Integrity and Compliance

On March 3, 2022, Mallinckrodt entered into a civil settlement with the federal government and U.S. states and territories to resolve certain government investigation and litigation matters. As part of the settlement, Mallinckrodt entered into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General. Through the CIA, we will take guidance from an Independent Review Organization’s reviews and will work with our government assigned compliance monitor to ensure we are meeting the high ethical standards to which we are committed. 

On February 3, 2022, a U.S. Bankruptcy Court confirmed Mallinckrodt’s reorganization plan under Chapter 11 of the Bankruptcy Code. Under this plan, certain Mallinckrodt subsidiaries are subject to an agreed-upon Operating Injunction that governs activities related to the manner in which the opioid business is operated. A monitor appointed by the Bankruptcy Court oversees Mallinckrodt’s compliance with the terms of the Operating Injunction and periodically reports on and makes certain recommendations related to the compliance program. The monitor’s reports can be found below.

1. Monitor Report 1— April 26, 2021 
2. Monitor Report 2— July 23, 2021 
3. Monitor Report 3— October 21, 2021 
4. Monitor Report 4— January 19, 2022 
5. Monitor Report 5— April 19, 2022 
6. Monitor Report 6— September 1, 2022 
7. Monitor Report 7— December 1, 2022
8. Monitor Report 8— May 30, 2023
9. Monitor Report 9— November 27, 2023
10. Monitor Report 10 – May 24, 2024

Integrity & Compliance is an independent function at Mallinckrodt. Responsible for overseeing the administration and implementation of the Compliance Program, the Chief Compliance Officer has the ability to effectuate change within the organization as necessary and to exercise independent judgment. Our Chief Compliance Officer reports directly to the Chief Executive Officer and has a line to the Chairman of the Governance and Compliance Committee of the Board of Directors. The Governance and Compliance Committee exercises oversight of the Compliance Program and provides advice, counsel, and support to the Chief Compliance Officer as needed. As a component of our governance structure, Mallinckrodt also has a Management Compliance Committee that provides guidance and support in the oversight of effectiveness of Mallinckrodt’s Compliance Program including compliance with healthcare laws and regulations, the development and implementation of company policy, and the fulfillment of CIA and Operating Injunction requirements. 

As part of our commitment to the highest standards of ethical conduct, Mallinckrodt has implemented written standards (policies and procedures) that are consistent with applicable laws and regulations. These written standards are reviewed regularly to ensure relevancy to Mallinckrodt’s operations and the evolving healthcare regulatory environment. 

A critical element of our Compliance Program is the education and training of our employees and contractors on their legal and ethical obligations under applicable polices, laws, and regulations. Mallinckrodt is committed to taking necessary steps to effectively communicate our policies, standards and procedures to all personnel and others with whom we do business. Mallinckrodt regularly reviews and updates its training programs, as well as identifies additional areas of training on an as needed basis.

Mallinckrodt is committed to a Speak Up culture, encouraging dialogue between management and employees. Our goal is that all employees, when seeking answers to questions or reporting potential violations of policy or procedure, should know to whom they may turn for a meaningful response and should be able to do so without fear of retribution or retaliation. To that end, we have adopted principles regarding anonymity, confidentiality, and the prohibition of retaliation as outlined in the Mallinckrodt Code of Conduct. Employees are expected to Speak Up and report suspected violations of company policy and are given multiple avenues to make reports, including our Compliance Integrity Hotline.

Mallinckrodt Integrity & Compliance also conducts an annual risk assessment process where we evaluate the top risks to the company and develop mitigating strategies for execution. Our monitoring and auditing activities are closely tied to our risk assessment process. The nature and frequency of our monitoring and auditing activities are regularly assessed and adjusted according to industry practice, new regulatory requirements, changes in business model, and other considerations.

Mallinckrodt's Compliance Program strives to ensure that the consequences of violating the law or company policy are clearly understood and that appropriate, consistent corrective and preventative action is taken. As such, our Compliance Program requires the company to evaluate each case, reasonably respond to potential violations of law or company policy and take appropriate corrective action. As a part of our investigation, we also assess whether the violation is in part due to gaps in our policies, practices, or internal controls and take action to prevent future violations. 

