Channel Medsystems’ (the Company) reputation is important, as is its mission to empower every woman to take control of her health journey and live her best life. With a commitment to deliver innovative technologies that exceed the expectations of women and their gynecologists, Channel Medsystems strives to develop easy-to-use, safe, and cost-effective medical devices, resulting in exceptional outcomes and superior patient comfort that are accessible to all women.
Channel Medsystems is also committed to maintaining the highest ethical standards in the execution of our business activities while complying with all applicable laws and regulations. To assist us in meeting these commitments, we have implemented this Code of Conduct (the “Code”). This document is not intended to be a substitute for more detailed policies that relate to standards of conduct (if applicable). The Company is committed to highest standards of honesty, integrity, ethics, and legality ensuring these standards are upheld and enforced. Employees are expected to be honest and ethical in dealing with each other, with customers and all other third parties. The Code will apply to all officers, directors, employees (including new employees at time of hiring) and all relevant business partners, such as sub distributors, agents, and consultants (“Company Representatives”).
We operate in a heavily regulated environment, and there are a myriad of federal, state and local laws, regulations and industry standards applicable to the Company. Many practices that are common in other industries are viewed as inappropriate in the health care industry.
The laws the Code describes below are broad and are implicated in many common interactions and activities. The health care industry is dynamic. Company guidance cannot address every situation that may arise, but the principles described in this Code, along with the Company policies and procedures, should help guide your actions. The absence of specific guidance does not relieve Company Representatives of the responsibility to operate within the highest ethical standards of conduct. If you do not know how to handle a situation, seek guidance from your manager, or Compliance Officer. In guiding your actions, it is also useful to think about whether a particular program, arrangement or interaction would, if it became public, inspire, or diminish the public’s trust in the Company.
The Company is committed to operating in compliance with all applicable health care laws and regulations, which includes the laws summarized below. Legal requirements can vary between jurisdictions. Company Representatives are responsible for complying with the strictest requirements imposed, either by the Code, Company policies and procedures, or the applicable laws, regulations, and other government guidance. Some of the laws applicable to our operations include:
In the United States and in many other countries, it is prohibited to offer or pay anything of value to induce or reward purchasing, prescribing or recommending a health care item or service. The federal anti-kickback statute prohibits offering or soliciting (and giving and receiving) any remuneration to induce or reward the order, purchase, prescription or recommendation of an item or service that may be paid for, directly or indirectly, by a federal health care program like Medicare, Medicaid, the Veteran Administration (VA) or Tricare. There are also state anti-kickback laws that apply regardless of the payor. Violations of the federal and state anti-kickback laws can result in substantial criminal and/or civil fines, damages or penalties for the Company and Company Representatives, imprisonment of individuals, and possible exclusion from participation in federal health care programs like Medicare and Medicaid.
These anti-kickback laws are quite broad and are implicated in a variety of business practices and interactions with physicians, patients, payors and anyone else in a position to order, recommend or influence the use of our products. For example, offering discounts, rebates, or no-charge product implicates the anti-kickback laws, as do referrals or engaging physicians to perform consulting or other services on behalf of the Company. Programs or interactions with customers that involve any transfer of value must be reviewed to ensure compliance with these complex laws.
The federal civil False Claims Act (FCA) prohibits, among other things, knowingly presenting, or causing someone else to present claims for payment of government funds that are false or fraudulent. The FCA also prohibits knowingly making, using or causing to be made or used a false record or statement that is material to a false or fraudulent claim, or knowingly concealing or improperly avoiding, decreasing, or concealing an obligation to pay money to the federal government. Many states have similar false claims laws. The FCA is violated not only when the person has acknowledged that the information is false or fraudulent, but also if the person acted in deliberate ignorance or reckless disregard of the truth or falsity of the information. In addition, claims for items or services that result from an anti-kickback violation are considered to be false or fraudulent. Violations of these laws can lead to substantial civil and administrative penalties, damages, or exclusion from participation in federal health care programs.
The FCA has been a powerful enforcement tool in the health care industry. FCA cases can be brought by the government or by whistleblowers called “relators” who bring an action on behalf of themselves and the government. The Department of Justice and private whistleblowers have pursued FCA actions against medical device manufacturers for a variety of promotional and marketing activities, including providing consulting fees, grants, no-charge product, and other benefits to health care professionals to induce them to use company products; promoting products for “off-label” uses; and providing false or misleading coding and billing information.
