Phlow Supplier Code of Conduct Policy
As America’s end-to-end essential medicines solutions provider, Phlow Corporation, a Delaware public benefit corporation (“Phlow”), is dedicated to reducing costs, creating more resilient supply chains, sustaining the environment, and moving beyond the decades old practice of traditional batch manufacturing. Phlow defines “essential medicines” as those that satisfy the priority health care needs of the American population—medicines that sustain life and conquer disease—and is focused on reducing scarcity of essential medicines that are in short supply, and for which there exists clear evidence of clinical efficacy and cost-effectiveness.
Given Phlow’s commitment to re-imagining the essential medicines supply chain from start to finish, Phlow is eager to create a collaborative, inclusive, and environmentally considerate network of manufacturers, distributors, vendors, and other third-party suppliers (each a “Supplier” and collectively “Suppliers”). Phlow aims to elevate the pharmaceutical industry’s legal and ethical standards by fostering a culture that prioritizes the implementation of sustainable practices, incentivizes regulatory compliance, and embraces technological innovation. Phlow expects its Suppliers to share such enthusiasm.
Phlow recognizes that its Suppliers are an integral part of its mission and overall success. Each day, Phlow and its Suppliers make decisions that impact Phlow’s ability to provide its customers with the sustainable, ethically sourced, and fully integrated essential medicines solution that they deserve. This Supplier Code of Conduct (“Code”) sets out principles and expectations that reflect Phlow’s values in the areas of corporate integrity, environmental impact, responsible product sourcing, and the safety and wellbeing of the global supply-chain workforce.
The principles and expectations, established in this Code are of paramount importance to Phlow; encompass all aspects of Phlow’s business, and apply to all Suppliers with whom Phlow does business. Phlow intends this Code to help its personnel and Suppliers work together to establish and foster strong and ethically sound business relationships with one another. While Phlow believes these principles are universal, Phlow is aware that cultural differences and interpretive challenges will require a degree of flexibility in the application of this Code, and understands that the methods for meeting the expectations outlined below may vary to enable consistent and complete compliance with the laws, values and cultural expectations in different countries around the world.
Phlow Suppliers are expected to understand and comply with this Code. Phlow considers the principles contained in this Code when selecting a Supplier and Phlow reserves the right to monitor a Supplier’s ongoing compliance with these principles. Phlow’s Suppliers must also apply the same or substantially similar principles toward third parties with whom they work in providing goods and services to Phlow. If Phlow becomes aware of any actions or conditions not in compliance with this Code, Phlow reserves the right to seek corrective action and/or to immediately terminate any engagement with a non-compliant Supplier.
Phlow strives to maintain collaborative and vibrant relationships with its Suppliers, and warmly welcomes Supplier feedback and suggestions regarding the principles and expectations enshrined in the Code. Suppliers are encouraged to contact a Phlow representative with any questions, including inquiries relating to the appropriateness of any activity.
- Conflicts of Interest: Any time a Supplier places personal, social, financial, or political interests before those of Phlow, a conflict of interest arises. Suppliers are responsible for avoiding situations that present—or create the appearance of—a conflict between their interests and those of Phlow. Whether the situation arises during an engagement with Phlow or otherwise, nothing should conflict with a Supplier’s responsibilities to Phlow.Phlow employees may accept gifts or entertainment as part of the normal business process, but only to the extent that acceptance of such is permitted under the law. Any such gifts shall be of nominal value and may not influence or appear to influence Phlow’s business decisions. Phlow employees do not accept gifts of cash or cash equivalents.
Suppliers shall notify Phlow immediately if a potential or actual conflict of interest arises.
- Material Non-Public Information: Suppliers may come across material non-public information about Phlow, Phlow’s customers, and/or Phlow’s partners during a Supplier’s engagement with Phlow. Information is considered “material non-public information” if there is a substantial likelihood that a reasonable investor would consider it important in deciding whether to purchase or sell a security.Buying or selling the securities of a company while being aware of such material non-public information is considered “insider trading,” which is unlawful. Suppliers must not buy or sell any Phlow securities or the securities of any other company based on such material non-public information. In addition, Suppliers must not provide such material non-public information to anyone else (“tipping”) for personal profit. This restriction applies globally, regardless of the location or residence of the Supplier or the location or residence of the persons who receive such material non-public information.