The Modern Slavery Act 2015 ("the Act") came into effect on 29 October 2015 and requires those entities carrying on a business or part of a business in the UK, supplying goods or services, and having annual turnover of £36 million or more to disclose information regarding the steps they have taken to eradicate slavery and human trafficking from their supply chain as well as within their own organization during the previous financial year. This statement has been prepared by Mallinckrodt plc and its consolidated subsidiaries ("Mallinckrodt" or "we") in order to comply with Section 54 of the Act and covers the fiscal year ended December 31, 2023. Mallinckrodt plc is incorporated in Ireland and its principal executive offices are located at College Business & Technology Park, Cruiserath Road, Blanchardstown, Dublin 15, Ireland. The subsidiary entities that are covered by this report include the following: Mallinckrodt ARD Holdings Limited; Mallinckrodt Chemical Holdings (U.K.) Ltd.; Mallinckrodt Chemical Limited; Mallinckrodt Enterprises UK Limited; Mallinckrodt Equinox Limited; Mallinckrodt Medical Holdings (UK) Limited; Mallinckrodt Pharmaceuticals Limited; Mallinckrodt UK Ltd.; Mallinckrodt UK Finance LLP; MKG Medical UK Ltd; MUSHI UK Holdings Limited; Sucampo International Holdings Limited and Therakos (UK), Ltd.

We are a global business consisting of multiple wholly owned subsidiaries that develop, manufacture, market and distribute specialty pharmaceutical products and therapies. The Company's Specialty Brands reportable segment's areas of focus include autoimmune and rare diseases in specialty areas like neurology, rheumatology, hepatology, nephrology, pulmonology, ophthalmology and oncology; immunotherapy and neonatal respiratory critical care therapies; analgesics; cultured skin substitutes and gastrointestinal products. Its Specialty Generics reportable segment includes specialty generic drugs and active pharmaceutical ingredients.

People throughout the world count on Mallinckrodt products every day to help them lead healthier lives, and we believe that all human life should be held in the highest regard. While we believe the risk of modern slavery and human trafficking is relatively low in the highly regulated pharmaceutical industry, as a global company we recognize that our responsibility to ensure that modern slavery and human trafficking are not taking place extends to our business relationships as well. To support these efforts, we have joined the Pharmaceutical Supply Chain Initiative (PSCI), a consortium of pharmaceutical and healthcare companies that share a vision of better social, environmental and economic outcomes within the supply chain (https://pscinitiative.org/home).

We have taken several steps to mitigate the risks associated with modern slavery in our business and supply chain. In particular, we support the human rights of our workers and the treatment of all people with dignity and respect through two core policy documents: the Mallinckrodt Supplier Code of Conduct and the Mallinckrodt Pharmaceuticals Code of Conduct.

The Mallinckrodt Supplier Code of Conduct outlines the expectations for the ethical behavior of our suppliers and prohibits child and compulsory labor, human trafficking and slavery, unsafe and hazardous working conditions and environments, and any behavior that does not maintain human dignity and respect. These standards apply to all suppliers of goods and services to any Mallinckrodt business or supplier, regardless of location.

All of our employees are required to be trained on the Mallinckrodt Pharmaceuticals Code of Conduct and to certify annually both to their understanding and compliance. The Code reflects our aims for good global citizenship and worldwide social responsibility. It provides that we must provide clean and safe working environments and conditions free of human rights violations, and forbids forced or child labor at Mallinckrodt and at the companies with which we work, with no exceptions. The Code also prohibits human trafficking or slavery, unsafe or hazardous conditions or environments, or any behavior that does not maintain human dignity and respect. It further states that Mallinckrodt must not engage in activities that fail to protect individual dignity and respect, even if permissible under local law, and must pay a fair wage.

We may take disciplinary action against anyone found to have violated the Mallinckrodt Pharmaceuticals Code of Conduct or the Mallinckrodt Supplier Code of Conduct, which can include termination of employment or supply agreements.

