In-house code: Specific guidelines regarding a company s own promotion. All members are requested to formulate an in-house code.

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1 Comparison of the AdvaMed Code of Ethics and the Japanese JFMDA Promotion Code Executive Summary: The Japan Federation of Medical Devices Associations, (JFMDA), consists of some 20 associations representing approximately 5000 companies engaged in the development, production and distribution of medical and health-care devices, equipment, instruments and materials. JFMDA has four main functions: 1.) Government Relations, (acting as a liaison between the member associations and various government agencies); 2.) Information Services, (providing information, lectures, seminars to members, along with public relations activities); 3.) Study and Research Activities, (conducting research to address industryrelated issues or needs of member companies and government agencies); and 4.) International Affairs, (investigating standards and regulations and promoting mutual recognition and harmonization activities). The vision JFMDA is focused on providing the latest technologies to healthcare professionals (HCPs) and patients, ensuring product safety and increasing global competitiveness. JFMDA has a Code of Ethics (called the Promotion Code) and a Charter for Business Behavior. Together with the Fair Competition Code of the Medical Devices Industry in Japan, they provide behavioral standards for normal business practices in the medical device industry. They do not provide guidance on interactions of the industry with HCPs. Consequently, in this analysis, sections in the JFMDA Promotion Code or the Fair Competition Code are matched as closely as possible with comparable sections of the AdvaMed Code of Ethics. AdvaMed Code of Ethics on Interactions with Health JFMDA Code of Ethics and the Fair Competition Code Care Professionals (FCC) Approved: December 18, 2008, Effective July 1, 2009 Latest Revision: March 25, 2005 I. Preamble: Goal and Scope The following terms are defined in the Promotion Code of the Medical Devices Industry, Terminology: 1. Defines the terms: Companies : companies that develop, produce, manufacture, and market medical products, technologies and related services and therapies used to diagnose, treat, monitor, manage and alleviate health conditions and disabilities. These products, technologies and services are defined as Medical Technologies. Health Care Professional : (HCP) those individuals or entities involved in the provision of health care services and/or items to patients, which purchase, lease, recommend, use, arrange for the purchase or lease of, or prescribe Companies Medical Technologies in the United States. 2. Medical Technologies: makes a distinction between Medical Technologies which are highly dependent on hands on HCP interaction, and drugs and biologics, which act on the human body by pharmacological, immunological or metabolic means. 3. Interactions with HCPs: explains the scope and types of interactions with HCPs. a) Promote the advancement of Medical Technologies b) Enhance the Safe and Effective use of Medical Technologies Code: a written code of behavior to which Members shall adhere. Dealer and lease firm of medical devices: a firm granted a license for advanced control medical devices, a firm that notified its control medical devices and a dealer and lease firm of general medical devices. "Fair Competition Code: the industry s voluntary rules concerning premiums offered or information to be represented and displayed by firms or trade associations under the certification of the Fair Trade Commission, In-house code: Specific guidelines regarding a company s own promotion. All members are requested to formulate an in-house code. Manufacturer and distributor of medical devices: A firm granted a license according to pertinent sections of the Pharmaceutical Affairs Law. Medical device: an item used by a medical institution and other similar institution for the purpose of medical care. Medical and other similar institution: a hospital or Page 1 Notes The Terminology is a companion document to the Promotion Code of the Medical Devices Industry. Reference is also made to the Pharmaceutical Affairs Law.

2 c) Encourage Research and Education d) Foster Charitable Donations and Giving 4. The Purpose of the Code of Ethics: recognizes that HCP s first duty is to act in the best interest of patients, and the obligation to facilitate ethical interactions between Companies and HCPs. 5. A footnote notes that the principles are derived from a number of authorities, including the federal Anti-Kickback Statute. Reference to unlawful inducement relates to the Anti-Kickback Statute prohibitions. clinic, a health services facility for the aged or a pharmacy. Medical professionals: doctors, nurses, technicians, and other personnel engaged in medical care according to doctors instructions. Members: companies of the associations who have joined the JFMDA. Normal business practice: rules of common sense of the business society. Business practice, which is generally followed but is not considered to be normal practice by many firms, cannot be regarded as normal business practice. Personnel in the field of medical care: the founder of a medical or similar institution, its director, medical professional, or another employee. Premiums: an economic benefit provided in connection with trade as a means of inducing customers. Out of premiums mentioned herein, goods and money and the like have the following meanings: Goods: include economic benefits except services and money and the like, as well as the provisions of attached products. Money and the like: includes cash and notes, money certificates, bank deposit certificates, bond or share certificates, shopping certificates and other negotiable securities as substitutes for money, payments of travel expenses, and assumptions of monetary liabilities. Premiums, however, do not include economic benefits regarded as discounts, as after-sale services, or as pertaining to products. Promotion: a proper sales promotion activity for the purpose of the adoption or use of medical devices. Page 2

