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.

Aerin Medical, Inc. (“Aerin”) is a medical device manufacturer and marketer headquartered in Austin, Texas. Aerin’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 Aerin does, or plans to do, business. The Compliance Program is modeled after the Compliance Program Guidance documents provided by the Office of the Inspector General of the US Department of Health and Human Services (“OIG”), the Federal Sentencing Guidelines’ Seven Elements of an Effective Compliance Program, the AdvaMed Code of Ethics on Interactions with Healthcare Professionals (“AdvaMed Code”), and Eucomed’s Code of Business Practice.

As of the date of this Compliance Disclosure, Aerin believes its operations comply with the provisions of its Compliance Program and 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 Aerin’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. Questions regarding Aerin’s Code of Business Conduct and Ethics or this Compliance Disclosure may be addressed to Scott Smith, Vice President, General Counsel and Compliance Officer, at ssmith@aerinmedical.com.

Element 1: Written Policies and Procedures

Aerin’s written policies and procedures, including its Code of Business Conduct and Ethics, emphasize individual and corporate responsibility for compliance with all applicable laws and regulations and adherence to the highest ethical standards. All Aerin personnel worldwide must understand and comply with these obligations, and Aerin trains its personnel to ensure that they do so comply.

The Aerin Code of Business Conduct and Ethics (the “Code of Conduct”) describes Aerin’s commitment to operate in accordance with accepted standards of business integrity, Aerin policies, and applicable laws and regulations. Aerin’s General Counsel and Compliance Officer ensures that the Code of Conduct is regularly reviewed and offers revisions to Aerin’s Compliance Committee.

The Code of Conduct and Aerin’s compliance policies provide explicit guidance aimed at ensuring the integrity of Aerin personnel’s relationships with customers and other Health Care Professionals (“HCPs”) across the globe. Aerin’s compliance policies and procedures closely model the AdvaMed Code and incorporate appropriate laws and standards of conduct from each jurisdiction in which Aerin operates or does business (e.g., Eucomed/Europe, US state laws governing medical device companies, and the UK Bribery Act 2010). Aerin ensures that legal and compliance-related developments relevant to Aerin’s business are captured in its policies and procedures and that those documents are revised, published and trained on as necessary to maintain compliance with applicable laws.

Consistent with CAL. HEALTH & SAFETY CODE § 119402, Aerin has established a written $2,500-per-calendar-year limit for certain promotional materials, items and/or promotional activities provided to California licensed health care professionals. Consistent with California statute, this spending limit 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
  • Payment for legitimate professional healthcare services provided by a health care professional

Element 2: Compliance Officer and Compliance Committee

The Aerin Compliance Program is designed to equip and empower the participation of Aerin personnel at all levels, from the Board of Directors and Aerin Senior Management to sales representatives, distributors, accountants, engineers, and administrative personnel. Aerin has also established the senior management position of VP, General Counsel and Compliance Officer, with global responsibility over the Compliance Program. The General Counsel and Compliance Officer manages and oversees the day-to-day operations of the Compliance Program and reports directly to the CEO and Audit Committee of the Aerin Board of Directors.

Aerin has also established a Compliance Committee that meets once every two months to review the Compliance Program and advise the General Counsel and Compliance Officer regarding its operation. The Compliance Committee is currently made up of Aerin’s General Counsel and Compliance Officer, CEO, CFO and VP of Operations.

Element 3: Training and Education

As part of their general compliance training, Aerin personnel must annually acknowledge and document that they have reviewed the Code of Conduct and compliance policies and procedures and acknowledge their obligation to carry out their responsibilities in accordance with applicable law and Aerin policies and procedures.

The General Counsel and Compliance Officer ensures that all Aerin 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 General Counsel and Compliance Officer also sends compliance updates to Aerin personnel as appropriate.

Element 4: Effective Lines of Communication

Aerin encourages candid and open communication between management and Aerin personnel regarding compliance concerns. Aerin requires 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 to their supervisor or Aerin’s Human Resources Department, Legal Department or Compliance Officer. Personnel are provided with means to report compliance concerns anonymously, whenever possible, and without fear of retaliation. Failure to report suspected non-compliance may result in disciplinary action, up to and including termination of employment or contract.

Element 5: Auditing and Monitoring

Compliance concerns may be directed to numerous managers, supervisors and executives throughout the organization, and are ultimately reported to Aerin’s General Counsel and Compliance Officer. Aerin also offers an Ethics Helpline, which is available 24/7. 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 Aerin General Counsel and Compliance Officer continuously monitors Aerin personnel’s compliance with the Compliance Program and Aerin policies and procedures. The General Counsel and Compliance Officer also conducts audits, both formal and informal, to address areas of risk.

Element 6: Enforcement and Disciplinary Guidelines

Aerin Compliance Program documents establish the standards to which personnel are expected to adhere, as well as publish the procedures Aerin follows in response to any reported or otherwise-suspected improper behavior. Aerin timely investigates such suspected and/or reported non-compliance and responds promptly with corrective action consistent with Aerin’s Compliance Program policies and procedures.

Element 7: Response and Prevention

As noted above, Aerin timely investigates suspected and/or reported non-compliance and responds promptly with corrective and preventive actions tailored to address improper actions and 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 retraining. The General Counsel and Compliance Officer works with Aerin management to ensure that Aerin 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 General Counsel and Compliance Officer reports such investigation outcomes, corrective actions and prevention plans to the CEO and Compliance Committee. Certain matters may also be reported to the Aerin Board of Directors’ Audit Committee.

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Last Modified: 26 Feb 2019
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