Exhibit
10.31


 


CORPORATE
INTEGRITY AGREEMENT


 


BETWEEN
THE

OFFICE OF INSPECTOR GENERAL

OF THE

DEPARTMENT OF HEALTH AND HUMAN SERVICES

AND

BIOVAIL CORPORATION


 


I.             PREAMBLE


 


Biovail Corporation hereby
enters into this Corporate Integrity Agreement (CIA) with the Office of
Inspector General (OIG) of the United States Department of Health and Human
Services (HHS) to promote compliance with the statutes, regulations, and
written directives of Medicare, Medicaid, and all other Federal health care
programs (as defined in 42 U.S.C. § 1320a-7b(f)) (Federal health care program
requirements) and with the statutes, regulations, and written directives of the
Food and Drug Administration (FDA requirements). This CIA specifically applies
to Biovail Corporation and all its corporate subsidiaries, affiliates, and
other related corporate entities, including but not limited to BTA
Pharmaceuticals, Inc. (collectively “Biovail”). Contemporaneously with
this CIA, Biovail Corporation is entering into a Settlement Agreement with the United
States.


 


II.            TERM AND SCOPE OF THE CIA


 


A.            The period of the compliance
obligations assumed by Biovail under this CIA shall be 5 years from the
effective date of this CIA, unless otherwise specified. The effective date
shall be the date on which the final signatory of this CIA executes this CIA
(Effective Date). Each one-year period, beginning with the one-year period
following the Effective Date, shall be referred to as a “Reporting Period.”


 


B.            Sections VII, IX, X, and XI
shall expire no later than 120 days after OIG’s receipt of: (1) Biovail’s
final Annual Report; or (2) any additional materials submitted by Biovail
pursuant to OIG’s request, whichever is later.


 


C.            The scope of this CIA shall be
governed by the following definitions:


 


1.             “Covered Persons” includes:


 


a.             Except as otherwise provided below, all owners of
Biovail (other than shareholders who: (1) have an ownership interest of
less than 5%; and (2) acquired the ownership interest through public
trading). The term “Covered Persons” shall not include Eugene Melnyk provided
that he does not directly participate in the management and operation of
Biovail;


 


b.             all officers, directors, and employees of Biovail
(including, but not limited to, BTA Pharmaceuticals, Inc. (BTA)) who are
based in the United States or have job responsibilities in the United States,
except as carved out below in this Section II.C.1; and


 

















 


c.             all contractors, subcontractors, agents, and other
persons who perform Government Pricing and Contracting Functions or Promotional
and Product Services Related Functions on behalf of Biovail, including but not
limited to sales representatives and other individuals who engage in
Promotional and Product Services Related Functions on behalf of Biovail or BTA
under the terms of an agreement (the “PSS Contract”) between BTA and Publicis
Selling Solutions, Inc. (PSS) in place as of the Effective Date of the
CIA. The term “Covered Persons” shall also apply to all contractors,
subcontractors, agents and other persons who may perform Government Pricing and
Contracting Functions or Promotional and Product Services Related Functions on
behalf of Biovail or BTA under any renewals of the PSS Contract or any new
contract entered after the Effective Date and relating to the Functions.


 


Notwithstanding the above, the term “Covered
Persons” does not include: (1) part-time or per diem employees,
contractors, subcontractors, agents, and other persons who are not reasonably
expected to work more than 160 hours per year, except that any such individuals
shall become “Covered Persons” at the point when they work more than 160 hours
during the calendar year; or (2) employees of Biovail who perform only
manufacturing functions.


 


2.     “Relevant Covered Persons”
includes all Covered Persons whose job responsibilities relate to Government
Pricing and Contracting Functions or Promotional and Product Services Related
Functions, as defined below in Sections II.C.4 and 5, respectively. Relevant
Covered Persons include employees of PSS engaged in Promotional and Product
Services Related Functions under the PSS Contract and those Biovail and BTA
employees who have responsibilities managing or overseeing the PSS Contract and
any subsequent contract, renewal, or amendment to a contract relating to the
provision of Promotional and Product Services Related Functions or Government
Pricing and Contracting Functions on behalf of Biovail or BTA.


 


3.             “Government Reimbursed
Products” refers to all Biovail products that are sold in the United States by
Biovail or by third-party contractors on Biovail’s behalf and which are
reimbursed by Federal health care programs.


 


4.             The term “Government Pricing
and Contracting Functions” means the collection, calculation, verification, or
reporting of pricing and other information for purposes of the Medicaid Drug
Rebate Program (codified at 42 U.S.C. § 1396r-8, et seq.), the Medicare Program
(codified at 42 U.S.C. § 1395-1395hhh), the 340B Drug Pricing Program (codified
at 42 U.S.C. § 256(b)), or any other government programs through which health
care items or services may be purchased or reimbursed, in whole or in part, by
the federal government, and the Veteran’s Administration pricing program (the “VA
Programs”), as set forth in the Federal Supply Schedule and the Veteran’s
Healthcare Act of 1992. This definition includes, but is not limited to, the
calculation and reporting of Average Sales Price (ASP), Average Manufacturer
Price (AMP), Best Price (BP), and all pricing and other information reported
and used in connection with reimbursement under the Federal health care
programs described in this paragraph.


 


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5.             The term “Promotional and
Product Services Related Functions” means the promotion, marketing, sales, or
provision of information about, or services relating to, Government Reimbursed
Products in or for the United States market.


 


6.             The term “Third Party
Educational Activity” shall mean any U.S.-based continuing medical education
(CME), independent medical education (IME), disease awareness, or other
scientific, educational, or professional program, meeting, or event sponsored
by Biovail, including but not limited to, sponsorship of symposia at medical
conferences.


 


III.          CORPORATE INTEGRITY
OBLIGATIONS


 


Biovail shall establish and
maintain a Compliance Program that includes the following elements:


 


A.            Chief Compliance Officer,
Committee, and Board Responsibilities.


 


1.             Chief
Compliance Officer. Biovail has appointed, and shall maintain during the
term of the CIA, an individual to serve as its Chief Compliance Officer. To the
extent necessary, within 90 days after the Effective Date, Biovail shall modify
the position description, scope of responsibility, and authority of the Chief
Compliance Officer such that the following requirements are satisfied. The
Chief Compliance Officer shall be primarily responsible for ensuring the
effective operation of Biovail’s compliance program on an enterprise-wide
basis. The Chief Compliance Officer shall be primarily responsible for
developing and implementing policies, procedures, and practices designed to
ensure compliance with the requirements set forth in this CIA and with Federal
health care program and FDA requirements. The Chief Compliance Officer shall be
a member of senior management of Biovail, shall make periodic (at least
quarterly) reports regarding compliance matters directly to the Risk and
Compliance Committee of the Board of Directors of Biovail. The Chief Compliance
Officer shall be authorized to report on such matters to the Risk and Compliance
Committee of the Board of Directors at any time. The Chief Compliance Officer
shall not be or be subordinate to the General Counsel or Chief Financial
Officer. The Chief Compliance Officer shall be responsible for monitoring the
day-to-day compliance activities engaged in by Biovail as well as for any
reporting obligations created under this CIA.


 


Biovail may appoint an individual to serve as Biovail’s U.S. Compliance
Officer for BTA and other U.S. operations of Biovail. Any such U.S. Compliance
Officer would be responsible for assisting the Chief Compliance Officer in
implementing policies, procedures, and practices within the U.S. designed to
ensure compliance with the requirements set forth in this CIA and with Federal
health care program and FDA requirements. Any U.S. Compliance Officer shall not
be or be subordinate to the General Counsel or Chief Financial Officer of
Biovail.


 


Biovail shall report to OIG, in writing, any changes in the identity or
position description of the Chief Compliance Officer or the U.S. Compliance
Officer, or any actions or changes that would affect the Chief Compliance
Officer’s or the U.S. Compliance Officer’s ability to perform the duties
necessary to meet the obligations in this CIA, within 15 days after such a
change.


 


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2.             Compliance
Committee.
Prior to the Effective Date, Biovail established a U.S. Healthcare Compliance
Policy Committee with responsibilities relating to U.S. healthcare compliance.
To the extent necessary, within 90 days after the Effective Date, Biovail shall
amend the duties, responsibilities, and authorities of the U.S. Healthcare
Compliance Policy Committee to meet the requirements set forth below. The U.S.
Healthcare Compliance Policy Committee shall, at a minimum, include the Chief
Compliance Officer and other members of management necessary to meet the
requirements of this CIA (e.g., executives of relevant departments, such
as regulatory, government contracting, human resources, internal audit, operations,
legal, medical affairs, and sales and marketing or their designees). The Chief
Compliance Officer shall chair the U.S. Healthcare Compliance Policy Committee
and the Committee shall support the Chief Compliance Officer in fulfilling
his/her responsibilities including with regard to the CIA (e.g., shall
assist in the analysis of the organization’s risk areas, shall oversee
monitoring of internal and external investigations, and shall receive reports
about internal and external audits).


 


Biovail shall report to OIG, in writing, any changes in the composition
of the U.S. Healthcare Compliance Policy Committee, or any actions or changes
that would affect the U.S. Healthcare Compliance Policy Committee’s ability to
perform the duties necessary to meet the obligations in this CIA, within 15
days after such a change.


 


3.             Board of
Directors Resolution. The Risk and Compliance Committee of the Board of
Directors of Biovail Corporation (Risk Committee) shall be responsible for the
review and oversight of matters related to compliance with Federal health care
program requirements, FDA requirements, and the obligations of this CIA. The
Risk Committee shall, at a minimum, be responsible for the following:


 


a.             meeting at least quarterly to review and oversee
Biovail’s Compliance Program, including but not limited to the performance of
the Chief Compliance Officer and compliance department.


 


b.             for each Reporting Period (as defined in Section ILA)
of the CIA, adopting a resolution summarizing its review and oversight of
Biovail’s compliance with Federal health care program requirements, FDA
requirements, and the obligations of this CIA. Each individual member of the
Risk Committee shall sign a statement indicating that he or she agrees with the
resolution.


 


At minimum, the resolution shall include
the following language:


 


“The Risk and Compliance Committee of Biovail’s Board of Directors
(Risk Committee) has made a reasonable inquiry into the operations of Biovail’s
Compliance Program, including the performance of the Chief Compliance Officer
and the compliance department. Based on its inquiry, the Risk Committee has
concluded that, to the best of its knowledge, Biovail has implemented an
effective Compliance Program to meet the Federal health care program
requirements, FDA requirements, and the obligations of the CIA.”


 


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If the Risk Committee is unable to provide such a conclusion in the
resolution, the Risk Committee shall include in the resolution a written
explanation of the reasons why it is unable to provide the conclusion and the
steps it is taking to implement an effective Compliance Program at Biovail.


 


Biovail shall report to OIG, in writing, any changes in the composition
of the Risk Committee, or any actions or changes that would affect the Risk
Committee’s ability to perform the duties necessary to meet the obligations in
this CIA, within 15 days after such a change.


 


B.            Written Standards.


 


1.             Code of
Conduct.
Prior to the Effective Date, Biovail developed and implemented a program to
distribute a code of conduct (known as its “Standards of Business Conduct”) to
its employees, officers, and directors. Within 120 days after the Effective
Date, Biovail shall either amend its Standards of Business Conduct to meet the
requirements set forth below, or Biovail shall develop, implement, and
distribute to all Covered Persons a written U.S. Healthcare Code of Conduct
which meets the requirements set forth below. (For purposes of this CIA, the
revised Standards of Business Conduct or the U.S. Healthcare Code, as
applicable, shall be referred to as the “Code of Conduct”.) Biovail shall make
the promotion of, and adherence to, the Code of Conduct an element in
evaluating the performance of all employees who are Covered Persons. The Code
of Conduct shall, at a minimum, set forth:


 


a.             Biovail’s commitment to full compliance with all
Federal health care program and FDA requirements, including its commitment to
market, sell, promote, research, develop, provide information about, and
advertise its products in accordance with Federal health care program and FDA
requirements;


 


b.             Biovail’s requirement that all of its Covered Persons
shall be expected to comply with all Federal health care program and FDA
requirements and with Biovail’s own Policies and Procedures as implemented
pursuant to Section III.C (including the requirements of this CIA);


 


c.             the requirement that all of Biovail’s Covered Persons
shall be expected to report to the Chief Compliance Officer, or other
appropriate individual designated by Biovail, suspected violations of any
Federal health care program or FDA requirements or of BiovaiI’s own Policies
and Procedures;


 


d.             the possible consequences to both Biovail and Covered
Persons of failure to comply with Federal health care program and FDA
requirements and with Biovail’s own Policies and Procedures and the failure to
report such noncompliance; and


 


e.             the right of all individuals to use the Disclosure
Program described in Section III.E, and Biovail’s commitment to nonretaliation
and to maintain, as appropriate, confidentiality and anonymity with respect to
such disclosures.


 


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Within 150 days after the Effective Date, each Covered Person shall
certify, in writing, that he or she has received, read, understood, and shall
abide by Biovail’s Code of Conduct. New Covered Persons shall receive the Code
of Conduct and shall complete the required certification within 30 days after
becoming a Covered Person or within 150 days after the Effective Date,
whichever is later.


 


Biovail shall periodically review the Code of Conduct to determine if
revisions are appropriate and shall make any necessary revisions based on such
review. Any revised Code of Conduct shall be distributed within 30 days after
any revisions are finalized and approved by Biovail’s Board or Directors or a
committee thereof. Each Covered Person shall certify, in writing, that he or
she has received, read, understood, and shall abide by the revised Code of
Conduct within 30 days after the distribution of the revised Code of Conduct.


