Implementing International Codes of Conduct: The Daunting Issues and Questions Surrounding Global Compliance The Medical Device Regulatory, Reimbursement and Compliance Congress March 28, 2007

2 Today’s Agenda Introductions Introductions Challenges in today’s global compliance environment Challenges in today’s global compliance environment Panel discussion: Daunting questions regarding how to operationalize compliance in a global company Panel discussion: Daunting questions regarding how to operationalize compliance in a global company Self-Regulated Guidance – Creating an international structure and foundation for global compliance Self-Regulated Guidance – Creating an international structure and foundation for global compliance

Challenges in Today’s Global Operating Environment

4 Oversight and enforcement in Europe Oversight and enforcement in Europe Oversight and enforcement in developing regions Oversight and enforcement in developing regions The U.S. Foreign Corrupt Practices Act The U.S. Foreign Corrupt Practices Act Heightened risk for U.S.-based companies Heightened risk for U.S.-based companies Recent settlements Recent settlements Other investigations Other investigations Self-Regulatory Codes of Conduct Self-Regulatory Codes of Conduct

Panel Discussion: Daunting Questions in Today’s Global Compliance Environment

6 Panelist Members John Bentivoglio, Esq., Partner, King & Spalding LLP John Bentivoglio, Esq., Partner, King & Spalding LLP William Fitzgerald, Esq., Vice President, Global Compliance, Alcon Laboratories William Fitzgerald, Esq., Vice President, Global Compliance, Alcon Laboratories Daniel Garen, Esq., Senior Counsel, Seimens AG Daniel Garen, Esq., Senior Counsel, Seimens AG Donna Hill, Esq., Assistant General Counsel, SCA Americas Donna Hill, Esq., Assistant General Counsel, SCA Americas William J. Hrubes, Corporate Compliance Officer, Gambro, Inc. William J. Hrubes, Corporate Compliance Officer, Gambro, Inc. Laura O’Donnell, Chief Compliance Officer, Zimmer, Inc. Laura O’Donnell, Chief Compliance Officer, Zimmer, Inc. Rosemary E. Weghorst, Manager, Huron Consulting Group Rosemary E. Weghorst, Manager, Huron Consulting Group Christopher White, Esq., EVP, General Counsel and Secretary, AdvaMed Christopher White, Esq., EVP, General Counsel and Secretary, AdvaMed Scott Willoughby, Managing Director, Huron Consulting Group Scott Willoughby, Managing Director, Huron Consulting Group

7 Daunting Questions Today’s Global Compliance Environment Considering local laws and customs Considering local laws and customs Applying local law on a global level Applying local law on a global level What are the barriers to implementing a code of conduct across different cultures and languages? What are the barriers to implementing a code of conduct across different cultures and languages? Does “one size fit all”? Does “one size fit all”? Applying code from a developed/developing country to an underdeveloped country Applying code from a developed/developing country to an underdeveloped country What is the effect on competition? What is the effect on competition? Applying Codes of Conduct

8 Daunting Questions Today’s Global Compliance Environment What are the obligations of compliance delegates outside the United States? What are the obligations of compliance delegates outside the United States? Who is responsible for compliance at a country or regional level? Who is responsible for compliance at a country or regional level? How do we structure compliance (e.g., product line discipline) in order to be most effective? How do we structure compliance (e.g., product line discipline) in order to be most effective? Does compliance have the authority and autonomy it needs to drive compliance at the country level? Does compliance have the authority and autonomy it needs to drive compliance at the country level? Compliance Roles and Responsibilities

9 Daunting Questions Today’s Global Compliance Environment How do we audit the effectiveness of compliance delegates/officers outside the U.S.? How do we audit the effectiveness of compliance delegates/officers outside the U.S.? How can or should a medical device company handle corporate level vs. country/divisional level SOPs to ensure that appropriate controls are being adhered to, and that policies are not in conflict? How can or should a medical device company handle corporate level vs. country/divisional level SOPs to ensure that appropriate controls are being adhered to, and that policies are not in conflict? Compliance Roles and Responsibilities (continued)