The applicable provisions of the Federal Food Drug and Cosmetics Act, as well as regulations and guidance issued by the Food and Drug Administration (FDA) require the Company to promote and sell its products consistent with labeling, through accurate and truthful communications about the efficacy, quality, and safety of the product. All information provided to health care professionals about Company products and therapies, including availability and delivery, must be truthful, balanced, fair, objective, and supported by data and relevant experience. All materials created for use in promoting Company products must be reviewed and approved through the proper Company channels. All statements about Company products, whether in written materials and made in verbal communications, must be balanced, truthful, and consistent with labeling.
Federal and state laws and regulations, including the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and regulations promulgated thereunder, require individuals with access to patient health information to protect the privacy and security of that information. Company Representatives may learn of, or gain access to, confidential patient health information, and must take care to protect the confidentiality of this information, and refrain from using or disclosing this confidential information in an unauthorized manner. Unauthorized use or distribution of this information could also be illegal and result in civil liability and/or criminal penalties. Company Representatives must take precautions to prevent unauthorized access to or disclosures of confidential information, including by securely storing materials that contain such information.
The Company is also subject to laws and regulations designed to increase transparency around the financial relationships between physicians and manufacturers of drugs and medical devices, including the Physician Payments Sunshine Act (Sunshine Act). The Sunshine Act requires manufacturers to track and report to the federal government all payments and transfers of value made to physicians, certain other practitioners (physician assistance, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, anesthesiologist assistance, and certified nurse midwives), and teaching hospitals in the United States, with certain limited exceptions. A manufacturer may be subject to civil monetary penalties for failure to report a payment or transfer of value.
We are also subject to other federal laws, including federal criminal healthcare fraud and false statement statutes that extend to non-government health benefit programs. An increasing list of states also have enacted laws that prohibit medical device manufacturers from providing certain economic benefits to health care practitioners, require manufacturers to report certain marketing expenditures to state regulatory bodies, and/or require manufacturers to adopt compliance programs consistent with industry guidance.
In addition to the laws and regulations discussed above, the Advanced Medical Technology Association (“AdvaMed”), the trade association representing medical technology companies, has issued a voluntary code of ethics setting out guidelines related to the interactions of medical technology companies and health care professionals. The Company has adopted the principles of the AdvaMed Code of Ethics on Interactions with Health Care Professionals (the “AdvaMed Code”), which is available at https://www.advamed.org/issues/code-ethics/code-ethics. The AdvaMed Code provides specific guidance about compliant ways to engage in common interactions with health care professionals, such as conducting product training and education sessions, entering into consulting arrangements, providing coverage and reimbursement advice, research and educational grants, and products for evaluation or demonstration purposes.
By adopting the AdvaMed Code, the Company has committed to complying with these guidelines in all interactions with health care professionals. All Company Representatives are expected to be familiar with and follow the principles and requirements of the AdvaMed Code.
A conflict of interest occurs when a person’s private interest interferes or appears to interfere in any way with Channel Medsystems interests and may also arise when the company, employee, director, or a member of his or her family receives improper benefits because of his or her position within Channel Medsystems. These situations include, but are not limited to, relationships with government officials, health care professionals, health care organizations, physician owned companies, or any other situation where it may appear that company decisions can be influenced by personal interests or relationships. You should avoid a conflict, or an appearance of a conflict, between your personal interests, your official responsibilities, and your Company’s interests. Any potential conflict of interest should be disclosed to the Compliance Officer.
All employees will deal with Channel Medsystems customers, suppliers, competitors, and independent auditors in a fair and transparent way and will not take unfair advantage of anyone through manipulation, concealment, abuse of privileged information or misrepresentation of facts. Even the perception of unlawful conduct should be avoided, including inappropriately disclosing pricing, costs, production, products and services, bidding practices, other nonpublic business matters, and sales territories.
Tenders require a transparent, fair, and equal bidding process. Channel Medsystems must not collaborate with a tendering authority in the creation or interpretation of tender materials or documentation in a way which could compromise fairness of the process.
