California Compliance Disclosure
updated January 30, 2023
This California Compliance Disclosure (“Compliance Disclosure”) is provided pursuant to the requirements of CAL. HEALTH & SAFETY CODE §§ 119400 – 119402, which requires that certain pharmaceutical and medical device companies adopt and make public Comprehensive Compliance Programs (“Compliance Programs”) that govern such companies’ marketing and promotional activities.
Apollo Endosurgery, Inc. (“Apollo”) is a medical device manufacturer and marketer headquartered in Austin, Texas. Apollo’s Compliance Program is global in scope and incorporates the highest standards of ethical and legal conduct as expressed in laws, rules and regulations applicable to the many territories in which Apollo does business. The Compliance Program is primarily structured to follow Office of the Inspector General of the US Department of Health and Human Services (“OIG”) Compliance Program Guidance documents, as well as the Federal Sentencing Guidelines’ Seven Elements of an Effective Compliance Program (endorsed by the OIG and set forth in the sections below). The policies and procedures issued under the Compliance Program are appropriate to Apollo and are modeled on (and often more strict than) guidance set forth in the AdvaMed Code of Ethics on Interactions with Healthcare Professionals, MedTech Europe Code of Ethical Business Practice, and various other self-regulatory codes applicable to where Apollo does business.
The Compliance Program is designed to assist Apollo in maintaining its reputation of good corporate citizenship and the high levels of trust Apollo has established in the global marketplace. Apollo’s Compliance Program aids Apollo by giving Apollo personnel specific direction in preventing, detecting and resolving compliance challenges. Apollo is committed to ensuring that its personnel are trained comprehensively and understand their duties under the Compliance Program.
Apollo investigates and resolves all reported compliance concerns in a timely manner; reporting compliance concerns is each Apollo personnel’s obligation, and non-compliance with this or any other Compliance Program obligation may result in disciplinary action up to and including termination of employment or contract.
As of the date of this Compliance Disclosure, Apollo believes that its operations are in compliance with its Compliance Program and the provisions of CAL. HEALTH & SAFETY CODE §§ 119400 – 119402.
This Compliance Disclosure is made solely for the purpose of complying with the California law cited above and should not be read in isolation from Apollo’s other discussions of its compliance related activities and information currently disclosed or disclosed in the future in its public statements, press releases, securities filings, and elsewhere. To see a copy of Apollo’s Code of Business Conduct and Ethics, please click here. Questions regarding Apollo’s Code of Business Conduct and Ethics and/or this Compliance Disclosure may be addressed to Brian Szymczak, Vice President of Legal and Compliance at (512) 279-5153, or at brian.szymczak@apolloendo.com.
Element 1: Written Policies and Procedures
Apollo’s written policies and procedures – including the Code of Business Conduct and Ethics and policies and procedures Apollo has put in place and published to its personnel – emphasize individual and corporate responsibility for compliance with all applicable laws and regulations and adherence to the highest ethical standards. All Apollo personnel worldwide must understand and comply with these obligations, and Apollo trains its personnel to ensure that they do so comply.
The Apollo Code of Business Conduct and Ethics (the “Code of Conduct”) describes Apollo’s commitment to operate in accordance with accepted standards of business integrity, Apollo policies, and applicable laws and regulations. Apollo’s Vice President of Legal and Compliance ensures that the Code of Conduct is regularly reviewed and offers revisions to a committee of the CEO and other senior business leaders responsible for compliance operations.
The Code of Conduct and Apollo’s compliance policies provide explicit guidance aimed at ensuring the integrity of Apollo personnel’s relationships with customers and other Healthcare Professionals (“HCPs”) across the globe. Apollo’s compliance policies and procedures closely model the AdvaMed Code of Ethics for Interactions with Healthcare Providers and incorporate appropriate laws and standards of conduct from each jurisdiction in which Apollo operates or does business (e.g., MedTech Europe, Medec/Canada, US state laws governing medical device companies, and the UK Bribery Act 2010). Apollo ensures that legal and compliance-related developments relevant to Apollo’s business are captured in the policies and procedures and that those foundational documents are revised, published and trained on as necessary to maintain compliance with applicable laws.
Consistent with CAL. HEALTH & SAFETY CODE § 119402, Apollo has established a written $2,500-per-calendar-year limit for certain promotional materials, items and/or promotional activities provided to California licensed healthcare professionals.
The spending limit, consistent with California statute, excludes the value of the following:
Travel expenses for attendance at company medical education and product training meetings.