3 II. Code of Ethics Compliance All Companies are strongly encouraged to adopt the Code and implement effective compliance programs. 1. Annual Certification Companies that adopt the Code are strongly encouraged to submit an annual certification that the Company has adopted the Code and has implemented an effective compliance program. Certification should be signed by the CEO and Chief Compliance Officer. AdvaMed will publish a list of Companies that have certified. 2. Contact Information AdvaMed member Companies must, and non-members may supply contact information for the Company s Compliance Department or anonymous hot line to facilitate reporting of possible violations. AdvaMed will publish this information. 3. Elements of an Effective Compliance Program: Companies are strongly encouraged to follow the seven elements of an Effective Compliance Program. a) Written policies and procedures; b) Designated compliance officer and compliance committee; c) Conduct effective training and education; d) Develop effective lines of communication (including an anonymous reporting function); e) Conducting internal monitoring and auditing; f) Enforcing standards through well-publicized disciplinary guidelines; and g) Responding promptly to detected problems and undertaking corrective action. 4. Note: Companies adopting the Code shall communicate the principles of the Code to their employees, agents, dealers and distributors with the expectation that they will adhere to the Code. Companies shall encourage ethical business practices and socially responsible industry conduct and shall not engage in any unlawful inducement. Obligations and Practices of Members Obligations of Members: Members shall adhere to basic philosophy which means being fully aware of the importance of social missions as a company, being engaged in medical businesses, sharing values with society, proposing new values through their businesses and fostering a healthy and happy life. Members shall formulate an in-house control system in order to properly promote it in accordance with this basic philosophy. Practices of Members: Members shall be aware of social missions as a company handling medical devices and comply with applicable laws and regulations and adhere to ordinances. They shall also formulate a definite code of practice standards based on "The Code of Ethics" and JFMDA s "Promotion Code" and shall educate/train their employees to behave in accordance with it. All Members shall follow the Practices shown below: (1) Establish an in-house control system so that proper and continuous promotion can be implemented. (2) Request and encourage the observance of the Code for group companies in Japan and foreign countries. (3) Provide, in a proper manner, medical institutions and other similar institutions with the latest data based on established scientific grounds. (4) Aim to be an excellent company, complying with international standards for safety and taking necessary measures toward environmental issues. Obligations of Top Management In order to meet the expectations and gain the confidence of society, top management of Members shall implement the following tasks with a high order of ethics and a strong sense of responsibility according to "The Charter of Business Behavior": Reference: Section I., Subsection 1 of the Promotion Code of Ethics There is no requirement in the JFMDA that companies certify compliance with the Code or the FCC. It does encourage members top management to promote awareness of compliance Codes and for member companies to have a committee to review marketing practices and ethical behavior. The Obligations and Practices of Members, addresses several other obligations, including product development, manufacturing and marketing, market research and advertising and promotion. It brings into discussion other obligations in bioethics, environmental preservation, handling confidential information and proper disposal of medical devices. Page 3

