Corporate Compliance

Commitment

The Spectrum Pharmaceuticals Inc. Board of Directors and senior management are in support of and are committed to a corporate culture of compliance facilitated by the Compliance and Ethics Program. Evidence of that commitment includes the allocation of adequate resources, a timetable for the implementation of the compliance measures, and the identification of an individual to serve as a Chief Compliance Officer to ensure that each of the recommended and adopted elements is addressed. It is an expectation of the Board of Directors and senior management the commitment should filter down through management to every employee and third-party vendor, as applicable for the individual.

At Spectrum we foster a culture that promotes the prevention, detection, and resolution of instances of problems. The primary manner we do this is by maintaining the company Compliance and Ethics Program, which is a set of internal controls and standards that promote adherence to pharmaceutical industry statutes, regulations, and requirements of the federal health care programs with respect to the development, manufacturing, marketing and selling of Spectrum products.

Code of Business Conduct and Ethics

Spectrum’s foundation is built on strong ethical principles and values which reflect our commitment to conducting business with honesty, fairness and integrity; whereby we avoid doing anything that could even suggest impropriety in any of our dealings.

Spectrum abides by the following core principles:

  1. We will use all lawful and ethical means possible to bring our therapy options to the right patients, in the right way.
  2. We will be personally responsible to understand and adhere to the letter and spirit of all laws and company policies that pertain to our daily business.
  3. We will partner only with healthcare professionals, suppliers and other business partners who share our commitment to understand and uphold the laws and regulations that apply to our operations.
  4. We will respect and protect the dignity and privacy of patients, healthcare professionals and their staff, business partners, competitors and our fellow employees.
  5. We will promptly and cooperatively report without fear of retaliation any behavior contrary to these principles to management, the Compliance Department or the Compliance Helpline.

Elements of the Program

Governance

The Spectrum Pharmaceuticals, Inc. Compliance and Ethics Program is overseen and managed by the following committees and officers:

Audit Committee of the Board of Directors

Assists the Board of Directors exercise its oversight of the Company’s compliance with applicable laws and regulations through the implementation of an effective Compliance and Ethics Program. The membership, structure, and roles and responsibilities of the Audit Committee in overseeing the Compliance and Ethics Program are set forth in the Company’s Audit Committee Charter, as reviewed and approved by the Board of Directors.

The Audit Committee is comprised of three (3) directors, each of whom meet the independence requirements and financial literacy requirements set forth in the listing rules of the NASDAQ Stock Market, Inc. (NASDAQ) and the applicable rules and regulations of the Securities and Exchange Commission (SEC). Each committee member must be able to read and understand fundamental financial statements, including a balance sheet, income statement and cash flow statement.

At least one (1) member of the committee must be financially sophisticated, as determined by the Board, and no committee member may have participated in the preparation of the financial statements of the Company or any of the Company’s current subsidiaries at any time during the past three years, each as required by the NASDAQ listing rules. In addition, at least one (1) member of the committee must be an “audit committee financial expert” under applicable SEC rules.

The Audit Committee is responsible for:

  • Representing and assisting the Board in its general oversight of the Company’s accounting and financial reporting processes, audits of the financial statements, internal control and audit functions, and compliance with legal and regulatory requirements.
  • Serving a board level oversight role where it oversees the relationship with the independent auditor, receiving information and providing advice, counsel and general direction, as it deems appropriate, to management and the auditors, considering the information it receives, discussions with the auditor, and the experience of the committee’s members in business, financial and accounting matters.
Chief Compliance Officer

Manages the creation, development, implementation, operation, monitoring, and enforcement of the Company’s Compliance and Ethics Program and the day-to-day function and administration of the Compliance and Ethics Department. The roles and responsibilities of the Chief Compliance Officer are set forth in the Chief Compliance Officer Job Description, as reviewed and approved by the Chief Executive Officer and the Audit Committee of the Board of Directors.

