Contract analysis

I. Executive Summary A. Purpose This memorandum presents a comprehensive survey of state-level sales and marketing compliance laws applicable to Solstice Biomedical Inc. ("SBI"), a Delaware corporation (EIN 93-4718206), with principal offices located at 200 Harborview Drive, Suite 1100, Boston, Massachusetts 02210, in connection with the planned United States commercial launch of the Pulsar™ Cardiac Rhythm Management

12. Washington, D.C. (treated as a state-equivalent jurisdiction) These jurisdictions were selected based on a comprehensive review of the US legislative landscape as of the second quarter of 2024, with a focus on states that impose affirmative obligations — including registration, reporting, code adoption, and gift restrictions — on medical device manufacturers or, more broadly, on manufacturers of healthcare produc

II. Methodology and Legal Framework A. Scope and Approach The twelve jurisdictions analyzed in this survey were selected based on a systematic review of the US legislative landscape as of the second quarter of 2024. The selection process focused on identifying jurisdictions that impose affirmative obligations on medical device manufacturers — or, more broadly, on manufacturers of healthcare products — in the areas of

1. Applicability to Medical Device Manufacturers: Whether the jurisdiction's marketing compliance statutes apply to medical device manufacturers, pharmaceutical manufacturers only, or a broader category of healthcare product manufacturers.

2. Registration or Licensure Requirements: Whether the jurisdiction requires manufacturers to register or obtain licensure before engaging in commercial marketing activities within the jurisdiction.

3. Fee Payment Obligations: Whether the jurisdiction requires payment of registration fees, annual renewal fees, or other monetary obligations as a condition of engaging in commercial marketing activities.

4. Aggregate Spend or Transfer-of-Value Reporting: Whether the jurisdiction requires periodic reporting of expenditures made by manufacturers to healthcare professionals, including consulting fees, speaker honoraria, meals, travel, gifts, and other transfers of value.

5. Gift Bans or Limitations: Whether the jurisdiction prohibits or restricts gifts, entertainment, meals, or other transfers of value from manufacturers to healthcare professionals, and the nature and scope of any applicable restrictions and exceptions.

6. Marketing Code Adoption or Certification: Whether the jurisdiction requires manufacturers to adopt and certify compliance with an industry-recognized marketing code of conduct, such as the PhRMA Code on Interactions with Healthcare Professionals or the AdvaMed Code of Ethics.

7. Promotional Restrictions Specific to the Jurisdiction: Whether the jurisdiction imposes restrictions on promotional activities beyond those applicable under federal law, including restrictions on specific types of promotional claims, detailing practices, or use of particular marketing channels.

8. Enforcement Mechanisms and Penalties: The enforcement mechanisms available to state regulators and the nature and magnitude of penalties for non-compliance. For each jurisdiction, the analysis includes a compliance action checklist that identifies the specific actions SBI must take to comply with the jurisdiction's requirements, the responsible parties for each action, and the recommended deadlines for completion.

III. State-by-State Analysis A. California

1. Applicable Statutes and Regulations The following California statutes and regulations are relevant to SBI's marketing compliance obligations in connection with the Pulsar™ CRM System: • California Health & Safety Code §§ 119400–119402 — Comprehensive Compliance Program Requirements for pharmaceutical companies, requiring adoption of a compliance program consistent with industry codes of conduct and Office of Inspe

2. Applicability to Medical Device Manufacturers California Health & Safety Code § 119400 applies by its terms to "pharmaceutical companies," defined to include entities engaged in the production, preparation, propagation, compounding, conversion, or processing of prescription drugs. The statute does not expressly include medical device manufacturers within its scope. However, the California Legislature has on multip

3. Registration and Fee Requirements California does not impose a separate manufacturer registration requirement or registration fee on medical device companies under Health & Safety Code §§ 119400–119402 or under the Fair Pricing Act. SBI is not required to register as a medical device manufacturer with any California agency solely for purposes of marketing compliance (separate FDA establishment registration and Cal

4. Compliance Program Mandate California Health & Safety Code § 119402 requires pharmaceutical companies to adopt a comprehensive compliance program that is consistent with the PhRMA Code on Interactions with Healthcare Professionals, the OIG Compliance Program Guidance for Pharmaceutical Manufacturers, or a substantially similar industry code. While this requirement applies by its terms to pharmaceutical companies r

5. California Fair Pricing Act Disclosure This is a critical compliance item requiring pre-launch action. The California Fair Pricing Act (Health & Safety Code § 127685 et seq.) requires manufacturers of healthcare products, including medical devices, to provide specified disclosures to the Department of Health Care Access and Information ("HCAI") when a product's wholesale acquisition cost exceeds certain thresholds

6. Gift and Aggregate Spend Reporting California does not currently have a standalone aggregate spend reporting statute specific to medical device manufacturers. The transparency objectives underlying aggregate spend reporting are addressed at the federal level through the Physician Payments Sunshine Act, and SBI's compliance with federal Open Payments reporting requirements will satisfy California's transparency exp