4 III. Company-Conducted Product Training and Education 1. The Code defines: Training: training on the safe and effective use of Medical Technologies Education: communicating information directly concerning or associated with the use of Companies Medical Technologies, e.g., information about disease states and benefits to certain patient populations. FDA Required Training The Code points out the FDA often mandates training and education to facilitate the safe and effective use of Medical Technologies. 2. Companies should adhere to the following principles concerning training and education: a) Conducive Setting Programs should be conducted in a setting conducive to the effective transmission of information. Settings may include clinical, educational or conference sites including hotels and other meeting facilities. They may also include the HCPs site. b) Hands on Training Training should be conducted at training facilities, medical institutions or laboratories. Training staff should be qualified. Sales employees may conduct the training if they have the technical expertise. c) Modest meals and refreshments may be provided if they are modest in value and subordinate in time to the training or education. d) Travel and Lodging Out-of-town travel and modest lodging may be provided the HCPs if there are objective reasons to support the need. e) No Guests Meals, refreshments, travel and lodging may be provided only to HCPs with a bona fide reason to attend the training. (1) To realize this Code, top management of Members shall promote greater awareness and understanding for all parties concerned, organize an in-house system and take the lead in implementing it. (2) In case of incidents contrary to this Code, top management of Members must promptly investigate the cause for the incident, solve the problems and make the utmost efforts to avoid recurrence at their respective organizations. Holding Seminars When holding a seminar on product explanations for medical professionals, Members shall take reasonable care not to take advantage of scientific opportunities by providing the attendants with professional information. When Members host social gatherings or receptions, or present some gifts, they shall adhere to the "Fair Competition Code". Page 4 Lectures and Meetings With respect to premium or the like, offers at lecture meetings or the like, and other purposes for medical devices marketed by a company stipulated, the following shall pertain: (1) The term "lecture meetings and other purposes for medical devices marketed by a company" shall mean any meeting, irrespective of the title of the meeting such as an explanatory meeting or seminar, to explain medical devices marketed by a company to a number of medical institutions and other similar institutions. (2) Attention shall be paid to the venue, facility, and other means of holding such meetings, so to avoid being misconstrued as invitations for travel or entertainment. (3) The following is acceptable payment of expenses for participation; (a) Payment of remuneration, expenses and honoraria to a lecturer or like person, requested by a company, within the amount that is considered acceptable in light of common practices shall be permissible. Reference: Section I., Subsection 9 of the Promotion Code. Reference: In the Enforcement Section of the FCC, Article 4 provides a reference to lectures and meetings. This section is pertinent as well to Supporting Third-Party Educational Conferences (AdvaMed Section IV), Sales, Promotional and Other Business Meetings (AdvaMed Section V), and Modest Meals Associated with Health Care Professional Business Interactions (AdvaMed Section VIII), and is repeated there for convenience.

5 (b) Payment of necessary minimum amount of travel expenses to the participants, other than lecturers, shall be permissible. (c) Receptions, not considered extravagant or excessive, held in connection with the meeting shall be permissible. IV. Supporting Third-Party Educational Conferences Bona fide independent, education, scientific and policymaking conferences include educational conferences include conferences sponsored by national, regional, or specialty medical associations and conferences sponsored by accredited continuing medical education providers. Companies may support these through: Conference Grants Grants must be provided to the conference sponsor to reduce conference costs, or to training institutions to allow attendance by medical students, residents, fellows and other HCPs in training. Grants may be provided when: a) The gathering is primarily dedicated to promoting objective scientific and educational activities, and b) The training institution or conference sponsor selects the attending HCPs in training. Grants should be paid ONLY to organizations with a genuine educational function The may be used to reimburse legitimate expenses for bona fide educational activities. The conference sponsor controls the selection of program content, faculty, methods and materials. Conference Meals and Refreshments Companies may provide: Funding to conference sponsors to support the provision of meals and refreshments to conference attendees Meals and refreshments themselves if they are provided: (1) To all HCP attendees (note exception below) (2) Consistent with applicable standards established by the conference sponsor and any accrediting body. Note: meals and refreshments provided to fewer Scientific Display of Unapproved Medical Devices When displaying unapproved medical devices, only those that have been requested from and permitted by the chair of a medical conference for the purpose of enhancement and advances in scientific research shall be allowed. In this case, Members shall adhere to the industry s voluntary standard, "Guideline Concerning the Display of Unapproved Medical Devices, etc." issued by JFMDA in August, Page 5 Lectures and Meetings With respect to premium or the like, offers at lecture meetings or the like, and other purposes for medical devices marketed by a company stipulated, the following shall pertain: (1) The term "lecture meetings and other purposes for medical devices marketed by a company" shall mean any meeting, irrespective of the title of the meeting such as an explanatory meeting or seminar, to explain medical devices marketed by a company to a number of medical institutions and other similar institutions. (2) Attention shall be paid to the venue, facility, and other means of holding such meetings, so to avoid being misconstrued as invitations for travel or entertainment. (3) The following is acceptable payment of expenses for participation; (a) Payment of remuneration, expenses and honoraria to a lecturer or like person, requested by a company, within the amount that is considered acceptable in light of common practices shall be permissible. (b) Payment of necessary minimum amount of travel Reference Section 10 of the Promotion Code. There is not a comparable section dealing with conference grants. Reference: In the Enforcement Section of the FCC, Article 4 provides a reference to lectures and meetings. This section is pertinent as well to Company- Conducted Product Training and Education, (AdvaMed Section III), Sales, Promotional and Other Business Meetings (AdvaMed Section V), and Modest Meals Associated with Health Care Professional Business Interactions (AdvaMed Section VIII), and is repeated there for convenience.

