Corporate Compliance Program

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Revision: 4/18/2012

I. Introduction

Questcor Pharmaceuticals ("Questcor") is committed to establishing and maintaining an effective Compliance Program in accordance with the California Health and Safety Code sections 119400 and 119402 and the "Compliance Program Guidance for Pharmaceutical Manufactures," published by the Office of Inspector General, U.S. Department of Health and Human Services (the "HHS-OIG Guidance"). Our Compliance Program is one of the key components of our commitment to the highest standards of corporate conduct.

The purpose of our Compliance Program is to prevent and detect violations of law or company policy. As the HHS-OIG Guidance recognizes, however, the implementation of such a program cannot guarantee that improper employee conduct will be entirely eliminated. Nonetheless, it is Questcor's expectation that employees will comply with Questcor's Code of Ethics and, for field-based employees, the Conduct Guide for Questcor Field Professionals. In the event that Questcor becomes aware of violations of law or company policy, we will investigate the matter and, where appropriate, take disciplinary action and implement corrective measures to prevent future violations.

Questcor has described below the fundamental elements of Questcor's Compliance Program. As HHS-OIG calls for in its Guidance, we have tailored our Compliance Program to fit the unique environment of our company. Moreover, our Compliance Program is dynamic; we regularly review and enhance our Compliance Program to meet our evolving compliance needs.

II. Overview of Compliance Program

  1. Leadership and Structure
    Chief Compliance Officer. Questcor has designated a Chief Compliance Officer. Our Chief Compliance Officer has the ability to effect change within the organization as necessary and to exercise independent judgment. The Chief Compliance Officer is charged with the responsibility for developing, operating and monitoring the Questcor Compliance Program.
  2. Written Standards
    Questcor's Code of Ethics is an expression of the company's expected standards of behavior for everyone who conducts business on behalf of the Company. The code establishes compliance responsibilities, supports applicable laws and regulations, and reinforces corporate policies and procedures. The Code articulates our fundamental principals, values and framework for action within our organization. Questcor's Conduct Guide for Field Professionals provides principles and standards for our interactions with health care professionals.
  3. Education and Training
    A critical element of our Compliance Program is the education and training of our employees on their legal and ethical obligations under applicable health care program requirements. Questcor is committed to taking necessary steos to effectively communicate our standards and procedures to all affected personnel. Moreover, Questcor will regularly review and update its training programs, as well as identify additional areas of training on an "as needed" basis.
  4. Internal Lines of Communication
    Questcor is committed to encouraging dialogue between management and employees. Our goal is that all employees, when seeking answers to questions or reporting potential instances of fraud and abuse, should know to whom to turn for a meaningful response and should be able to do so without fear of retribution. To that end, we have adopted principles regarding confidentiality and policies prohibiting retaliation as outlines in the Questcor Code of Ethics. Employees are expected to report suspected violations of company policy by contacting the Law Department, Human Resources, or the Office of Corporate Compliance.
  5. Annual Spending Limit
    For purposes of complying with the California Health and Safety Code § 119402, Questcor has established a maximum annual aggregate dollar limit of $2,500 for gifts, promotional materials or activities provided to California health care professionals. This dollar limit represents a spending cap, not a goal or average, and typically the amount spent per healthcare provider is anticipated to be substantially less than this maximum amount. Any waiver in excess of this amount requires the approval of the Questcor Chief Compliance Officer.
  6. Auditing and Monitoring
    Questcor's Compliance Program includes efforts to monitor, audit, and evaluate adherence to the compnay's compliance activities. We note that in accordance with the HHS-OIG Guidance, the nature of our reviews as well as the extent and frequency of our compliance monitoring and auditing varies according to a variety of factors, including new regulatory requirements, changes in business practices, and other considerations.
  7. Responding to Potential Violations and Corrective Actions
    Questcor's Compliance Program strives to ensure that the consequences of violating the law or company policy are clearly understood and the appropriate, consistent disciplinary action is enforced. Additional efforts are underway to create a Compliance Program that increases the likelihood that unlawful and unethical behavior is identified and prevented. However, HHS-OIG recognizes that even an effective compliance program may not prevent all violations. As such, our Compliance Program requires the company to evaluate each case and respond promptly to potential violations of law or company policy, take appropriate disciplinary action, assess whether the violation is in part due to gaps in our policies, practices, or internal controls, and take action to prevent future violations.

III. Contact Information

For questions or comments regarding Questcor's Compliance Program, or to request printed copies of the Compliance Program, please call 510.400.0700, or email us at compliance [at] questcor [dot] com.

California Compliance Declaration

As part of Questcor, Inc.'s continuing activities in the area of corporate compliance, we have implemented the Questcor Corporate Compliance Program. This program was developed with consideration given both to the goals of sections 119400-119402 of the California Health and Safety Code and to the operations, size, and organization of our Company. Based upon our good faith understanding of these statutory requirements, we believe we are in compliance in all material respects with our Compliance Program and the requirements of the California Health and Safety Code. Copies of this declaration and the Comprehensive Compliance Program may be obtained by calling 510.400.0700 or via email at compliance [at] questcor [dot] com.