Exhibit 10.43
Adopted by action of the Board of Directors: June 30, 2005
PHOTOMEDEX, INC.
COMPREHENSIVE COMPLIANCE PROGRAM
CODE OF ETHICS ON INTERACTIONS WITH HEALTH CARE PROFESSIONALS
REASON FOR THE PROGRAM
This Comprehensive Compliance Program is established by PhotoMedex, Inc. to
establish guidelines for the ethical and legal promotion of its products and to
guide the Company and its employees and consultants to avoid activities that may
be viewed as improper inducements to increase the purchase or use of the
Company's products. All references to the "Company," "we," "us" or "our" refer
to PhotoMedex, Inc. and its subsidiaries, including ProCyte Corporation. All
references to "employees," "you" or "your" refer to PhotoMedex's officers,
directors, employees and consultants.
PhotoMedex's Code of Ethics on Interactions with Health Care Professionals is an
integral part of our Compliance Program (the "Program") and may be used as a
reference tool on a daily basis. If you have questions about the Program, or our
policies in general, do not hesitate to contact your supervisor, the Compliance
Officer who has been appointed by our Board of Directors, or the chairman of the
Audit Committee of the Board of Directors (the "Audit Committee") for
clarification. We will use every reasonable effort to treat your questions as
confidential.
We are committed to complying with all applicable laws governing the sale and
marketing of and price reporting for, our products, and to maintaining the
privacy of any information that we may receive regarding patients that comes
into our possession. Failure to comply with the requirements of the Program may
subject you and/or the Company to criminal and civil penalties, money damages
and regulatory sanctions. Further, your failure to comply with this Program may
subject you to disciplinary action by the Company, which may include, but may
not be limited to, demotion or termination of your relationship with the
Company. In addition, a lack of compliance may result in the exclusion of the
Company from government reimbursement programs such as Medicare and Medicaid.
PRINCIPAL GUIDELINES OF THE PROGRAM
Maintenance of the Independent Judgment of Health Care Professionals
Your interactions with health care professionals should serve to benefit
patients and to enhance the practice of medicine by providing to physicians the
Company's approved scientific and educational information regarding our
products. The independent judgment of health care professionals must be
respected at all times. For purposes of this Program, the term "Health Care
Professionals" includes all individual and entities involved in the product
purchase decision, including persons licensed by state law to prescribe drugs or
medical treatments for patients, medical students, members of a drug formulary
committee, office and hospital staff, governmental agencies and group purchasing
entities.
Anti-Kickback Laws
The purpose of the "anti-kickback" laws is to prevent the receipt of
improper inducements by Health Care Professionals that could result in the
improper generation of business reimbursable under Federal or State health care
programs. The anti-kickback laws generally make it illegal to offer remuneration
to a Health Care Professional if the purpose of the remuneration is to encourage
or reward the prescribing or purchase of any reimbursable product or service.
Remuneration can be almost anything of value, including grants, referral fees,
cash, frequent flier miles, lottery tickets, entertainment or gifts. Any such
remuneration must not interfere with a Health Care Professional's independent
judgment regarding our products and services. Some guidance on permissible and
impermissible remuneration is already provided by a number of exceptions (or
"safe harbors") to the anti-kickback laws that allow us to offer certain price
and other concessions to customers without violating these laws. Under this
Program, we may provide modest gifts, hospitality, promotional items, samples
and other items and activities that are not inconsistent with the anti-kickback
laws. Please contact the Compliance Officer for a more comprehensive explanation
of the anti-kickback laws or if you have any questions regarding their
application.
ADMINISTRATION OF THE COMPLIANCE PROGRAM
Administration
Our Board of Directors (the "Board") is committed to the standards
contained in this Program and is responsible for overseeing the Company's
implementation and administration of the Program. The Audit Committee is
responsible for ensuring that these standards are reviewed and updated as
appropriate to reflect changes in the legal and regulatory framework applicable
to the Company, the Company's business practices and the business practices
within the Company's industry and the prevailing ethical standards of the
communities in which the Company operates.
The Compliance Officer reports to the Audit Committee, and is initially
responsible for providing interpretive guidance in applying these policies to
specific situations and for generally overseeing implementation and enforcement
of the policies set forth in this Program, as amended from time to time. In
addition, the Chief Executive Officer and other members of senior management
will lend their full support to the efforts of the Board and the Compliance
Officer in this regard.