7. Promotional Restrictions California Business and Professions Code § 17500 prohibits false or misleading advertising in connection with the sale of goods or services. Section 17200 prohibits unlawful, unfair, or fraudulent business acts or practices. Both provisions apply to SBI's promotional activities in California, including advertising, sales materials, physician detailing, and digital marketing. SBI's promotio

8. Enforcement and Penalties The California Attorney General has enforcement authority over violations of Health & Safety Code §§ 119400–119402, the Fair Pricing Act, and Business and Professions Code §§ 17200 and 17500. Enforcement may take the form of civil actions seeking injunctive relief, civil penalties, and disgorgement of profits. Penalties under the Fair Pricing Act may include fines for failure to file requ

9. Compliance Action Checklist — California • [ ] Complete California Fair Pricing Act disclosure filing for the Pulsar™ implantable monitor (WAC $4,950 exceeds $2,500 threshold). Target deadline: September 15, 2024. Responsible: Theresa Brennan / Patrick Dunne. • [ ] Adopt a comprehensive compliance program that satisfies the standards of Cal. H&S Code § 119402, even though the statute is primarily pharmaceutical-di

1. Applicable Statutes and Regulations The following Colorado statutes and regulations were analyzed for potential applicability to SBI's marketing activities in connection with the Pulsar™ CRM System: • Colorado Consumer Protection Act, C.R.S. § 6-1-101 et seq. — Prohibits deceptive trade practices in connection with the sale or advertisement of goods or services. Applies broadly to all businesses operating in Color

2. Applicability to Medical Device Manufacturers Colorado's pharmaceutical marketing and pricing transparency provisions are drafted in terms that apply to "pharmaceutical manufacturers," "manufacturers of prescription drugs," or similar terminology that does not expressly encompass medical device manufacturers. A review of the relevant statutory definitions, regulatory guidance, and enforcement history reveals no in

3. Registration and Fee Requirements No manufacturer registration or fee requirement applicable to medical device companies has been identified under Colorado law. SBI is not required to register with any Colorado state agency for purposes of marketing compliance.

4. Aggregate Spend Reporting No aggregate spend reporting requirement applicable to medical device manufacturers has been identified under Colorado law. SBI's compliance with federal Sunshine Act reporting will provide transparency with respect to transfers of value to Colorado healthcare professionals.

5. Gift Restrictions Colorado has not enacted a standalone gift ban or gift limitation statute applicable to medical device manufacturers or pharmaceutical manufacturers. The general consumer protection prohibitions on deceptive trade practices apply broadly and may be implicated by promotional practices that involve excessive or improper inducements to healthcare professionals, but Colorado does not impose specific

6. Enforcement and Penalties The Colorado Attorney General has primary enforcement authority under the Consumer Protection Act, with the ability to bring civil actions seeking injunctive relief, civil penalties of up to $20,000 per violation, and restitution. Private actions for damages and injunctive relief are also available under certain circumstances.

7. Compliance Action Checklist — Colorado • [ ] Monitor Colorado legislative developments for any proposed expansion of pharmaceutical marketing laws to the medical device sector. • [ ] Ensure compliance with the Colorado Consumer Protection Act in all promotional activities conducted in Colorado. • [ ] No affirmative registration, fee payment, or reporting obligations identified for medical device manufacturers at t

1. Applicable Statutes and Regulations The following Connecticut statutes are relevant to SBI's marketing compliance obligations: • Connecticut General Statutes § 21a-70c et seq. — Pharmaceutical and Medical Device Marketing Disclosure Requirements. This statute requires manufacturers of pharmaceutical products and medical devices to report specified marketing expenditures and transfers of value to healthcare profess

2. Applicability to Medical Device Manufacturers Connecticut General Statutes § 21a-70c is one of a limited number of state marketing compliance statutes that expressly applies to both pharmaceutical and medical device manufacturers. The statute defines "manufacturer" to include entities engaged in the production, preparation, propagation, compounding, conversion, or processing of pharmaceutical products or medical d

3. Registration and Fee Requirements Connecticut does not impose a separate registration or fee payment requirement on medical device manufacturers under CGS § 21a-70c. SBI is not required to register with the Connecticut Department of Consumer Protection or any other Connecticut state agency for purposes of marketing compliance. However, SBI must comply with the reporting requirements described below.

4. Aggregate Spend and Gift Reporting Connecticut General Statutes § 21a-70c requires manufacturers of pharmaceutical products and medical devices to report gifts, compensation, and other transfers of value made to healthcare professionals licensed in Connecticut. The statute defines reportable transfers broadly to include: (a) Gifts of any kind, including promotional items, product samples (to the extent not otherwi

5. Gift Bans and Limitations Connecticut imposes restrictions on gifts to prescribers, including physicians and other healthcare professionals who have prescribing authority or who make purchasing decisions regarding medical devices. The statute prohibits the provision of gifts that are intended to influence or could reasonably be perceived as influencing clinical decision-making or purchasing decisions. Key provisio

6. Marketing Code Requirements Connecticut does not impose a mandatory marketing code adoption requirement on pharmaceutical or medical device manufacturers. However, SBI's voluntary adoption of the AdvaMed Code of Ethics demonstrates good faith commitment to industry standards and provides a compliance framework that satisfies Connecticut's substantive requirements.