6 than all HCP attendees must meet all the principles stated in Section VIII of the Code, and must be modest in value, subordinate in time and focus to the purpose of the conference and separate from the educational portion of the conference. Faculty Expenses Grants may be made for reasonable honoraria, travel, lodging and modest meals for bona fide faculty members. expenses to the participants, other than lecturers, shall be permissible. (c) Receptions, not considered extravagant or excessive, held in connection with the meeting shall be permissible. Advertising Companies may purchase advertisements and lease booth space for Company displays. V. Sales, Promotional, and Other Business Meetings Companies may conduct business meetings with HCPs: a) Business Discussion Discuss Medical Technology features, sales terms or contracts b) Meals Occasional modest meals and refreshments may be provided c) Travel When necessary, (e.g., plant tours or demonstration of non-portable equipment) reasonable travel costs and lodging may be provided d) No Guests Meals, refreshments, travel or lodging may not be provided for guests of HCPs or anyone without a bona fide interest in the information being shared at the meeting. Lectures and Meetings With respect to premium or the like, offers at lecture meetings or the like, and other purposes for medical devices marketed by a company stipulated in Article 5, Item 5 of the FCC, the following shall pertain; (1) The term "lecture meetings and other purposes for medical devices marketed by a company" shall mean any meeting, irrespective of the title of the meeting such as an explanatory meeting or seminar, to explain medical devices marketed by a company to a number of medical institutions and other similar institutions. (2) Attention shall be paid to the venue, facility, and other means of holding such meetings, so to avoid being misconstrued as invitations for travel or entertainment. (3) The following is acceptable payment of expenses for participation; (a) Payment of remuneration, expenses and honoraria to a lecturer or like person, requested by a company, within the amount that is considered acceptable in light of common practices shall be permissible. (b) Payment of necessary minimum amount of travel expenses to the participants, other than lecturers, shall be permissible. (c) Receptions, not considered extravagant or excessive, Reference: In the Enforcement Section of the FCC, Article 4 provides a reference to lectures and meetings. This section is pertinent as well to Company- Conducted Product Training and Education (AdvaMed Section III), Supporting Third-Party Educational Conferences (AdvaMed Section IV), and Modest Meals Associated with Health Care Professional Business Interactions (AdvaMed Section VIII), and is repeated there for convenience. Page 6

7 VI. Consulting Arrangements with Health Care Professionals Companies may pay HCP consultants fair market value for services that fulfill a legitimate business need and do not constitute an unlawful inducement. The following standards apply: Agreements should be written and describe all the services to be provided. Clinical research services should have a written research protocol. Legitimate need for the services should be identified and documented in advance of any arrangements. Selection should be based on the consultant s qualifications and expertise to meet the defined need. held in connection with the meeting shall be permissible. Concluding Agreements in Writing (1) Members shall conclude a written agreement prior to transactions with customers as well as prior to entrustment or requests to medical institutions and doctors for research, surveys or lectures, in order to make the terms and conditions of transactions clear and to carry out business activities in a safe, smooth and transparent manner. (2) Members shall comply with applicable laws and regulations in transactions with public institutions and operate business activities following their rules, if any. Reference Section 8, Subsection 10 of the Promotion Code. Compensation should be fair market value and not based on past, present or anticipated business. Expenses Companies may pay for actual, reasonable and documented expenses, including travel, modest meals and lodging, incurred by the consultant to carry out the arrangement. Venue and circumstances of any meetings should be appropriate for the subject of the consultation, and conducive to the effective exchange of information. Meals and refreshments should be modest in value and subordinate in time and focus to the primary purpose of the meeting. Recreation or entertainment should not be provided. Sales Involvement Sales personnel may provide input about the suitability of proposed consultant, but should not control or unduly influence the selection decision. Provisions on Payment of Royalties Companies should enter into a royalty arrangement only where the HCP makes a novel, significant or innovative contribution to the development of a product, technology, process or method. There is no comparable section dealing with payment of royalties. Calculation of royalties should preserve the objectivity of medical decision-making and avoid the potential for improper influence and should not be conditioned on a requirement to purchase, order or recommend the Company s product or Page 7

