Promoting Compliance Management

The Daiichi Sankyo Group aims “To contribute to the enrichment of quality of life around the world through the creation of innovative pharmaceuticals, and through the provision of pharmaceuticals addressing diverse medical needs.” Accordingly, we aspire to entrench compliance as the underlying principle that supports our management as a company engaged in a business affecting human lives. To this end, we practice good corporate ethics and engage in compliance management to ensure we observe laws and other rules. To guide us in exercising corporate social responsibility (CSR) in our global business activities, we have established the DAIICHI SANKYO Group Corporate Conduct Charter and the Daiichi Sankyo Group Individual Conduct Principles (ICP). Based on the principles set forth in these documents, Group companies have formulated compliance conduct standards and other guidelines,* which are disseminated among all executive officers and employees. The Daiichi Sankyo Group is thus working to practice compliance management in all of its business activities in order to improve corporate value and thereby live up to the expectations of all of its stakeholders.

* Concrete codes of conduct, initiative promotion regulations and systems, and training and educational programs and related operation methods established based on the social expectations of the respective region

No matter how successful or strongly performing a company may be, it will be unable to continue growing within society if it does not practice good compliance. As a global pharmaceutical company, the Daiichi Sankyo Group therefore practices management founded on compliance.

Basic Policy

In conducting its global business operations, the Daiichi Sankyo Group is committed to practicing good corporate ethics and views compliance as the foundation for its corporate management. We remain compliant with all relevant laws and regulations and conduct compliance management with a strong focus on ensuring the highest level of ethics and social consciousness, which is essential for a life science-oriented company.
To guide us in these efforts, we have established the Daiichi Sankyo Group Corporate Conduct Charter and the Daiichi Sankyo Group Individual Conduct Principles (ICP), which are applied throughout our operations. Based on the essence of the Charter and the ICP, the Company and other Group companies have developed compliance conduct standards appropriate to their respective regions and social requirements. Awareness regarding these standards is being entrenched among all executive officers and employees.

Examples of Initiatives

Continued Operation of the Compliance System

The vice president of the Legal Affairs Department of the Company plays a central role in promoting compliance throughout the Daiichi Sankyo Group.
At Daiichi Sankyo in Japan, the head of the General Affairs & Human Resources Division serves as the compliance officer, a position that entails managing our entire compliance program, which includes the Daiichi Sankyo Code of Conduct for Compliance and related rules and annual objectives. The compliance officer also serves as the chairperson of the Company’s Corporate Ethics Committee in Japan. This committee is a deliberation and decision-making body for compliance that meets twice per year, in principle, and is made up of 11 members, including the chairperson and nine other internal representatives, as well as an appointed external attorney, who ensures that the committee operates in transparent and reliable manner.
In addition, a compliance officer is appointed at each Group company in Japan to promote and oversee compliance programs at their respective company.
In April 2016, we established the Global Compliance Advisory Committee as an advisory organ to the Corporate Ethics Committee to further evolve its global compliance system. Full-time members of the new committee include compliance officers from subsidiaries in Europe and the United States, and the committee is responsible for examining global policies and annual targets for the Group.

Dissemination of the ICP

Global companies have recently come to be expected to establish broad-ranging global policies regarding the requirements for the behavior of individuals across their organization. Moreover, this policy must be adhered to and disclosed outside of the company to demonstrate that its global business activities are being conducted with integrity.
In light of this expectation, we developed the ICP, a shared, Group-wide policy regarding the behavior of individual executive officers and employees established as a supplement to the Daiichi Sankyo Group Corporate Conduct Charter. The ICP was put into effect at Group companies in Japan and overseas in April 2015.
To promote understanding of the ICP among all Group employees, the president of each Group company transmitted messages regarding the implementation of this policy. Other measures were used to promote understanding, including interactive training programs conducted at all Group companies and departments as well as training sessions in which members of the Legal Affairs Department are dispatched to provide direct support on-site for certain Group companies. (See “Voice” below.)

【VOICE】Promotion of Compliance as a Team

Kasumi Fujii Kasumi Fujii
Compliance Group
Legal Affairs Department
General Affairs & Human
Resources Division
Daiichi Sankyo Co., Ltd.