Product samples.
Educational materials that directly benefit patients or are intended for patient use.
Short-term loan of a device to permit evaluation.
In-kind items used for the provision of charity care; and
Payment for legitimate professional healthcare services provided by a healthcare professional.
Element 2: The Vice President of Legal and Compliance Committee
The Apollo Compliance Program is designed to equip and empower the participation of Apollo personnel at all levels – from the Board of Directors and Apollo Senior Management to Sales Representatives, Distributors, accountants, engineers, and administrative personnel. Apollo has also established the senior management position, the Vice President of Legal and Compliance, with global responsibility over the Compliance Program. The Vice President of Legal and Compliance manages and oversees the day-to-day operations of the Compliance Program, and reports directly to the CEO and Audit Committee of the Apollo Board of Directors.
Apollo has also established a Compliance Committee that meets once a quarter to review the Compliance Program and advise the Vice President of Legal and Compliance regarding its operation. The Compliance Committee is made up of the CEO, the Vice President of Legal and Compliance, and leaders of key operational functions within Apollo, including Regulatory, Human Resources, Chief Medical Officer, Sales and Marketing.
Element 3: Training and Education
As part of their general compliance training, Apollo personnel must annually acknowledge and document that they have reviewed the Code of Conduct and the compliance policies and procedures and acknowledge their obligation to carry out their responsibilities in accordance with applicable law and Apollo policies and procedures.
The Vice President of Legal and Compliance ensures that all Apollo personnel receive generalized compliance training wherever they are in the world, as well as specialized training relevant to their day-to-day activities. Such training occurs at least annually, with additional training events as necessary for new personnel or to address significant changes in law or industry practices. The Vice President of Legal and Compliance also sends compliance updates to Apollo personnel as appropriate.
Element 4: Effective Lines of Communication
Apollo encourages candid and open communication between management and Apollo personnel regarding compliance concerns. Apollo has established (and communicated to personnel) multiple reporting channels, all of which are confidential, which offer personnel the means to report compliance concerns without fear of retaliation. Apollo not only encourages its personnel to report possible violations of the Code of Conduct, its policies and procedures, U.S. law, or another country’s anti-corruption laws, it requires such reporting: Failure to report suspected non-compliance may result in disciplinary action up to and including termination of employment or contract with Apollo.
Element 5: Auditing and Monitoring
Compliance concerns may be directed to numerous managers, supervisors and executives throughout the organization, and are ultimately reported to Apollo’s Vice President of Legal and Compliance, Brian Szymczak (who may be reached by phone at (512) 279-5153). Apollo also offers an Ethics Helpline, which is hosted by an independent third party and is available 24/7. Anyone who has a compliance concern or suspects a potential violation of our policies may contact our Ethics Helpline at 1-800-916-7037, company identifier 2736, or may report on-line at www.apolloendo.com/ethicshelpline. Callers may choose to remain anonymous, and information provided will be treated as confidential as far as possible. We will ensure that no action is taken against anyone who reports, in good faith, actual or suspected misconduct.
The Apollo Vice President of Legal and Compliance continuously monitors Apollo personnel’s compliance with the Compliance Program and Apollo policies and procedures. The Vice President of Legal and Compliance also conducts audits – both formal and informal – to address areas of risk.
Element 6: Enforcement and Discipline
Apollo Compliance Program documents establish the standards to which personnel are expected to adhere, as well as publish the procedures Apollo follows in response to any reported or otherwise-suspected improper behavior. Apollo timely investigates such suspected and/or reported non-compliance and responds promptly with corrective action as appropriate and required, and consistent with Apollo’s Compliance Program policies and procedures.
Element 7: Response and Prevention
As noted above, Apollo timely investigates suspected and/or reported non-compliance and responds promptly with corrective and preventive actions tailored to address improper actions or prevent potential violations.
Actions in response to detected violations of the Compliance Program or applicable laws, rules or regulations can include, but are not limited to, corrective actions, prevention plans, disciplinary action (up to and including dismissal), revision of Compliance Program documents, and re-training. The Vice President of Legal and Compliance works with Apollo management to ensure that Apollo personnel who remain with the company successfully complete any corrective action or prevention plans and takes the lead on re-drafting documents and conducting follow-up training, as necessary. The Vice President of Legal and Compliance reports such investigation outcomes, corrective actions and prevention plans to the CEO and Compliance Committee. Certain matters are also reported to the Apollo Board of Directors’ Audit Committee, as appropriate.