10 Daunting Questions Today’s Global Compliance Environment What types of learning platforms should we be using? What types of learning platforms should we be using? How can you track global training and education requirements required for compliance? How can you track global training and education requirements required for compliance? What types of systems or documentation methods can be used to ensure attendance and comprehension? What types of systems or documentation methods can be used to ensure attendance and comprehension? How do we determine our end users of training (e.g., sales representatives, managers, line employees)? How do we determine our end users of training (e.g., sales representatives, managers, line employees)? How much customization/tailoring do we allow at a local level? How do we determine and monitor? How much customization/tailoring do we allow at a local level? How do we determine and monitor? What are the issues around translation of company policy and training into other languages? What are the issues around translation of company policy and training into other languages? Training and Education

11 Daunting Questions Today’s Global Compliance Environment Varying standards of behavior Varying standards of behavior Adapting to different cultures when “selling” the code of conduct abroad Adapting to different cultures when “selling” the code of conduct abroad Potentially culturally offensive statements Potentially culturally offensive statements Understanding religious customs Understanding religious customs Sensitivity to education and economic norms Sensitivity to education and economic norms Special challenges in developing nations Special challenges in developing nations Practices necessary to do business Practices necessary to do business Crime cartels Crime cartels Kickbacks vs. cultural customs of gift giving Kickbacks vs. cultural customs of gift giving Cultural Differences

12 Daunting Questions Today’s Global Compliance Environment Rights of work councils Rights of work councils Partnership with works councils Partnership with works councils Translation of documents Translation of documents Recognition of human rights Recognition of human rights Interactions with Company Union Representatives

13 Daunting Questions Today’s Global Compliance Environment Inconsistent definitions between countries Inconsistent definitions between countries Religious impact on definitions Religious impact on definitions Impact on character of item as it changes between countries Impact on character of item as it changes between countries Defining Medical Device

14 Daunting Questions Today’s Global Compliance Environment How should issues such as hotlines and other anonymous means of communication be managed and tracked at a global level? How should issues such as hotlines and other anonymous means of communication be managed and tracked at a global level? How do you ensure effective communication across cultures and languages? How do you ensure effective communication across cultures and languages? Who is responsible for “delivering the compliance message” in various countries and is it consistent with corporate standards? Who is responsible for “delivering the compliance message” in various countries and is it consistent with corporate standards? Use of confidential information Use of confidential information Guidance from the CNIL (French Privacy Authorities) Guidance from the CNIL (French Privacy Authorities) Recent activity – McDonald’s case Recent activity – McDonald’s case Communication and Privacy Issues

Self-Regulated Guidance: Providing a Foundational Structure

16 Self-Regulated Guidance: Providing a Foundational Structure In the absence of more definitive guidance from governmental authorities on the proper guidelines for industry-physician relations, manufacturer and provider self-regulatory codes offer the most definitive and generally well-accepted guidelines for such relationships.

17 Self-Regulated Guidance: Providing a Foundational Structure Eucomed: Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Sweden, Switzerland, and United Kingdom. Eucomed: Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Sweden, Switzerland, and United Kingdom. EDMA: Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Sweden, Switzerland, and United Kingdom. EDMA: Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Sweden, Switzerland, and United Kingdom. Regional Associations

18 Self-Regulated Guidance: Providing a Foundational Structure MIAA - Australia MIAA - Australia MEDEC - Canada MEDEC - Canada Medicoindustrien - Denmark Medicoindustrien - Denmark NEFEMED - Netherlands NEFEMED - Netherlands FENIN - Spain FENIN - Spain AdvaMed – United States AdvaMed – United States NEMA – United States NEMA – United States Country Associations

19 Self-Regulated Guidance: Providing a Foundational Structure Austria Austria France France Germany Germany Japan Japan Sweden Sweden Countries in which medical device companies follow pharmaceutical guidance

20 Self-Regulated Guidance: Providing a Foundational Structure The International Medical Device Compliance Code Compendium

Questions