The Chief Compliance Officer is responsible for:

Guidance and Reporting to Management and the Board of Directors

  • Providing guidance and advice to the Chief Executive Officer and other Company personnel related to the Company’s Compliance and Ethics Program
  • Developing metrics, reports, and dashboards to measure the effectiveness of the Compliance and Ethics Program and providing regular reports and updates to the Company’s Chief Executive Officer, Compliance Committee, Audit Committee of the Board of Directors, and Board of Directors

Administrative and Operational Oversight of the Compliance and Ethics Department

  • Supervising and directing the strategic objectives and day-to-day activities of Compliance and Ethics Department staff
  • Maintaining a Compliance and Ethics Department budget that ensures appropriate internal and external resources to implement and manage the Company’s Compliance and Ethics Program
  • Developing and presenting an annual Compliance and Ethics Department work plan to the Compliance Committee
  • Overseeing and managing the effective allocation of external resources, such as outside advisors and third parties, related to the Compliance and Ethics Program

Implement Written Standards, Policies, and Procedures

  • Ensuring written standards, policies, and procedures correspond to applicable legal and regulatory requirements, reflect the Company’s values, and are available and easily accessible to Spectrum employees
  • Overseeing the maintenance, distribution, and revision, as necessary, of the Company’s Code of Business Conduct and Ethics and the approval by the Spectrum Board of Directors
  • Overseeing the development, maintenance, distribution, and revision, as necessary, of written compliance policies, procedures and other guidance and the approval by the Compliance Committee

Ensure Effective Communication, Education, and Training

  • Providing training and updates on applicable federal, state, and local laws, including the enforcement updates related to such laws, as well as the policies and procedures associated with the Company’s employees and Chief Executive Officer, Compliance Committee, Audit Committee of the Board of Directors, and Board of Directors
  • Overseeing the dissemination of relevant and appropriate communications to Spectrum employees and other third parties that promote the Company’s Compliance and Ethics Program
  • Overseeing and managing the Company’s compliance training and recordkeeping and ensuring tailored training initiatives for high risk personnel and third parties, as well as recordkeeping for all trainings provided to all employees that provide the content provided and the date and time completed by the employee

Monitoring, Auditing, and Internal Reporting Systems

  • Initiating and overseeing periodic Compliance and Ethics Program risk assessments and benchmarking
  • Developing and presenting an annual Compliance and Ethics Department monitoring and auditing work plan to the Compliance Committee
  • Ensuring adequate mechanisms are in place for employees to ask compliance-related questions or to report compliance concerns or suspected violations, such as through the Company’s Compliance Helpline or website

Investigations and Corrective Actions

  • Overseeing all internal and external investigations into actual or suspected violations of the Company’s Compliance and Ethics Program and any matter reported to the Company’s Compliance Helpline or website
  • Recommending consistent and appropriate disciplinary action and corrective action to the Compliance Committee when noncompliance is substantiated
  • In conjunction with the Legal Department, cooperating and managing federal and state government inquiries and investigations into potential violations of applicable laws
Compliance Committee

The Compliance Committee is a sub-committee of the Audit Committee of the Board of Directors that evaluates the effectiveness of the Company’s Compliance and Ethics Program through the review and approval of the Company’s Code of Business Conduct and Ethics and related policies, procedures, and internal controls reasonably designed to comply with applicable laws and regulations. The membership, structure, and roles and responsibilities of the Compliance Committee, a management-level committee, are set forth in the Company’s Compliance Committee Charter, as reviewed and approved by the Chief Executive Officer and the Audit Committee of the Board of Directors.

The Compliance Committee is composed of senior members of management, representing certain core departments and functions across the Company. Each member must be of sufficient seniority to represent his/her respective department’s views and support the Compliance and Ethics Program, as needed. The committee is chaired by the Chief Compliance Officer and comprised of at least five members from the following departments:

  • Legal
  • Finance & Accounting
  • Operations & Commercial
  • Medical & Research and Development
  • Human Resources

The Compliance Committee is responsible for:

  • Reviewing and evaluating the design, development, and operation of the Company’s Compliance and Ethics Program, including its policies and procedures and related internal controls, which are designed to ensure compliance with the Company’s Code of Business Conduct and Ethics and applicable laws
  • Considering and providing guidance on matters reported by the Chief Compliance Officer and providing support and assistance to the Chief Compliance Officer and Compliance Department, as necessary, with the administration of the Compliance and Ethics Program
  • Reviewing and approving any changes to the Company’s Code of Business Conduct and Ethics
  • Reviewing and approving any changes to policies, procedures, or internal controls related to the Company’s Compliance and Ethics Program
  • Reviewing and approving measures that require Committee approval pursuant to any policies related to the Company’s Compliance and Ethics Program
  • Reviewing and providing recommendations related to the Compliance Officer’s annual Compliance Department work plan
  • Reviewing and providing recommendations related to the Compliance Officer’s annual monitoring and auditing work plan
  • Developing metrics to measure the effectiveness of the Compliance and Ethics Program and approving reports and dashboards that help management evaluate the effectiveness of the Compliance and Ethics Program
  • Authorizing periodic enterprise risk assessments
  • Receiving regular training and updates from the Compliance Officer related to applicable laws and regulations
  • Obtaining periodic reports from the Compliance Officer related to the Compliance Department Helpline and investigations into actual or suspected non-compliance with the Company’s Compliance and Ethics Program, as well as proposed corrective actions
  • In consultation with the Human Resources and Legal Departments, issuing disciplinary measures and approve corrective actions when non-compliance is substantiated
Funding and Support Request Review Committee

The Funding and Support Request Review Committee is a sub-committee of the Compliance Committee that reviews and approves funding and support requests from outside organizations against a series of guidelines as a duly authorized sub-committee of the Compliance Committee. The membership, structure, and roles and responsibilities of the Funding and Support Request Review Committee are set forth in the Company’s Funding and Support Request Review Committee Charter, as reviewed and approved by the Company’s Compliance Committee.

The Funding and Support Request Review Committee is chaired by the Chief Compliance Officer and supported by the Chief Medical Officer and comprised of at least three individuals from the following departments:

  • Medical Affairs
  • Medical Strategic Planning
  • Legal
  • Clinical
  • Regulatory

The committee is responsible for:

  • Reviewing and either approving, modifying, or denying any external funding request to the Company in the form of grants, sponsorships, exhibits, investigator-initiated studies (“IIS”), corporate memberships, charitable contributions, business donations and requests for expanded access of investigational products, as defined in the Company’s Compliance and Ethics Program and associated policies and procedures
  • Reviewing and approving measures that require committee approval pursuant to any policies related to the Company’s Compliance and Ethics Program
  • Reporting to the Compliance Committee on a quarterly basis regarding its activities, including all approved funding and support requests
Chief Legal Officer

Advises the Company on the legal and regulatory risks and counsels management, the Audit Committee of the Board of Directors and the Board of Directors regarding applicable laws and regulations that govern, relate to, or impact the Company’s day-to-day operations and strategy. Manages the day-to-day function and administration of the Legal Department. The roles and responsibilities of the Chief Legal Officer are set forth in the Chief Legal Officer Job Description, as reviewed and approved by the Chief Executive Officer.

Written Standards
Policies and Procedures

At Spectrum organizational expectations are documented to ensure employees understand the organization’s culture, expectations and requirements. All employees are required to read, understand and acknowledge all policies and procedures applicable to their roles and responsibilities.

Policies address an organization’s guiding principles, whereas procedures address a sequence of steps to be followed in a consistent manner.

Corporate Goals

At Spectrum compliance is fundamental to the company’s success. Each year Spectrum sets a corporate goal specific to compliance and whether or not an individual meets the goal is a component of their annual performance review.

Education and Training

Spectrum is committed to developing and implementing regular, effective education and training programs for all affected employees and third parties.

At Spectrum training and education enables individuals to recognize their obligations to comply with the organization’s policies and procedures and identify high risk areas, which reduces the probability of non-compliant conduct.

Our training curricula are tailored to an individual’s role within the organization. Employees are not permitted to conduct any activities without prior training codified in a documented training record.

Communications

Spectrum is committed to creating and maintaining an effective line of communication between the Chief Compliance Officer and all employees, including a process (such as a Helpline or other reporting system) to receive complaints or questions, and the adoption of procedure to protect the anonymity of complainants and to protect whistleblowers from retaliation.

Duty to Report

At Spectrum, all employees have a duty to report any known or suspected violation of law, rules or regulations that apply to the company. All reports are handled with sensitivity and discretion. The identity of the individual who reports any information will be protected, to the extent possible, consistent with applicable law and Spectrum’s need to investigate an allegation.