One of the duties of the Compliance Group of the Legal Affairs Department is to advance initiatives for promoting compliance on a Group-wide basis. I am personally responsible for conducting training spearheaded by the Legal Affairs Department at domestic Group companies and formulating global policies related to compliance for the Group. We form teams to work in for each activity. I would like to contribute to my teams by calling on the knowledge and experience I gained as a lawyer.
For example, the content of materials and the methods used in conducting compliance training are decided in a collaborative process. We include case studies of compliance violations and incorporate interactive training activities. In formulating global policies for the Daiichi Sankyo Group, the teams collect information on overseas legal systems and trends in activities of overseas regulatory authorities and conduct exhaustive discussion with compliance representatives from overseas Group companies. Through this process, we always take into account the future direction of the companies within the Group.
We continue to advance activities targeting even higher levels of compliance management by combining the skills of all team members.

Compliance Training and Educational Activities

Compliance training and educational activities are an indispensable part of advancing our compliance programs.
In fiscal 2015, members of the Legal Affairs Department were dispatched to conduct training at various divisions of domestic Group companies. This training was designed to raise awareness of the ICP and to cultivate compliance understanding regarding the prevention of harassment and information leaks, appropriate transactions with subcontractors, and other matters. In addition, the interactive training on the ICP was held in small groups at various divisions of domestic Group companies.
Furthermore, the compliance officers and compliance promotion managers at domestic Group companies underwent training on the ICP that was carried out by an external specialist and incorporated case studies.
We also conduct e-learning programs related to the ICP targeting all employees at domestic Group companies while distributing educational information on intranet sites and providing compliance training DVDs that can be borrowed by any division. Through these and other proactive initiatives, we work to raise compliance awareness among all employees.
Employees at overseas Group companies are also provided with ongoing training using case studies and e-learning programs.

Use of Compliance Reporting System

The Company has in place compliance reporting systems that can be used to report legal violations, harassment, or other issues at the Company or at Group companies in Japan to the Legal Affairs Department or an external law firm, etc. Swift and appropriate action is taken to address any issues reported.
Furthermore, each Group company in Japan provides reporting channels, such as a hotline or e-mail system.
The Company and Group companies in Japan have formulated internal rules related to internal compliance reporting clearly specifying that confidentiality will be maintained and that the individual reporting will be protected from any unfavorable treatment as a consequence of reporting.
Outside of Japan, we are establishing compliance reporting systems that are matched to the circumstances in specific countries and regions. For example, Daiichi Sankyo, Inc., of the United States, employs an external compliance reporting system that is available on a 24-hour basis. Meanwhile, Daiichi Sankyo Europe GmbH, of Germany, installed an external reporting system that has been made available to all European companies under Daiichi Sankyo Europe’s jurisdiction and in all relevant languages.

Protection of Personal Information, Exhaustive Information Security, and Compliance with the Individual Number Act

Collecting personal information is a routine part of a pharmaceutical company’s business activities. However, due to the sensitive nature of this information, misuse can cause serious damage to the lives of individuals. Recognizing this fact, the Company and domestic Group companies have established internal rules related to information management and the protection of personal information and are promoting information security to ensure personal information is handled in an appropriate manner.
In addition, we have thorough precautionary measures in Japan in place to prevent loss and theft of Company computers that are taken off the premises. Employees also carry emergency contact cards that indicate which official is to be contacted in the event of an information security emergency. Furthermore, security measures are installed into the hard drives of Company computers as an added precaution against information leakage.
In October 2015, the Act on the Use of Numbers to Identify a Specific Individual in the Administrative Procedure (“Individual Number Act”) was enacted in Japan. To comply with this new law, we have established cross-organizational teams for formulating related measures comprised of members for relevant divisions and Group companies. We are also implementing appropriate response measures including establishing internal regulations and frameworks for assigning responsibility, sending notice of the purpose of use to employees and individual business partners, collecting specific personal information from them, and investigating our outsourcing contractors whether they are complying with the Individual Number Act.

Initiatives for Anti-Corruption

For companies developing their operations on a global scale, the risks related to bribery of government officials are growing with each coming year.
One of the Individual Norms defined in the ICP states our commitment to preventing corruption and bribery. To uphold this commitment, we continue efforts to actively incorporate such topics into compliance training programs.

Promotion of Compliance in Procurement

The Group has formulated its Global Procurement Policy, based on which it conducts global procurement activities founded on compliance.

