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Preparing for Compliance with the New MA Pharmaceutical and Medical Device

Code of Conduct Law

January 23, 2008

Rupa M. Cornell

Director, SEC Compliance and Corporate Counsel

Agenda

• Overview of Boston Scientific Corporation

• Compliance Challenges

• Approaches to Compliance

• Key Tactics for Compliance

• Summary

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• Founded in 1979 with 38 employees and

$2 million in sales

• Now a global leader in cardiovascular

medicine and one of the world’s largest

medical device companies

• Portfolio of approx. 13,000 products,

many with market leading positions

• 25,000 Employees

• Over 2,000 in MA

• Dedicated marketing and sales force

in more than 45 countries

• 37 manufacturing, distribution and

technology centers worldwide

Boston Scientific Corporation Profile

• Corporate HQ: Natick, MA

• Regional HQs: Paris, Tokyo, Singapore

• Website: www.bostonscientific.com

• The TAXUS® drug-eluting coronary stent was the most successfully launched product in the history of the industry

• Added Cardiac Rhythm Management Group through acquisition of Guidant Corporation in April 2006

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Boston Scientific’s mission is to improve the quality of patient care and the productivity of health care delivery through the development and advocacy of less-invasive medical devices and procedures.

Boston Scientific’s Mission Statement

Boston Scientific’s Mission

This is accomplished through the continuing refinement of existing products and procedures and the investigation and development of new technologies that can reduce risk, trauma, cost, procedure time and the need for aftercare.

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Sampling of Boston Scientific’s Product Portfolio

Broad and Deep Portfolio of Over 13,000 Products

Stents Embolic ProtectionBalloons Catheters / Guidewires Ultrasound Imaging

Lithotripsy SystemsStone Retrieval Enteral FeedingEmbolicsBiopsy Systems

Pacemakers / ICDs Detachable CoilsAblation Peripheral Dilatation Neurostimulation

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Boston Scientific is Organized into Five Businesses

NeuromodulationCardiac Rhythm

Management

Electrophysiology

Urology

Gynecology

EndosurgeryCardiovascular

Business

Group

International

Americas

Europe/ Middle East/Africa

Asia / Pacific

Japan

EndoscopyInterventionalCardiology

PeripheralInterventions

Neurovascular

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MA Statute – Compliance Challenges

• Broad statutory language

• “Bona Fide Services,” “Covered Recipients” and

“Health Care Practitioners”

• Clinical trials and R&D included as part of Sales and Marketing

activities?

• Vague language

• Fifty dollar threshold in aggregate or per transaction?

• Discounts and rebates

• Incomplete regulations

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Possible Approaches

• Broad approach to overall Health Care Practitioner (HCP)

compliance taking Federal, state, local level laws into account

• Focused MA-only approach

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BSC Approach – HCP Project

• Boston Scientific is approaching HCP compliance broadly

• HCP Project Team

• Focused on our policies, systems and processes involved in planning,

approving, monitoring, controlling, compiling and reporting HCP

payments/relationships

• To ensure compliance with legal requirements, as well as with desired

standards of conduct

• Key to staff project with leadership and team, and identify and

budget sufficient resources

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BSC Approach- HCP Project

• Comprehensive workplan that addresses near term HCP program

requirements, and anticipates long term requirements

• Closely align required HCP project workflows with project teams,

with defined objectives/deliverables

• Develop cross- functional teams, with subject matter experts, as

well as those who use the systems, processes and policies on a day-

to-day basis

• Develop a program that is compliant and works

• Smooth implementation for company and HCPs

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Key Tactics - MA

• Since regulations are not yet final and statute remains broad and

vague, gather all possibly relevant data and refine once regulations

are final

• Continue vigilant lobbying efforts until regulations are finalized

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Key Tactics - MA

• Information Technology is INTEGRAL & CRITICAL

• Information Technology Considerations:• Identification of MA HCPs who fall within statutory requirements – consider

outside vendor for databases

• Working across multiple business unit/payment systems, for consolidation or

common data warehouse possibilities

• Systems to track travel and expenses and other spending sufficient detail

captured to comply with MA statute

• System controls and tools to ensure compliance with requirements

• Online training for various groups across your organization

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Key Tactics – MA

• Define scope and elements of compliance, considering:• US vs. Global application

• Identification of applicable ethical codes, Federal, state, local laws

• Anticipate future requirements to identify long term

requirements/functionality that may be required

• Plan project and workflows• Understand company’s current state

• Define expected end state

• Identify steps required to bridge from current state to expected end state

• Consider use of outside resources/advisors to assess current policies and

procedures and recommended changes

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Key Tactics - MA

• Tee up key people and resources now

• Leadership

• Staffing

• Budget

• Develop appropriate cross-functional teams

• Legal

• Compliance

• Marketing

• Sales

• Communication

• Executive Management

• Clinical

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Key Tactics - MA

• Rolling Communication Plan• Timing is critical

• Communicate on a high level now (e.g., National Sales Meetings)

• Be prepared to provide more specific communication as soon as the regulations are final

• Training

• Break-out sessions

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HCP Project Workflow

Example of HCP Project Workflow Teams to address MA law or broader HCP initiative

Federal, State & Local Requirements

Sustaining Compliance

Training&

Communications

Documentation

ManagementProcesses

&Controls

Policies,Procedures &

Work Instructions

HCP Compliance

Summary

• Be proactive – the time to act is NOW, even though regulations aren’t final

• Consider an approach that allows expansion/modification of MA compliance measures to meet other states, and likely Federal, law

• Communication and training are key

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Thank You

Questions