Mallinckrodt incorporates language related to compliance with the Act into certain of its contracts with suppliers and other service providers, and will continue to assess appropriate incorporation of such language as business needs evolve. In addition, as a contractor to the U.S. government, we have specific obligations with regard to human trafficking pursuant to Federal Acquisition Regulation clause 52.222-50, Combating Trafficking in Persons, and Defense Federal Acquisition Regulation Supplement 252.222-7007, Representation Regarding Combating Trafficking in Persons. In 2017, we instituted a Human Trafficking Policy that applies to all Mallinckrodt employees, subcontractors, suppliers and other partners that assist in our performance of all U.S. government contracts and subcontracts, and expressly prohibits Mallinckrodt from engaging in human trafficking while performing under such contracts.

Mallinckrodt encourages reporting of any unethical conduct up through supervisors and the leadership chain of command, or through the Mallinckrodt Pharmaceuticals Integrity Hotline. The Integrity Hotline is a simple way for employees, suppliers and customers to express concerns regarding any potential unethical situation. The Integrity Hotline is available seven days a week, 24 hours a day. Additional information may be found at http://www.mallinckrodt.com/contact-us, Integrity & Compliance.

Although we do not have a formal process for verifying our supply chains or obtaining certification of compliance from suppliers, all suppliers are subject to audit. Mallinckrodt conducts audits of its suppliers based on an internal assessment of business and environmental health and safety risk, and measures against recognized industry standards. We do not use a third party to verify supply chains or perform unannounced audits.

This statement has been approved by our Board of Directors on 28 February 2024.

Signed,
Sigurdur Olafsson
President, Chief Executive Officer and Director 

Statement regarding compliance with California Health & Safety Code § 119402

California Health & Safety Code, Sections 119400 – 119402, (“California Code”) requires pharmaceutical companies to adopt a compliance program in accordance with the April 2003 publication “Compliance Program Guidance for Pharmaceutical Manufacturers” (“OIG Compliance Guidance”) developed by the United States Department of Health and Human Services Office of Inspector General (“OIG”) and policies for compliance with the Pharmaceutical Research and Manufacturers of America (“PhRMA”) “Code on Interactions with Health Care Professionals” (“PhRMA Code”) within six months of any update or revision of the PhRMA Code.

Mallinckrodt Pharmaceuticals (“Mallinckrodt” or “Company”) has established a Compliance Program in accordance with the OIG Compliance Guidance and has policies in place to foster compliance with the PhRMA Code.  For purposes of compliance with the requirements of the California Code and as part of the Compliance Program, Mallinckrodt has established a specific annual aggregate dollar limit of $2000 on gifts, promotional materials, or items or activities that Mallinckrodt may give or otherwise provide to an individual medical or healthcare professional in California on an annual basis from January 1 to December 31.  Such items or activities primarily include:  medical educational items such as textbooks or clinical reprints, intended to enhance patient care; modest meals associated with a substantive discussion of a Company product or a disease state; and other items or activities permitted under the PhRMA Code, the AdvaMed Code of Ethics for Interactions with Healthcare Professionals and/or the OIG Compliance Guidance.  These items and activities are primarily directed to the dissemination or communication of medical and scientific information as a resource for healthcare professionals to assist in making clinical or other medical judgments.  This limit may be revised from time to time, in which case the revised limit will be published in this section of the Company website.  This limit represents a spending cap, not a goal or average; in many cases, the amount spent per prescriber is substantially less than the cap amount.

In accordance with the California Code, the annual limits do not include the following:

• drug samples given to physicians and healthcare professionals
• financial support for continuing medical education forums
• financial support for health educational scholarships
• payments made at fair market value for legitimate professional services, and any meals or expenses associated with the provision of those services

Annual Declaration of Compliance

Mallinckrodt’s Compliance Program was developed with consideration given both to the goals of sections 119400- 119402 of the California Health and Safety Code and to the operations, size, and organization of the Company.  Based upon our good faith understanding of these statutory requirements, we believe we are in compliance in all material respects with our Compliance Program and the requirements of the California Health and Safety Code.