 


2.             Policies
and Procedures. Within 120 days after the Effective Date, Biovail shall implement
written Policies and Procedures regarding the operation of Biovail’s compliance
program and its compliance with Federal health care program and FDA
requirements for activities occurring in or related to the United States
market. At a minimum, the Policies and Procedures shall address:


 


a.             the subjects relating to the Code of Conduct
identified in Section III.B.1;


 


b.             appropriate ways to conduct Government Pricing and
Contracting Functions in compliance with all applicable Federal healthcare
program requirements, including, but not limited to the Federal anti-kickback
statute (codified at 42 U.S.C. § 1320a-7b), and the False Claims Act (codified
at 31 U.S.C. 3729-3733);


 


c.             compensation (including salaries and bonuses) for
Relevant Covered Persons. These Policies and Procedures shall be designed to
ensure that financial incentives do not inappropriately motivate such
individuals to engage in improper promotion, sales, marketing, pricing, or
contracting for Biovail’s products;


 


d.             disciplinary policies and procedures for violations of
Biovail’s Policies and Procedures, including policies relating to Federal
health care program and FDA requirements;


 


e.             appropriate ways to conduct Promotional and Product
Services Related Functions in compliance with all applicable Federal healthcare
program requirements, including, but not limited to the Federal anti-kickback
statute (codified at 42 U.S.C. § 1320a-7b), and the False Claims Act (codified
at 31 U.S.C. 3729-3733);


 


f.             appropriate ways to conduct Promotional and Product
Services Related Functions in compliance with all applicable FDA requirements;


 


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g.             the materials and information that may be distributed
by Biovail sales representatives (including any contract sales agents) about
Government Reimbursed Products for use in the United States and the manner in
which Biovail sales representatives respond to requests for information about
non-FDA approved (or “off-label”) uses of the products;


 


h.             the materials and information that may be distributed
by Biovail representatives who are not field sales agents (e.g.,
through a medical services or medical information department or otherwise); the
mechanisms through, and manner in which, Biovail receives and responds to
requests for information about off-label uses of Government Reimbursed
Products; the form and content of information disseminated in response to such
requests; and the internal review process for the information disseminated;


 


The Policies and Procedures shall include a
requirement that Biovail develop a database (the “Inquiries Database”) that
includes the following items of information for each request for information or
inquiry about Government Reimbursed Products (hereafter, “Inquiry”): 1) date of
Inquiry; 2) form of Inquiry (e.g., fax, phone, medical information
request form); 3) name of the requesting health care professional (HCP) or
health care institution (HCI); 4) nature and topic of request (including exact
language of the Inquiry if made in writing); 5) an evaluation of whether the
Inquiry relates to information about an off-label indication for the product;
6) nature/form of the response from Biovail (including a record of the
materials provided to the HCP or HCI in response to the request); 7) the name
of the field sales representative who called on or interacted with the HCP or
HCI; and 8) the status and findings of any follow-up review conducted by
Biovail in situations in which it appears that the Inquiry may have related to
improper off-label promotion;


 


i.              systems, processes, policies, and procedures relating
to the development of call plans for field sales representatives (including
contract sales agents) who promote, market, or sell Government Reimbursed
Products in the United States. The Policies and Procedures shall require that
Biovail review the call plans for its Government Reimbursed Products and the
bases upon and circumstances under which HCPs and HCIs belonging to specified
medical specialties or types of clinical practices are included in, or excluded
from, the call plans. The Policies and Procedures shall also require that
Biovail modify the call plans as necessary to ensure that Biovail is promoting
its products in a manner that complies with all applicable Federal health care
program and FDA requirements. Biovail’s call plan review shall occur at least
annually and shall also occur each time the FDA approves a new or additional
indication for a Government Reimbursed Product;


 


j.              systems, processes, policies, and procedures relating
to the development, implementation, and review of plans for the distribution of
samples of Government Reimbursed Products in the United States (U.S. Sample
Distribution Plans);


 


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k.             consultant or other fee-for-service arrangements
entered into with HCPs or HCIs related to the United States market for
Government Reimbursed Products (including, but not limited to, speaker
programs, speaker training programs, advisory boards, mentorships,
preceptorships, or any other financial relationship with an HCP or HCI) and all
events and expenses relating to such engagements or arrangements. These
Policies and Procedures shall be designed to ensure that the engagements,
arrangements, and related events are used for legitimate and lawful purposes in
accordance with applicable Federal health care program and FDA requirements. The
policies shall include requirements about the uses, content, and circumstances
of such engagements, arrangements, and events;


 


l.              sponsorship or funding of grants (including
educational grants) or charitable contributions in the United States. These Policies
and Procedures shall be designed to ensure that Biovail’s sponsorship or
funding complies with all applicable Federal health care program requirements
and FDA requirements;


 


m.           funding of, or participation in, any Third Party
Educational Activity as defined in Section II.C.6 above. These Policies
and Procedures shall be designed to ensure that Biovail’s sponsorship or
funding of, or participation in, such programs satisfies all applicable Federal
health care program and FDA requirements related to the sponsorship of any
Educational or Informational Activity;


 


n.             review of all promotional and other materials and
information intended to be disseminated outside Biovail in the United States by
legal, medical, and regulatory personnel in a manner designed to ensure that
legal, regulatory, and medical concerns are properly addressed during Biovail’s
review and approval process and are elevated when appropriate; and


 


o.             sponsorship or funding of U.S.-based research or
related activities (including clinical trials, market research, or authorship
of articles or other publications) by Biovail in a manner that is designed to
ensure that Biovail’s funding or sponsorship of, or participation in, such
activities complies with all applicable Federal health care program and FDA
requirements. In addition, such Policies and Procedures shall ensure that sales
and marketing activities are separate from research activities (e.g.,
clinical trial enrollment).


 


Within 120 days after the Effective Date, the relevant portions of the
Policies and Procedures shall be distributed to all Covered Persons whose job
functions relate to those Policies and Procedures. Appropriate and
knowledgeable staff shall be available to explain the Policies and Procedures.


 


At least annually (and more frequently, if appropriate), Biovail shall
assess and update, as necessary, the Policies and Procedures. Within 30 days
after the effective date of any revisions, the relevant portions of any such
revised Policies and Procedures shall be distributed to all individuals whose
job functions relate to those Policies and Procedures.


 


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C.            Training and Education.


 


1.             General
Training.
Within 120 days after the Effective Date, Biovail shall provide at least two
hours of General Training to each Covered Person. This training, at a minimum,
shall explain Biovail’s:


 


a.             CIA requirements; and


 


b.             Biovail’s Compliance Program (including the Code of
Conduct and the Policies and Procedures as they pertain to general U.S. compliance
issues and CIA compliance issues).


 


To the extent that Biovail provided General Training to Covered Persons
during the 180 days immediately prior to the Effective Date that satisfied the
requirements set forth in Section III.C.1.b above, the OIG shall credit
that training for purposes of satisfying Biovail’s General Training obligations
of this Section III.C.1 for the first Reporting Period. Biovail may
satisfy its remaining General Training obligations for the Covered Persons who
received the training described in the preceding sentence by notifying them
within 90 days after the Effective Date in writing or in electronic format of
the fact that Biovail entered a CIA and providing an explanation of Biovail’s
requirements and obligations under the CIA.


 


New Covered Persons shall receive the General Training described above
within 30 days after becoming a Covered Person or within 120 days after the
Effective Date, whichever is later. After receiving the initial General
Training described above, each Covered Person shall receive at least one hour
of General Training in each subsequent Reporting Period.


 


2.             Specific
Training.
Within 120 days after the Effective Date, each Relevant Covered Person engaged
in Government Contracting and Pricing Functions shall receive at least four
hours of Specific Training in addition to the General Training required above.
This Specific Training shall include, at a minimum, a discussion of:


 


a.             all applicable Federal health care program
requirements relating to Government Pricing and Contracting Functions;


 


b.             all Biovail Policies and Procedures and other
requirements applicable to Government Pricing and Contracting Functions;


 


c.             the personal obligation of each individual involved in
Government Pricing and Contracting Functions to comply with all applicable
Federal health care program requirements and all other applicable legal
requirements;


 


d.             the legal sanctions for violations of the applicable
Federal health care program requirements; and


 


e.             examples of proper and improper practices related to
Government Pricing and Contracting Functions.


 


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Within 120 days after the Effective Date, each Relevant Covered Person
engaged in Promotional and Product Services Related Functions (including BTA
employees who have responsibilities managing or overseeing the PSS Contract)
shall receive at least four hours of Specific Training in addition to the
General Training required above.


 


This Specific Training shall include, at a minimum, a discussion of:


 


f.             all applicable Federal health care program
requirements relating to Promotional and Product Services Related Functions;


 


g.             all applicable FDA requirements relating to
Promotional and Product Services Related Functions;


 


h.             all BiovaiI Policies and Procedures and other
requirements applicable to Promotional and Product Services Related Functions;


 


i.              the personal obligation of each individual involved in
Promotional and Product Services Related Functions to comply with all
applicable Federal health care program and FDA requirements and all other
applicable legal requirements;


 


j.              the legal sanctions for violations of the applicable
Federal health care program and FDA requirements; and


 


k.             examples of proper and improper practices relating to
Promotional and Product Services Related Functions.


 


To the extent that Biovail provided Specific Training to Relevant Covered
Persons during the 180 days immediately prior to the Effective Date that
satisfied the requirements set forth in this Section III.C.2 above, the
OIG shall credit that training for purposes of satisfying Biovail’s Specific
Training obligations of this Section III.C.2 for the first Reporting
Period.


 


New Relevant Covered Persons shall receive Specific Training as set
forth above within 30 days after the beginning of their employment or becoming
Relevant Covered Persons, or within 120 days after the Effective Date,
whichever is later. A Biovail employee who has completed the Specific Training
shall review a new Relevant Covered Person’s work, to the extent that the work
relates to Government Pricing and Contracting Functions or Promotional and
Product Services Related Functions until such time as the new Relevant Covered
Person completes his or her Specific Training.


 


After receiving the initial Specific Training described in this
Section, each Relevant Covered Person shall receive at least three hours of Specific
Training in each subsequent Reporting Period as defined in Section II.A.


 


3.             Certification. Each individual who is
required to attend training shall certify, in writing, or in electronic form,
if applicable, that he or she has received the required training. The
certification shall specify the type of training received and the date
received. The 


 


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Chief Compliance Officer (or designee) shall retain
the certifications, along with all course materials. These shall be made
available to OIG, upon request.


 


4.             Qualifications
of Trainer. Persons providing the training shall be knowledgeable about the
subject area, including applicable Federal health care program and FDA
requirements.


 


5.             Update of
Training.
Biovail shall review the training annually, and, where appropriate, update the
training to reflect changes in Federal health care program requirements, FDA
requirements, any issues discovered during internal audits or any IRO Review,
and any other relevant information.


 


6.             Computer-based
Training.
Biovail may provide the training required under this CIA through appropriate
computer-based training approaches. If Biovail chooses to provide
computer-based training, it shall make available appropriately qualified and
knowledgeable staff or trainers to answer questions or provide additional
information to the individuals receiving such training.


 


D.            Review Procedures.


 


1.     General
Description.


 


a.             Engagement of Independent Review Organization. Within 120 days after the
Effective Date, Biovail shall engage an entity (or entities), such as an
accounting, auditing, or consulting firm (hereinafter “Independent Review
Organization” or “IRO”), to perform reviews to assist Biovail in assessing and
evaluating its Government Pricing and Contracting Functions and its Promotional
and Product Services Related Functions. The applicable requirements relating to
the IRO are outlined in Appendix A to this CIA, which is incorporated by
reference.


 


Each IRO engaged by Biovail shall have expertise in
applicable Federal health care program and FDA requirements as may be
appropriate to the Review for which the IRO is retained. Each IRO shall assess,
along with Biovail, whether it can perform the engagement in a professionally independent
and objective fashion, as appropriate to the nature of the review, taking into
account any other business relationships or other engagements that may exist.


 


The IRO(s) shall conduct reviews that assess
Biovail’s systems, processes, policies, procedures, and practices relating to
Government Pricing and Contracting Functions and Promotional and Product
Services Related Functions (IRO Reviews).


 


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b.             Frequency and Brief Description of Reviews. As set forth more fully in
Appendix B, the IRO Reviews shall consist of two components - a Systems Review
and a Transactions Review. The Systems Review shall assess Biovail’s systems,
processes, policies, and procedures relating to the Medicaid Drug Rebate Program
and the reporting of ASP for purposes of the Medicare Program and certain
elements of Biovail’s Promotional and Product Services Related Functions
(Systems Review). As set forth in Appendix B, if there are no material changes
in Biovail’s relevant systems, processes, policies, and procedures, the Systems
Review shall be performed for the periods covering the first and fourth
Reporting Periods. If Biovail materially changes its relevant systems,
processes, policies, and procedures, the IRO shall perform a Systems Review for
the Reporting Period in which such changes were made in addition to conducting
the Systems Review for the first and fourth Reporting Periods. The Transactions
Review shall be performed annually and shall cover each of the five Reporting Periods.


 


c.             Retention of Records. The IRO and Biovail shall retain and make available to
OIG, upon request, all work papers, supporting documentation, correspondence,
and draft reports (those exchanged between the IRO and Biovail) related to the
reviews.


 


2.             IRO
Review Reports. The IRO(s) shall prepare a report (or reports) based upon each
Review performed. The information and content to be included in each report is
described in Appendix B, which is incorporated by reference.


 


3.             Validation
Review.
In the event OIG has reason to believe that: (a) any IRO Review fails to
conform to the requirements of this CIA; or (b) the IRO’s findings or
Review results are inaccurate, OIG may, at its sole discretion, conduct its own
review to determine whether the applicable IRO Review complied with the
requirements of the CIA and/or the findings or Review results are inaccurate
(Validation Review). Biovail shall pay for the reasonable cost of any such
review performed by OIG or any of its designated agents. Any Validation Review
of Reports submitted as part of Biovail’s final Annual Report shall be
initiated no later than one year after Biovail’s final submission (as described
in Section II) is received by OIG.


 


Prior to initiating a Validation Review, OIG
shall notify Biovail of its intent to do so and provide a written explanation
of why OIG believes such a review is necessary. To resolve any concerns raised
by OIG, Biovail may request a meeting with OIG to: (a) discuss the results
of any Review submissions or findings; (b) present any additional
information to clarify the results of the applicable Review or to correct the
inaccuracy of the Review; and/or (c) propose alternatives to the proposed
Validation Review. Biovail agrees to provide any additional information as may
be requested by OIG under this Section III.E.3 in an expedited manner. OIG
will attempt in good faith to resolve any Review issues with Biovail prior to
conducting a Validation Review. 


