Please answer the following questions based on the case below

i) what activities/plans/initiatives could potentially constitute a legal violation? (e.g., ad board, speaker program, research grant, etc);

(ii) for each activity/plan/initiative identified, what specific facts contribute to making it a violation and explain your reasoning (e.g., ad board has 100 members which is far greater than needed, therefore intent seems to be to provide kickback to HCPs rather than gain needed advice). Be forewarned, not all facts in the Fact Pattern contribute to making the activity/plan/initiative a legal violation. Some facts reflect legitimate business practice. In such case, you should so state and explain your reasoning (e.g., ad board has 3 members which is a reasonable amount to accomplish the legitimate purpose of gaining needed advice). In other words, there is nuance built into this Fact Pattern and your answers should reflect that nuance. Thus, for each given activity/plan/initiative you identify, please explain what facts could be used as evidence of a legal violation and distinguish these from any facts that reflect legitimate business practice; and

(iii) for each activity/plan/initiative identified, what type of violation/problem is at issue (e.g, kickback, off-label promotion, performance pressure, privacy violation, bad governance, etc)?

The case

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Commercial Assets:

You are the Global Chief Commercial Officer of SuperTech, a mid-sized pharmaceutical company with revenues of $4 billion and a market cap of about $35 billion. You have an approved product, Super X which is used to treat Bad Disease. Super X is approved and marketed in the US, Europe, Japan, Canada, and Australia. In addition, marketing applications for Super X have been submitted in all major LATAM countries as well as in China, with expected approval dates ranging from the next 1 to 5 months. Third party distributors have been acting on your behalf in LATAM and China for the past year, ostensibly conducting disease awareness activities and market research to gauge the size of the respective country markets. You also submitted marketing applications for Super X in Russia and India, with expected approval within the next 6 to 8 months in those countries. Contracts have just been signed with distributors for those markets. In addition to Super X, you have a second product - MiracleCure - that has completed phase III trials. MiracleCure is used to treat Terrible Disease. While there is already a treatment on the market for Terrible Disease, it is common knowledge that it is not very effective. Marketing applications for MiracleCure have been submitted in the US and Europe, with approval expected first in the US in 3 months and then in the EU in 6 months.

Market Conditions, Targets, & Governance:

Reporting to you globally are Sales, Sales Operations, Marketing, Market Access, Patient Service HUBs (US only), Medical Affairs, and Patient Advocacy. You, in turn, report to the Chief Operating Officer, who reports to the Chief Executive Officer. You've divided the world into 4 regions, each led by a general manager reporting to you. The regions are: (i) North America (US and Canada), (ii) EuroPlus (Europe, Australia, and Russia), (iii) Asia (Japan, China, and India), and (iv) LATAM (Brazil, Argentina, Columbia, and Chile). It is a new year and to be successful you will need significant sales in each region's largest market. This means keeping a laser focus on the US, Europe, Japan, and Brazil. It won't be easy. The Board of Directors has set this year's target at $5 Billion, which is $1 Billion more than last year's target of $4 Billion. The problem is that Super X is somewhat saturated in the approved markets, with a further penetration potential of about 15% ($150,000M), leaving a shortfall of $850,000M.

To hit this target, which has already been communicated to the Street, you will need to squeeze more than 15% from the approved markets, and find opportunities elsewhere. You schedule a meeting with your leadership team, comprised of the General Managers of each of the four regions, the VP Global Marketing, VP Sales Operations, VP Global Medical Affairs, and VP Patient Advocacy, to figure out how to hit target. It is agreed that to grow the market from $4 billion to $5 billion, the approved markets for Super X will need to generate at least $200,000 million. In addition, each Regional General Manager is assigned the following product-specific country-level targets: (i) $250,000 million for the launch of MiracleCure in the US, (ii) $200,000 million for the launch of MiracleCure in the EU, (iii) $150,000 million for the launch of Super X in China, (iv) $100,000 million for the launch of Super X in Brazil and Argentina, (v) $50,000 million

for the launch of Super X in Columbia and Chile, and (vi) $50,000 million for the launch of Super X in Russia and India.