We recognize that rapid changes in the business environment and the
regulatory framework constantly pose new ethical and legal considerations. No
set of guidelines, therefore, should be considered the absolute last word under
all circumstances. We encourage you to consult with your supervisor, the
Compliance Officer or the Chairman of the Audit Committee if there is any doubt
as to the proper course of action under the Program. We are committed to an open
and constructive environment in which compliance with the Program and the
Company's best interests are paramount. A shared willingness to raise concerns
in good faith is essential to such an environment.
Training
Proper education of the Company's employees and consultants is critical
for maintaining compliance with the laws and regulations affecting the Company.
The Compliance Officer, with the oversight of the Audit Committee, will work to
implement training programs in conjunction with the Program, which will be
reviewed and possibly revised on a periodic basis. Such training shall include
all employees and consultants of the Company that have direct or indirect
contact with Health Care Professionals, whether or not such employees or
consultants are involved in sales, marketing or administrative functions.
Employees with more direct involvement with sales and marketing to Health Care
Professionals may receive more intensive, specialized training. Employees having
direct or indirect contact with Health Care Professionals will be required, in
order to continue to perform the functions of their assignment at the Company,
to pass a test on a periodic basis for an understanding of the Program and the
Code of Ethics.
The Compliance Officer shall maintain records of training, which shall be
available to management, including those in Human Resources, to aid in the
periodic evaluation of the Program and the employees and consultants
participating in the training.
Reporting Violations of the Program
It is the responsibility of each of us to maintain this Program. We are
all required to assist the Compliance Officer and the Audit Committee in
ensuring adherence by everyone with the Program. Whenever you have information
regarding any possible violation that has taken place, is taking place, or is
anticipated to take place, you shall promptly report that information in a
manner that is consistent with the Program. We will not tolerate any retaliation
for any reason against anyone who has reported a suspected violation or concern
in good faith. We will use every reasonable effort to protect the identity of
those making reports to the extent possible, consistent with applicable law and
the need to conduct an adequate investigation.
Whenever you have information regarding any actual or possible violation,
you should first consider bringing such information to an immediate supervisor
or the Compliance Officer. Management is responsible for maintaining a workplace
environment that encourages and solicits frank and open communication regarding
compliance with the Program. However, if you do not feel comfortable bringing
such information to management or the Compliance Officer, or if the possible
violation involves the activities of management, you may report the information
directly:
o Submitting the information to the attention of the Compliance
Officer, the Audit Committee or any of its members, as applicable,
in writing and directing such correspondence to the following
address: 147 Keystone Drive, Montgomeryville, PA 18936-9638.
The Company encourages anyone who reports information to the Compliance
Officer, management or the Board to identify him or herself when making such a
report in order to facilitate the investigation of possible violations. The
Compliance Officer and the Board will use every reasonable effort to protect the
confidentiality of the identities of persons reporting information, consistent
with the need to perform an adequate investigation of any reported matter.
However, you may also report information directly and confidentially to the
Compliance Officer and the Chairman of the Audit Committee, on an anonymous
basis, by:
o Calling the Company's Hotline with Lighthouse Services at
1-800-398-1496. Alternatively, you may report via Lighthouse's
website at www.lighthouse-services.com or sending an email report at
reports@lighthouse-services.com. You may also write to Lighthouse at
1128 Wheatsheaf Road, Abington, PA 19001.
The Company requires each employee or consultant to fully cooperate with
investigations of possible violations of the Program by management, the
Compliance Officer or the Audit Committee. Any employee who has information
relevant to an investigation of possible violations of the Program must not
discuss or disclose such information to any person not authorized by the
Compliance Officer or the Audit Committee, except as may be required by law or
for the purpose of obtaining legal advice.
Treatment of Reported Violations
All reported possible violations will be forwarded to the Compliance
Officer for recordation in a log, as provided below. Upon receipt of a reported
possible violation, the Compliance Officer will, when possible, acknowledge
receipt of the report to the sender, unless the reported possible violation has
been submitted anonymously.
Possible violations of the Program will be investigated and reviewed by
the Compliance Officer, with the direction and oversight by the Audit Committee,
or such other person as the Audit Committee determines to be appropriate.
