MBC LAW & POLICY COMMITTEE MEETING

1. MBC LAW & POLICY COMMITTEE MEETING Roger Louis Senior Vice President, Chief Compliance Officer Genzyme Corporation January 8, 2009

2. 5 Steps Back . . . Law = Response to “Dash & Dine” “Gas & Go” BUT could be interpreted as - Way more than a “Gift Ban” Well beyond “Sales & Marketing”

3. Well intended (though ambiguous) law . . . . . . Unintended consequences “[P]ortions of this section may sweep too broadly. However, after careful review if the bill and conversations with legislative leaders and sponsors, I am persuaded that this section is not intended to require the disclosure of confidential proprietary information . . .” “I am confident that the Department of Public Health will develop regulations that, consistent with the intent of the legislation, enhance transparency without requiring the disclosure of trade secrets and proprietary information…” - Governor Patrick signing letter

4. 3 Essential Elements • Process Compliance Program • Substance Code Do’s & Don’ts • Substance Public Disclosure “Economic Benefit”

5. Unintended Consequences: Intent = Reduce health care costs Result = Increase health care costs e.g. Mandatory disclosure of rebates & discounts may result in their elimination (but only in the Commonwealth)

6. Suggested Revision Further clarify definition of “Sales & Marketing Activities” (These regulations govern sales & marketing practices.) Follow SEC/Sarbanes Oxley reporting and accounting standards Already reflected by clinical research exception (it’s a research & development expense, not sales & marketing) Discounts & rebates are not sales & marketing expenses. They are reductions to revenue. If a company treated discounts as a sales expense they’d violate SEC laws. Other items