Because these targets are aggressive and will stretch your team to perform at its very best, you tell the team that you have modified their bonus structure. This year hitting target will result in a 125% payout (rather than 100%). Additionally, every $100,000 million in revenue above target will result in an additional 5% payout. However, every $50,000 million below target will reduce the payout by 10%, and if global revenues are below $4.8 billion, the payout will be zero. You advise your leadership team to develop incentive compensation plans for each of their teams that will heavily drive performance and give them wide latitude to be innovative.

North America:

Your North America General Manager, Johnny Depp, has been on your team since the launch of Super X five years ago. Since launch, no new scientific data has been generated, but a competitor has entered the market with a medicine called SecondDrug. No head-to-head trial was performed to compare the efficacy of Super X versus SecondDrug. As of today, Super X has 60% of the market and SecondDrug 40%. To hit target, Johnny needs to grow Super X by switching patients from SecondDrug onto Super X and by launching MiracleCure successfully in the US. Marketing has come up with a new tag line for Super X: "Get Super Results With Super X." Beneath the tag line are the words: "Switch Your Patient to The Drug of Choice for Treating Bad Disease in America." Though you conducted a speaker program during the first two years of Super X's launch, three years have gone by since you had an active program. Johnny tells you he wants to reinvigorate excitement about Super X by launching a new speaker program. His plan is to hire the top 20 key opinion leaders ("KOLs") as speakers, and to target all 160 HCPs known to SuperTech who treat Bad Disease. This could theoretically be accomplished by having 16 sessions with 10 HCPs in the audience per session, but Johnny says it will be difficult to get 10 HCPs per session given their busy schedules. Though it will cost more money in speaker fees, venues, food, etc, Johnny would prefer to design more intimate sessions of three HCP attendees per session to guarantee attendance and to ensure all their questions get answered. Additionally, because HCPs take advantage of these programs to educate their office staff about Bad Disease, it is decided to budget for 100 sessions. During the initial speaker program conducted during the first two years of launch, HCPs appreciated being able to re-invite all their office staff to several sessions until they understood the data. The sessions will be held at modest restaurants and/or at HCPs' own offices to avoid expensive venues. You agree but caution Johnny: "no sports bars or Hooters. The restaurants need to be appropriate and conducive to scientific dialogue."

To help the 20 KOL Speakers get up-to-date on Bad Disease so they can be effective speakers, SuperTech send them to a Continuing Medical Education program provided by the American Medical Association, covering their costs including registration fees, travel, and lodging. Additionally, SuperTech will hold its own speaker training program for the KOL Speakers. The training will take place in Dallas, Texas at the airport Hilton. SuperTech will pay the travel, lodging, and meal costs for the KOLs to attend the training. Each HCP will be paid an hourly rate of $300 for the time in which they attend the training. The speaker presentation must be reviewed and approved by SuperTech's Copy Review Board, but Johnny has made clear that speakers can make the presentation more personal by adding slides at any time detailing the KOL's own real-world practice experience with Super X.

Another way to help hit target in North America is to have a best-in-class patient support hub. At SuperTech the hub sits within the commercial organization. Will Turner, the head of SuperTech's patient support team who reports to Johnny sends him an email: "Johnny, I just got off the phone with the Black Pearl Patient Support Foundation. Apparently, the large donation we gave them last quarter has already been used up, and they sent us a list of 6 Medicare patients with prescriptions for Super X who can't afford the co-pay. I don't have any further charitable contribution funds in our hub budget to cover this. Could you please transfer additional funding so these poor patients can be covered? I'll also need extra funding to cover future patients. If we get these six patients on drug, one hundred Super X patients total will have been assisted by the Black Pearl's Super X Fund." Within five minutes of receiving the email, Johnny calls Will by phone. "Will, that's great news. I'll have Finance transfer money from my budget to yours. By the way, how is the nurse educator program going?" To which Will answers: "Progressing nicely. As you know, HCPs have indicated that they get great value from our educators, but we don't have enough of them in the field to service all HCPs. So we're going to hire more nurse educators. They'll all be properly qualified. We're requiring them to be licensed registered nurses and to have 10 years of real-world nursing experience. They'll be assigned to different geographic regions with target lists of HCPs to call upon. Their role will be to provide in-depth medical education about the signs and symptoms of Bad Disease and Terrible Disease, and to answer HCP questions." "Okay," Johnny says, "what about in-office meals?" "All meals will be modest," Will answers, "and provided as part of an educational interaction. I should also mention that the Midwest Region has a pilot they are testing with HCPs. Each nurse educator has been assigned to a specific HCP office in which they physically work each day providing disease education directly to the patients of that office and providing any prior authorization assistance needed to get health plans to approve the medicine for those patients. The docs love it because it helps them focus on the important stuff by not having to spend time on basic disease education and prior auths. Our nurse educators also directly call the patient's health plan as an extension of the HCP's office. In fact, our metrics show that HCPs in the Midwest Region have been writing many more Super X prescriptions than HCPs in other regions." "Finally," Johnny blurted, "some real innovation! Savvy?"

