levels of reimbursement, payment or charge. Health care providers are advised to consult their local payer organizations with regard to local reimbursement policies.

INVENTORY EXCHANGES

DePuy Spine may provide new inventory to a customer in exchange for a customer’s own, existing DePuy Spine products or a competitor’s inventory owned by the customer. Such exchanges typically arise from upgrades of company product or competitive conversions. The value of the inventory returned will be assessed by DePuy Spine’s Finance Department and must be of equal value to the new inventory issued using the customer’s existing pricing.

The customer must relinquish its existing, owned inventory to DePuy Spine in exchange for the replacement inventory. A credit memo will be issued for the products received by the company, offset by an invoice for the new products issued. The customer is under no obligation to purchase additional products from DePuy Spine as a direct result of the exchange. However, minimum purchase commitments, enabling a customer to earn certain volume discounts, may be in effect pursuant to a separate pricing agreement.

A health care provider should contact the local DePuy Spine sales representative for more information on inventory exchanges.

REPORTING SUSPECTED VIOLATIONS

Conducting our business in an ethical manner, consistent with all applicable laws and regulations, is the responsibility of every DePuy Spine employee and contracted party. Training on our policies is provided to our associates, and appropriate disciplinary action is taken against those who violate the company’s HCC policies.

Suspected violations of DePuy Spine’s HCC policies, as well as any other allegation of impropriety (such as threats and physical violence, financial fraud, workplace discrimination, environmental or safety concerns, alleged off label promotion, conflicts of interest, sexual harassment, anti-trust, Sarbanes Oxley exceptions, patient privacy concerns, other ethical violations, etc.) may be reported to the company’s Director of Health Care Compliance HCCDPYUS@its.jnj.com. or other appropriate senior manager of the company (tel. 508-880-8100).

For those who wish to remain anonymous, a toll-free hotline has been established in the US to report suspected violations: 1-800-371-2029. The hotline is managed by an outside vendor, who will log the call and route it to the appropriate member of company management for investigation. The caller may be provided with a case number to check on the status at a future date.

A website also has been established for those who wish to report a suspected violation online. Please visit: https://www.credohotline.com for more information on how an alleged incident may be reported to the company online.

 Questions and comments about these and other HCC policies may be directed to the Director of Health Care Compliance, DePuy Spine’s chief compliance officer, at (508) 880-8100 or HCCDPYUS@its.jnj.com.