 


12

















 


However, the final determination as to
whether or not to proceed with a Validation Review shall be made at the sole
discretion of OIG.


 


4.             Independence
and Objectivity Certification. The IRO shall include in its report(s) to
Biovail a certification or sworn affidavit that it has evaluated its
professional independence and objectivity, as appropriate to the nature of the
engagement, with regard to the IRO Review and that it has concluded that it is,
in fact, independent and objective.


 


E.            Disclosure Program.


 


To the extent not already accomplished, within 90 days after the
Effective Date, Biovail shall establish a Disclosure Program that includes a
mechanism (e.g., a toll-free compliance telephone line) to enable
individuals to disclose, to the Chief Compliance Officer or some other person
who is not in the disclosing individual’s chain of command, any identified
issues or questions associated with Biovail’s policies, conduct, practices, or
procedures with respect to a Federal health care program or FDA requirement
believed by the individual to be a potential violation of criminal, civil, or
administrative law. Biovail shall appropriately publicize the existence of the
disclosure mechanism (e.g., via periodic e-mails to employees or by
posting the information in prominent common areas).


 


The Disclosure Program shall emphasize a nonretribution, nonretaliation
policy, and shall include a reporting mechanism for anonymous communications
for which appropriate confidentiality shall be maintained. Upon receipt of a
disclosure, the Chief Compliance Officer (or designee) shall gather all
relevant information from the disclosing individual. The Chief Compliance
Officer (or designee) shall make a preliminary, good faith inquiry into the
allegations set forth in every disclosure to ensure that he or she has obtained
all of the information necessary to determine whether a further review should
be conducted. For any disclosure that is sufficiently specific so that it
reasonably: (1) permits a determination of the appropriateness of the
alleged improper practice; and (2) provides an opportunity for taking
corrective action, BiovaiI shall conduct an internal review of the allegations
set forth in the disclosure and ensure that proper follow-up is conducted.


 


The Chief Compliance Officer (or designee) shall maintain a disclosure
log, which shall include a record and summary of each disclosure received
(whether anonymous or not), the status of the respective internal reviews, and
any corrective action taken in response to the internal reviews. The disclosure
log shall be made available to OIG upon request.


 


F.             Ineligible Persons.


 


1.     Definitions.
For
purposes of this CIA:


 


a.             an “Ineligible Person” shall include an individual or
entity who:


 


i.              is currently excluded, debarred, suspended, or
otherwise ineligible to participate in the Federal health care programs or in
Federal procurement or nonprocurement programs; or


 


13

















 


ii.             has been convicted of a criminal offense that falls
within the scope of 42 U.S.C. § 1320a-7(a), but has not yet been excluded,
debarred, suspended, or otherwise declared ineligible.


 


b.             “Exclusion Lists” include:


 


i.              the HHS/OIG List of Excluded Individuals/Entities
(available through the Internet at http://www.oig.hhs.gov); and


 


ii.             the General Services Administration’s List of Parties
Excluded from Federal Programs (available through the Internet at
http://www.epls.gov).


 


2.             Screening
Requirements. Biovail shall ensure that all prospective and current Covered Persons
are not Ineligible Persons, by implementing the following screening
requirements.


 


a.             Biovail shall screen all prospective and current
Covered Persons against the Exclusion Lists prior to engaging their services
and, as part of the hiring or contracting process, shall require such Covered
Persons to disclose whether they are Ineligible Persons.


 


b.             Biovail shall screen all Covered Persons against the
Exclusion Lists within 90 days after the Effective Date and on an annual basis
thereafter.


 


c.             Biovail shall implement a policy requiring all Covered
Persons to disclose immediately any debarment, exclusion, suspension, or other
event that makes that person an Ineligible Person.


 


Nothing in this Section affects the responsibility of (or
liability for) Biovail to refrain from billing Federal health care programs for
items or services furnished, ordered, or prescribed by an Ineligible Person.
Biovail understands that items or services furnished by excluded persons are
not payable by Federal health care programs and that Biovail may be liable for
overpayments and/or criminal, civil, and administrative sanctions for employing
or contracting with an excluded person regardless of whether Biovail meets the
requirements of Section III.F.


 


3.             Removal
Requirement. If Biovail has actual notice that a Covered Person has become an
Ineligible Person, Biovail shall remove such Covered Person from responsibility
for, or involvement with, Biovail’s business operations related to the Federal
health care programs and shall remove such Covered Person from any position for
which the Covered Person’s compensation or the items or services furnished,
ordered, or prescribed by the Covered Person are paid in whole or part,
directly or indirectly, by Federal health care programs or otherwise with
Federal funds at least until such time as the Covered Person is reinstated into
participation in the Federal health care programs.


 


14

















 


4.             Pending
Charges and Proposed Exclusions. If Biovail has actual notice that a Covered Person
is charged with a criminal offense that falls within the scope of 42 U.S.C. §§
1320a-7(a), 1320a-7(b)(1)-(3), or is proposed for exclusion during the Covered
Person’s employment or contract term or during the term of a physician’s or
other practitioner’s medical staff privileges, Biovail shall take all
appropriate actions to ensure that the responsibilities of that Covered Person
have not and shall not adversely affect the quality of care rendered to any
beneficiary, patient, or resident, or any claims submitted to any Federal
health care program.


 


G.            Notification of Government
Investigation or Legal Proceedings.


 


Within 30 days after discovery, Biovail shall notify 0IG, in writing,
of any ongoing investigation or legal proceeding known to Biovail conducted or
brought by any U.S. based governmental entity or its agents involving an
allegation that Biovail has committed a crime or has engaged in fraudulent
activities. This notification shall include a description of the allegation,
the identity of the investigating or prosecuting agency, and the status of such
investigation or legal proceeding. BiovaiI shall also provide written notice to
OIG within 30 days after the resolution of the matter, and shall provide OIG
with a description of the findings and/or results of the investigation or
proceedings, if any.


 


H.            Reporting.


 


1.             Reportable
Events.


 


a.     Definition
of Reportable Event. For purposes of this CIA, a “Reportable Event” means
anything that involves:


 


i.              a matter that a reasonable
person would consider a probable violation of criminal, civil, or
administrative laws applicable to any Federal health care program and/or
applicable to any FDA requirements relating to the promotion of products for
which penalties or exclusion may be authorized; or


 


ii.             the filing of a bankruptcy petition by Biovail.


 


A Reportable Event may be the result of an
isolated event or a series of occurrences.


 


b.             Reporting of Reportable Events. If Biovail determines (after a reasonable
opportunity to conduct an appropriate review or investigation of the
allegations) through any means that there is a Reportable Event, Biovail shall
notify OIG, in writing, within 30 days after making the determination that the
Reportable Event exists. The report to OIG shall include the following
information:


 


i.              a complete description of the Reportable Event,
including the relevant facts, persons involved, and legal and Federal health
care program authorities and/or FDA authorities implicated;


 


15

















 


ii.             a description of Biovail’s actions taken to correct
the Reportable Event; and


 


iii.            any further steps Biovail plans to take to address the
Reportable Event and prevent it from recurring.


 


iv.            If the Reportable Event involves the filing of a
bankruptcy petition, the report to the OIG shall include documentation of the
filing and a description of any Federal health care program and/or FDA
authorities implicated.


 


2.             Biovail shall not be required
to report as a Reportable Event any matter previously disclosed under Section III.G
above.


 


I.             Notification of Communications
with FDA.


 


Within 30 days after the date of any written report, correspondence, or
communication between Biovail and the FDA that materially discusses Biovail’s
or a Covered Person’s actual or potential unlawful or improper promotion of any
products (including any improper dissemination of information about off-label
indications), Biovail shall provide a copy of the report, correspondence, or
communication to the OIG. Biovail shall also provide written notice to the OIG
within 30 days after the resolution of any such disclosed off-label matter, and
shall provide the OIG with a description of the findings and/or results of the
matter, if any.


 


J.             Reporting of Physician Payment


 


1.             Posting of Payment Information


 


By April 30, 2010, Biovail shall post in a prominent position on
its website an easily accessible and readily searchable listing of all
U.S.-based physicians, U.S.-based Physician Related Entities (as defined below
in Section III.J.2), or U.S.-based Product Decision-Makers (as defined
below in Section III.J.2) who or which received any Payments (as defined
below in Section III.J.2.) directly or indirectly from Biovail during the
first three months of 2010.


 


After the initial posting, 30 days after the end of each subsequent
calendar quarter, Biovail shall also post on its website a listing of updated
information about all Payments provided during the applicable calendar year
during the preceding quarter(s). No later than January 31, 2011, and each
calendar year thereafter during the term of the CIA, Biovail shall also post on
its website a report of the cumulative value of Payments provided to each
U.S.-based physician, U.S.-based Related Entity, and/or U.S.-based Product
Decision Makers during the preceding calendar year. The quarterly and annual
reports shall be easily accessible and readily searchable.


 


Each listing shall include a complete list of all individual U.S.-based
physicians, U.S.-based Related Entities and/or U.S.-based Product
Decision-Makers to whom or to which 


 


16

















 


Biovail directly or indirectly made Payments in the
preceding calendar quarter or year (as applicable). Each listing shall be
arranged alphabetically according to the physicians’ last name, the name of the
Related Entity, or the name of the Product Decision-Maker. The Payment amounts
in the lists shall be reported in $5,000 increments (e.g., $0 - $5,000;
$5,001- $10,000; etc.) For each entry, the listing
shall include the following information: i) physician’s or Product
Decision-Maker’s full name; ii) name of Related Entity (if applicable); iii)
city and state of the physician’s practice, the Related Entity, or the Product
Decision-Maker (as applicable); iii) the purpose of the Payment; and iii) the
aggregate value of the Payment(s) in the preceding quarter(s) or year
(as applicable).


 


2.             Definitions and Miscellaneous
Provisions


 


Biovail shall continue to make each annual listing and the most recent
quarterly listing of Payment information available on its website at least
throughout the term of this CIA. Biovail shall retain and make available to
OIG, upon request, all work papers, supporting documentation, correspondence,
and records related to all applicable Payments and to the annual and quarterly
listings of Payments. Nothing in this Section III.J affects the
responsibility of Biovail to comply with (or liability for noncompliance with)
all applicable Federal health care program requirements and state laws as they relate
to all applicable Payments made to U.S.-based physicians, U.S.-based Related
Entities, or U.S.-based Product Decision-Makers.


 


If the proposed Physician Payments Sunshine Act of 2009 or similar
legislation is enacted, the OIG shall determine whether the purposes of this Section III.J
are reasonably satisfied by Biovail’s compliance with such legislation. In such
case, and in its sole discretion, the OIG may agree to modify or terminate
provisions of Section III.J as appropriate.


 


For purposes of this Section III.J, the term “Payments” is defined
to include all payments or transfers of value (whether in cash or in kind) made
to U.S.-based physicians, U.S.-based Related Entities, and/or U.S.-based
Product Decision-Makers. The term Payments includes, for example, payments or
compensation for services rendered, grants, fees (including data service fees,
and formulary placement fees), honoraria, and payments relating to research or
education. The term Payments also includes food, entertainment, gifts, trips or
travel, product(s)/item(s) provided for less than fair market value; or
other economic benefit. The term Payments does not include: i) samples of drug
products that meet the definition set forth in 21 C.F.R. § 203.3(i), or ii)
discounts, rebates, or other pricing terms.


 


For purposes of this Section III.J, the term “U.S.-based Related
Entity” is defined to be any entity by or in which any U.S.-based physician
receiving Payments is employed, has tenure, or has an ownership interest.


 


For purposes of this Section III.J, the term “U.S.-based Product
Decision-Maker” is defined to be any individual or entity in a position to
arrange for or recommend the purchasing, prescribing, ordering, or furnishing
of any Government Reimbursed Product in the U.S. market, including with regard
to the placement of any Government Reimbursed Product on a formulary or other
preferred drug list.


 


17

















 


3.             If Biovail does not make any
Payments to U.S.-based physicians, U.S.-based Related Entities, or U.S.-based
Product Decision-Makers during a Reporting Period, Biovail shall not be
required to post Payment information as set forth in Section III.J.1 for
that Reporting Period. Instead, the Chief Compliance Officer shall certify that
Biovail made no such Payments during the applicable Reporting Period. Biovail
shall include such certification(s) in the applicable Annual Report(s).


 


K.            Review of Records Reflecting
the Content of Detailing Sessions.


 


For each Reporting Period, Biovail shall obtain non-Biovail records (e.g.,
Verbatims or similar records) generated by an independent entity (Survey
Entity) reflecting the purported content and subject matter of detailing
interactions between sales representatives and U.S.-based HCPs for up to three
Covered Products (as defined below in this Section III.K.) For each
Covered Product, Biovail shall contract with a Survey Entity to conduct
inquiries into the content and subject matter of the detailing interactions in
the United States. The OIG shall select and notify the Survey Entity of a one
week period within every other quarter in the Reporting Period for which the
surveys shall be conducted, beginning in the second full quarter after the
Effective Date. For each Covered Product, Biovail shall obtain records
reflecting the purported content and subject matter of detailing sessions
during the identified week in all regions across the United States.


 


Prior to start of the second Reporting Period and every Reporting
Period thereafter, based on information provided by Biovail and other
information known to it, and after consultation with Biovail, the OIG shall
select up to three Government Reimbursed Products to be the basis for the
review outlined in this Section III.K and shall notify Biovail of its selection.
The identified products shall be known as the “Covered Products.” The parties
have already identified the Covered Products for the first Reporting Period.