- Anti-trust Compliance: Anti-trust and competition laws seek to ensure that businesses compete on the basis of quality, price and service. This area of law varies depending on the jurisdiction. These laws are referred to as anti-trust, monopoly, restrictive or unfair trade, competition, price discrimination, and/or cartel laws. In general, they seek to promote fair competition among competitors and may go so far as to protect small-scale competitors. Such laws prohibit, among other things, price-fixing agreements, allocation of markets or customers, participation in group boycotts, and arrangements that attempt to obtain or maintain a monopoly through non-competitive or unmeritorious means.Suppliers shall abide by all applicable anti-trust and competition laws and regulations, and shall make no attempts to obtain information of or about competitors in an illegal or unfair manner. Accordingly, stealing proprietary information, possessing trade secrets obtained without the owner’s consent, or inducing any past or present employee of other companies to disclose such information is strictly prohibited.
- Anti-Corruption: Suppliers shall prohibit all bribery and corruption. Suppliers shall comply with the letter and spirit of all anti-corruption laws and regulations to which Phlow is subject and shall abide by Phlow’s anti-corruption standards and policies. No Supplier or anyone acting on Phlow’s behalf may offer or pay a bribe, kickback, or other improper payment. Suppliers are also not allowed to provide anything of value that is intended to win business, improperly influence a decision, or gain an unfair business advantage—or even appear to do so.
- Trade Controls: Suppliers shall be committed to maintaining compliance with all applicable laws regarding imports, exports, re-exports and diversion of products, goods, services, and technical data, including import and customs laws, export controls, economic sanctions, denied parties lists, anti-boycott laws, and diversion of products.
- Third-Party Proprietary Information: Just as Suppliers value and protect their own proprietary information and trade secrets, Phlow expects its Suppliers to respect the intellectual property rights of others. In the course of any engagement between Phlow and Suppliers, the Suppliers may receive sensitive or proprietary information from third parties that is confidential. Suppliers shall respect and maintain the confidentiality of such information, and shall ensure that its employees and contractors do the same.
- Accurate Reporting: Suppliers shall be committed to delivering accurate full, fair, timely, and reliable information to regulatory authorities, shareholders, customers, healthcare professionals, media representatives, financial analysts, brokers, and the general public. Suppliers’ internal system controlling financial reports shall be capable of providing reasonable assurance that financial statements for external use are prepared in accordance with generally accepted accounting principles (“GAAP”), and fairly present Suppliers’ financial condition. Suppliers shall maintain materially accurate and complete financial and other business records, and such records shall be legible and transparent. Supplier shall always provide full and accurate disclosure about its business and its financial condition.
- Data Integrity: Suppliers shall ensure that all documentation delivered to Phlow by Supplier, including, without limitation, documentation provided in connection with materials and services used in the research, development, manufacture and/or supply of finished pharmaceutical product is accurate and complete in all material respects. In addition, such documentation shall comply with applicable laws, rules, and regulations.
1. Business Integrity and Fair Competition
Corruption, embezzlement, and extortion of any kind are absolutely prohibited. Suppliers shall not pay or accept bribes or participate in any other illegal inducements in business or government relationships. Suppliers shall conduct their business in a manner that is consistent with fair and vigorous competition and in compliance with all applicable anti-trust laws. Suppliers shall employ, at all times, fair business practices and shall abide by and foster accurate and truthful advertising. Phlow expects that Suppliers will achieve the standards embodied in this Code:
2. Identification of Concerns
Suppliers’ workers and service providers should be encouraged to report concerns or illegal activities in the workplace without threat of reprisal, intimidation or harassment. Suppliers who believe that a Phlow employee, or any person or entity acting on behalf of Phlow, has engaged in illegal or otherwise improper conduct shall report the matter promptly to Phlow’s Chief Legal and Compliance Officer.
Phlow’s Chief Legal and Compliance Officer is responsible for assessing and investigating reports of misconduct. There are multiple ways to report concerns confidentially and without fear of retaliation. Reports can be made directly to the Chief Legal and Compliance Officer or to [email protected].
3. Animal Welfare
Suppliers shall provide humane care and treatment of research animals.