8 technology or a requirement to market the product or technology upon commercialization. Companies may elect to enter into separate agreements with HCPS for marketing services and are strongly encouraged to consider the appropriateness and practicality of excluding the HCP consultant s purchases from the calculation of royalty payments. VII. Prohibition on Entertainment and Recreation Companies should not provide or pay for any entertainment or recreational event or activity for any non-employee HCP. Examples include: golf, skiing. Hunting, sporting equipment and leisure or vacation trips. Such events or items should not be provided regardless of: (1) Their value, (2).whether the HCP is a speaker or consultant, or (3) whether the entertainment or recreation is secondary to an educational purpose. VIII. Modest Meals Associated with Health Care Professional Business Interactions Modest meals may be provided as an occasional business courtesy involving the presentation of scientific, educational, or business information, consistent with the following limitations: Purpose The meal should be incidental to the bona fide presentation of scientific, educational or business information, and should provided in a manner conducive to the presentation. It should not be part of an entertainment or recreation event. Setting and Location The setting should be conducive to bona fide scientific, educational or business discussion. Meals may occur at the HCP s place of business, however, if that place is not available or conducive to such discussions, meals may be provided off-site. Examples include: (1) where the medical technology cannot easily be transported to the HCP s location, (2) when it is necessary to discuss confidential product development or improvement information, or (3) where a private space cannot be obtained Restricted Premium Offers Examples of premium offers that violate the provisions of Article 3 are as follows; 1. Money and articles, travel, entertainment, conveniences and labors, and other services offered as a means of inducing selection or purchase of the medical devices to medical doctors, dentists or other medical professionals belonging to medical institutions and other similar institutions. 2. Gratuitous offer of medical devices, conveniences and labors, and other services to medical institutions and other similar institutions as a means of inducing selection or purchase of the medical devices. Lectures and Meetings With respect to premium or the like, offers at lecture meetings or the like, and other purposes for medical devices marketed by a company stipulated, the following shall pertain: (1) The term "lecture meetings and other purposes for medical devices marketed by a company" shall mean any meeting, irrespective of the title of the meeting such as an explanatory meeting or seminar, to explain medical devices marketed by a company to a number of medical institutions and other similar institutions. (2) Attention shall be paid to the venue, facility, and other means of holding such meetings, so to avoid being misconstrued as invitations for travel or entertainment. (3) The following is acceptable payment of expenses for participation; Page 8 Reference: Article 4 of the FCC. Article 3 of the FCC, Principles of Restriction on Premium Offers, states: The business entities shall not offer premiums to medical institutions and other similar institutions as a means of unjustifiably inducing transactions of medical devices. In Article 4, there is a reference to entertainment in paragraph 1. Reference: In the Enforcement Section of the FCC, Article 4 provides a reference to lectures and meetings. This section is pertinent as well to Company- Conducted Product Training and Education (AdvaMed Section III), Supporting Third-Party Educational Conferences (AdvaMed Section IV), and Sales, Promotional and Other Business Meetings (AdvaMed Section V), and is repeated there for convenience.

9 on site. Participants (No Guests) Meals may be provided only to HCPs who actually attend the meeting, and may not be provided for an entire staff where everyone does not attend the meeting, i.e., no dine and dash programs. Meals may not be provided for guests of HCPs or any one not having a bona fide professional interest in the information being shared. (a) Payment of remuneration, expenses and honoraria to a lecturer or like person, requested by a company, within the amount that is considered acceptable in light of common practices shall be permissible. (b) Payment of necessary minimum amount of travel expenses to the participants, other than lecturers, shall be permissible. (c) Receptions, not considered extravagant or excessive, held in connection with the meeting shall be permissible. IX. Educational items; Prohibition on Gifts Items that benefit patients or serve a genuine educational function occasionally may be provided to HCPs. Items should have a FMV of less than $100, except text books and anatomical models. Items must not be capable of non-educational or nonpatient-related uses. Non-educational branded promotional items may not be given to HCPs, even if of minimal value and related to the HCPs work or benefit patients. Items such as wine, flowers, cookies, gift baskets, holiday gifts etc., or cash or cash equivalents are not permitted. Principle of Restriction on Premium Offers The business entities shall not offer premiums to medical institutions and other similar institutions as a means of unjustifiably inducing transactions of medical devices. Restricted Premium Offers Examples of premium offers that violate the provisions of Article 3 are as follows; (1) Money and articles, travel, entertainment, conveniences and labors, and other services offered as a means of inducing selection or purchase of the medical devices to medical doctors, dentists or other medical professionals belonging to medical institutions and other similar institutions. Reference Articles 3 through 6 of the FCC. (2) Gratuitous offer of medical devices, conveniences and labors, and other services to medical institutions and other similar institutions as a means of inducing selection or purchase of the medical devices. Unrestricted Premium Offers Examples of offers of premiums or economic benefits that do not violate the FCC are as follows; (1) Offer of articles or conveniences or other services required for proper use of medical devices marketed by a company or to cope with an emergency, Reference: Article 6 of the FCC. (2) Offer of medical information or supply of explanatory Page 9