Prompt and appropriate corrective action will be taken when and as
warranted in the judgment of the Compliance Officer under the oversight of the
Audit Committee to ensure consistent enforcement of the Program. Such action
shall be reasonably designed to deter wrongdoing and to promote accountability
for adherence to the Program. Except as prohibited by applicable law,
appropriate corrective action may include, among other things, written notice of
violations, censure, demotion or reassignment, suspension (with or without
pay/benefits) and termination of the individual's employment. In determining
what action is appropriate in a particular case, the Compliance Officer under
the supervision of the Audit Committee shall take into account all information,
he or she deems material, which may include the nature and severity of the
violation, whether the violation was a single occurrence or part of a pattern of
occurrences, whether the violation appears to have been intentional or
inadvertent, whether the individual in question has been advised prior to the
violation as to the proper course of action and whether or not the individual in
question had committed other violations in the past.
The Compliance Officer will maintain a log of all reported violations,
tracking their receipt, investigation and resolution and shall prepare a
periodic summary report thereof for the Board. Copies of reported violations and
such log will be maintained in accordance with the Company's document retention
policy.
Monitoring and Periodic Review
The Audit Committee, with the assistance of the Compliance Officer and
other members of management, shall monitor the implementation and administration
of the Program. As part of that oversight, the Audit Committee shall review the
operations of the Company, and developments in the Company's industry, to
identify new and emerging risk factors for the Company in its relationships with
health care professionals. The Compliance Officer will report at least annually
to the Board as to the status of the Program, including its implementation and
an assessment as to its effectiveness and any areas that need improvement or any
changes that can be made to improve compliance.
PHOTOMEDEX, INC.
CODE OF ETHICS
ON INTERACTIONS WITH HEALTH CARE PROFESSIONALS
Adopted: June 30, 2005
Revised:
Goal and Scope of Code
PhotoMedex is a medical device and pharmaceutical company focused on
facilitating the cost-effective use of technologies for doctors, hospitals,
surgery centers and patients or consumers. Our business has five general
categories, or segments, of business activity. We are engaged in the business of
marketing the XTRAC(R) laser system, a 308 nanometer (nm) excimer laser for
dermatology (the "XTRAC") domestically and internationally and marketing
skin-care products on a prescription basis and over-the-counter basis, as
applicable. We are also engaged in the business of marketing surgical products
and surgical services using a variety of lasers and related products over a
range of specialties. We are committed to adhere to ethical and legal standards
in our relationship with Health Care Professionals (defined below). This Code of
Ethics (the "Code") is intended to govern, on a world-wide basis, our
interactions with Health Care Professionals.
The term Health Care Professionals, as used herein, includes all
individual and entities involved in the product purchase decision, including
persons licensed by state law to prescribe drugs or medical treatments for
patients, medical students, members of a drug formulary committee, office and
hospital staff, governmental agencies and group purchasing entities. All
references to "Company," "we," "us" or "our" refer to PhotoMedex. All references
to "Employees," "you" or "your" refer to PhotoMedex's officers, directors,
employees and consultants.
Our interactions with Health Care Professionals cover a broad range of
activities, including:
o Promotional Activities. We promote the sale and use of our products
to Health Care Professionals directly and indirectly through
representatives and distributors. We also promote through print
advertisements, direct mail and other media, such as the internet.
o Training and Product Related Education. We offer instruction,
education, training, service and technical support to Health Care
Professionals to ensure the safe and effective use of our products.
o Research and Education. We support bona fide medical research and
continuing medical education for Health Care Professionals to
increase access to new technology and enhance the delivery of safe,
efficacious and cost-effective health care.
o Advancement of Medical Technology. We collaborate with Health Care
Professionals to demonstrate the effectiveness of our products, to
improve the utility and applications of our products and to create
new products.
Our reputation for honesty, integrity and fair dealing with our customers,
others we do business with, our Employees and the communities we serve is our
most important asset. Accordingly, we require that you act in a manner
consistent with the letter and intent of the Code and the policies underlying
it. While the Code addresses many of the interactions we have with Health Care
Professionals, it is impossible to provide specific guidance for every
situation. Matters not specifically addressed in the Code, should be addressed
in light of the following principle:
PhotoMedex insists on ethical business practices and socially responsible
conduct and shall not use any unlawful inducement in order to sell, recommend or
arrange for the sale or use of its products or services.
Our failure to adhere to this Code could subject us to severe penalties,
including disqualification of the Company as a vendor, civil fines and
injunctions and criminal prosecution, fines and imprisonment.
Each of you is expected to become familiar with these policies and to
affirm your agreement to comply with these policies by signing the Compliance
Certificate that appears at the end of the Code. Any questions regarding the
Code or matters not covered by the Code should be referred to your immediate
supervisor, Compliance Officer or the Audit Committee of the Board (the "Audit
Committee").