 


Biovail shall review the records obtained from the Survey Entity and
shall identify any instances in which the records appear to indicate that
Covered Persons may have discussed and/or disseminated information about
off-label uses of the Covered Products. Biovail shall make findings based on
its review (Off-Label Findings) and shall take any responsive action it deems
necessary. If necessary for purposes of its review, Biovail shall endeavor to
gather additional factual information about the circumstances relating to any
Off-Label Findings. As part of each Annual Report, Biovail shall provide the
OIG with copies of the underlying records of the detailing interactions, a copy
of Biovail’s Off-Label Findings, and a description of the action(s), if any,
Biovail took in response to the Off-Label Findings.


 


IV.          CHANGES TO BUSINESS UNITS
OR LOCATIONS


 


A.            Change or Closure of Unit or
Location.
In the event that, after the Effective Date, Biovail changes locations or
closes a business unit or location engaged in Government Pricing or Contracting
Functions or Promotional and Product Services Related Functions, Biovail shall
notify OIG of this fact as soon as possible, but no later than within 30 days
after the date of change or closure of the location.


 


18

















 


B.            Purchase or Establishment of
New Unit or Location. In the event that, after the Effective Date, Biovail
purchases or establishes a new business unit or location engaged in Government
Pricing or Contracting Functions or Promotional and Product Services Related
Functions, Biovail shall notify OIG no later than the date the purchase or
establishment is publicly disclosed or the operation of the new business unit
or location. This notification shall include the address of the new business
unit or location, phone number, fax number, Federal health care program provider
and/or supplier number, and the name and address of the contractor that issued
each number (if applicable). Each new business unit or location and all Covered
Persons at each new business unit or location shall be subject to the
applicable requirements of this CIA. In the event that Biovail purchases or
merges with an entity in a transaction that will result in the addition of a
significant number of new Covered Persons, Biovail shall consult with OIG
regarding a plan and timeline for implementing the CIA requirements with
respect to those new Covered Persons. The OIG shall determine, in its sole
discretion, whether to grant time extensions for the implementation of the
applicable CIA requirements with respect to new business units or locations and
new Covered Persons at such locations.


 


C.            Sale of Unit or Location. In the event that, after the
Effective Date, Biovail proposes to sell any or all of its business units or
locations that are subject to this CIA, Biovail shall notify OIG of the
proposed sale no later than the date the sale is publicly disclosed. This
notification shall include a description of the business unit or location to be
sold, a brief description of the terms of the sale, and the name and contact
information of the prospective purchaser. This CIA shall be binding on the
purchaser of such business unit or location, unless otherwise determined and
agreed to in writing by the OIG.


 


V.            IMPLEMENTATION AND ANNUAL REPORTS


 


A.            Implementation Report. Within 150 days after the
Effective Date, Biovail shall submit a written report to OIG summarizing the
status of its implementation of the requirements of this CIA (Implementation
Report). The Implementation Report shall, at a minimum, include:


 


1.             the name, address, phone
number, and position description of the Chief Compliance Officer required by Section III.A,
and a summary of other noncompliance job responsibilities the Chief Compliance
Officer may have;


 


2.             the names and positions of the
members of the U.S. Healthcare Compliance Policy Committee required by Section III.A;


 


3.             a copy of Biovail’s Code of
Conduct required by Section III.B.1;


 


4.             a copy of all Policies and
Procedures required by Section III.B.2;


 


5.             the number of individuals
required to complete the Code of Conduct certification required by Section III.B.1,
the percentage of individuals who have completed such certification, and an
explanation of any exceptions (the documentation supporting this information
shall be available to OIG, upon request);


 


19














 


6.             the following information
regarding each type of training required by Section III.C:


 


a.             a description of such training, including a summary of
the topics covered, the length of sessions, and a schedule of training
sessions; and


 


b.             the number of individuals required to be trained,
percentage of individuals actually trained, and an explanation of any
exceptions.


 


A copy of all training materials and the
documentation supporting this information shall be available to OIG, upon
request.


 


7.             the following information
regarding the IRO(s): (a) identity, address, and phone number; (b) a
copy of the engagement letter; and (c) a summary and description of any
and all current and prior engagements and agreements between Biovail and the
IRO;


 


8.             a certification from the IRO
regarding its professional independence and objectivity with respect to
Biovail;


 


9.             a description of the
Disclosure Program required by Section III.E;


 


10.          a description of the process
by which Biovail fulfills the requirements of Section III.F regarding
Ineligible Persons;


 


11.          the name, title, and
responsibilities of any person who is determined to be an Ineligible Person
under Section III.F; the actions taken in response to the screening and
removal obligations set forth in Section III.F; and the actions taken in
response to the screening and removal obligations set forth in Section III.F;


 


12.          a list of all of Biovail’s
locations (including locations and mailing addresses); the corresponding name
under which each location is doing business; the corresponding phone numbers
and fax numbers; each location’s Federal health care provider or supplier
number(s) (if applicable), and the name and address of each Federal health
care program contractor to which Biovail currently submits claims (if applicable);


 


13.          a description of Biovail’s
corporate structure, including identification of any parent and sister
companies, subsidiaries, and their respective lines of business; and


 


14.          the certifications required by
Section V.C.


 


B.            Annual Reports. Biovail shall
submit to OIG annually a report with respect to the status of, and findings
regarding, Biovail’s compliance activities for each of the five Reporting
Periods (Annual Report).


 


Each Annual Report shall include, at a
minimum:


 


20

















 


1.             any change in the identity,
position description, or other noncompliance job responsibilities of the Chief
Compliance Officer and any change in the membership of the U.S. Healthcare
Compliance Policy Committee described in Section III.A;


 


2.             a summary of any significant
changes or amendments to the Policies and Procedures required by Section III.B
and the reasons for such changes (e.g., change in applicable Federal
health care program or FDA requirements);


 


3.             the number of individuals
required to complete the Code of Conduct certification required by Section III.B.1,
the percentage of individuals who have completed such certification, and an
explanation of any exceptions (the documentation supporting this information
shall be available to OIG, upon request);


 


4.             the following information
regarding each type of training required by Section III.C:


 


a.             a description of such training, including a summary of
the topics covered, the length of sessions, and a schedule of training sessions;
and


 


b.             the number of individuals required to be trained,
percentage of individuals actually trained, and an explanation of any
exceptions.


 


A copy of all training materials and the
documentation supporting this information shall be available to OIG, upon
request.


 


5.             a complete copy of all reports
prepared pursuant to Section III.D, along with a copy of the IRO’s
engagement letter (if applicable);


 


6.             Biovail’s response and
corrective action plan(s) related to any issues raised by the reports prepared
pursuant to Section III.D;


 


7.             a summary and description of
any and all current and prior engagements and agreements between Biovail and
the IRO, if different from what was submitted as part of the Implementation
Report;


 


8.             a certification from the IRO
regarding its professional independence and objectivity with respect to
Biovail;


 


9.             a summary of the disclosures
in the disclosure log required by Section III.E that relate to Federal
health care programs or FDA requirements;


 


10.          any changes to the process by
which Biovail fulfills the requirements of Section III.F regarding
Ineligible Persons;


 


11.          the name, title, and
responsibilities of any person who is determined to be an Ineligible Person
under Section III.F; the actions taken by Biovail in response to the
screening 


 


21

















 


and removal obligations set forth in Section III.F;
and the actions by Biovail in response to the screening and removal obligations
set forth in Section III.F;


 


12.          a summary describing any
ongoing investigation or legal proceeding required to have been reported
pursuant to Section III.G. The summary shall include a description of the
allegation, the identity of the investigating or prosecuting agency, and the
status of such investigation or legal proceeding;


 


13.          a summary of Reportable Events
(as defined in Section III.H) identified during the Reporting Period and
the status of any corrective and preventative action relating to all such
Reportable Events;


 


14.          a summary describing any
communications with the FDA required to have been reported pursuant to Section III.I.
This summary shall include a description of the matter and the status of the
matter;


 


15.          a copy of all information
required by Section III.K;


 


16.          a list and description of all
Government Reimbursed Products promoted by Biovail in the United States (either
directly or through the use of a contract sales force) and the FDA-approved
uses of the products;


 


17.          a description of all changes
to the most recently provided list of Biovail’s locations (including addresses)
as required by Section V.A.12; the corresponding name under which each
location is doing business; the corresponding phone numbers and fax numbers;
each location’s Federal health care program provider number or supplier number(s) (if
applicable); and the name and address of each Federal health care program
contractor to which Biovail currently submits claims (if applicable); and


 


18.          the certifications required by
Section V.C.


 


The first Annual Report shall be received by OIG no later than 90 days
after the end of the first Reporting Period. Subsequent Annual Reports shall be
received by OIG no later than the anniversary date of the due date of the first
Annual Report.


 


C.            Certifications. The Implementation Report
and Annual Reports shall include a certification by the Chief Compliance
Officer that:


 


1.             to the best of his or her
knowledge, except as otherwise described in the applicable report, Biovail is
in compliance with all of the requirements of this CIA;


 


2.             he or she has reviewed the
Report and has made reasonable inquiry regarding its content and believes that
the information in the Report is accurate and truthful;


 


3.             to the best of his or her
knowledge, Biovail has complied with its obligations under the Settlement
Agreement: (a) not to resubmit to any Federal health care program payors
any previously denied claims related to the Covered Conduct addressed in the 


 


22

















 


Settlement Agreement, and not to appeal any such
denials of claims; (b) not to charge to or otherwise seek payment from
federal or state payors for unallowable costs (as defined in the Settlement
Agreement); and (c) to identify and adjust any past charges or claims for
unallowable costs;


 


4.             Biovail’s: 1) Policies and
Procedures as referenced in Section III.B.2 above; 2) templates for
standardized contracts and other similar documents; and 3) the training
materials used for purposes of Section III.C all have been reviewed by
competent legal counsel and have been found to be in compliance with all
applicable Federal health care program and FDA requirements. In addition, any
Biovail promotional materials containing claims or information about Government
Reimbursed Products and other materials and information intended to be
disseminated outside Biovail in the United States have been reviewed by
competent regulatory, medical and/or legal personnel in accordance with
applicable Policies and Procedures to ensure that legal, medical, and
regulatory concerns have been addressed and elevated when required, and that
the materials and information when finally approved are in compliance with all
applicable Federal health care program and FDA requirements. If the applicable
legal requirements have not changed, after the initial review of the documents
listed above, only material changes to the documents must be reviewed by
competent regulatory, medical and/or legal personnel. The certification shall
include a description of the document(s) reviewed and approximately when
the review was completed. The documentation supporting this certification shall
be available to OIG, upon request; and


 


5.             Biovail posted information
about Payments on its website as required by in Section III.J, or, if
applicable, Biovail made no Payments (as defined in Section III.J) during
the Reporting Period to any U.S.-based physician, U.S.-based Related Entity, or
U.S.-based Product Decision-Maker.


 


D.            Designation of Information. Biovail shall clearly
identify any portions of its submissions that it believes are trade secrets, or
information that is commercial or financial and privileged or confidential, and
therefore potentially exempt from disclosure under the Freedom of Information
Act (FOIA), 5 U.S.C. § 552. Biovail shall refrain from identifying any
information as exempt from disclosure if that information does not meet the
criteria for exemption from disclosure under FOIA.


 


VI.          NOTIFICATIONS ANT)
SUBMISSION OF REPORTS


 


Unless otherwise stated in writing after the Effective Date, all notifications
and reports required under this CIA shall be submitted to the following
entities:


 


OIG:


 


Administrative and Civil Remedies Branch

Office of Counsel to the Inspector General 

Office of Inspector General

U.S. Department of Health and Human Services 

Cohen Building, Room 5527


 


23

















 


330 Independence Avenue, S.W.

Washington, DC 20201

Telephone: 202.619.2078

Facsimile: 202.205.0604


 


Biovail:


 


Seana Carson

Chief Compliance Officer 

Biovail Corporation

7150 Mississauga Rd. 

Mississauga, Ontario

L5N 8M5

Phone: 905.286.3373 

Fax: 905.286.3201


 


Unless otherwise specified, all notifications
and reports required by this CIA may be made by certified mail, overnight mail,
hand delivery, or other means, provided that there is proof that such
notification was received. For purposes of this requirement, internal facsimile
confirmation sheets do not constitute proof of receipt. Upon request by OIG,
Biovail may be required to provide OIG with an electronic copy of each notification
or report required by this CIA in searchable portable document format (pdf),
either instead of or in addition to, a paper copy.


 


VII.         OIG INSPECTION, AUDIT, AND
REVIEW RIGHTS


 


In addition to any other
rights OIG may have by statute, regulation, or contract, OIG or its duly
authorized representative(s) may examine or request copies of Biovail’s
books, records, and other documents and supporting materials and/or conduct
on-site reviews of any of Biovail’s U.S. locations for the purpose of verifying
and evaluating: (a) Biovail’s compliance with the terms of this CIA; and (b) Biovail’s
compliance with the requirements of the Federal health care programs in which
it participates and with all applicable FDA requirements. The documentation
described above shall be made available by Biovail to OIG or its duly
authorized representative(s) at all reasonable times for inspection,
audit, or reproduction. Furthermore, for purposes of this provision, OIG or its
duly authorized representative(s) may interview any of BiovaiI’s
employees, contractors, or agents who consent to be interviewed at the
individual’s place of business during normal business hours or at such other
place and time as may be mutually agreed upon between the individual and OIG.
Biovail shall assist OIG or its duly authorized representative(s) in
contacting and arranging interviews with such individuals upon OIG’s request.
Biovail’s employees may elect to be interviewed with or without a
representative of Biovail present.


 


VIII.       DOCUMENT AND RECORD
RETENTION


 


Biovail shall maintain for
inspection all documents and records relating to reimbursement from the Federal
health care programs, or to compliance with this CIA, for six years (or longer
if otherwise required by law) from the Effective Date.


 


24

















 


IX.          DISCLOSURES


 


Consistent with HHS’s FOIA
procedures, set forth in 45 C.F.R. Part 5, OIG shall make a reasonable
effort to notify Biovail prior to any release by OIG of information submitted
by Biovail pursuant to its obligations under this CIA and identified upon
submission by Biovail as trade secrets, or information that is commercial or
financial and privileged or confidential, under the FOIA rules. With respect to
such releases, Biovail shall have the rights set forth at 45 C.F.R. § 5.65(d).