Sales and promotion of Company products and services should be based only on the benefit those treatments can offer to patients. Channel Medsystems and Company Representatives will represent its products and services accurately and fairly, complying with applicable regulatory and legal requirements governing the marketing and sale of products and services. Company Representatives may only use, and cannot alter, advertising and marketing materials and messages that the Company has approved pursuant to its policies and procedures. The Company will promote its products only for their approved or cleared indications and uses and must present appropriate risk information. Company’s advertising and marketing communications about its products will be truthful, accurate and not misleading, and in compliance with FDA guidance and Company policies and procedures, including but not limited to the FDA Draft Guidance for Industry Responding to Unsolicited Requests for Off-Label Information About Prescription Drugs and Medical Devices (Dec. 2011), https://www.fda.gov/media/82660/download
The Company’s engagements with health care professionals (HCPs) may never be based on the giving or receiving of payments, gifts, entertainment, or favors to induce or reward the use or prescription of Company products. Payments in cash or kind or in the form of anything of value to HCPs with the purpose of inducing or rewarding business, seeking to influence independent clinical judgment, or obtaining an improper business advantage are considered improper payments and are prohibited. The Company will not provide any gifts or entertainment to any health care professional, payer, patient, or other person in a position to influence the prescription, use, coverage, or use of Company products. The Company may provide certain approved educational items to physicians or patients, and may provide meals, travel, and certain accommodations in accordance with Company policies and procedures.
Channel Medsystems may engage health care professionals to perform certain services for which the Company has identified a legitimate business need that it cannot accomplish without the assistance of outside health care professionals. All such engagements must be in accordance with Company policies and procedures. Channel Medsystems will ensure that the engagement is supported by a legitimate, clearly defined and documented business need, as well as allowed/approved under a written agreement (when applicable). Channel Medsystems may only engage HCP whose expertise and experience are appropriate given the business need. Channel Medsystems will only compensate HCPs for legitimate services that are actually performed, and the compensation must be at Fair Market Value.
Channel Medsystems may not engage health care professionals to perform services in order to induce or reward the use, prescription, or coverage of Company products.
Channel Medsystems will keep accurate books and records that reflect actual payments and transfers of value to health care professionals and will comply with requirements for reporting and disclosing such payments or transfers of value. Company Representatives must track and report any transfers of value to health care professionals and teaching hospitals by submitting the HCP Expense Form or through other means as instructed by the Company.
No payments or items of value, including consulting arrangements or business courtesy meals/refreshments shall be provided to Federal, state, or local government personnel (including, for example, employees of state, county, or city facilities) without prior approval of legal counsel to determine consistency with the laws governing business courtesies to such individuals.
Channel Medsystems employees are expected to be responsible for protecting any property, assets and/or equipment that is under their control and they should safeguard them from loss, theft, and unauthorized use. Channel Medsystems property and assets includes cash, securities, business plans, third party information, intellectual property (computer programs, software, models, and other items), confidential information, office equipment and supplies.
Any use of CHANNEL MEDSYSTEMS’s electronic communications systems for non-business purposes should: (a) be occasional; (b) not interfere with professional responsibilities; (c) not diminish productivity; and (d) not violate this Code of Conduct or any other Channel Medsystems policies.
In the course of business, Channel Medsystems employees will have access to business or personal information about Channel Medsystems, its employees, suppliers, business partners, and others in the medical community. Confidential exchange of information is typically given in good faith and needs to be respected. Employees must keep confidential information acquired while they are with Channel Medsystems, or acting on behalf of Channel Medsystems, confidential, even after they leave or cease their engagement/position with Channel Medsystems.
Channel Medsystems respects the privacy of others and will only use personal information collected from Employees for legitimate purposes relating to their position with Channel Medsystems.
Employees are responsible for the integrity of the information, reports and records under their control and are expected to exercise a high standard of care in preparing materials for public communications. Documents should: (a) comply with any applicable legal requirements; (b) not contain any false or intentionally misleading information, and (c) comply with privacy requirements and any applicable requirements protecting confidential information.
Channel Medsystems is committed to equal opportunity employment and a positive, conducive work environment free from any kind of discrimination, harassment, or intimidation of any Channel Medsystems employee. Channel Medsystems will promptly investigate all allegations of harassment, bullying, victimization, or discrimination and will take appropriate corrective action. Retaliation against individuals for raising claims of harassment or discrimination will not be tolerated.