Promotional Activities
We interact with Health Care Professionals to discuss product features,
contract negotiations, and sales terms, both in the Health Care Professionals'
offices and at meetings and conferences.
o Gifts. We may occasionally provide modest gifts to Health Care
Professionals, but only if the gifts benefit patients or serve a
genuine educational function. Other than gifts of medical textbooks
or anatomical models used for educational purposes, no gift should
have a fair market value of more than $100. Under no circumstances
may gifts be given in the form of cash or cash equivalents.
o Hospitality. We may pay for occasional hospitality only in the form
of modest meals and receptions for Health Care Professionals that
are conducive to the exchange of information. It is not appropriate
to pay for meals of guests of Health Care Professionals or any other
person who does not have a bona fide professional interest in the
information being shared at the meeting.
o Promotional Items. We may occasionally give Health Care
Professionals items of minimal value related to the Health Care
Professional's work or for the benefit of patients.
o Samples. We may provide appropriate samples or information to
illustrate the benefits of our products and services, or
opportunities for evaluation of our products and services.
The total value of gifts, promotional materials or any other items or
activities that we provide to a Health Care Professional shall not exceed $1,500
per calendar year. This amount applies to PhotoMedex as a company, not to an
individual Employee. This total does not include financial support for
continuing medical education forums, including Company training events,
financial support for health educational scholarships, or samples or information
given to physicians and other Health Care Professionals intended for free
distribution to patients. Neither does this total include benefits exempt under
the anti-kickback laws (e.g. product discounts) or payments to consultants or
investigators, provided such payments do not exceed the fair market value of the
services rendered.
Product Training and Education
We conduct and sponsor programs focused on education and training in the
safe and effective use of our products and services.
o Location. Programs should be conducted in clinical, educational,
conference or other settings, including hotel or other commercially
available meeting facilities, conducive to the effective
transmission of knowledge. Programs requiring "hands-on" training in
medical procedures should be held at training facilities, medical
institutions, laboratories, or other appropriate facilities.
o Training Staff. The training staff should have the proper
qualifications and expertise to conduct such training.
o Hospitality. We may provide Health Care Professional attendees with
hospitality only in the form of modest meals and receptions in
connection with these programs. Any such meals and receptions should
be modest in value and subordinate in time and focus to the
educational or training purpose of the meeting.
o Travel and Lodging. We may pay for reasonable travel and modest
lodging costs incurred by attending Health Care Professionals.
o Guests. It is not appropriate for us to pay for the meals,
hospitality, travel, or other expenses for guest of Health Care
Professionals or for any other person who does not have a bona fide
professional interest in the information being shared at the
meeting.
Third-Party Educational Conferences
We may support independent, educational or scientific conferences to
promote scientific knowledge, medical advancement and the delivery of effective
health care. These typically include conferences sponsored by national, regional
or specialty medical associations, conferences sponsored by accredited
continuing medical education providers and grand rounds.
o Educational Grants. We may provide educational grants when: (1) the
gathering is primarily dedicated to promoting objective scientific
and educational activities and discourse; and (2) the training
institution or the conference sponsor selects the attending Health
Care Professionals who are in training. Such grants should be paid
only to organizations with a genuine educational purpose or
function, and may be used only to reimburse the legitimate expenses
for bona fide educational activities. Such grants also should be
consistent with relevant guidelines established by professional
societies or organizations. While we may recommend faculty for a
conference, the conference sponsor should be responsible for and
control the selection of program content, faculty, educational
methods and materials. We may provide grants either directly to the
conference sponsor or to a training institution to reduce conference
costs, or to allow attendance by medical students, residents,
fellows and others who are Health Care Professionals in training.
o Meals and Hospitality. We may provide funding to the conference
sponsor to support the conference's meals and hospitality. Also, we
may provide meals and receptions for all Health Care Professional
attendees, but only if it is provided in a manner that is also
consistent with the sponsor's guidelines. Any meals, receptions and
hospitality should be modest in value and should be subordinate in
time and focus to the purpose of the conference.
o Faculty Expenses. We may make grants to conference sponsors for
reasonable honoraria, travel, lodging and meals for Health Care
Professionals who are bona fide conference faculty members.