 


X.            BREACH AND DEFAULT PROVISIONS


 


Biovail is expected to fully and timely comply with all of its CIA
obligations.


 


A.            Stipulated Penalties for
Failure to Comply with Certain Obligations. As a contractual remedy, Biovail and OIG
hereby agree that failure to comply with certain obligations as set forth in
this CIA may lead to the imposition of the following monetary penalties
(hereinafter referred to as “Stipulated Penalties”) in accordance with the
following provisions.


 


1.             A Stipulated Penalty of $2,500
(which shall begin to accrue on the day after the date the obligation became
due) for each day Biovail fails to establish and implement any of the following
obligations as described in Section III:


 


a.             a Chief Compliance Officer;


 


b.             a U.S. Healthcare Compliance Policy Committee;


 


c.             the Risk and Compliance Committee of the Board of
Director’s resolution;


 


d.             a written Code of Conduct;


 


e.             written Policies and Procedures;


 


f.             the training of Covered Persons and Relevant Covered
Persons;


 


g.             a Disclosure Program;


 


h.             Ineligible Persons screening and removal requirements;
L notification of Government investigations or legal proceedings;


 


i.              notification of Government investigations of legal
proceedings;


 


j.              notification of communications with the FDA as
specified in Section III.I;


 


k.             posting of Payment information as required by Section III.J;
and


 


l.              a review of records reflecting the content of
detailing sessions as required by Section III.K.


 


25

















 


2.             A Stipulated Penalty of $2,500
(which shall begin to accrue on the day after the date the obligation became
due) for each day Biovail fails to engage an IRO, as required in Section III.D
and Appendix A.


 


3.             A Stipulated Penalty of $2,500
(which shall begin to accrue on the day after the date the obligation became
due) for each day Biovail fails to submit the Implementation Report or any
Annual Reports to OIG in accordance with the requirements of Section V by
the deadlines for submission.


 


4.             A Stipulated Penalty of $2,500
(which shall begin to accrue on the day after the date the obligation became
due) for each day Biovail fails to submit the annual IRO Review Report(s) in
accordance with the requirements of Section III.D and Appendix B.


 


5.             A Stipulated Penalty of $1,500
for each day Biovail fails to grant access as required in Section VII.
(This Stipulated Penalty shall begin to accrue on the date Biovail fails to
grant access.)


 


6.             A Stipulated Penalty of $5,000
for each false certification submitted by or on behalf of Biovail as part of
its Implementation Report, Annual Report, additional documentation to a report
(as requested by the OIG), or otherwise required by this CIA.


 


7.             A Stipulated Penalty of $1,000
for each day Biovail fails to comply fully and adequately with any obligation
of this CIA. OIG shall provide notice to Biovail stating the specific grounds
for its determination that Biovail has failed to comply fully and adequately
with the CIA obligation(s) at issue and steps Biovail shall take to comply
with the CIA. (This Stipulated Penalty shall begin to accrue 10 days after
Biovail receives this notice from OIG of the failure to comply.) A Stipulated
Penalty as described in this Subsection shall not be demanded for any violation
for which OIG has sought a Stipulated Penalty under Subsections 1-6 of this
Section.


 


B.            Timely Written Requests for
Extensions. Biovail may, in advance of the due date, submit a timely written
request for an extension of time to perform any act or file any notification or
report required by this CIA. Notwithstanding any other provision in this
Section, if OIG grants the timely written request with respect to an act,
notification, or report, Stipulated Penalties for failure to perform the act or
file the notification or report shall not begin to accrue until one day after
Biovail fails to meet the revised deadline set by OIG. Notwithstanding any
other provision in this Section, if OIG denies such a timely written request,
Stipulated Penalties for failure to perform the act or file the notification or
report shall not begin to accrue until three business days after Biovail
receives OIG’s written denial of such request or the original due date,
whichever is later. A “timely written request” is defined as a request in
writing received by OIG at least five business days prior to the date by which
any act is due to be performed or any notification or report is due to be
filed.


 


26

















 


C.            Payment of Stipulated
Penalties.


 


1.             Demand
Letter.
Upon a finding that Biovail has failed to comply with any of the obligations
described in Section X.A and after determining that Stipulated Penalties
are appropriate, OIG shall notify Biovail of: (a) Biovail’s failure to comply;
and (b) OIG’s exercise of its contractual right to demand payment of the
Stipulated Penalties (this notification is referred to as the “Demand Letter”).


 


2.             Response
to Demand Letter. Within 10 days after the receipt of the Demand
Letter, Biovail shall either: (a) cure the breach to OIG’s satisfaction
and pay the applicable Stipulated Penalties or (b) request a hearing
before an HHS administrative law judge (ALJ) to dispute OIG’s determination of
noncompliance, pursuant to the agreed upon provisions set forth below in Section X.E.
In the event Biovail elects to request an ALJ hearing, the Stipulated Penalties
shall continue to accrue until Biovail cures, to OIG’s satisfaction, the
alleged breach in dispute. Failure to respond to the Demand Letter in one of
these two manners within the allowed time period shall be considered a material
breach of this CIA and shall be grounds for exclusion under Section X.D.


 


3.             Form of
Payment.
Payment of the Stipulated Penalties shall be made by electronic funds transfer
to an account specified by OIG in the Demand Letter.


 


4.             Independence
from Material Breach Determination. Except as set forth in Section X.D.1.c,
these provisions for payment of Stipulated Penalties shall not affect or
otherwise set a standard for OIG’s decision that Biovail has materially
breached this CIA, which decision shall be made at OIG’s discretion and shall
be governed by the provisions in Section X.D, below.


 


D.            Exclusion for Material Breach
of this CIA.


 


1.             Definition
of Material Breach. A material breach of this CIA means:


 


a.             a failure by Biovail to report a Reportable Event and
take corrective action as required in Section III.H;


 


b.             a repeated or flagrant violation of the obligations
under this CIA, including, but not limited to, the obligations addressed in Section X.A;


 


c.             a failure to respond to a Demand Letter concerning the
payment of Stipulated Penalties in accordance with Section X.C;


 


d.             a failure to engage and use an IRO in accordance with Section III,D;
or


 


e.             a failure of the Risk and Compliance Committee of the
Board to issue a resolution in accordance with Section III.A.3.


 


2.             Notice of
Material Breach and Intent to Exclude. The parties agree that a material breach
of this CIA by Biovail constitutes an independent basis for Biovail’s exclusion
from participation in the Federal health care programs. Upon a determination by
OIG that Biovail has materially breached this CIA and that exclusion is the
appropriate remedy, OIG shall 


 


27

















 


notify Biovail of: (a) Biovail’s material breach;
and (b) OIG’s intent to exercise its contractual right to impose exclusion
(this notification is hereinafter referred to as the “Notice of Material Breach
and Intent to Exclude”).


 


3.             Opportunity
to Cure.
Biovail shall have 30 days from the date of receipt of the Notice of Material
Breach and Intent to Exclude to demonstrate to OIG’s satisfaction that:


 


a.             Biovail is in compliance with the obligations of the
CIA cited by OIG as being the basis for the material breach;


 


b.             the alleged material breach has been cured; or


 


c.             the alleged material breach cannot be cured within the
30-day period, but that: (i) Biovail has begun to take action to cure the
material breach; (ii) Biovail is pursuing such action with due diligence;
and (iii) Biovail has provided to OIG a reasonable timetable for curing
the material breach.


 


4.             Exclusion
Letter.
If, at the conclusion of the 30-day period, Biovail fails to satisfy the
requirements of Section X.D.3, OIG may exclude Biovail from participation
in the Federal health care programs. OIG shall notify Biovail in writing of its
determination to exclude Biovail (this letter shall be referred to hereinafter
as the “Exclusion Letter”). Subject to the Dispute Resolution provisions in Section X.E,
below, the exclusion shall go into effect 30 days after the date of Biovail’s
receipt of the Exclusion Letter. The exclusion shall have national effect and
shall also apply to all other Federal procurement and nonprocurement programs.
Reinstatement to program participation is not automatic. After the end of the
period of exclusion, Biovail may apply for reinstatement by submitting a
written request for reinstatement in accordance with the provisions at 42
C.F.R. §§ 1001.3001-.3004.


 


E.            Dispute Resolution


 


1.             Review
Rights.
Upon OIG’s delivery to Biovail of its Demand Letter or of its Exclusion Letter,
and as an agreed-upon contractual remedy for the resolution of disputes arising
under this CIA, Biovail shall be afforded certain review rights comparable to
the ones that are provided in 42 U.S.C. § 1320a-7(f) and 42 C.F.R. Part 1005
as if they applied to the Stipulated Penalties or exclusion sought pursuant to
this CIA. Specifically, OIG’s determination to demand payment of Stipulated
Penalties or to seek exclusion shall be subject to review by an HHS ALJ and, in
the event of an appeal, the HHS Departmental Appeals Board (DAB), in a manner
consistent with the provisions in 42 C.F.R. § 1005.2-100521. Notwithstanding
the language in 42 C.F.R. § 1005.2(c), the request for a hearing involving
Stipulated Penalties shall be made within 10 days after receipt of the Demand
Letter and the request for a hearing involving exclusion shall be made within
25 days after receipt of the Exclusion Letter.


 


2.             Stipulated
Penalties Review. Notwithstanding any provision of Title 42 of the
United States Code or Title 42 of the Code of Federal Regulations, the only
issues in a proceeding for Stipulated Penalties under this CIA shall be: (a) whether
Biovail was in full and timely compliance with the obligations of this CIA for
which OIG demands payment; and (b) the 


 


28

















 


period of noncompliance. Biovail shall have the burden
of proving its full and timely compliance and the steps taken to cure the
noncompliance, if any. OIG shall not have the right to appeal to the DAB an
adverse ALJ decision related to Stipulated Penalties. If the ALJ agrees with
OIG with regard to a finding of a breach of this CIA and orders Biovail to pay
Stipulated Penalties, such Stipulated Penalties shall become due and payable 20
days after the ALJ issues such a decision unless Biovail requests review of the
ALJ decision by the DAB. If the All decision is properly appealed to the DAB
and the DAB upholds the determination of OIG, the Stipulated Penalties shall
become due and payable 20 days after the DAB issues its decision.


 


3.             Exclusion
Review.
Notwithstanding any provision of Title 42 of the United States Code or Title 42
of the Code of Federal Regulations, the only issues in a proceeding for
exclusion based on a material breach of this CIA shall be:


 


a.             whether Biovail was in material breach of this CIA;


 


b.             whether such breach was continuing on the date of the
Exclusion Letter; and


 


c.             whether the alleged material breach could not have
been cured within the 30-day period, but that: (i) Biovail had begun to
take action to cure the material breach within that period; (ii) Biovail
has pursued and is pursuing such action with due diligence; and (iii) Biovail
provided to GIG within that period a reasonable timetable for curing the
material breach and Biovail has followed the timetable.


 


For purposes of the exclusion herein, exclusion shall take effect only
after an ALJ decision favorable to OIG, or, if the ALJ rules for Biovail,
only after a DAB decision in favor of OIG. Biovail’s election of its
contractual right to appeal to the DAB shall not abrogate OIG’s authority to
exclude Biovail upon the issuance of an ALJ’s decision in favor of OIG. If the
ALJ sustains the determination of OIG and determines that exclusion is
authorized, such exclusion shall take effect 20 days after the ALJ issues such
a decision, notwithstanding that Biovail may request review of the All decision
by the DAB. If the DAB finds in favor of OIG after an ALJ decision adverse to
OIG, the exclusion shall take effect 20 days after the DAB decision. Biovail
shall waive its right to any notice of such an exclusion if a decision
upholding the exclusion is rendered by the ALJ or DAB. If the DAB finds in
favor of Biovail, Biovail shall be reinstated effective on the date of the
original exclusion.


 


4.             Finality
of Decision. The review by an ALJ or DAB provided for above shall not be
considered to be an appeal right arising under any statutes or regulations.
Consequently, the parties to this CIA agree that the DAB’s decision (or the ALJ
s decision if not appealed) shall be considered final for all purposes under
this CIA.


 


XI.          EFFECTIVE AND BINDING
AGREEMENT


 


Biovail and OIG
agree as follows:


 


29

















 


A.            This CIA shall be binding on
the successors, assigns, and transferees of Biovail;


 


B.            This CIA shall become final
and binding on the date the final signature is obtained on the CIA;


 


C.            This CIA constitutes the complete
agreement between the parties and may not be amended except by written consent
of the parties to this CIA;


 


D.            The undersigned Biovail
signatories represent and warrant that they are authorized to execute this CIA.
The undersigned OIG signatory represents that he is signing this CIA in his
official capacity and that he is authorized to execute this CIA.


 


E.            This CIA may be executed in
counterparts, each of which constitutes an original and all of which constitute
one and the same CIA. Facsimiles of signatures shall constitute acceptable,
binding signatures for purposes of this CIA.


 


30














 


ON
BEHALF OF BIOVAIL CORPORATION


 


	
  /s/ Jennifer Tindale

  	
   

  	
  September 11, 2009

  
	
  Jennifer Tindale

  	
   

  	
  DATE

  
	
  Vice President, Associate General Counsel

  	
   

  	
   

  
	
  Biovail Corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Geoffrey E. Hobart

  	
   

  	
  9/11/09

  
	
  Geoffrey E. Hobart

  	
   

  	
  DATE

  
	
  Covington & Burling LLP

  	
   

  	
   

  
	
  Counsel for Biovail Corporation

  	
   

  	
   

  



 


31

















 


ON
BEHALF OF THE OFFICE OF INSPECTOR GENERAL

OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES


 




	
   

  	
   

  	
   

  
	
  /s/ Gregory E. Demske

  	
   

  	
  9/11/09

  
	
   

  	
   

  	
   

  
	
  GREGORY E. DEMSKE

  	
   

  	
  DATE

  
	
  Assistant Inspector General for Legal Affairs

  	
   

  	
   

  
	
  Office of Inspector General

  	
   

  	
   

  
	
  U.S. Department of Health and Human Services

  	
   

  	
   

  






 


32

















 


APPENDIX
A


 


INDEPENDENT
REVIEW ORGANIZATION


 


This Appendix contains the requirements
relating to the Independent Review Organization (IRO) required by Section III.D
of the CIA.