There are many resources at Spectrum that can be leveraged to ask questions or report any suspected instances of misconduct including Supervisors, Human Resources, Compliance and Legal. Additionally, there is the Compliance Helpline in the event the individual reporting the information would prefer to remain anonymous:

On-line: www.sppirx.ethicspoint.com
Toll Free Phone: 1-844-587-1660

Protection from Retaliation

Spectrum prohibits retaliation against an employee who, in good faith, seeks help or reports known or suspected violations; including participating in an investigation or opposing any unlawful or discriminatory practices.

Compliance and Ethics Award Program

At Spectrum, employees who demonstrate the Company’s commitment to compliance and ethics are publicly recognized and rewarded. This includes, but is not limited to, individuals who lead others to conduct business activities in a compliant manner, individuals who proactively ask for assistance for compliance and ethics related challenges and those who do the right thing when faced with an ethical dilemma.

Risk Assessments, Auditing and Monitoring

Spectrum is committed to using audits and/or other risk evaluation techniques to monitor compliance, identify problem areas and assist in the reduction of identified problems.

Risk Assessment

Compliance risk is the threat posed to an organization’s financial, organizational, or reputational standing resulting from violations of laws, regulations, codes of conduct, or organizational standards of practice.

Spectrum proactively conducts risk assessments to determine which risks have the greatest potential for legal, financial, operational, or reputational damage; and thereby allocates resources to manage and mitigate those risks.

Auditing and Monitoring

Compliance auditing is a retrospective assessment of activities to determine if behaviors were consistent with policies and procedures. Compliance monitoring is an observation of real time activities.

Spectrum proactively conducts routine auditing and monitoring of business processes in accordance with the annual Compliance Auditing and Monitoring plan, that is approved by the Board of Directors and the Compliance Committee. Additionally, Spectrum conducts for cause audits in the event they are deemed necessary.

Discipline and Due Diligence Screening

Spectrum is committed to developing policies and procedures addressing the non-employment or retention of individuals or entities excluded from participation in federal health care programs and enforcing appropriate disciplinary action against employees or third parties who have violated company policies and procedures and/or applicable federal health care program requirements.

Due Diligence Screening and Self Disclosure

Spectrum proactively screens candidates for employment or third parties for exclusion, debarment or any other ineligibility in federal healthcare programs or government contracts. If Spectrum determines a candidate is a Debarred/Excluded Person, Spectrum will not employ or contract with such candidate.

All Spectrum employees and contracted third parties have a duty to self-disclose any information that might preclude their involvement in Spectrum business operations. If Spectrum is notified or otherwise informed a contracted third party is a Debarred/Excluded Person, Spectrum will terminate the agreement.

Product Access

Only employees who are required to regularly access Spectrum investigational or marketed products as a function of their job duties shall have access to such products.

Employee involvement in Drug Diversion is strictly prohibited.

In the event of employment termination, the access must be revoked immediately.

In the event of an employment transfer, and prior to the transfer 1) an analysis must be conducted to determine if the individual will still require access to product in their new role. If not, the access must be revoked immediately. If access is still required, it shall be appropriate as a function of their new job duties; 2) a due diligence screening must be conducted.

Enforcement Action

Spectrum prohibits violations of law and Company policies conducted in a knowingly and willful manner. Violators may expose themselves to substantial civil damages, criminal fines and prison terms. Spectrum may also face substantial fines/penalties and may incur damage to its reputation and standing in the community.

At Spectrum employment is “at will” and can be terminated at any time, with or without cause, and with or without prior notice. Depending on the circumstances, Spectrum may choose to implement progressive discipline, however is under no obligation to do so.

Investigations

Spectrum is committed to developing policies and procedures for the investigation of identified instances of noncompliance or misconduct. These include directions regarding the prompt and proper response to detected offenses, such as the initiation of appropriate corrective action and preventive measures and processes to report the offense to relevant authorities in appropriate circumstances.

At Spectrum, the facts and circumstances of each particular situation undergo a thorough review and violations are addressed in an appropriate manner.

Transparency and Disclosure

Spectrum is committed to reporting all transactions that constitute a payment or transfer of value to a healthcare professional (HCP) or healthcare organization (HCO).

At Spectrum it is the responsibility of each employee to track all applicable transactions, regardless of whether the employee is seeking reimbursement for expenses. Individual employees may be held financially responsible for any Company penalties incurred as a result of the individual employee failing to report or inaccurately reporting a transaction to the Company. If an individual is ever in doubt as to whether a payment or transfer of value should be reported, they should err on the side of reporting.