Animal testing should be performed only after consideration has been given to non-animal based test methods, reducing the numbers of animals used, or refining procedures to minimize distress in animals being tested. Use of animals in any testing or process should only occur after alternate methods have been fully explored and rejected. Alternatives should be used wherever these are scientifically valid and acceptable to regulators. If animals must be utilized in testing, these animals shall be treated humanely, with minimized pain and stress.
[Contract laboratories and collaborating laboratories must be accredited by the Association for Assessment and Accreditation of Laboratory Animal Care International (AAALAC).]
Suppliers are strongly encouraged to notify Phlow immediately if they are offered the opportunity to purchase counterfeit, illegally diverted or stolen pharmaceuticals, other products or components related to the Supplier’s supply chain, or should they otherwise become aware of any such products.
Suppliers shall uphold ethical labor practices and procedures globally. Suppliers’ responsibility in this matter includes creating awareness and understanding of human rights and compliance with employment and labor laws and practices. By incorporating these principles into strategies, policies and procedures, and embodying these principles, Suppliers will uphold their basic responsibilities toward their employees and others.
Suppliers shall support and respect the protection of internationally recognized human rights, and shall ensure that they are not complicit in human rights abuses. Suppliers shall also honor the freedom of association and the effective recognition of the right to collective bargaining, the elimination of all forms of forced and compulsory labor, and the abolition of child labor.
1. Freely Chosen Employment
Suppliers shall not employ, use, or otherwise benefit from forced, bonded or indentured labor, involuntary prison labor or human trafficking. To this end, Suppliers shall uphold that the products or services provided to Phlow, including the materials incorporated into its own products, comply with the laws regarding forced labor of the country or countries in which Phlow and the Supplier have operations relating to the products or services being provided by the Supplier to Phlow. Moreover, Suppliers shall monitor compliance with these commitments including, but not limited to, reviewing their own supply chain and requiring similar standards from their own Suppliers.
2. Young Workers
Suppliers shall abide by the International Labor Organization’s Minimum Age Convention and the International Labor Organization’s Worst Forms of Child Labour Convention. Accurate and complete employee files shall be maintained, inclusive of confirmation of date of birth.
3. Freedom from Workplace Harassment, Discrimination and Abuse
Suppliers shall provide a workplace free of harassment, discrimination, punitive and/or inhumane treatment. Harassment is any physical or verbal act that creates an offensive, hostile or intimidating work environment. Discrimination is any workplace action such as hiring, firing, demoting, and promoting based on a prejudice of some kind that results in the unfair treatment of employees. Harassment or discrimination for reasons such as race, color, age, gender, sexual orientation, ethnicity, disability, religion, political affiliation, union membership or marital status shall not be condoned or tolerated.
Punitive and/or inhumane treatment includes, but is not limited to, any sexual harassment, sexual abuse, corporal punishment, mental or physical coercion, verbal abuse or threat of any such treatment. Violence of any kind in the workplace, including acts or threats of violence toward another person, intentional damaging of the property of any person, or behavior that causes others to feel unsafe is prohibited and shall not be tolerated.
4. Wages, Benefits, and Working Hours
Suppliers shall pay workers according to applicable wage laws, including minimum wages, overtime hours and mandated benefits as per custom of the country of employment. Suppliers shall communicate to the workers the basis on which they are being compensated in a timely and clear manner. Suppliers are also expected to communicate to the worker whether overtime work is required and the wages to be paid for such overtime.
5. Privacy & Protection of Personal Information
During normal business activities, Suppliers may collect personal information regarding various individuals, including employees, patients, customers and other persons or entities with whom they do business. Suppliers shall collect and keep only personal information that is legally permitted and legitimately needed to carry out their business and/or the engagement between Phlow and the Suppliers, and to implementing measures designed to protect such information.
III. Health and Safety
1. Health and Safety
Suppliers shall conduct their activities with adequate regard for the safety and health of its workforce and the general public. Suppliers shall continuously work to provide safe working conditions and instill a strong safety culture worldwide. Suppliers’ paramount priority and goal shall be to avoid any accident in the workplace through their rigorous compliance with global safety standards and industry best-practices. Each Supplier is responsible for a safe and healthy work environment, including for any Supplier-provided living quarters.
