Compliance starts with, and is the responsibility and continuing obligation of, each Vericel employee. We rely upon and expect that Vericel employees will conduct themselves in compliance with Vericel policies, and applicable laws, rules and regulations. In an effort to ensure that our employees remain abreast of and informed about these policies, and the laws, rules and regulations that govern our business, Vericel developed its Compliance Program. The Compliance Program provides training and education and is designed to monitor, detect, correct, and as necessary take disciplinary action, in respect of activities or practices that do not comply with the law or Vericel policies and expectations.
Vericel Code of Business Conduct, Policies and Procedures
The Vericel Code of Business Conduct and Ethics is based on the Company’s core values, good business practices and applicable law. Vericel employees are expected to comply with the Vericel Code of Business Conduct and Ethics, the Pharmaceutical Research and Manufacturers of America (PhRMA) Code on Interactions with Healthcare Professionals as updated and made effective as of January 2009, and any and all compliance policies and procedures applicable to their function at, and activities performed on behalf of, Vericel.
Compliance Officer and Compliance Committee
Vericel has appointed a Compliance Officer and has established a Compliance Committee that is chaired by the Compliance Officer and is comprised of leaders from key functions within Vericel. The membership of the Compliance Committee may change from time to time in the discretion of the Compliance Committee.
Compliance Training and Education
Vericel is committed to developing and providing its employees with effective compliance training. This training covers not only relevant company policies and procedures governing the conduct of Vericel employees, but also applicable state and federal laws, rules and regulations.
Under the Code of Business Conduct and Ethics, Vericel encourages and promotes the prevention, detection, reporting and correction of unlawful or improper conduct. Vericel is committed to fostering dialogue between management and employees through multiple channels. Employees must report any concerns to their managers, or to an officer, the Compliance Officer, the Chief Executive Officer or the Chairman of the Audit Committee of Vericel’s Board of Directors. In addition, employees are free to report concerns anonymously 24 hours a day, 7 days per week through the Vericel Compliance Hotline by calling 1-734-418-4444. The Compliance Department and other departments as appropriate will evaluate all reports and as appropriate investigate the reports. Although each situation is considered on a case-by-case basis, Vericel imposes discipline to address inappropriate conduct and to deter potential future violations of law or company policies. No retaliation will be taken against any employee for a good faith report of what they honestly believe to be an actual or suspected violation.
Auditing and Monitoring
To measure the effectiveness of Vericel’s training and education program and confirm that Vericel employees are acting a compliant manner as we expect, Vericel will periodically perform monitoring and auditing activities to evaluate compliance with company policies and applicable laws. The nature, frequency and extent of these reviews may vary according to factors such as internal risk assessments, regulatory requirements and developments, and changes in Vericel’s business practices.
California Health & Safety Code Sections 119400-119402
California Health & Safety Code, Sections 119400 – 119402 (California Compliance Law) requires pharmaceutical companies to adopt a compliance program in accordance with the April 2003 publication “Compliance Program Guidance for Pharmaceutical Manufacturers” (OIG Compliance Guidance) developed by the United States Department of Health and Human Services Office of Inspector General and policies for compliance with the PhRMA Code. Vericel will make conforming changes to the Program within six months of any update or revision of the PhRMA Code.
Vericel has established a Compliance Program in accordance with the OIG Compliance Guidance and has policies in place to foster compliance with the PhRMA Code for their pharmaceutical businesses. For purposes of compliance with the requirements of the California Compliance Law and as part of the Compliance Program, Vericel established a specific annual aggregate dollar limit of $2500 on gifts, promotional materials, or items or activities that Vericel may give or otherwise provide to an individual medical or healthcare professional in California. Such items or activities primarily include: medical textbooks and other items that principally entail a patient benefit or are related to the healthcare professional’s practice; modest meals associated with a substantive discussion of a Company product or a disease state; and other items or activities permitted under the PhRMA Code, AdvaMed Code and OIG Compliance Guidance. These items and activities are primarily directed to the dissemination or communication of medical and scientific information as a resource for healthcare professionals to assist in making clinical or other medical judgments. This limit may be revised from time to time, in which case the revised limit will be published in this section of the Vericel website. This limit represents a spending cap, not a goal or average; in many cases, the amount spent per physician may be substantially less than the cap amount. Vericel has established an internal monitoring system designed to help ensure compliance with the annual spending limits in California and is working to establish additional monitoring processes.
The annual limits do not include the following:
- Samples given to physicians and healthcare professionals
- Financial support for continuing medical education forums
- Financial support for health educational scholarships
- Payments for legitimate professional services, and any meals or expenses associated with the provision of such services
- Items of nominal value with a retail value of less than $10 (e.g., visual aids, reprints of medical journal articles)
- Patient educational materials provided to patients by their physician with the purpose of educating the patient or enhancing the patient’s understanding or management of the condition
Declaration of Compliance
As stated in its Compliance Program description, Vericel is committed to conducting its business ethically and in compliance with all applicable laws. To the best of its knowledge and based on a good faith understanding of the statutory requirements, Vericel has established a Compliance Program that meets the requirements set forth in California Health & Safety Code, Sections 119400-119402. Vericel has tailored its Compliance Program to meet the specific needs of Vericel and continuously assesses the effectiveness of the Compliance Program. Vericel has established an internal monitoring system designed to help ensure compliance with its respective annual spending limits in California and is working to establish additional corporate tracking and monitoring processes. Thus, subject to the limitations described above, Vericel declares that, as of the date of this declaration, Vericel is, in all material respects, in compliance with the Compliance Program and the California Health & Safety Code, Sections 119400-119402.
As recognized by the OIG Compliance Guidance, even an effective compliance program cannot eliminate the possibility that one or more individual employees engage in conduct that would be considered improper. Accordingly, this declaration is not intended and should not be construed to imply that Vericel has not identified any individual instances in which an employee has or may have violated one or more provisions of its Compliance Program. In such situations, Vericel takes reasonable and appropriate remedial or corrective action in a manner consistent with its Compliance Program.