A week later you check-in with the VP of Medical Affairs, Hector Barbossa, and VP of Patient Advocacy, Tia Dalma. To help generate excitement about MiracleCure in advance of the US and EU launches, Medical Affairs will present a medical talk entitled: "MiracleCure - Finally An Effective Treatment For Terrible Disease" at GLOBE Conference (an international conference attended by HCPs from around the world), widely recognized as the leading scientific conference in the treatment of Terrible Disease. Medical Affairs has a big role to play in the launch of MiracleCure by properly educating HCPs in the medical community and answering any questions they may have. In anticipation of this, Hector established a special incentive plan just for Medical Affairs. Hector is calling it a "Milestone Award." If Super X and MiracleCure are at or above target by midyear, everyone in Medical Affairs will receive a $10,000 midyear

bonus. Tia Dalma reminds you that Patient Advocacy also has a big role to play and will be critical to the success of MiracleCure, which has been shown in studies to offer important clinical benefits to patients suffering from Terrible Disease. You are well-aware of the fact that your boss, the COO, is a true believer in the medicine and has big commercial expectations for MiracleCure. The biggest benefits come from early treatment. If treated within the first year of disease onset, patients can actually be cured. If not, MiracleCure can still significantly delay the progression of the disease which otherwise typically leads to death within 5 years. Either way, time is of the essence. The more patients get on drug and the sooner treatment begins, the better the potentially life-saving patient outcomes. But as Tia Dalma reminds you, these life-saving benefits can only happen if patients know about MiracleCure and its upcoming approval date.

Luckily, she has a plan. She has approached the largest Patient Advocacy Organization (PAO) to see if it can help distribute information about Terrible Disease and MiracleCure to its patient members. The PAO said it used to communicate to its patient members via a newsletter, but that it had to abandon the newsletter due to insufficient funding. Tia told the PAO that she could arrange for SuperTech to make a charitable contribution to it, but that the PAO would need to comply with SuperTech's Charitable Contribution Policy by providing evidence of its charitable status and by applying for the donation directly with SuperTech's Charitable Contributions Committee. The PAO agreed to do so and to add info about MiracleCure to its newsletter once back in operation. Because Elizabeth Swann, the VP of Sales Operations, sits on the Charitable Contribution Committee, Tia has already called her to let her know an important request is coming. Tia tells you she is also going to hold a patient advisory board related to Bad Disease. The purpose of the ad board will be to gain insight from patients about what it's like to live with Bad Disease and to ask the patient ad board members how SuperTech could better educate the patient community about Bad Disease and Super X. The ad board will consist of eight patients, with a team of three employees from SuperTech in attendance (Advocacy, Marketing, and Sales). Because a large PAO is having a national meeting from March 3-5 and because all eight patient ad board members would like to attend the meeting, Tia decided to hold the ad board the evening of March 5th after the PAO meeting has ended. She will hold the meeting at the Hard Rock Hotel in Las Vegas where the PAO meeting is being held so there is no need to travel to a separate venue. SuperTech will pay the cost of the patients' travel to the PAO meeting, cover the cost of the hotel from the 3rd to the 5th, and pay each patient $500 for participating in the ad board. Return flights are booked for the 6th, although several patients asked for return flights on the 7th or 8th.

