Compliance Program

VQ OrthoCare’s Compliance Program is a comprehensive set of policies, procedures and guidelines designed to ensure that the Company conducts its business in accordance with applicable laws and regulations, particularly those related to the health care industry. Our compliance program helps ensure that VQ OrthoCare conducts its business in accordance with the values represented in our Code of Ethics and Mission Statement. All employees are required to read the full text of the Compliance plan annually, and certify that they have done so.

Annual Declaration and Description of Comprehensive Compliance Plan Pursuant to California Drug Marketing Practices Act

The information set forth below is being provided pursuant to California Health & Safety Code § 119402 (S.B. 1765), which requires certain pharmaceutical and medical device companies to make available to the public on their websites their annual declarations regarding compliance with the California Drug Marketing Practices Act and their Comprehensive Compliance Programs.

Annual Declaration Pursuant to California Drug Marketing Practices Act

VQ OrthoCare is committed to adhering to all laws, rules and regulations that govern all aspects of its operations. As a part of this commitment, VQ OrthoCare has developed and adopted a Comprehensive Compliance Program that is designed to comply with all applicable federal and state laws, rules and regulations, as well as applicable industry standards relating to the manufacture, marketing and promotion of its products.

To its knowledge, VQ OrthoCare is in compliance with its Comprehensive Compliance Program and is in compliance, in all material respects, with California Health & Safety Code Sections 119400 – 119402 (California Drug Marketing Practices Act).

This Annual Declaration is dated as of July 1, 2018.

Description of Comprehensive Compliance Plan

Introduction
VQ OrthoCare has established a comprehensive compliance program designed to comply with applicable federal and state laws and industry standards relating to all aspects of its business, including the marketing and promotion of its products. VQ OrthoCare’s Comprehensive Compliance Program has been drafted in accordance with the Compliance Program Guidance for Pharmaceutical Manufacturers, published by the Office of Inspector General of the U.S. Department of Health and Human Services. As described below, these elements form the basis of VQ OrthoCare’s program for compliance with the standards regulating all aspects of its business. VQ OrthoCare’s Comprehensive Compliance Program also has been drafted to include policies for compliance, in all material respects, with the Pharmaceutical Research and Manufacturers of America (PhRMA) “Code of Interaction with Health Care Professionals”, Furthermore, VQ OrthoCare, as a manufacturer of medical devices, is a member of the Advanced Medical Technology Association (AdvaMed) and has adopted AdvaMed’s Code of Ethics on Interactions with Healthcare Professionals, which VQ OrthoCare also has incorporated into its Comprehensive Compliance Program.

  1. Written Policies and Procedures (Standards of Conduct)
    VQ OrthoCare has adopted and implemented written policies and procedures in order to assure substantial compliance with all applicable laws and regulations and industry standards governing its operations, including the marketing and promotion of its products. Among these standards are recognized industry codes of conduct, including the AdvaMed Code of Ethics on Interactions with Health Care Professionals and the PhRMA Code of Interaction with Health Care Professionals. These policies and procedures include:

    1. Policy on Supporting 3rd Party Conferences (including Advertising and Product Demonstrations)
      Bona fide independent, educational or scientific conferences promote scientific knowledge, medical advancement and the delivery of effective health care. These include conferences sponsored by national, regional or specialty medical associations, conferences sponsored by accredited continuing medical education providers, etc. VQ OrthoCare may support these conferences by providing educational grants (see discussion below), modest meals and receptions for attendees, but not their guests, funding faculty expenses and purchasing advertisements and leasing booth space for company displays and demonstrations at conferences. All requests for support must be reviewed and approved by VQ OrthoCare’s Compliance Committee.
    2. Policy on Product Training and Education Sponsored by VQ OrthoCare
      Device manufacturers, such as VQ OrthoCare, have a responsibility to make product education and training available to healthcare professionals. In fact, the U.S. Federal Drug Administration mandates training and education to facilitate the safe and effective use of medical devices. Accordingly, VQ OrthoCare may sponsor product training and education seminars in appropriate locations conducive to the effective transmission of knowledge. VQ OrthoCare may provide healthcare professionals with modest meals and receptions in connection with these programs, and may pay for reasonable travel and modest lodging costs for such professionals if the need for such payment is supported by objective reasons, in accordance with recognized standards for the industry. All requests for sponsorships must be reviewed and approved by VQ OrthoCare’s Compliance Committee.
    3. Policy Prohibiting Provision of Entertainment or Recreational Activities during Sales Functions
      Entertainment and recreational activities (e.g. sporting events, golf outings, concerts, hunting, etc.) shall not to be provided by or paid for by VQ OrthoCare to healthcare professionals as part of VQ OrthoCare’s sales activities.
    4. Policy on Business Meals
      VQ OrthoCare may occasionally offer a modest meal to a healthcare professional as part of an educational presentation or a business discussion. The appropriate focus of these activities is directed to an informational presentation or discussion; therefore, venues that feature entertainment or recreation and attendance by spouses or guests, are not permitted. What constitutes a modest meal is to be judged by local standards as determined by VQ OrthoCare in advance.
    5. Policy on Charitable Contributions
      VQ OrthoCare will consider charitable contributions, requests for patient assistance, and the sponsorship of events where proceeds are intended for chairitable purposes, consistent with its written policies and procedures in these areas. Charitable contributions must be approved by VQ OrthoCare’s Compliance Committee and may be made only to confirmed charitable organizations [e.g., 501(c)(3)]. In no event will charitable contributions be made directly to healthcare professionals.
    6. Policy on the Provision of Educational and Practice-Related Items
      On occasion, VQ OrthoCare representatives may provide patient or practice-related items to healthcare professionals. These items must not be of substantial value ($100 or less) and cannot be offered on more than an occasional basis. VQ OrthoCare may not provide any other items, including any strictly promotional items, regardless of value. Items of personal benefit to healthcare professionals are not permitted. In no event will cash or cash equivalent payments be made directly to healthcare professionals.
    7. Policy on Educational Grants and Research Grants
      VQ OrthoCare may provide grants for specific educational purposes that benefit patients and customers. These may include, but are not limited to, continuing medical education programs and fellowships provided to teaching institutions and similar organizations with a demonstrated commitment to scientific and technical education. Educational or research grant will be provided only to independent organizations and institutions, and not directly to healthcare professionals. All such grants must be approved by VQ OrthoCare’s Compliance Committee.
    8. Annual Limits on Items or Services Provided to Healthcare Professionals
      VQ OrthoCare has established an aggregate annual limit of $1,500 for educational and practice-related items, meals, entertainment and other items or services that may be provided to a healthcare professional pursuant to the requirements of Cal. Health & Safety Code § 119402 (S.B. 1765).
  2. Compliance Officers and Compliance Committee
    VQ OrthoCare has appointed a Compliance Officer who is responsible for implementing the day-to-day operations of the Compliance Committee and has been empowered with appropriate authority to exercise independent judgment regarding compliance matters. Our Compliance Officer has free and unencumbered access to senior management. In addition, VQ OrthoCare has appointed a Compliance Committee which advises the Compliance Officer and assists in the overall implementation of the Compliance Program. The Compliance Committee is comprised of representatives of VQ OrthoCare’s various departments, including members of senior management and two members of the Company’s Board of Directors.
  3. Training and Education
    VQ OrthoCare conducts annual compliance training for all employees. The training covers applicable guidelines governing VQ OrthoCare’s Comprehensive Compliance Program. Employees also are educated on the consequences of failure to comply with the requirements of the Comprehensive Compliance Program.
  4. Lines of Communication
    VQ OrthoCare encourages open and easily-accessible communication between the Compliance Committee (and Compliance Officer) and employees regarding any compliance concerns. VQ OrthoCare employees are encouraged to report their concerns to their direct supervisors or department directors, to the Compliance Officer or any other member of the Compliance Committee. In addition, VQ OrthoCare has established a toll-free hotline number for compliance concerns and questions, maintains Comment Boxes in its corporate offices and other facilities and has, a Compliance Incident Reporting Form on its intranet in order to encourage the communication of compliance concerns and questions.
  5. Monitoring and Auditing
    VQ OrthoCare self-assesses and periodically audits its compliance with its policies and procedures.
  6. Enforcement and Disciplinary Guidelines (Enforcement and Penalties)
    VQ OrthoCare will take disciplinary actions in response to violation of its compliance policies or procedures. VQ OrthoCare will conduct a fair and diligent investigation of matters that are brought to its attention in order to ensure the consistent application of its policies and procedures.
  7. Responses to Detected Problems and Corrective Action (Enforcement and Penalties)
    VQ OrthoCare requires a prompt and diligent response to potential violations of the Comprehensive Compliance Program, including any violation of the standards regulating the marketing and promotion of our products. Actions in response to detected problems may include improving policies and procedures, training, communication and monitoring, or may require disciplinary action to prevent future violations.

For a copy of VQ OrthoCare’s complete Compliance Plan, call (800) 266-6969, or send an email message to our Compliance Officer, Kevin Lunau at klunau@vqorthocare.com.