Domestic Group companies have established internal rules on procurement in which compliance is listed as a procurement mission, stipulating that strict compliance must be practiced regarding the procurement-related laws, such as the Antimonopoly Act and the Act against Delay in Payment of Subcontract Proceeds, Etc., to Subcontractors, among others. In addition, we have established the CSR Procurement Standard to encourage all of our suppliers to engage in socially responsible actions. Furthermore, the Company and domestic Group companies are working to clarify the procurement process and realize optimal procurement based on such internal procurement rules.

CSR Procurement Outline

CSR Procurement Promotion

To further promote CSR procurement practices, the Supply Chain Unit implements initiatives on a three-year cycle. During fiscal 2015, the first year of this cycle, we asked domestic suppliers of raw materials to take CSR Self-Assessment Questionnaire.
These assessments evaluated suppliers based on the six perspectives of how they (1) comply with laws and enhance socially responsible activities (promotion of voluntary employment, prevention of child labor, payment of appropriate wages, guarantee of reasonable work hours, management of safety, etc.), (2) promote fair trade and ethics (free competition, information disclosure, etc.), (3) consider the environment (resource conservation, waste reduction, biodiversity preservation, etc.), (4) secure optimal quality and costs (quality assurance, safety evaluation, etc.), (5) ensure stable supply (raw material management, system construction, etc.), and (6) keep information security (personal information protection, etc.). Based on the findings of these assessments, we intend to work together with major business partners during fiscal 2016, the second year of the three-year cycle, to realize improvements in terms of CSR procurement. In fiscal 2017, the third year of the cycle, we plan to confirm the progress of these improvements. Going forward, we will continue our initiatives to practice socially responsible procurement activities together with partners (suppliers). This concept will guide us in promoting CSR procurement activities as part of our efforts to ensure sustainability in our corporate activities while securing superior quality, steady supplies, and low costs.

Measures for Ensuring the Transparency of Corporate Activities

We work to ensure the transparency of our relationships with healthcare professionals, medical institutions and patient groups in Japan based on the Company’s defined policies, and we disclose information on payments to such entities on the Company’s corporate website. Overseas, we disclose information on payments to healthcare professionals and medical institutions by calendar year based on the applicable law, including for instance, Physician Payments Sunshine Act for payments in the United States and EFPIA HCP/HCO Disclosure Code for payments conducted in Europe. We also comply with applicable regulations and codes of each country.

Approach to Clinical Research Support

In supporting clinical research, Daiichi Sankyo adheres to the Japan Pharmaceutical Manufacturers Association’s Guidelines for Supporting Clinical Research Projects headed by External Researchers with Pharmaceuticals. We support research only after identifying any possible conflicts of interest among researchers and examining issues with an eye to the potential implementation of a clinical research law currently in the drafting phase.
Daiichi Sankyo also provides scholarship donations. To improve transparency with regard to these scholarships, we introduced the Daiichi Sankyo Scholarship Program in April 2016. In this program, universities and other research institutions submit applications for scholarships directly through the Company’s corporate website, and these applications are investigated and approved by an organization that is independent from the Sales & Marketing Division.

Protection of Intellectual Property

A variety of intellectual properties are used throughout the process of bringing drugs from the R&D phase to commercialization and to eventual use by appropriate patients in need. These intellectual properties include the ideas needed to overcome scientific and technical issues (patents and utility models), designs that make products easy to use (designs), and branding provisions to ensure customers can properly choose our drugs (trademarks).
The Daiichi Sankyo Group seeks to appropriately protect these intellectual properties. Our patent portfolio protects products with the contained substance patents, which relate to the active ingredients of drugs, as well as other patents pertaining to manufacturing processes, pharmaceutical technology, and new efficacies and effects. Intellectual property rights are not only acquired for inventions that are directly associated with products; we also realize the importance of such intellectual properties as the various tools and biomarkers necessary for R&D and the basic techniques necessary for manufacturing, and we are actively acquiring rights to protect these properties.
Daiichi Sankyo works to secure business opportunities while protecting its own intellectual property rights in a variety of areas and respecting those of other companies. Areas in which intellectual property rights must be considered include biologics, generic products, biosimilars, vaccines, and over-the-counter (OTC) drugs. As we develop our operations on a global scale, we are expanding the range of countries in which we acquire intellectual property. In addition, intellectual property representatives have been positioned in Japan, the U.S., Europe, and India to ensure timely and accurate responses to the Company’s intellectual property needs that are fine-tuned to the respective region. We are also building cooperative relationships with external partners that possess cutting-edge scientific and technological capabilities to guarantee we are able to continue creating innovative new drugs through the utilization of open innovations and open development projects.