10 leaflets or materials for medical devices marketed by a company, (3) Offer of sample medical devices in compliance with the standards stipulated in the Enforcement Rule, (4) Payment of remuneration and expenses for research or study regarding medicine or medical devices such as postmarketing surveillance or clinical studies of the medical device consigned to medical institutions and other similar institutions, (5) Offer of articles or services not considered extravagant or excessive pertaining to seminars or the like, organized for the medical institutions and other similar institutions, to deepen understanding of the medical devices marketed by a company or payment of attending expenses thereto. Restriction on Premium Offers to Medical Devices Distributors Medical devices manufacturers shall not offer premiums to medical devices distributors in violation of the provision of Article 19 (Prohibition of Unfair Trade Practices) concerning The Prohibition of Private Monopoly and Maintenance of Fair Trade Act (Act No. 54, 1947). Premium Offers, etc. The Enforcement Section of the FCC adds the following language with respect to premium offers: Reference: Article 5 of the Enforcement Section of the FCC. Economic benefits as specified below shall not contravene the Provisions of Article 3 of the FCC, even if they are considered as premium offers. (1) Offer of premiums within the quantity which is considered reasonable in light of normal business practices. (2) Gifts which are offered, or receptions which are held, in line with customary social gatherings and which are not considered extravagant or excessive in light of common practices. (3) Gifts which are offered, or receptions which are the Page 10

11 customary memorial ceremonies of a company or medical institution or other institution and which are not considered extravagant or excessive in light of common practices. X. Provision of Coverage, Reimbursement and Health Economics Information Companies may provide accurate and objective reimbursement information on their products to HCPs, professional or patient organizations, patients and payors as follows: Identifying the clinical value of their technologies and services Collaborating on joint advocacy on coverage, reimbursement and health economics issues Providing information indentifying coverage, codes and billing options regarding technologies on which they may be used Providing information about the economically efficient use of their technologies Providing information related to available reimbursement revenues and associated costs Providing information relating to changes in coverage or reimbursement amounts Providing support in the appropriate and efficient use of their technologies Assisting to obtain coverage decisions and in the preparation and submission of coverage requests, prior authorizations and appeals. Companies may not interfere with HCPs independent clinical decision making or provide information as an unlawful inducement or suggest mechanisms for billing for unnecessary services or fraudulent practices to achieve inappropriate payment. XI. Research and Educational Grants and Charitable Donations Companies may provide such grants and donations but not as an unlawful inducement. Companies should: a) Adopt objective criteria that exclude purchasing value of the recipient b) Implement procedures to ensure such grants are not used as an unlawful inducement c) Document such grants and donations. No Equivalent Section. Remuneration for Case Reports Remuneration for case reports in post marketing surveillance stipulated in Article 5, Item 4 of the FCC shall be in accordance with the following standards; (1) The term "case reports" shall mean that medical doctors or like persons, in accordance with the request of a medical device manufacturer, prepares a report concerning the efficacy, safety, and quality of a certain type of post marketing medical device in a particular format regarding the Ref: Article 3 of the FCC. There is no equivalent section relating to educational grants or charitable donations. Page 11