7. Enforcement and Penalties The Connecticut Department of Consumer Protection has primary enforcement authority over violations of CGS § 21a-70c. Enforcement actions may result in civil penalties, including fines for failure to report or for providing inaccurate or incomplete reports. The Connecticut Attorney General also has authority to bring enforcement actions under the state's consumer protection statutes and a

8. Compliance Action Checklist — Connecticut • [ ] Ensure aggregate spend reporting protocols capture all Connecticut-specific categories of reportable transfers of value, including categories that may exceed federal Sunshine Act requirements. • [ ] Verify that physician consulting and speaker program honoraria comply with Connecticut's gift restrictions, including documentation of fair market value, legitimate need,

1. Applicable Statutes and Regulations The following Louisiana statutes were analyzed for potential applicability to SBI's marketing activities: • Louisiana Revised Statutes § 40:1237.1 et seq. — Louisiana healthcare-related provisions addressing relationships between manufacturers and healthcare providers, including provisions related to inducements and referral arrangements. • Louisiana Unfair Trade Practices and C

2. Applicability to Medical Device Manufacturers Louisiana's healthcare marketing-related provisions at La. R.S. § 40:1237.1 et seq. are primarily focused on pharmaceutical manufacturers and the marketing of prescription drugs. A review of the statutory definitions reveals that the term "manufacturer" as used in these provisions is generally defined by reference to pharmaceutical products and does not expressly inclu

3. Registration and Fee Requirements No manufacturer registration or fee requirement applicable to medical device companies has been identified under Louisiana law.

4. Aggregate Spend Reporting No aggregate spend reporting requirement applicable to medical device manufacturers has been identified under Louisiana law. SBI's compliance with federal Sunshine Act reporting will provide transparency with respect to transfers of value to Louisiana healthcare professionals.

5. Gift Restrictions Louisiana has not enacted a standalone gift ban or gift limitation statute applicable to medical device manufacturers. General prohibitions on inducements that may constitute kickbacks or improper referral arrangements are addressed by Louisiana's healthcare fraud statutes, which are analyzed in SBI's separate federal/state anti-kickback compliance memorandum. SBI's adherence to the AdvaMed Code'

6. Enforcement and Penalties The Louisiana Attorney General and relevant state licensing boards have enforcement authority over healthcare-related marketing practices. The Attorney General may bring actions under the Unfair Trade Practices and Consumer Protection Law seeking injunctive relief, civil penalties, and attorney's fees. Violations of healthcare fraud provisions may result in criminal prosecution.

7. Compliance Action Checklist — Louisiana • [ ] Monitor Louisiana statutory and regulatory developments for any expansion of pharmaceutical marketing provisions to the medical device sector. • [ ] Ensure promotional activities in Louisiana comply with the Louisiana Unfair Trade Practices and Consumer Protection Law. • [ ] No affirmative registration, fee payment, or reporting obligations currently identified for med

1. Applicable Statutes and Regulations The following Maine statutes are relevant to SBI's marketing compliance obligations: • Maine Revised Statutes Title 22, § 2698-A et seq. — Prescription Drug Marketing Activities. This statute regulates certain marketing activities directed at healthcare professionals by manufacturers of prescription products and, depending on interpretation, medical devices. • Maine Revised Stat

2. Applicability to Medical Device Manufacturers Maine law extends certain marketing and reporting requirements to medical device manufacturers. Title 22, § 2700-A specifically references "pharmaceutical and medical device manufacturer reporting," indicating legislative intent to include medical device companies within its scope. The term "manufacturer" as defined in the reporting statute includes entities that manuf

3. Registration and Fee Requirements Maine does not impose a separate manufacturer registration or fee requirement on medical device companies for purposes of marketing compliance. The compliance obligation takes the form of reporting rather than pre-launch registration. SBI is not required to register with any Maine state agency prior to commencing marketing activities in Maine, although it must be prepared to compl

4. Aggregate Spend Reporting Maine requires manufacturers of pharmaceutical products and medical devices to file annual reports with the Maine Attorney General's Office disclosing aggregate expenditures on marketing activities directed at healthcare professionals licensed or practicing in Maine. The categories of reportable expenditures include: (a) Fees paid for consulting services, advisory board participation, and

5. Gift Bans and Limitations Maine imposes restrictions on gifts to healthcare practitioners. The gift ban provisions prohibit manufacturers from providing gifts to healthcare professionals that are intended to influence or could reasonably be perceived as influencing prescribing or purchasing decisions. Key aspects of Maine's gift ban framework include: • Prohibition on gifts of entertainment, recreation, or leisure

6. Marketing Code Adoption Maine does not require manufacturers to adopt a specific marketing code of conduct. However, SBI's adoption of the AdvaMed Code of Ethics demonstrates compliance with industry best practices and may serve as evidence of good faith in the event of a regulatory inquiry or enforcement action.