 


A.                                   IRO Engagement.


 


Biovail shall engage an IRO
that possesses the qualifications set forth in Paragraph B, below, to perform
the responsibilities in Paragraph C, below. The IRO shall conduct its review in
a professionally independent and objective fashion, as set forth in Paragraph
D.  Within 30 days after OIG receives
written notice of the identity of the selected IRO, OIG will notify Biovail if
the IRO is unacceptable. Absent notification from OIG that the IRO is
unacceptable, Biovail may continue to engage the IRO.


 


If Biovail engages a new IRO
during the term of the CIA, this IRO shall also meet the requirements of this
Appendix. If a new IRO is engaged, Biovail shall submit the information
identified in Section V.A.7 of the CIA to OIG within 30 days of engagement
of the IRO. Within 30 days after OIG receives written notice of the identity of
the selected IRO, OIG will notify Biovail if the IRO is unacceptable. Absent
notification from OIG that the IRO is unacceptable, Biovail may continue to
engage the IRO.


 


B.                                     IRO Qualifications.


 


The IRO shall:


 


1.             assign
individuals to conduct the IRO Review(s) who have expertise in all
applicable Federal health care program and FDA requirements related to the
Reviews. The individuals shall also be knowledgeable about the general
requirements of the Federal health care program(s) under which Biovail
products are reimbursed;


 


2.             assign
individuals to design and select the Transaction Review sample(s) who are
knowledgeable about the appropriate statistical sampling techniques; and


 


3.             have
sufficient staff and resources to conduct the reviews required by the CIA on a
timely basis.


 


C.                                     IRO Responsibilities.


 


The IRO shall:


 


1.             perform
each IRO Review in accordance with the specific requirements of the CIA;


 


2.             follow
all applicable Federal health care program and FDA requirements in making
assessments in the IRO Reviews;


 

















 


3.             if
in doubt of the application of a particular Federal health care program or FDA
requirement, policy, or regulation, request clarification from the appropriate
authority (e.g., CMS or FDA);


 


4.             respond
to all OIG inquires in a prompt, objective, and factual manner; and


 


5.             prepare
timely, clear, well-written reports that include all the information required
by Appendix B to the CIA.


 


D.                                    IRO Independence and Objectivity.


 


The IRO must perform the IRO Reviews in a
professionally independent and objective fashion, as appropriate to the nature
of the engagement, taking into account any other business relationships or
engagements that may exist between the IRO and Biovail.


 


E.                                      IRO Removal/Termination.


 


1.             Provider. If Biovail terminates its IRO during the course of
the engagement, Biovail must submit a notice explaining its reasons to OIG no
later than 30 days after termination. Biovail must engage a new IRO in
accordance with Paragraph A of this Appendix.


 


2.             OIG Removal of IRO. In the event OIG has reason to believe
that the IRO does not possess the qualifications described in Paragraph B, is
not independent and/or objective as set forth in Paragraph D, or has failed to
carry out its responsibilities as described in Paragraph C, OIG may, at its
sole discretion, require Biovail to engage a new IRO in accordance with
Paragraph A of this Appendix.


 


Prior to requiring Biovail
to engage a new IRO, OIG shall notify Biovail of its intent to do so and
provide a written explanation of why OIG believes such a step is necessary. To
resolve any concerns raised by OIG, Biovail may request a meeting with OIG to
discuss any aspect of the IRO’s qualifications, independence or performance of
its responsibilities and to present additional information regarding these
matters. Biovail shall provide any additional information as may be requested
by OIG under this Paragraph in an expedited manner. OIG will attempt in good
faith to resolve any differences regarding the IRO with Biovail prior to
requiring Biovail to terminate the IRO. 
However, the final determination as to whether or not to require Biovail
to engage a new IRO shall be made at the sole discretion of OIG.


 


2

















 


APPENDIX
B TO CIA


 


IRO
SYSTEM AND TRANSACTION REVIEWS


 


I.                                         IRO System and Transaction
Reviews — General Description


 


As specified more fully below, Biovail shall
retain an Independent Review Organization (IRO) to perform reviews to assist
Biovail in assessing and evaluating its systems, processes, policies,
procedures, and practices related to Government Pricing and Contracting
Functions (as defined in Section II.C.3 of the CIA) and to Promotional and
Product Services Related Functions (as defined in Section II.C.5 of the
CIA). To the extent that the CIA requires a review of transactions or
activities, the IRO shall review transactions and activities that occur
subsequent to the Effective Date of the CIA.


 


The IRO shall perform two types of
engagements. First, the IRO shall perform two-part system reviews of: 1)
Biovail’s systems, processes, policies, and procedures relating to the
calculation and reporting of AMP, BP, and ASP for purposes of the Medicaid Drug
Rebate program and the Medicare program, respectively; and 2) Biovail’s
systems, processes, policies, and procedures relating to certain elements of
its Promotional and Product Services Related Functions. Collectively, these
reviews shall be known as the “Systems Review”. Second, the IRO shall perform
Transactions Reviews as described more fully below in Section III. Biovail
may engage, at its discretion, a single IRO to perform the Systems Reviews and
the Transactions Reviews provided that the entity has the necessary expertise
and capabilities to perform both.


 


If, during the term of the CIA, there are no
material changes in Biovail’s Government Pricing and Contracting related
systems, processes, policies, and procedures related to AMP, BP, or ASP or in
Biovail’s Promotional and Product Services Related Functions related to the
items identified in Section II.B below, the IRO shall perform a Systems
Review for the first and fourth Reporting Periods, If, during the term of the
CIA, Biovail materially changes its Government Pricing and Contracting related
systems, processes, policies, and procedures related to AMP, BP, or ASP, or its
Promotional and Product Services Related Functions as they relate to the items
set forth in Section II.B, the IRO shall perform a Systems Review for the
Reporting Period in which such changes were made in addition to conducting the
Systems Review for the first and fourth Reporting Periods.


 


Any additional Systems Review(s) shall
consist of: 1) an identification of the material changes; 2) an assessment of
whether the systems, processes, policies, and procedures already reported on
did not materially change; and 3) an update on the systems, processes,
policies, and procedures that materially changed.


 


The IRO shall conduct the Transactions Review
for each Reporting Period of the CIA.


 


II.                                     Systems Review


 


A.                                   Systems Review - Part 1 (relating to
AMP, BP, and ASP)


 


The IRO shall review Biovail’s systems,
processes, policies, and procedures (including the controls on the systems,
processes, policies, and procedures) associated with the tracking,


 

















 


gathering, and accounting for all relevant
data for purposes of calculating and reporting AMP, BP, and ASP to CMS. More
specifically, the IRO shall review the following for Biovail’s Government
Reimbursed Products as defined in Section II.C.3 of the CIA:


 


a)                                      The systems, processes, policies, and
procedures used to determine which Biovail customers are included or excluded
for purposes of calculating AMP, BP, and ASP;


 


b)                                     The systems, policies, processes, and
procedures used to determine whether and which particular transactions (e.g.,
discounts, rebates) are included in or excluded from AMP, BP, and ASP determinations;


 


c)                                      A review of Biovail’s methodology for
applying transactions to the AMP, BP, and ASP determinations;


 


d)                                     A review of Biovail’s methodology for
estimating any prices, discounts, or other amounts used in determining AMP, BP,
and ASP;


 


e)                                      The flow of data and information by which
price, contract terms, and transactions with Biovail customers are accumulated
from the source systems and entered and tracked in Biovail’s information
systems for purposes of determining AMP, BP, and ASP;


 


f)                                        A review of any Biovail inquiries to CMS
regarding AMP, BP, and ASP determinations and reporting requirements, including
requests for interpretation or guidance, and any responses to those inquiries;
and


 


g)                                     The controls and processes in place to
examine and address system reports that require critical evaluation (such as
reports of variations, exceptions, or outliers). This shall include a review of
the bases upon which variations, exceptions, and outliers are identified and
the follow-up actions undertaken to identify the cause of any variations.


 


B.                                     Systems Review - Part 2 (Relating to
Promotional and Product Services Related Functions)


 


The IRO shall review Biovail’s systems,
processes, policies, and procedures (including the controls on those systems,
processes, policies, and procedures) relating to the following Promotional and
Product Services Related Functions (known as “Reviewed Policies and Procedures”):


 


1.             Biovail’s
systems, policies, processes, and procedures applicable to the manner in which
Biovail representatives (including employee sales representatives, contract
sales agents, and/or headquarters personnel (such as medical services
personnel)) handle requests for information or inquiries about the uses of
Government Reimbursed Products in the United States 


 


2

















 


(including the off-label
uses of the products) and the dissemination of materials relating to off-label
uses of such products in the United States. This review includes:


 


a)                                      the manner in which U.S.-based field sales
representatives and headquarters personnel (including medical services
personnel) with responsibility for the U.S. market receive and respond to
requests for information about off-label uses of Government Reimbursed
Products;


 


b)                                     the form and content of product-related
information disseminated by Biovail or its agents to U.S.-based HCPs or
U.S.-based HCIs;


 


c)                                      Biovail’s internal review and approval
process for the material and information disseminated by U.S.-based field sales
representatives and headquarters personnel with responsibilities for the U.S.
market;


 


d)                                     Biovail’s systems, processes, and
procedures (including its Inquiries Database) to track requests from U.S.-based
physicians and other persons for information about the uses of products in the
U.S. and responses to those requests;


 


e)                                      the manner in which Biovail collects and
supports data reported in its Inquiries Database related to the U.S. market;


 


f)                                        the processes and procedures by which the
Chief Compliance Officer (and other appropriate individuals within Biovail)
identify situations in which it appears that off-label promotion may have
occurred in the United States; and


 


g)                                     Biovail’s processes and procedures for
investigating, documenting, resolving, and taking appropriate disciplinary
action for potential situations involving off-label promotion in the United
States;


 


2.             Biovail’s
systems, policies, processes, and procedures relating to the retention of
U.S.-based HCPs or U.S.-based HCIs as consultants or under fee-for-service
arrangements (e.g, including as members of advisory boards, focus
groups, or clinical research project teams, or as speakers or preceptors.) This
review shall include a review of:


 


a)                                      the criteria used to determine whether, how
many, and under what circumstances (including the venue for the performance of
any services) Biovail will enter such arrangements and the business rationale
for entering such arrangements for the U.S. market;


 


b)                                     the processes and criteria used to identify
and select U.S.-based HCPs and U.S.-based HCIs with whom Biovail enters
arrangements, including the role played by U.S.-based field sales
representatives in the process (if any). This includes a review of Biovail’s
internal review and approval 


 


3

















 


process
for such arrangements, and the circumstances under which there may be
exceptions to the process;


 


c)                                      Biovail’s tracking or monitoring of the
services provided or the work performed under such arrangements (including the
receipt of the work product received from the U.S.-based HCPs or U.S.-based
HCIs, if any);


 


d)                                     Biovail’s policies and procedures related
to any requirement that the U.S.-based HCPs or U.S.-based HCIs (or their
agents) disclose the existence of their arrangements with Biovail and any
financial relationship the HCP or HCI has with Biovail;


 


e)                                      the uses made of work product received from
the U.S.-based HCPs or U.S.-based HCIs, if any;


 


f)                                        Biovail’s processes for establishing the
amounts paid to U.S.-based HCPs or U.S.-based HCIs under such arrangements and
the reasons or justifications for any differentials in the amounts paid to
different HCPs and HCIs;


 


g)                                     the criteria used to determine under what
circumstances entertainment, travel, lodging, meals, and/or other items or
reimbursements are provided to the U.S.-based HCPs or U.S.-based HCIs in
connection with the arrangements, and Biovail’s processes for establishing the
amounts paid or reimbursed for such items;


 


h)                                     whether and in what manner Biovail tracks
or monitors the prescribing habits or product use of individuals or entities
with whom it enters consulting or fee-for-service arrangements, if any; and


 


i)                                         the budget funding source within Biovail (e.g,
department or division) for the consulting or fee-for-service arrangements;


 


3.             Biovail’s
systems, policies, processes, and procedures relating to funding or sponsorship
of any Third Party Educational Activity (as defined in Section II.C.6 of
the CIA) in the United States. This review shall include a review of the
following items:


 


a)                                      the processes and procedures used to
approve the funding or sponsorship of the Third Party Educational Activity;


 


b)                                     the criteria used to determine whether and
under what circumstances the funding or sponsorship will be provided;


 


c)                                      the processes and criteria used to select
recipients of the funding or sponsorships, including the role played by field
sales representatives in the processes (if any), and the circumstances under
which there may be exceptions to the processes;


 


4

















 


d)                                     Biovail’s policies and procedures relating
to any requirement that the recipient of the funding or sponsorship (or the
recipient’s agent) disclose BiovaiI’s funding or sponsorship and any financial
relationship Biovail may have with the recipient;


 


e)                                      Biovail’s policies or procedures for
determining and memorializing the amounts paid to recipients of the funding or
sponsorship and the purpose or justifications for the amounts paid;


 


f)                                        Biovail’s policies and procedures relating
to the independence of any programs funded or sponsored by Biovail;


 


g)                                     Biovail’s policies and procedures relating
to the content and nature (e.g, promotional, non-promotional) of any
programs sponsored through the funding or sponsorships;


 


h)                                     whether and in what manner Biovail tracks
or monitors the prescribing habits or product use of individuals or entities
receiving the funding or sponsorship, if any; and


 


i)                                         the budget funding source within Biovail (e.g,
department or division) from which the funding or sponsorships are provided;


 


4.             Biovail’s
systems, policies, processes, and procedures relating to funding or sponsorship
of, or participation in, research agreements, grants, and/or research
collaborations (including clinical trials and independent research) in the
United States (collectively “U.S. Research Activities”). This review shall
include a review of the following items:


 


a)                                      the processes and procedures used to
approve the funding or sponsorship of, or participation in, U.S. Research
Activities;


 


b)                                     the criteria used to determine whether and
under what circumstances Biovail will fund or otherwise participate in U.S.
Research Activities;


 


c)                                      the processes and criteria used to select
recipients of the funding for the U.S. Research Activities, including the role
played by field sales representatives in the processes (if any), and the
circumstances under which there may be exceptions to the processes;


 


d)                                     Biovail’s policies and procedures relating
to any requirement that the recipient of the funding or participant in the U.
S. Research Activities disclose Biovail’s funding and any financial
relationship Biovail may have with the recipient;


 


e)                                      Biovail’s policies or procedures for
determining and memorializing the amounts paid in connection with the U.S.
Research Activities and the purpose or justifications for the amounts paid;


 


5

















 


f)                                        Biovail’s policies and procedures relating
to the independence of the U.S. Research Activities funded by Biovail;


 


g)                                     whether and in what manner BiovaiI tracks
or monitors the prescribing habits or product use of individuals or entities
receiving the funding or otherwise participating in the U.S. Research
Activities, if any; and


 


h)                                     the budget funding source within Biovail (e.g,
department or division) for the U.S. Research Activities;


 


5.             BiovaiI’s
systems, polices, processes, and procedures relating to compensation
arrangements (including salaries and bonuses) for Covered Persons (including
contract sales agents), with regard to whether the systems, policies,
processes, and procedures are designed to ensure that financial incentives do
not motivate such individuals to engage in improper promotion, sales, or
marketing of Government Reimbursed Products. This shall include a review of the
bases upon which compensation is determined and the extent to which
compensation is based on product performance;


 


6.             Biovail’s
systems, processes, policies, and procedures relating to the development and
review of call plans for Biovail’s field sales representatives (including
contract sales agents) and other personnel related to the promotion, marketing,
or sale of Government Reimbursed Products in the United States. This shall
include a review of the extent to which U.S.-based HCPs and U.S.-based HCIs
belonging to specified medical specialties or types of clinical practice are
included in, or excluded from, the call lists based on their expected
utilization of the products for FDA-approved uses or non-FDA-approved uses of
the Government Reimbursed Products; and


 


7.             Biovail’s
systems, processes, policies, and procedures relating to the development,
implementation, and review of U.S. Sample Distribution Plans. This shall
include a review of the bases upon, and circumstances under, which U.S.-based
HCPs and U.S.-based HCIs belonging to specified medical specialties or types of
clinical practice may receive samples of Government Reimbursed Products from
Biovail (including, separately, from Biovail sales representatives (including
contract sales agents) and from BiovaiI’s headquarters personnel.)


 


C.                                     Systems Review Report


 


For each Reporting Period for which a Systems
Review is performed hereunder, the IRO shall prepare a report based upon the
Systems Review. This report may be (but is not required to be) combined with
the report for the Transactions Review described in Section III below, and
shall include the following:


 


(Relating to Systems Review —
Part I)


 


1.             A
description of the systems, processes, policies, and procedures in place to track,
gather, and account for price terms, contract terms, and transactions with
Biovail customers that are relevant to the calculation and reporting of AMP,
BP, and ASP, including, but not limited to:


 


6














 


a)                                      The computer or other relevant systems
(including the source systems and any other information systems, as applicable)
used to track data for and to calculate and report AMP, BP, and ASP;


 


b)                                     The information input into Biovail’s
relevant computer or other systems used to calculate AMP, BP, and ASP;


 


c)                                      The system logic or decisional rationale
used to determine which customers are included or excluded for purposes of
calculating AMP, BP, and ASP;


 


d)                                     The system logic or decisional rationale
used to determine whether contract terms, discounts, rebates and all other
relevant transactions with Biovail customers are included or excluded when
calculating AMP, BP, and ASP;


 


e)                                      The system logic or decisional rationale
used to determine whether and in what manner estimates of prices, discounts and
other amounts are made for purposes of determining AMP, BP, and ASP; and


 


f)                                        Biovail’s policies and procedures in
examining system reports for variations that require critical evaluation,
including the basis on which variations, exceptions, or outliers are
identified, and the follow-up actions taken in response.


 


2.             A
description of the documentation, information, and systems reviewed, and the
personnel interviewed, if any, including a description of the following:


 


a)                                      Biovail’s inquiries to CMS regarding the
calculation of AMP, BP or ASP and any responses to those inquiries;


 


b)                                     Biovail’s systems and practices for
reporting AMP, BP, and ASP to CMS as required by the Medicaid Drug Rebate
program and the Medicare Program; and


 


c)                                      Biovail’s systems and practices for
reporting any adjustments to AMP, BP, or ASP or additional information relating
to the submissions.


 


3.             Observations,
findings, and recommendations for any improvements to Biovail’s systems,
processes, policies, and procedures, including any changes recommended in order
to improve compliance with the requirements of the Medicaid Drug Rebate and/or
Medicare Program(s).


 


(Relating to the
Reviewed Policies and Procedures)


 


For each of the Reviewed
Policies and Procedures identified in Section II.B above, the report shall
include the following items:


 


7

















 


4.             A
description of the documentation (including policies) reviewed and any
personnel interviewed;


 


5.             A
detailed description of Biovail’s systems, policies, processes, and procedures
relating to the items identified in Sections II.B.1-7 above, including a
general description of Biovail’s control and accountability systems (e.g,
documentation and approval requirements, tracking mechanisms) and written
policies regarding the Reviewed Policies and Procedures;


 


6.             A
description of the manner in which the control and accountability systems and
the written policies relating to the items identified in Sections II.B. l-7
above are made known or disseminated within Biovail and to any contractors (as
applicable);


 


7.             A
detailed description of any system used to track and respond to requests for
information about Government Reimbursed Products including through the
Inquiries Database;


 


8.             A
description of Biovail’s systems, policies, processes, and procedures for
tracking any expenditures associated with the Reviewed Policies and Procedures
referenced in Sections II.B.2-4, above;


 


9.             A
general description of Biovail’s disciplinary measures applicable for a failure
to comply with its policies and procedures relating to Promotional and Product
Services Related Functions;


 


10.           A
detailed description of Biovail’s compensation system (including salaries and
bonuses) for Covered Persons, including a description of the bases upon which
compensation is determined and the extent to which compensation is based on
product performance. To the extent that Biovail may establish compensation
differently for individual products, the IRO shall report separately on each
such type of compensation arrangement;


 


11.           Findings
and supporting rationale regarding any weaknesses in Biovail’s systems,
processes, policies, and procedures relating to the Reviewed Policies and
Procedures, if any; and


 


12.           Recommendations
to improve any of the systems, policies, processes, or procedures relating to
the Reviewed Policies and Procedures, if any.


 


III.                                 Transactions Review


 


The Transactions Review shall include a
review of the following: (1) records relating to a sample of the Payments
that are reported by Biovail pursuant to Section III.J of the CIA; (2) Biovail’s
call plans related to the promotion, marketing, or sale of Government
Reimbursed Products in the U.S. and Biovail’s call plan review process for
Government Reimbursed Products; (3) U.S. Sampling Events as defined below
in Section III.C; and (4) Inquiries reflected in Biovail’s Inquiries
Database. The IRO shall report on all aspects of its reviews in the
Transactions Review Reports.


 


8

















 


A.                                   IRO Review of Payment Listings


 


1.             Information
Contained in U.S.-based Physician Payment Listings


 


As set forth in Section III.J
of the CIA, Biovail shall post quarterly and annual listings of U.S.-based
physicians, U.S.-based Related Entities and U.S.-based Product Decision-Makers
who received Payments, as defined in the CIA, directly or indirectly from
Biovail. For purposes of the Transaction Review, each annual listing shall be
referred to as the “Payment Listing” or “Listing.” For each entry, the Listing
shall include the following information: i) physician’s or Product
Decision-Maker’s full name; ii) name of Related Entity (if applicable); iii)
city and state of the physician’s practice, the Related Entity (as applicable),
or the Product Decision-Maker; iii) the purpose of the Payment; and iii) the
aggregate value of the Payment(s) in the preceding quarter(s) or
year.


 


For purposes of the
Transaction Review, the term “Control Documents” shall include all documents or
electronic records associated with each Payment reflected in the Payment
Listing for the sampled U.S.-based physician, U.S.-based Related Entity, and/or
U.S.-based Product Decision-Maker. For example, the term, “Control Documents”
includes, but is not limited to, documents relating to the nature, purpose, and
amount of all Payments reflected in the Listing; contracts relating to the
Payment(s) reflected in the Listing; documents relating to the occurrence
of Payment(s) reflected in the Listing; documents reflecting any work
product generated or service provided in connection with the Payment(s);
documents submitted in connection with requests for approval for the
Payment(s); and business rationale or justification forms relating to the
Payment(s).


 


2.             Selection
of Sample for Review


 


For each Reporting Period,
the OIG shall have the discretion to identify up to 75 U.S.-based physicians,
U.S.-based Related Entities, and/or U.S.-based Product Decision-Makers from the
applicable Listing that will be subject to the IRO review described below.
Biovail may submit a written request to the OIG that the sample size should be
less than 75 and the OIG shall decide, in its sole discretion, whether to grant
the request. If the OIG elects to exercise its discretion to select the individuals
or entities to be included in the review, it shall notify the IRO of the 75
identified U.S.-based physicians, U.S.-based Related Entities, and/or
U.S.-based Product Decision-Makers subject to the IRO review. If the OIG elects
not to exercise its discretion as described above, the IRO shall randomly
select up to 75 (or such smaller number if approved by the OIG) U.S.-based
physicians, U.S.-based Related Entities, and/or U.S.-based Product
Decision-Makers to be included in the review. For each selected U.S.-based
physician, U.S.-based Related Entity, and/or U.S.-based Product Decision-Maker,
the IRO shall review the entry in the Listing and the Control Documents
relating to Payments reflected in Listing identified by the IRO as necessary
and sufficient to validate the Payment information in the Listing.


 


9

















 


3.             IRO
Review of Control Documents for Selected Physicians and/or Related Entities


 


For each physician,
Related-Entity, and/or Product Decision-Maker selected as part of the sample,
the IRO shall review the Control Documents identified by the IRO as necessary
and sufficient to validate each Payment reflected in the Listing to evaluate
the following:


 


a)                                      Whether Control Documents are available
relating to each Payment reflected in the Listing for the sampled physician,
Related Entity and/or Product Decision-Maker;


 


b)                                     Whether the Control Documents were
completed and archived in accordance with the requirements set forth in Biovail’s
policies;


 


c)                                      Whether the aggregate value of the Payment(s) as
reflected in the Listing for the sampled physician, Related Entity, and/or
Product Decision-Maker is consistent with the value of the Payments(s) reflected
in the Control Documents; and


 


d)                                     Whether the Control Documents reflect that
Biovail’s policies were followed in connection with Payment(s) reflected
in the Listing (e.g, all required written approvals for the activity
were obtained in accordance with Biovail’s policies.)


 


4.             Identification
of Material Errors and Additional Review


 


A Material Error is defined as any of the
following:


 


a)                                      A situation in which all required Control
Documents relating to Payments reflected in the Listing for the sampled
physician, Related Entity and/or Product Decision-Maker do not exist and:


 


i.                                          no corrective action was initiated prior to
the selection of the sampled physicians, Related Entities, and/or Product
Decision-Maker; or


 


ii.                                       the IRO cannot confirm that Biovail
otherwise followed its policies and procedures relating to the entry in the
Listing for the sampled physician, Related Entity, and/or Product
Decision-Maker, including its policies and procedures relating to any Payment(s) reflected
in the Listing; or


 


b)                                     Information or data is omitted from key
fields in the Control Documents that prevents the IRO from assessing compliance
with Biovail’s policies and procedures, and the IRO cannot obtain this
information or data from reviewing other Control Documents.


 


10

















 


If a Control Document does
not exist, but Biovail has initiated corrective action prior to the selection
of the sampled physicians, Related Entities, and/or Product Decision-Maker, or
if a Control Document does not exist but the IRO can determine that Biovail
otherwise followed its policies and procedures with regard to each entry in the
Listing for a sampled physician, Related Entity, and/or Product Decision-Maker,
the IRO shall consider such a situation to be an exception (rather than a
Material Error) and the IRO shall report the situation as such. Similarly, the
IRO shall note as exceptions any Control Documents for which non-material
information or data is omitted.


 


If the IRO identifies any
Material Errors, the IRO shall conduct such Additional Review of the underlying
Payment associated with the erroneous Control Documents as may be necessary to
determine the root cause of the Material Errors. For example, the IRO may need
to review additional documentation and/or conduct interviews with appropriate
personnel to identify the root cause of the Material Error(s) discovered.


 


B.                                     IRO Review of Biovail’s Call Plans and Call
Plan Review Process


 


The IRO shall conduct a
review and assessment of Biovail’s review of call plans for Government
Reimbursed Products (including call plans used by contract sales agents) as set
forth in Section III.B.2.i of the CIA. Biovail shall provide the IRO with:
i) a list of Government Reimbursed Products promoted, marketed, or sold by
Biovail in the United States, including through any contract sales force,
during the Reporting Period; ii) information about the FDA-approved uses for
each such Government Reimbursed Product; and iii) the call plans for each such
Government Reimbursed Product. Biovail shall also provide the IRO with
information about the reviews of call plans that Biovail conducted during the
Reporting Period consistent with Section III.B.2.i of the CIA and any
modifications to the call plans made as a result of Biovail’s reviews.


 


For each call plan, the IRO
shall select a sample of up to 75 of the U.S.-based HCPs and U.S.-based HCIs
included on the call plan. Biovail may submit a written request to the OIG that
the sample size should be less than 75 and the OIG shall decide, in its sole
discretion, whether to grant the request. For each call plan, the IRO shall
compare the sampled U.S.-based HCPs and U.S.-based HCIs against the criteria
(e.g., medical specialty or practice area) used by Biovail in conducting its
review and/or modification of the call plan in order to determine whether Biovail
followed its criteria and Policies and Procedures in reviewing and modifying
the call plan.


