Compliance

Neos Therapeutics, Inc. (“Neos” or the “Company”) is committed to compliance with all applicable laws, regulations, and policies governing its operations and the marketing and promotion of its commercial products. Accordingly, the Company has established a comprehensive compliance program, as more fully described below.

Elements of an Effective Compliance Program

In 2003, the Office of Inspector General (OIG) for the U.S. Department of Health and Human Services developed the OIG Compliance Program Guidance for Pharmaceutical Manufacturers. According to the OIG, it is essential for pharmaceutical manufacturers to establish and maintain effective compliance programs. The program should foster a culture of compliance that begins at the executive level and filters throughout the organization. The OIG’s guidance includes seven fundamental elements for an effective compliance program:

  1. Designated compliance officer and compliance committee
  2. Written policies and procedures
  3. Effective training and education
  4. Open lines of communication
  5. Internal monitoring and auditing
  6. Enforcement of standards through disciplinary guidelines
  7. Prompt response to detected problems through corrective actions

The Neos Compliance department has established a mission and strategy to create and maintain a culture of compliance through the establishment of a robust corporate compliance program that reflects these seven elements.

Compliance Mission

To ensure all Neos stakeholders (e.g., patients, healthcare professionals, payers, regulators, stockholders and employees) understand and see the Company’s commitment to integrity in the development, research, manufacturing, marketing and sales of Neos products.

Compliance Strategy

  • Foster a culture based on trust, integrity, open and honest communications, accountability and an uncompromising focus on the well-being of patients.
  • Provide effective training on our Code of Conduct, company policies and procedures and industry standards and regulations.
  • Partner with business leadership to drive annual compliance goals.
  • Collaborate with business partners to create policies and procedures that enable the business to operate in an efficient and compliant manner.
  • Promote continuous improvement of our compliance program through monitoring and auditing.
  • Provide open lines of communication to allow concerns to be raised in a safe environment. Oversee a fair and objective investigation and corrective action process.

Leadership Responsibilities

Neos leadership fosters a culture of compliance by setting the appropriate “tone at the top” and by demonstrating a commitment to integrity in business practices every day. Through the Neos Corporate Compliance Program, Neos leadership supports managers and employees to conduct business ethically by providing resources such as the Code of Business Conduct and Ethics, policies, procedures, and training and education. Neos leadership is encouraged to foster an “open door” policy, and the Company offers a variety of channels through which individuals may raise concerns, including through the Compliance Helpline.

Additionally, Neos leadership holds all personnel accountable for ethical business conduct by:

  • Written Policies and Procedures.

Neos has developed a written Code of Business Conduct and Ethics (the “Code”) that articulates the core ethical and compliance principles that guide the Neos’ operations. The Code establishes our expectation that management, employees, and agents of Neos act in accordance with all applicable laws, rules, regulations, and Neos policies and procedures, as well as the highest standards of ethics.

Neos has also developed a Sales & Marketing Code of Conduct (the “Sales & Marketing Code”) addressing the specific risk areas identified in the OIG Compliance Program Guidance and implementing the PhRMA Code. The Sales & Marketing Code is designed to help ensure appropriate interactions between Neos personnel and healthcare professionals and organizations.

  •  Compliance Governance.

Compliance Officer. The Neos Board of Directors has appointed a compliance officer (the “Compliance Officer”) who is charged with developing, implementing, and monitoring the CCP. The Board and the company are committed to ensuring that the Compliance Officer has the ability to exercise independent judgment and effectuate change within the organization as needed. The Compliance Officer reports to the President and Chief Executive Officer and has direct access to the Neos Board of Directors.

Compliance Committee. Neos has established a Compliance Committee made up of Neos senior management. The role of the Compliance Committee is to advise and assist the Compliance Officer in the development, implementation, and ongoing oversight of the CCP. The Compliance Committee meets on a regular basis to identify and manage areas of risk and areas of critical focus for the CCP.

  • Training and Education.

A crucial element of the Neos CCP is the education and training of our employees and contractors on their legal and ethical obligations under applicable laws, rules, regulations, and company policies and procedures. Neos conducts compliance training for its employees and contractors, including sales, marketing, medical affairs, and pricing personnel, to ensure a thorough understanding of the company’s expectations. The training covers, at a minimum, a summary of the federal healthcare fraud and abuse laws, the requirements of the CCP, and the requirements of the company’s policies and procedures. Participation in training programs is mandatory. Neos’ training programs are regularly reviewed and updated.

  • Lines of Communication.

Neos has developed effective lines of communication for Neos personnel to report concerns and ask questions regarding the CCP, company policies and procedures, or other compliance issues. Neos employees and contractors are required to report any suspected violation of law, the CCP, or Neos policies to his or her supervisor or the Compliance Officer. Supervisors are expected to report suspected violations to the Compliance Officer. Alternatively, employees and contractors may anonymously report violations by contacting the Neos Compliance HelpLine. No one who in good faith reports suspected wrongdoing will be subject to retaliation for having done so. Retaliation by a manager, supervisor, or any other company personnel will be grounds for disciplinary action, up to and including termination. Failure to report wrongdoing of which an employee has knowledge may, in itself, be a basis for disciplinary action.

  • Monitoring and Auditing.

Neos conducts periodic auditing and monitoring to ensure that, among other things, the CCP is properly functioning, the Code and Sales & Marketing Code have been adequately disseminated, required training has taken place, and company policies and procedures are being implemented and followed. Such reviews are conducted under the direction of the Compliance Officer. We note that, in accordance with the OIG Guidance, the focus, extent, and frequency of these auditing and monitoring activities varies depending on a variety of factors including new regulatory requirements, changes in business practices, compliance history, and Neos’ assessment of identified risk areas. If a review indicates that there are gaps in Neos’ policies or controls, corrective action is taken.

  • Disciplinary Action.

All Neos employees and contractors are expected to be familiar with and adhere to the CCP, company policies and procedures, and applicable laws, rules, and regulations. While each substantiated violation will be considered on a case-by-case basis, where appropriate we will utilize disciplinary action consistent with company policy, up to and including termination, to address violative conduct and to deter future violations.

  • Investigative and Corrective Action.

All reported violations of laws, rules, and regulations, company policies and procedures, and other reported misconduct are investigated by the Compliance Officer to determine whether a violation has occurred. If corrective action or disciplinary action is required, it is undertaken promptly.

II. Annual Spending Limits

In addition to the above elements of the CCP, Neos has established an annual spending limit on certain promotional activities directed at health care professionals who may prescribe or influence prescribing in California. The annual limit is $1500 per healthcare professional. This annual spending limit includes occasional modest meals in connection with informational presentations and educational items but does not include payments to healthcare professionals for bona fide consulting or other services.

III. Declaration of Compliance

Neos’ declaration of compliance with Cal. Health & Safety Code § 119400 et seq. and with the CCP can be found at www.neostx.com. A copy of this CCP and the declaration of compliance may also be obtained by contacting infoHQ@neostx.com.

Declaration of Compliance (PDF)