Arrangements with Consultants, Clinical Investigators
We may engage Health Care Professionals to serve as consultants (including
as clinical investigators) to provide valuable bona fide consulting services,
including research, participation on advisory board, presentations at our
training or other professional meetings, and product collaboration. It is
appropriate to pay Health Care Professionals reasonable compensation for
performing these services.
o Need and Qualification. Consulting agreements may be entered into
only where a legitimate need and purpose for the services is
identified in advance. Selection of consultants should be on the
basis of the consultant's qualifications and expertise to address
the identified purpose, and may not be on the basis of the past or
potential volume or value of business generated by the consultant.
o Written Agreement and Protocol. All consulting arrangements must be
written, signed by the parties and must specify all services to be
provided. Where research services are provided, the agreement must
contain a statement of work or research protocol. All agreements
must be signed by our Chief Executive Officer or Chief Financial
Officer, or another officer specifically designated by them.
o Compensation. Compensation paid to consultants must be consistent
with the fair market value for the services provided.
o Meetings. The venue and circumstances for meetings with consultants
should be appropriate to the subject matter of the consultation.
These meetings should be conducted in clinical, educational,
conference, or other setting, including hotel or other commercially
available meeting facilities, conducive to the effective exchange of
information.
o Hospitality. Hospitality that occurs in conjunction with a
consultant meeting or consultant's services should be modest in
value and should be subordinate in time and focus to the primary
purpose of the meeting or services.
o Travel and Lodging. We may pay for reasonable and actual expenses
incurred by consultants in carrying out the subject of the
consulting arrangement, including reasonable and actual travel,
modest meals and lodging costs incurred by consultants attending
meetings with or on our behalf.
o FDA and other Regulatory Restrictions for Clinical Investigators.
Our relationships with clinical investigators in trials to be
submitted to the FDA or other regulatory agencies are governed by
conflict of interest, disclosure and other rules. Nothing in the
Code is intended to supersede or modify our strict compliance with
such regulations.
Provision of Reimbursement and Other Economic Information
We support accurate and responsible billing to Medicare and other payors.
We may assist Health Care Professionals by providing reimbursement information
regarding our products, including identifying or justifying appropriate
coverage, coding, or billing of products, or of procedures using those products,
or other economic information about our products and services. However, this is
only acceptable if (a) the information provided is accurate and (b) the
information is of a general nature and of insubstantial fair market value such
that our assistance does not supplant the judgment and responsibility of the
Health Care Professional.
Grants and Other Charitable Donations
We may make donations for a charitable purpose, such as supporting genuine
independent medical research for the advancement of medical science or
education, indigent care, patient education, public education or the sponsorship
of events where proceeds are intended for charitable purposes. We may not make
such donations for the purpose of unlawfully inducing Health Care Professionals
to purchase, recommend, use, or arrange for the purchase or use of our products.
o Recipients. Donations should be made only to charitable
organizations or in rare instances, to individuals engaged in
genuine charitable missions for the support of that mission.
o Advancement of Medical Education. We may make grants to support the
genuine medical education of medical students, residents, and
fellows participating in fellowship programs, which are charitable
or have an academic affiliation or, where consistent with the
preamble to this section, other medical personnel.
o Support of Research with Scientific Merit. We may make research
grants to support genuine medical research. The purpose of the grant
must be clearly documented.
o Public Education. We may make grants for the purpose of supporting
education of patients or the public about important health care
topics.
o Authorization. Any request for charitable donations must be made to
and approved by the Compliance Officer.
International Interactions with Health Care Professionals
We recognize that customs, practices, laws and regulations vary throughout
the world. However, it is our intent that the underlying purposes of the Code,
to ensure ethical and legal relationships with Health Care Professionals, are
equally applicable inside and outside the United States. Interactions that may
be customary and not illegal in a particular country may still be unlawful under
U.S. law and subject PhotoMedex and the persons involved to criminal liability.
PHOTOMEDEX, INC.
COMPLIANCE PROGRAM AND CODE OF ETHICS
COMPLIANCE CERTIFICATE
I have read and understand the Company's Comprehensive Compliance Program
and Code of Ethics on Interactions with Health Care Professionals (the "Code").
I will adhere in all respects to the ethics and standards of conduct described
in the Code. I further confirm my understanding that any violation of the Code
will subject me to appropriate disciplinary action, which may include, but is
not limited to, demotion or discharge.
I certify to the Company that I am not in violation of the Code, and I am
not aware of any violation by others.
Date:
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Name:
Title/Position:
Department: