BUSINESS OVERVIEW 6 labeling of the approved product would need to be changed, lease, order or recommendation of, any good, facility, item or e.g., to reflect a change in intended use, dosage form, strength, service, for which payment may be made, in whole or in part, route of administration, or significant change in dose; or under federal and state healthcare programs such as Medicare • any investigational drug or device packaged separately that and Medicaid; according to its proposed labeling is for use only with another • federal civil and criminal false claims laws, including, individually specified investigational drug, device, or biological without limitations, the federal civil False Claims Act, which product where both are required to achieve the intended use, impose criminal and civil penalties, including through civil indication, or effect. whistleblower or qui tam actions, against individuals or entities Under the FD&C Act, the FDA is charged with assigning for, among other things, knowingly presenting, or causing to be a center with primary jurisdiction, or a lead center, for review presented, to the federal government, including federal health of a combination product. That determination is based on the care programs, such as, the Medicare and Medicaid programs, “primary mode of action” of the combination product. Thus, if the claims for payment that are false or fraudulent or making a false primary mode of action of a device-drug combination product statement to avoid, decrease or conceal an obligation to pay is attributable to the drug product, the FDA Center responsible money to the federal government; for premarket review of the drug product would have primary • the civil monetary penalties statute, which imposes penalties jurisdiction for the combination product, but the other relevant against any person or entity who, among other things, is FDA Centers would consult on the review. The FDA has also determined to have presented or caused to be presented a established an Office of Combination Products to address issues claim to a federal health program that the person knows or surrounding combination products and provide more certainty should know is for an item or service that was not provided as to the regulatory review process. That office serves as a focal claimed or is false or fraudulent; point for combination product issues for agency reviewers and • HIPAA, which created additional federal criminal statutes industry. It is also responsible for developing guidance and that prohibit knowingly and willfully executing, or attempting regulations to clarify the regulation of combination products, and to execute, a scheme to defraud any healthcare benefit for assignment of the FDA center that has primary jurisdiction for program or obtain, by means of false or fraudulent pretenses, review of combination products where the jurisdiction is unclear representations or promises, any of the money or property or in dispute. owned by, or under the custody or control of, any healthcare Other Healthcare Laws and Regulations benefit program, regardless of whether the payor is public or Healthcare providers, physicians and third-party payors in private, knowingly and willfully embezzling or stealing from a the United States and elsewhere will play a primary role in the health care benefit program, wil lful ly obstructing a criminal recommendation and prescription of any product candidates investigation of a health care offense and knowingly and for which we obtain marketing approval. Our current and wil lful ly falsifying, concealing or covering up by any trick or future arrangements with healthcare professionals, principal device a material fact or making any materially false statements investigators, consultants, customers and third-party payors in connection with the delivery of, or payment for, healthcare may expose us to broadly applicable fraud and abuse and benefits, items or services relating to healthcare matters; other healthcare laws, including, without limitation, the federal • HIPAA, as amended by HITECH, and their respective Anti-Kickback Statute and the federal civil False Claims Act, implementing regulations, which impose obligations on that may constrain the business or financial arrangements and “covered entities,” including healthcare providers, health plans, relationships through which we sell, market and distribute any and healthcare clearinghouses, as wel l as their respective product candidates for which we obtain marketing approval. In “business associates” that create, receive, maintain or transmit addition, we may be subject to physician payment transparency individual ly identifiable health information for or on behalf laws and patient privacy and security regulation by the federal of a covered entity, with respect to safeguarding the privacy, government and by the states and foreign jurisdictions in which security and transmission of individual ly identifiable health we conduct our business. The applicable federal, state and foreign information; healthcare laws that may affect our ability to operate include the • the Physician Payments Sunshine Act, created under Section following: 6002 of the Patient Protection and Affordable Care Act, as • the federal Anti-Kickback Statute, which prohibits, among amended by the Health Care and Education Reconciliation other things, persons from knowingly and willfully soliciting, Act of 2010, or col lectively the ACA, imposed annual offering, receiving or providing remuneration, directly or reporting requirements for certain manufacturers of drugs, indirectly, in cash or in kind, to induce or reward, or in return devices, biologics and medical supplies for certain payments for, either the referral of an individual for, or the purchase, and “transfers of value” provided to physicians and teaching GENSIGHT BIOLOGICS – 2017 Registration Document– 97