To have any chance of hitting target it will be important for you and the General Managers to be up-to-date on how you are collectively and individually tracking against target. This will allow you to spend more time in the regions that are behind, and allow the General Managers to deploy tactics based on how they are tracking. Your VP of Sales Operations, Elizabeth Swann, is responsible for maintaining and communicating these metrics. Each month Elizabeth sends a report to you and your leadership team outlining the performance of each region. The regions are color coded based on how they are tracking (green for meeting or beating target; yellow for 10% or less behind target; and red for 11% or more behind target). At the end of Q1,

North America and EuropePlus are yellow and Asia and LATAM are red. Not off to a great start, but not surprising given the unrealistic target for each region. You will clearly need to exercise far greater oversight than you have so far. You ask your secretary to set up bi-weekly (every second week) Update Meetings with your leadership team during which they will need to report on financial progress toward 'reaching green' and on success of locally executed tactics. This will allow you to prune unsuccessful tactics and leverage successful ones across different regions. "I wish there was someone to congratulate," you say during your first Update Meeting, "but so far you are all under-performing. I want to be clear. This isn't a game we're playing. There isn't a prize for fourth place or for coming in below target. If everyone comes in at or above target, you will all be rewarded per the generous incentive plan I put into place this year. Not only that, but the highest performing General Manager who also meets or beats target will be listed as my successor in my succession plan. On the other hand, if the lowest performing General Manager is also below target, he or she will be replaced. Now get out there and impress me!"

EuroPlus:

Angela Merkel, the General Manager for the EuroPlus Region, can't afford to lose her job. She's taken out huge mortgages on two large villas, a main residence in London and a summer home in the south of France. She's determined to be the highest performing General Manager, but is currently tracking 8% below target. She is finding it hard to squeeze enough revenues out of Europe, but sees an opportunity in Russia. Although drug approval for Super X is taking longer than expected, she recently got very good advice from her former colleague, Vlad Putin, who runs the Russian Medicines Approval Agency (RMAA). Angela hired him as a consultant to explain the RMAA's complicated review and approval procedures and to learn if there is an accelerated pathway. Vlad was paid no more than fair market value for his services. During one of their calls, Vlad confirms there is no official accelerated pathway but states that the Russian government has recognized the need to fund registry studies to collect real world data on the safety of medicines used in Russia. Companies who are willing to fund such registry studies will be prioritized when it comes to both drug approval and reimbursement approval. In fact, for such companies, reimbursement discussions can parallel track approval discussions, such that Super X could be launched and reimbursed immediately upon approval. This was incredible news, because instead of the Russian launch of Super X being three months behind schedule (October launch), she could launch within a month (early May). Angela simply needs to make a $500k contribution to the registry study which Vlad indicates is currently being run by an organization called the Saints of Petersburg on behalf of the Russian government. Vlad sends Angela the paperwork and bank routing number associated with the safety study.

Now with the possibility of launching within a month, Angela needs to quickly get HCPs familiar with the incredible benefits of Super X in a country that is currently without treatment or competition. But she also needs to conduct market research on the prevalence of the Bad Disease in Russia. This involves going office-to-office to determine how many patients have been diagnosed with the disease at each office. This will greatly benefit both HCPs and patients because early identification of patients who could benefit from the medicine could have a significant impact on their health by slowing disease progression. The problem is that her

distributor who is conducting all field work is being turned away by many HCPs who do not have time to check the medical records of their patients to identify those with Bad Disease. It is agreed that going forward the distributor will offer to review charts and medical records on behalf of HCPs so these patients can be identified without burdening the HCPs and benefit from early identification and treatment.

