Description

I. Introduction

A. General
Novartis Vaccines and Diagnostics, Inc. ("Novartis V&D") formerly the Chiron Corporation ("Chiron"), is committed to establishing and maintaining an effective Integrity and Compliance Program in accordance with "Compliance Program Guidance for Pharmaceutical Manufacturers," published by the Office of Inspector General, U.S. Department of Health and Human Services (the "HHS-OIG Guidance"). Our Integrity and Compliance Program is one of the key components of our commitment to the highest standards of corporate conduct.

B. Transition, Chiron and Novartis merger
On April 20, 2006, Chiron Corporation was acquired by merger and became an indirect wholly owned subsidiary of Novartis AG, a Swiss corporation, and is now known as Novartis Vaccines and Diagnostics, Inc or Novartis V&D.

C. Purpose
The purpose of our Integrity and Compliance Program is to prevent and detect violations of law or company policies. As the HHS-OIG Guidance recognizes, however, the implementation of such a program cannot guarantee that improper employee conduct will be entirely eliminated. Nonetheless, it is our expectation that employees will comply with our Code of Conduct, and the policies established in support of such a Code. In the event that we become aware of violations of law or company policy, we will investigate the matter and, where appropriate, take disciplinary action and implement corrective measures to prevent future violations.

To view our Compliance Declaration, click here.

To view our Employee Code of Conduct, click here.

To view our Corporate Citizenship Policy on our commitment to ethical conduct, click here.

Described below are the fundamental elements of the Novartis V&D Integrity and Compliance Program. As HHS-OIG calls for in its Guidance, we have tailored our program to fit the unique environment of our company. Moreover, our Integrity and Compliance Program is dynamic; we regularly review and enhance our program to meet our evolving compliance needs.

II. Overview of Compliance Program

A. Leadership and Structure
Meghan B. Leader, a member of the Novartis V&D Executive Committee, serves as the Chief Compliance Officer, and maintains overall responsibility for the global Novartis V&D Integrity & Compliance program.  Ms. Leader reports directly to Joerg Reinhardt, CEO of Novartis V&D.

Ann Beasley Bacon is the designated senior-level official serving as the Vice President of Integrity and Compliance with daily responsibility for developing, operating and monitoring the Novartis V&D Integrity and Compliance Program. Ms. Bacon reports directly to Ms. Leader and either can be reached at NVD.IntegrityCompliance@Novartis.com.

Ms. Bacon and Ms. Leader have regular and direct access to present integrity and compliance issues to the Novartis V&D Executive Committee and CEO, and as such, have the ability to effectuate change within the organization as necessary and to exercise independent judgment.

B. Integrity and Compliance Organization
Novartis V&D has established an Integrity and Compliance Department and uses various forums and a broader network of Compliance Officers and Liaisons to assist in the implementation and maintenance of the program.

C. Written Standards
Novartis V&D's Code of Conduct is an expression of the company's expected standards of behavior for everyone who conducts business on behalf of the Company. The Code establishes compliance responsibilities, supports applicable laws and regulations, and reinforces organizational policies and procedures. The Code articulates our fundamental principles, values and framework for action within our organization. Novartis V&D policies, together with business unit procedures, address potential areas of risk including, but not limited to, those identified in the HHS-OIG Guidance such as data integrity pertaining to government reimbursement practices, kickbacks, and other illegal remuneration.

D. Gift Limits
We do not permit gifts, promotional materials, items or activities prohibited by the relevant marketing ethics codes (i.e. the IFPMA Code of Pharmaceutical Marketing Practices, EFPIA European Code of Practice on the Promotion of Medicines, PhRMA Code on Interactions with Healthcare Professionals, and the AdvaMed Code of Ethics on Interactions with Healthcare Professionals) or the HHS-OIG Guidance. For items and activities that are not prohibited, we have set a cumulative annual spending limit of $2500 per health care professional. These items and activities consist of (1) occasional modest meals given in conjunction with informational educational presentations and discussions that provide educational and scientific value, (2) modest meals and receptions provided to all attendees of CME forums and meetings, (3) items that are for the benefit of patients and of appropriate value as defined by applicable marketing ethics codes, and (4) items of minimal value associated with a health care professionals practice. We are currently building systems to enable us to track and manage these expenses.

E. Education and Training
A critical element of our Integrity and Compliance Program is the education and training of our employees on their legal and ethical obligations under applicable health care program requirements. We are committed to taking necessary steps to effectively communicate our standards and procedures to all affected personnel. Moreover, we will regularly review and update our training programs, as well as identify additional areas of training on an "as needed" basis.

F. Internal Lines of Communication
Novartis Vaccines and Diagnostics is committed to encouraging dialogue between management and employees. Our goal is that all employees, when seeking answers to questions or reporting potential instances of fraud and abuse, should know to whom to turn for a meaningful response and should be able to do so without fear of retribution. To that end, we have adopted principles regarding confidentiality and policies prohibiting retaliation as well as a helpline to which issues may be reported anonymously. Employees are expected to report suspected violations of company policy by calling the Novartis V&D Integrity Helpline at (866) 381-4321 or by contacting the Novartis Business Practices Officer at Business.PracticesOfficer@Novartis.com.

G. Auditing and Monitoring
We have instituted an Integrity and Compliance Program that includes efforts to monitor, audit, and evaluate adherence to the company's compliance activities. We note that in accordance with the HHS-OIG Guidance, the nature of our reviews as well as the extent and frequency of our compliance monitoring and auditing varies according to a variety of factors, including new regulatory requirements, changes in business practices, and other considerations.

H. Responding to Potential Violations and Corrective Actions
Although, HHS-OIG recognizes that even an effective compliance program may not prevent all violations, our Integrity and Compliance Program strives to ensure that all violations of the law or company policy are identified and that proper corrective actions are taken to ensure that future incidences of non-compliance can be prevented. As such, our Integrity and Compliance Program requires the company to evaluate each case and respond promptly to potential violations of law or company policy, take appropriate disciplinary action, assess whether the violation is in part due to gaps in our policies, practices, or internal controls, and take action to prevent future violations. Moreover, continuous efforts are underway to create compliance systems that address evolving industry and regulatory standards and which aim at deterring unlawful and unethical behavior.

III. Contact Information
For questions or comments regarding Novartis Vaccines and Diagnostics Integrity and Compliance Program, or to request printed copies of selected Integrity and Compliance Program materials, please call 1-617-871-7982, fax 1-617-871-8911, or e-mail us at NVD.IntegrityCompliance@Novartis.com.

Revision date 10 June 2008