RF Law on Competition Protection v. FCPA Natalya Thotahewage Head of Legal Johnson&Johnson LLC (Russia&CIS) June 24, 2011

FCPA requirement related to distributors Criteria for distributor selection, minimizing the number of distributors to reduce FCPA risks Due Diligence of Distributors (legal (companys incorporation, licenses etc, finance and FCPA integrity criteria Due Diligence for Sub-Distributors: 1) where US subsidiary has a direct involvement in hiring sub-distributor; 2) where sub-distributor distributor perform more than 50 % of distributorship overall business; 3) where sub-distributor performs more than 50 % of distributorship overall business as regards to US subsidiary products; Distributors shall inform US subsidiaries on appointment of sub- distributors May 19, 2010

FCPA requirement related to distributors (cont-d) Right to audit of the distributors activities related to US subsidiaries products specified in the distributorship contracts FCPA and Healthcare compliance training to distributors and sub- distributors induction for all employees involved Upon request of distributor Annual FCPA compliance certification of distributors and sub- distributors Other requirements arising from DOJ May 19, 2010

RF Law on Competition protection requirements April Distributor selection criteria Article 421 of RF Civil Code establishes the freedom of contract no public contract concept applicable as related to trading US sub-subsidiaries even dominant companies can refuse in supply of products if they have production and economically justified reason to refuse (Art 10, Law on Competition protection) Can US subsidiary can economically justify the refusal that the possible penalty for non-compliance with FCPA framework leads to significant economic losses? Please note that there is no FAS guidance for all market players exists to address the issue!!! Clear, fair, equal and verifiable criteria are needed. Due Diligence (due registration and pharmaceutical license in sufficient) Other forms of potential dominance abuse like inclusion of foreign law norms into contracts between companies of RF, especially if there is a protocol of disagreement (Art 10, Law on Competition protection), mandatory trainings and certification Redundant information on secondary sales (like sub0ditributor shipments, final clients (hospitals), prices for awarded auctions v. regional sales data to remunerate sales force (Art 11 Part 3, Law on Competition protection Coordination of economic activities/concerted actions) Informing of US subsidiaries about appointment of sub-distributor (Art 11 Part 3, Law on Competition protection Coordination of economic activities/concerted actions)

Interim first lessons learnt from Novonordisk case April NovonNodisk is accused for dominance abuse and entlitled to pay turnover penatlty NovoNordisk has challenged FAS decision in court with the court suspension of penalty payment Anticipated settlement agreement between NovoNordisk and FAS (as per Timofey Nizhegorodtsev speech of May 17 th ). Commercial policy shall be published at NovoNordisk website. It may increase the number of wholesalers rather than distributors and increase operational (logistical cost of the company). Template contract shall be placed at NovoNordisk website. Shall it become the public contract from civil law perspective or there will be a room for justified supply refusal as specified above? Criteria for distributor selection with partial implementation of FCPA criteria (to avoid vague ethical reasons) Fixed reasonable time for Due Diligence of distributors

Next steps April Dialog between FAS and DOJ shall be initiated to elaborate common vision and recommendation to prevent US subsidiaries to abide with one laws violating the others Increase awareness among US subsidiaries of such clashed in laws (AmCham event for all US subsidiary members) Seeking for general clarification of FAS to Due Dilihence and Distributor selection criteria to be published at FAS webside and at legal databases Follow-ups on NovoNordisk and other similar cases, even outside the Pharma industry, on big Pharma event ocassions Same consequences will apply to UK Anti-Bribery Act

Questions Thanks for the patience and attention! April XX 2010