Channel Medsystems values the unique contribution that all people/employees make on account of their individual skills, experiences, and perspectives, and how this fosters a constructive and inclusive work culture.
Occupational health and safety
Channel Medsystems is committed to maintaining a healthy and safe working environment for its Employees. All appropriate laws and internal regulations (including work health and safety laws) should be fully complied with.
Roles and Responsibilities
It is every employee’s responsibility to understand and comply with the Code of Conduct and to report any potential violation of policy or law, including violations raised by third parties.
Corporate Policies and Procedures
Wherever applicable, corporate specific standard operating procedures (SOP) and department specific operating procedures (DOP) will be developed and implemented to further address and support the Channel Medsystems Code of Conduct (as needed/required). Employees must adhere to the policies and procedures set forth in their functional areas, and functional leaders are responsible to ensure employees have read, trained and understand the policies and procedures required for their roles and responsibilities, including the Corporate Code of Conduct.
Communication and Training
Owners, officers, directors, and managers must communicate the Code of Conduct to ensure that all employees and relevant business partners understand and comply with the policies herein.
Each employee will receive relevant training and new employees will be trained upon hiring. Employees will be required to confirm in writing that they understand and comply with these policies and will report any violations that comes to their attention.
We have a dedicated Compliance Hotline for Company Representatives and other individuals to confidentially and anonymously report a suspected or actual violation of Channel Medsystems compliance policies and procedures, or applicable laws and regulations. Company representatives may contact the anonymous and confidential Compliance Reporting system via phone, email or webpage 24/7/365 at:
Obligation to Report Possible Violations
It is your duty to maintain the highest level of integrity and accountability by alerting a supervisor, senior management, the Compliance Officer, or the Compliance Hotline of suspected or actual violations of CHANNEL MEDSYSTEMS’s policies and procedures, applicable laws and regulations, or this Code. We cannot exempt ourselves from the consequences of our own misconduct by reporting an issue, but self-reporting may be taken into account when determining appropriate corrective action. If you fail to report a violation of Channel Medsystems policies and procedures, applicable laws or regulations, or this Code, you may be subject to corrective action, up to and including termination of employment, to the extent permitted by law. Remaining silent about a violation of Channel Medsystems policies and procedures, applicable laws or regulations, or this Code puts you and Channel Medsystems in jeopardy.
We are all encouraged to raise issues or concerns in good faith and may do so without fear of retaliation. Channel Medsystems makes every effort to maintain the confidentiality and anonymity of any individual who reports concerns or possible misconduct. Company Representatives who retaliate or encourage others to do so will be subject to corrective action, up to and including termination of employment to the extent permitted by law. Channel Medsystems does not tolerate any form of retaliation against anyone who makes a report in good faith.
If you feel that you have experienced retaliation, immediately report your concern to a supervisor who is not involved in the issue, senior management, the Compliance Officer, or contact the Compliance Hotline. All allegations of retaliation will be investigated, and appropriate steps will be taken to protect those who report retaliation.
Obeying the law, both in letter and in spirit, is the foundation of this Code. Our success depends upon each Company Representative operating within legal guidelines and cooperating with local, national and international authorities. We expect Company Representatives to understand the legal and regulatory requirements applicable to their groups and areas of responsibility. If you do have a question in the area of legal compliance, it is important that you not hesitate to seek answers from your supervisor or the Compliance Officer. Failure to comply with the Code of Conduct may result in disciplinary action according to Channel Medsystems policies, up to and including termination of employment, where appropriate.
While this Code of Conduct addresses a wide range of business practices and procedures, it cannot anticipate every issue that may arise and is intended to provide a set of guidelines on what is considered acceptable and appropriate behavior for Channel Medsystems employees and representatives.
Employees are responsible to ensure that they always act ethically and lawfully.
This Code of Conduct is a statement of certain fundamental principles, policies and procedures that govern actions in the conduct of Channel Medsystems’ business. It is not intended to and does not create any rights in any director, executive, consultant, member of the medical community, employee, supplier, competitor, stockholder or any other person or entity. Any person who has questions about this Code of Conduct or who requires further information should contact the Compliance Officer.
Review of this Code of Conduct
This Code of Conduct may be amended by the Executive Leadership as needed, to ensure that it is operating effectively. Approved by the Executive Leadership Team, Channel Medsystems, Berkeley, CA. [Date January 25, 2023]