2. Worker Protection
Suppliers shall protect workers from exposure to chemical, biological, physical hazards and unreasonably physically demanding tasks in the workplace and other company-provided facilities, including living quarters and vehicles. Suppliers shall ensure that any employee who comes into contact with hazardous substances are provided the proper personal protective equipment and perform the task according to all safety guidelines and instructions.
3. Saftey Programs and Protocols
Suppliers shall have programs and protocols in place to prevent and respond to catastrophic chemical or biological releases, if applicable. Programs shall comply with applicable laws and industry standards and be commensurate with the level of risk to which its workforce is exposed.
4. Emergency Preparedness and Disaster Response
Suppliers shall identify and assess emergency situations affecting its workforce and workplaces, including Supplier-provided living quarters, and shall minimize potentially adverse consequences by practicing safety drills, offering emergency scenario training, and implementing and maintaining effective emergency plans and disaster response procedures, in accordance with applicable laws and regulations, and consistent with industry best-practices.
5. Information on Hazardous Materials
Suppliers shall maintain and make available, upon request, safety information relating to any hazardous materials used in the workplace, including pharmaceutical compounds and pharmaceutical intermediate materials, to educate, train, and protect its personnel, contractors, and others from hazards.
Suppliers shall operate, and ensure that its personnel and third-party contractors operate, in an environmentally responsible and lawful manner, and shall minimize adverse impacts on the environment to the extent possible. Suppliers are encouraged to conserve natural resources, to avoid the use of hazardous materials where possible, and to employ practices that facilitate the reuse and recycling of manufacturing byproducts.
1. Environmental Protection, Authorizations, and Regulatory Compliance
Suppliers shall comply with all applicable environmental laws and regulations and meet, at all times, any applicable environmental reporting obligations and operating requirements. Suppliers shall obtain and ensuring the continuous validity of all required environmental permits, licenses, information registrations, and restrictions for the duration of each individual engagement for which any such licensure is required.
2. Waste and Emissions
To the extent applicable, Suppliers shall have systems in place to ensure the safe handling, movement, storage, recycling, reuse or management of waste, air emissions and wastewater discharges. Any waste, wastewater or emissions with the potential to adversely impact human or environmental health shall be appropriately managed, controlled and treated prior to release.
3. Spills and Releases
To the extent applicable, Suppliers shall have systems in place to prevent and quickly respond to all unauthorized spills and releases into the environment.
4. Restricted Substance Compliance
Suppliers shall adhere to all applicable restricted substance laws, regulations and customer requirements including responding to requests for substance composition in materials or product parts, prohibition or restriction of specific substances, including labeling for recycling, and disposal.
Supplier shall ensure that all parts and products supplied to Phlow do not contain “Conflict Minerals,” i.e., columbite-tantalite, cassiterite, wolframite (or their derivatives tantalum, tin and tungsten) or gold sourced from the Democratic Republic of the Congo (DRC) or an adjoining country that has directly or indirectly financed or benefitted armed groups in the DRC or an adjoining country. Suppliers shall have systems in place that are designed to meet these objectives.]
V. Management Systems
Suppliers should take steps to implement a quality management system to facilitate continual improvement and maintain compliance with the principles and expectations outlined in this Code.
1. Resource Allocation and Accountability
Suppliers shall allocate adequate financial, human and technical resources to ensure compliance with this Code.
2. Compliance with Laws and Customer Requirements
Suppliers shall identify and comply with all applicable laws, regulations, rules, ordinances, permits, licenses, approvals, orders, standards, and relevant customer requirements, and address identified gaps in a responsible and timely fashion.
3. Risk Management
Suppliers shall have mechanisms in place to determine and control risks in all areas addressed in this Code. Suppliers shall have adequate financial resources to assure business continuity and maintain financial solvency.
Suppliers shall maintain documentation necessary to demonstrate conformance with the principles and expectations outlined in this Code and Supplier’s compliance with applicable laws, regulations, rules, ordinances, permits, licenses, approvals, orders, standards and relevant Phlow requirements.
5. Training and Competency
Suppliers shall implement and maintain a personnel and contractor training program that cultivates the level of knowledge, skills, and abilities within its management team and greater workface necessary to comply with the principles and expectations, and to adequately perform the requested services, as set out in this Code. Documented training of all employees must be available as evidence that training took place.
Suppliers shall be expected to maintain open and direct channels of communication with the appropriate Phlow business function and personnel.