12 Companies sales personnel may provide input to, but not unduly influence grant and donation decisions or recipient selection. Research Grants should have well-defined objectives and milestones and may not be linked to purchases of Medical Technologies Educational Grants companies may make such grants to conference sponsors or training institutions but not to individual HCPs Advancement of Medical Education Companies may make grants to support genuine education of medical students, residents and fellows (See also Section IV) Public Education- Companies may make grants to support patient or public education on health care topics Charitable Donations Companies may make donations to organizations with bona fide charitable missions such as supporting indigent care, or patient and public education. cases where a medical doctor or like person, has in fact used or prescribed the said medical device. (2) Under the pretext of remuneration for case reports, money shall not be offered as a means of inducing selection or purchase of offerer s medical devices: therefore, the following matters shall be complied with; (a) No request for a case report shall be made to a medical institution and other similar institution which has not adopted nor purchased the medical device surveyed, nor on the condition that the said medical device will be adopted, continue to be purchased or increase in purchased amount. (b) The number of cases surveyed shall be reasonable in light of the purpose or content of the survey. (c) The requests shall be made to medical institutions and other similar institutions which can perform the purpose of the survey. (d) The requested institutions or the like shall not be biased toward particular areas or particular type of medical institutions and other similar institutions in light of the purpose of the survey (e) Excessive number of case reports shall not be requested for clinical cases handled by the medical institutions, or doctors, etc. (f) Requests for case reports shall be made in writing. (g) Remuneration for case reports shall not be more than an objective and fair amount calculated reasonably. XII. Evaluation and Demonstration Products This section of the Code discusses the provision of evaluation and demonstration products and is not intended to address any other arrangement. Evaluation Products: Provided at no charge to assess functionality and to Page 12 Sample Medical Devices The offering standards on sample medical devices stipulated in Article 5, Item 3 of the FCC shall be as follows; (1) Definition of "sample medical devices" The term "sample medical devices" shall mean the medical devices offered free of charge to medical institutions and Reference: Article 2 of the FCC.

13 determine future purchase and use of that product Expected to be used in patient care a) Single Use/Consumable/Disposable- may be provided in quantity reasonably necessary for adequate evaluation b) Multiple Use/Capital- furnished only for the time reasonably necessary for adequate evaluation. The terms of such an evaluation should be set in writing, Companies should retain title to the product, and the product should be removed promptly upon completion of the evaluation. Demonstration Products: Typically unsterilized single-use products typically used for HPC and patient awareness, education and training. Not expected to be used in patient care. Identified as not intended for patient use and typically designated as Sample, or Not for Human Use, on the packaging and/or other documentation that accompanies the product. Companies should provide HCPs with documentation disclosing the no-charge status of evaluation and demonstration products. other similar institutions so that the medical professionals can confirm outward characteristics of the medical devices concerned such as shape or can confirm and evaluate efficacy and safety of the medical devices under clinical testing use prior to routine use of the medical devices. (2) Offering Standard (a) Sample medical devices shall be labeled in a way that differentiates them from the marketed products. (b) Sample medical devices shall be supplied as per minimum quantity necessary for confirmation or evaluation of the product as stipulated in the preceding item. (c) Offer shall be made only when request in writing is submitted by medical doctor or like person, to use for clinical testing. Offering sample medical devices Members shall restrict the quantity of sample medical devices which are supplied to medical professionals as a means to furnish information. The quantity shall be kept to a minimum level necessary to help medical professionals confirm and evaluate appearance features, quality, effectiveness and safety for such devices. Offering medical devices on loan Before making loan of medical devices to medical institutions or other similar institutions, Members shall confirm the terms and conditions of the loan in writing, including items such as purpose, reason, number of cases (minimum), period, etc. Reference: Section 8, Subsection 7 of the Promotion Code. Reference: Section 8, Subsection 8 of the Promotion Code. No Equivalent Section Promotion in Foreign Countries Members shall provide information on medical devices to medical professionals in foreign countries, whether directly or indirectly, by following applicable laws and regulations and industry s voluntary standards pertaining to each country. Reference: Section 11 of the Promotion Code. Page 13

14 No Equivalent Section FCC Enforcement The referenced sections of the FCC direct business entities to cooperate with the Japan Fair Trade Council of the Medical Devices Industry (JFTC) to ensure smooth enforcement of the FCC. They provide guidance on Investigation of Violations (Article 9), Penalties for Violations (Article 10), and Procedures for Violations (Article 11). Penalties for violations or failure to cooperate with the JFTC can include monetary fines and / or expulsion from the FCC. There are also procedures for making appeals to JFTC decisions. Reference: Articles 8 through 11 of the Enforcement Section of the FCC< Page 14