R&D Ethics

Maintaining social trust is crucial to a company’s business activities. At the same time, it is vital to remain constantly aware of the importance of compliance. In life science-oriented industries, in particular, higher ethical standards are required with regard to life. In fiscal 2016, Daiichi Sankyo’s R&D Division defined “ethics and patient safety first”*1 as its global R&D unit core value and began conducting R&D activities in accordance with this value. We are aware that research is strongly related to the health and safety of people, and therefore emphasize values based on bioethics. In the following section, we will introduction some of the activities of Daiichi Sankyo’s R&D Division.

  • *1. Encapsulates our commitment to prioritizing ethics and patient safety above scientific or business interests

・Ethical Considerations in Research Using Human Biological Materials

Before conducting clinical trials, it is necessary to estimate and predict both the pharmacological effects and side effects of a drug using biological materials from humans, such as tissues, cells, blood, or genes. In recent years, there have been rapid advances in basic and regenerative medicine researchs on human-derived cells, such as embryonic stem (ES) cells and induced pluripotent stem (iPS) cells. In accordance with Japanese guidelines, including “the Ethical Guidelines for Medical and Health Research Involving Human Subjects” and “the Ethical Guidelines for Human Genome / Gene Analysis Research”, Daiichi Sankyo has established in house regulations , “Detailed Regulations for Ethical Research on Human Tissue and Other Human Material Research” along with the Ethical Research Practice Committee. This committee is charged with the task of objectively ascertaining the necessity and value of research on human materials. It is also responsible for ensuring respect for the human rights and dignity of sample donors. Furthermore, Daiichi Sankyo practices the highest ethical standards and follows legal and regulatory requirements in the process of collecting samples, which includes obtaining voluntary prior consent from research subjects (informed consent) and stringently protecting their genetic information and other personal information. Moreover, researchers engaged in this field are required to undergo specialized training each year.

・Ethical Considerations in Animal Experiments

Animal experiments must be conducted in an appropriate manner as prescribed by research ethics and with due consideration paid to the welfare of laboratory animals.
Daiichi Sankyo has established in house regulation, “the Detailed Regulations on Animal Experimentation” based on Japanese laws and guidelines, including “the Act on Welfare and Management of Animals” and the fundamental guidelines issued by the Ministry of Health, Labour and Welfare and related activities. Acting in accordance with these rules, we practice the 3Rs of animal research.*2 All animal-use protocol must be reviwed by the Company’s Institutional Animal Care and Use Committee, and only the protocols that have received approval can be enacted. Moreover, researchers conducting animal research are required to undergo specialized education each year. To confirm that the animal care and use programs are in compliance with Japanese laws and guidelines, we conduct annual self-inspections and also seek accreditation from third-party certifing organizations. The Kasai R&D Center has received certification from the Japan Health Sciences Foundation’s Center for Accreditation of Laboratory Animal Care and Use. The Shinagawa R&D Center has received accreditation from the Association for Assessment and Accreditation of Laboratory Animal Care International (AAALAC International).

  • *2. Replacement (methods that avoid using animals), reduction (use of fewer animals), and refinement (mimize or eliminate pain and distress)

・The 3Rs of Animal Usage

The Institutional Animal Care and Use Committee reviews animal-use protocol prior to enactment and, on top of stringent evaluation, enforces the following regulations with regard to the 3Rs of animal usage.

1. Replacement
The availability or appropriateness of completely replacing the usage of animal test subjects with alternative testing measures or replacing a portion of animal tests with animals that are lower from a phylogenic perspective is investigated, and only those animal experiments for which no alternative is found are conducted.

2. Reduction
The number of animals to be used is justified by determining the minimum number of subjects necessary for accomplishing the experiment’s goals based on statistical data. Even if the specifications of the experiment call for spare animals or the exclusion of certain animals, the usage of additional animals will not be approved unless deemed scientifically necessary.

3. Refinement
Procedures may only be performed on animals if it is determined that the procedure in question will cause the minimum amount of pain and distress necessary for accomplishing the experiment’s goals. All animal usage protocol applications must include considerations of humane end points in addition to experimental end points.

The principles and ways of thinking about the 3Rs of animal usage are always changing. For this reason, we periodically invite external experts to give lessons on this subject, thereby conducting education based on updated information to ensure that our researchers always possess the level of ethics that society expects in animal usage. In addition, researchers undergo training from instructors certified by the Japanese Society for Laboratory Animal Resources on techniques for use in performing experimental procedures on animals.