Asia:

In India, there is very little understanding of Bad Disease and no one other than the top three KOLs have heard of Super X. There are only about 20 KOLs in total for this large population, and these KOLs are mainly university professors who also have appointments at state-run university teaching hospitals. Jackie Chan, your Asia Region General Manager, is hoping drug and reimbursement approval for Super X will be wrapped up by October 1st. If so, he will have three months in which to book sales. It will be pedal-to-the-metal during those three months. The key to success will be to lay the groundwork by getting India's 20 KOLs as well as its 100 top HCPs knowledgeable about Bad Disease aware that a company called SuperTech will soon launch the first ever treatment for Bad Disease in India. Jackie was surprised to hear that the lowest ranked General Manager will lose their job if he or she comes in under target. But Jackie has a nice nest egg saved up and isn't so susceptible to threats. He is, however, susceptible to carrots. He has always wanted to be a chief commercial officer and would love to be listed as your successor. He is therefore very motivated to over-perform in India where there is high unmet need and a high prevalence of Bad Disease. So far, Jackie has spent most of his time and effort on the KOLs. Back in April he sent them to a four day scientific conference in Australia that presented the latest scientific information about Bad Disease. In the evenings, he would take them to dinner to gather their perspectives on the learnings coming out of the conference. One of the KOLs had asked for his return trip to be booked two days after the conclusion of the medical conference because he needed to meet with a manufacturer who is a supplier of medical devices to his hospital. Jackie was able to accommodate this extended return flight as well as two extra hotel nights for the HCP by staying an extra day himself to briefly meet with that KOL over dinner to discuss the market strategy for Super X in India.

During a trip to China, Jackie attended a meeting during which he met the social responsibility director of one of the state-run hospitals that promises to be a big prescriber of Super X. He learned of the hospital's struggles to combat a rare and devastating illness called epidermolysis bullosa ("EB"). Children with this devastating disease are called 'butterfly children,' because their skin can fall off as a result of even mild friction. After watching a video about these butterfly children, Jackie is deeply moved and determined to help them even though SuperTech does not sell any medicines related to EB. Sensing Jackie's empathy, the hospital's social responsibility director asks whether SuperTech could make a charitable contribution in the amount of $25,000 to the hospital's EB support group fund. Although this is only a small amount of money, and Jackie wishes he could do more, he knows he would not be able to justify a bigger donation to a disease disconnected to SuperTech and its treatments. He therefore provides the requested donation directly from his commercial budget to the hospital.

LATAM:

In Brazil, a distributor hired by your LATAM Region General Manager, Enrique Iglesias, has been very actively engaged in scientific exchange. The distributor has excellent contacts in the medical community and with the reviewers at Anvisa (i.e., the Brazilian FDA). As a result, this region is much more prepared for launch than either India or China. For example, the distributor has been presenting your clinical trial data at scientific conferences in Brazil. It has also been visiting HCP offices, but it never proactively discusses clinical trial data or even mentions Super X during such visits. Rather, only disease awareness and corporate information about SuperTech is provided. Occasionally, a doctor who attended a scientific conference may ask an unsolicited question about SuperTech's clinical trial data. In these cases, the distributor makes the HCP sign a medical information request form before providing the requested information. In addition to all this excellent scientific exchange, the distributor has been working on the marketing application for Super X in Brazil. The cost of this work was originally quoted to you as $50,000 US. However, that was just an estimate. The distributor contacts Enrique with great news. Negotiations with Anvisa have accelerated. However, another $10,000 will be needed because the application involved more work than anticipated. If the money can be wired over quickly, the distributor can have the application submitted in a week. The distributor is vague on details and seems unwilling to spend the time to itemized invoice for the added cost at a time when things are finally moving: "look Enrique, if we don't move fast, we will lose ANVISA's attention and it could be months before they turn back to our application." Knowing the original quote was just an estimate and unwilling to lose the momentum with Anvisa, you wire an additional $10,000 to the distributor. Interestingly, several of the reviewers tasked with approving or rejecting your marketing application don't actually work for Anvisa. Nor are they HCPs. They are independent professors from state-owned universities who lend their expertise by volunteering their time. It is customary in Brazil to send each of these professors a box of local Brazilian chocolate to thank them for their time and review of the application. It would be rude not to do so. Unbeknownst to you and Enrique, your distributor sent the chocolates along with a bottle of wine to each reviewer with a thank you note stating: "greetings and thanks for your review of Super X from SuperTech."