 


The IRO shall note any
instances in which it appears that the sampled U.S.-based HCPs and U.S.-based
HCIs on a particular call plan are inconsistent with Biovail’s criteria
relating to the call plan and/or Biovail’s Policies and Procedures. The IRO
shall also note any instances in which it appears that Biovail failed to follow
its criteria or Policies and Procedures.


 


C.                                     IRO Review of the Distribution of Samples of
Biovail’s Government Reimbursed Products


 


The IRO shall conduct a
review and assessment of the distribution of samples of Government Reimbursed
Products to U.S.-based HCPs and U.S.-based HCIs. Biovail shall 


 


11

















 


provide the IRO with: i) a
list of Government Reimbursed Products for which Biovail distributed samples in
the United States during the Reporting Period (either directly or through a
contract sales force); ii) information about the FDA-approved uses for each
such sampled Government Reimbursed Product; and iii) information about Biovail’s
policies and procedures relating to the distribution of samples of each such
Government Reimbursed Product, including Biovail’s U.S. Sample Distribution
Plan, if any, showing which type of samples may be distributed to U.S.-based
HCPs and U.S.-based HCIs of particular medical specialties or types of clinical
practices. Biovail shall also provide the IRO with information about: (1) the
reviews of Sample Distribution Plans that Biovail conducted during the
Reporting Period; and (2) any modifications to the Sample Distribution
Plans made or corrective actions that may be taken as a result of Biovail’s
reviews, including investigating, documenting, resolving, and taking disciplinary
action.


 


For each
Government Reimbursed Product for which Biovail distributed samples in the
United States during the Reporting Period, the IRO shall randomly select a
sample of up to 75 separate instances in which Biovail provided samples of the
product to U.S.-based HCPs or U.S.-based HCIs either through a sales
representative or direct shipment. Biovail may submit a written request to the
OIG that the sample size should be less than 75 and the OIG shall decide, in
its sole discretion, whether to grant the request. Each such instance shall be
known as a “U.S. Sampling Event.”


 


For each U.S. Sampling
Event, the IRO shall review all documents and information relating to the
distribution of the sample to the U.S.-based HCP or U.S.-based HCI, including
the sample card, direct shipment request form and/or the electronic call
record. The reviewed materials shall include information about the following:
I) the quantity, dosage, and form of the Government Reimbursed Product provided
to the HCP or HCI; 2) the identity and type of medical specialty or clinical
practice of the HCP or HCI; 3) the identity of the field sales representative
who accepted the sample request form or provided the sample to the HCP or HCI;
4) the manner and mechanism through which the sample was requested (e.g.,
sample card or direct shipment request form); and 5) the manner and mechanism
through which the request was fulfilled (e.g., sales representative
distribution or direct shipment.)


 


For each U.S. Sampling
Event, the IRO shall evaluate whether the sample was provided to a U.S.-based
HCP or U.S.-based HCI whose medical specialty or clinical practice is
consistent with the uses of the product approved by the FDA and whether the
sample was distributed by a Biovail representative in a manner consistent with
Biovail’s Sample Distribution Plan for the product(s), if any. To the extent
that a sample was provided to an HCP or HCI by a Biovail representative other
than a sales representative, the IRO shall contact the HCP or HCI by letter.
The letter shall request that the HCP or HCI: 1) verify that he/she/it received
the quantity and type of samples identified by the IRO as the U.S. Sampling
Event; 2) verify that he/she/it requested the samples provided during the U.S.
Sampling Event; 3) explain or confirm its type of medical specialty or clinical
practice; and 4) identify the basis for requesting the sample (e.g,
conversations with a Biovail sales representative, conversation with a
representative of Biovail’s medical services department, independent research
or knowledge of the HCP or HCI, etc.)


 


12

















 


For each U.S. Sampling
Event, the IRO shall compare the medical specialty and type of clinical
practice of the HCPs and HCIs that received the sample with uses of the product
approved by the FDA. The IRO shall note any instances in which it appears that
the medical specialty or clinical practice of the HCPs or HCIs that received a
sample during a U.S. Sampling Event were not consistent with the uses of the
product approved by the FDA. For each such situation, the IRO shall note the
process followed by Biovail in determining that it was appropriate to provide a
sample to such HCP or HCI and the basis for such determination. For each U.S.
Sampling Event, the IRO shall also note any instances in which it appears that
Biovail failed to follow its Sample Distribution Plan, if any, and sample
policies and procedures for the product(s) provided and, if so, whether
Biovail already had taken corrective action, including investigating,
documenting, resolving, and taking disciplinary action, if appropriate.


 


D.                                    Review of Inquiries Reflected in Inquiries
Database


 


1.             Description
of Inquiries Database


 


As set forth in Section III.C.3.h
of the CIA, Biovail, either directly or through a vendor, shall establish a
database (hereafter, “Inquiries database”) to track information relating to
requests for information or inquiries about Government Reimbursed Products
(hereafter “Inquiries”). Specifically, Biovail shall document and record all
Inquiries regarding its Government Reimbursed Products in the Inquiries
Database. Biovail shall record in the Inquiries Database the following
information for each Inquiry received: 1) date of Inquiry; 2) form of Inquiry (e.g,
fax, phone, medical information request form); 3) name of requesting HCP or
HCI; 4) nature and topic of request (including exact language of the Inquiry if
made in writing); 5) an evaluation of whether the Inquiry relates to
information about an off-label indication for the Government Reimbursed
Product; 6) nature/form of the response from Biovail (including a record of any
materials provided in response to the request); 7) the name of the U.S.-based
field sales representative who called upon or interacted with the HCP or HCI,
if known; and 8) the status and findings of any follow-up review conducted by
Biovail in situations in which it appears that the Inquiry may have related to
improper off-label promotion in the U.S..


 


2.             Internal
Review of the Inquiries Database


 


On a semi-annual basis,
Biovail’s Chief Compliance Office or designee shall review the Inquiries
Database and related information, as appropriate, and shall generate a report
summarizing the items of information outlined in Section III.D.1 above for
each Inquiry received during the preceding two quarters (“Inquiries Database
Report”). The Chief Compliance Office or designee shall review the Inquiries
Database Reports to assess whether the information contained in the report
suggests that improper off-label promotion may have occurred in the U.S. in
connection with any Inquiry(ies). If the Chief Compliance Office or designee,
in consultation with other appropriate Biovail personnel, suspects that
improper off-label promotion may have occurred in connection with any Inquiry,
the Chief Compliance Office or designee shall undertake a follow-up review of
the Inquiry (hereafter “Off-Label Review”), make specific findings based on the
Off-Label Review, and take all appropriate corrective action (including disciplinary
action of the Covered Person and reporting of the conduct, including disclosing
Reportable Events pursuant to Section III.I of the CIA, if applicable).


 


13

















 


3.             IRO
Review of Inquiries Reflected in Inquiries Database


 


The IRO shall select and
review a random sample of up to 60 Inquiries from among the Inquiries reflected
in the Inquiries Database for each Reporting Period. Forty-five of the
Inquiries reviewed by the IRO shall be Inquiries for which Biovail conducted an
Off- Label Review, and the other 15 shall be Inquiries for which Biovail did
not conduct an Off-Label Review. Biovail may submit a written request to the
OIG that the sample size should be less than 60 and the OIG shall decide, in
its sole discretion, whether to grant the request. If Biovail conducted an
Off-Label Review on fewer than 45 Inquiries, additional Inquiries may be
selected for which an Off-Label Review was not conducted to reach a total of 60
Inquiries or such other number of inquiries as approved by OIG. For each
Inquiry reviewed, the IRO shall determine:


 


a)                                      Whether each item of information listed
above in Section III.D.1 is reflected in the Inquiries Database for each
reviewed Inquiry; and


 


b)                                     For each Inquiry for which the Chief
Compliance Office or designee conducted an Off-Label Review, the basis for
suspecting that improper off-label promotion may have occurred; the steps
undertaken as part of the Off-Label Review; the findings of the Chief
Compliance Office or designee as a result of the Off-Label Review; and any
follow-up actions taken by Biovail based on the Off-Label Review findings.


 


E.                                      Transactions Review Report


 


For each
Reporting Period, the IRO shall prepare a report based on its Transactions
Review. The report shall include the following:


 


1.             General
Elements to Be Included in Report


 


a)                                      Review Objectives: A clear statement of the
objectives intended to be achieved by each part of the review;


 


b)                                     Review Protocol: A detailed narrative
description of the procedures performed and a description of the sampling unit
and universe utilized in performing the procedures for each sample reviewed;
and


 


c)                                      Sources of Data: A full description of
documentation and other information, if applicable, relied upon by the IRO in
performing the Transactions Review.


 


2.             Results
to be Included in Report


 


The following
results shall be included in each Transactions Report:


 


(Relating to the
Payment Listing Reviews)


 


14

















 


a)                                      a description of the entries in the Payment
Listing for each physician, Related Entity, and/or Product Decision-Maker
sampled and a description of Control Documents reviewed in connection with each
selected individual or entity;


 


b)                                     for each sampled physician, Related Entity,
or Product Decision-Maker, findings and supporting rationale as to whether: (i) all
required Control Documents exist; (ii) each Control Document was completed
in accordance with all of the requirements set forth in the applicable Biovail
policy; (iii) the aggregate value of the Payment(s) as reflected in
the Listing for the sampled individual or entity is consistent with the value
of the Payment(s) reflected in the Control Documents; (iv) each
Control Document reflects that Biovail’s policies were followed in connection
with the underlying activity reflected in the document (e.g., all required
approvals were obtained); and (v) any disciplinary action was undertaken
in those instances in which Biovail policies were not followed;


 


c)                                      for each sampled physician, Related Entity,
or Product Decision-Maker unit reviewed, an identification and description of
all exceptions discovered. The report shall also describe those instances in
which corrective action was initiated prior to the selection of the sampled
individuals or entities, including a description of the circumstances requiring
corrective action and the nature of the corrective action;


 


d)                                     if any Material Errors are discovered in
any sample unit reviewed, a description of the error, the Additional Review
procedures performed and a statement of findings as to the root cause(s) of
the Material Error;


 


(Relating to the
Call Plan Reviews)


 


e)                                      a list of the Government Reimbursed
Products promoted by Biovail, directly or indirectly, during the Reporting
Period and a summary of the FDA-approved uses for such products;


 


f)                                        for each promoted Government Reimbursed
Product: i) a description of the criteria used by Biovail in developing or
reviewing the call plans and for including or excluding specified types of HCPs
or HCIs from the call plans; ii) a description of the review conducted by
Biovail of the call plans and an indication of whether Biovail reviewed the
call plans as required by Section III.B.2.i of the CIA; iii) a description
of all instances for each call plan in which it appears that the HCPs and HCIs
included on the call plan are inconsistent with Biovail’s criteria relating to
the call plan and/or Biovail’s Policies and Procedures; and iv) a description
of all instances in which it appears that Biovail failed to follow its criteria
or Policies and Procedures relating to call plans or the review of the call
plans;


 


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g)                                     findings and supporting rationale regarding
any weaknesses in Biovail’s systems, processes, policies, procedures, and
practices relating to its call plans or the review of the call plans, if any;


 


h)                                     recommendations, if any, for changes in
Biovail’s systems, processes, policies, procedures, and practices that would
correct or address any weaknesses or deficiencies uncovered during the
Transactions Review with respect to call plans or the review of the call plans;


 


(Relating to the
Sampling Event Reviews)


 


i)                                         for each Government Reimbursed Product for
which Biovail directly or indirectly distributed samples in the United States
during the Reporting Period: i) a description of the U.S. Sample Distribution
Plan (including whether sales representatives may provide samples of the
product and, if so, to HCPs or HCIs of which medical specialty or type of clinical
practice a sales representative may provide samples); ii) a detailed
description of any instances identified during the IRO review in which it
appears that the medical specialty or clinical practice of the HCPs or HCIs
that received a sample during a Sampling Event were not consistent with the
uses of the product approved by the FDA. This description shall explain the
process followed by Biovail in determining that it was appropriate to provide a
sample to such HCP or HCI and the basis for such determination; and iii) a
detailed description of any instances in which it appears that Biovail failed
to follow its Sample Distribution Plan for the product(s) provided during
the Sampling Event;


 


j)                                         findings and supporting rationale regarding
any weaknesses in Biovail’s systems, processes, policies, procedures, and
practices relating to the distribution of samples of Government Reimbursed
Products, if any;


 


k)                                      recommendations, if any, for changes in
Biovail’s systems, processes, policies, procedures, and practices that would
correct or address any weaknesses or deficiencies uncovered during the
Transactions Review with respect to the distribution of samples;


 


(Relating to the
Review of Inquiries)


 


l)                                         in connection with the review of Inquiries,
a description of each type of sample unit reviewed, including the number of
each type of sample units reviewed (e.g, the number of Inquiries) and an
identification of the types of documents and information reviewed for the
Inquiries;


 


m)                                   for each Inquiry sample unit, the IRO shall
summarize the information about the Inquiry contained in the Inquiries
Database;


 


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n)                                     for each Inquiry sample unit, findings and
supporting rationale as to whether: (i) each item of information listed in
Section III.D.1 is reflected in the Inquiries Database; and (ii) for
each Inquiry for which an Off-Label Review was conducted, the basis for
suspecting that improper off-label promotion may have occurred; the steps
undertaken as part of the Off-Label Review; the findings of Biovail’s Chief
Compliance Office as a result of the Off-Label Review; and any follow-up
actions taken by Biovail as a result of Chief Compliance Officer findings; and


 


o)                                     findings and supporting rationale regarding
any weaknesses in Biovail’s systems, processes, policies, procedures, and
practices relating to the Inquiries and the Inquiries Database, if any; and


 


p)                                     recommendations for improvement in Biovail’s
systems, processes, policies, procedures, and practices relating to the
Inquiries and the Inquiries Database, if any.


 


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