・Handling of Biohazards and Genetically Modified Organisms

Daiichi Sankyo practices strict compliance with “the Act on Prevention of Infectious Diseases and Medical Care for Patients Suffering from Infectious Diseases” and “the Act on Domestic Animal Infectious Diseases Control”. Daiichi Sankyo has so established an internal biosafety manual that includes rules for the safe handling of pathogens and pathogen-containing materials. The Biosafety Committee fulfills the role of determining proper operating rules. In addition, Daiichi Sankyo has formulated internal rules for recombinant DNA experiments to ensure that genetically modified organisms are managed appropriately in accordance with “the Act on the Conservation and Sustainable Use of Biological Diversity through Regulations on the Use of Living Modified Organisms (Cartagena Act on Biosafety)”. Furthermore, the Recombinant DNA Safety Committee checks all research protocol to ensure compliance with “the Cartagena Act on Biosafety” prior to commencement. Training is also provided to recombinant DNA researchers to help prevent accidents.

・Fair Utilization of Genetic Resources

Concerning the preservation and sustainable use of biodiversity, and fair and equitable sharing of the benefits arising out of the utilization of genetic resources, we abide by the Convention on Biological Diversity. Moreover, we are giving full consideration to recent domestic developments leading up to the enactment of the Nagoya Protocol, which was adopted during the tenth meeting of the Conference of the Parties to the Convention on Biological Diversity (COP 10).

・Ethics in Clinical Trials

The Daiichi Sankyo Group conducts clinical trials in accordance with the Declaration of Helsinki, which defines the standards for ethical medical research involving human subjects. This means that trials are only conducted after obtaining voluntary informed consent from participants, while also ensuring their human rights are protected, personal information is securely managed, and their lives, health, and well-being are safeguarded. We comply with regulations such as Japan’s Pharmaceuticals and Medical Devices Affairs Act and the Good Clinical Practice ordinance of the Ministry of Health, Labour and Welfare. Moreover, we have set up the Daiichi Sankyo Ethical and Scientific Review Board, which monitors all clinical trials we conduct in Japan and some trials in Asia to ensure compliance with ethical standards and scientific validity and to ensure that medical tests are appropriate. Clinical trials in regions outside of Japan are instituted in accordance with the good clinical practices of the coalition of Japan, the United States, and Europe that is known as the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH) as well as the regulations of the country in which they take place.

・Collaboration with Contract Research Organizations

For its clinical trials, Daiichi Sankyo has formulated the Global Policy of Clinical Trials Standards. With these standards in place, we endeavor to ensure the highest degree of respect for the human rights and well-being of all individuals participating in trials. At the same time, we seek to guarantee that clinical trials are ethically sound and create results that are both highly reliable and scientifically viable. We also plan and conduct global clinical trials in accordance with Good Clinical Practices and in compliance with local regulations in each country.
Daiichi Sankyo sometimes outsources part or all of business in global clinical trials to contract research organizations (CROs). However, even in such cases, we expect CROs to comply with Daiichi Sankyo policies and standards for clinical trials. For this reason, we investigate CROs as part of the selection process before outsourcing to determine if they have the necessary capabilities to perform trials in adherence with this policy, and CROs are selected in consideration of evaluations of these investigations. Daiichi Sankyo agrees with CRO that the persons in CRO who have received the necessary training for the standard operating procedures based on Daiichi Sankyo policies and standards carry out their business when Daiichi Sanyko outsources to CRO.We have our responsibility to manage CROs by overseeing and evaluating their activities continuously after having contracted.

・Disclosure of Clinical Trial Information

DaiichiSankyo is committed to disclose information from the clinical trials it sponsors and recognizes that there are important benefits associated with making clinical trial information available to various related parties, and we therefore practice proactive clinical information disclosure. We have continued to adhere to local regulations and to support the guidelines and policies from industrial organizations by registering information on clinical trials and their results in various databases and making this information available through these databases. Furthermore, we recognize that providing clinical trial data to researchers serves to foster understanding regarding pharmaceuticals and spread scientific insight. Accordingly, such data sharing is important for advancing medicine to better aid patients. Based on this recognition, we began expanding access to clinical trial data through the dedicated system via clinicalstudydatarequest.com in February 2016. Through defined processes using this system, researchers from outside of the Company can access and analyze data that has been anonimized to protect personal information related to patients.