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Charter of the Compliance Committee

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This Compliance Committee Charter was adopted by the Board of Directors (the "Board") of Questcor Pharmaceuticals, Inc. (the "Company") on March 15, 2012.

I. Purpose

The purpose of the Compliance Committee (the "Committee") is to assist the Board with its oversight of significant healthcare related compliance and regulatory issues.

In addition to the powers and responsibilities expressly delegated to the Committee in this Charter, the Committee may exercise any other powers and carry out any other responsibilities delegated to it by the Board from time to time consistent with the Company's bylaws. The powers and responsibilities delegated by the Board to the Committee in this Charter or otherwise shall be exercised and carried out by the Committee as it deems appropriate without requirement of Board approval, and any decision made by the Committee (including any decision to exercise or refrain from exercising any of the powers delegated to the Committee hereunder) shall be at the Committee's sole discretion. While acting within the scope of the powers and responsibilities delegated to it, the Committee shall have and may exercise all the powers and authority of the Board. To the fullest extent permitted by law, the Committee shall have the power to determine which matters are within the scope of the powers and responsibilities delegated to it.

II. Membership

The Committee shall consist of at least two members of the Board, each of whom satisfies the independence requirements of NASDAQ Rule 4200(a)(15). Each Committee member shall be affirmatively determined by the Board to not have a relationship with the Company that would interfere with the exercise of independent judgment.

The members of the Committee shall be appointed by the Board. Committee members may be removed from the Committee, with or without cause, by the Board.

III. Meetings and Procedures

The Committee shall appoint a Chair. The Chair (or in his or her absence, a member designated by the Chair or the remaining members of the Committee) shall preside at each meeting of the Committee and set, in consultation with the other members of the Committee, the agendas for Committee meetings. The Committee shall have the authority to establish its own rules and procedures for notice and conduct of its meetings so long as they are not inconsistent with any provisions of the Company's bylaws that are applicable to the Committee.

The Committee shall meet at least once during each fiscal quarter and more frequently as the Committee deems desirable. The Committee chairperson shall report on Committee activities to the full Board from time to time and shall cause the Committee minutes to be provided to the Board on an ongoing basis.

All non-management directors that are not members of the Committee may attend and observe meetings of the Committee, but shall not participate in any discussion or deliberation unless invited to do so by the Committee, and in any event shall not be entitled to vote. The Committee may, at its discretion, include in its meetings the Company's Chief Compliance Officer and other members of the Company's management, any other personnel employed or retained by the Company or any other persons whose presence the Committee believes to be necessary or appropriate. Notwithstanding the foregoing, the Committee may also exclude from its meetings any persons it deems appropriate, including, but not limited to, any director that is not a member of the Committee.

The Committee may retain any independent counsel, experts or advisors that the Committee believes to be necessary or appropriate. The Committee may also utilize the services of the Company's regular legal counsel or other advisors to the Company. The Company shall provide for appropriate and reasonable funding, as determined by the Committee, for payment of compensation to any advisors employed by the Committee.

The Committee may conduct or authorize investigations into any matters within the scope of the powers and responsibilities delegated to the Committee.

IV. Powers and Responsibilities

1. Review and oversee the Company's Compliance Program, including but not limited to, evaluating its effectiveness and receiving updates about the activities of the Chief Compliance Officer and other compliance personnel.
2. Review the status of the Company's compliance with relevant laws, regulations, and internal procedures (e.g., compliance with U.S. federal healthcare program requirements; compliance with U.S. pharmaceutical product promotional rules and regulations, including with respect to "off-label" and other product promotional activities, unapproved product uses, fair balance, product safety claims, and product superiority or efficacy claims; product manufacturing quality control; clinical studies quality control; and required reporting to the Food and Drug Administration ("FDA")). The Audit Committee of the Company's Board of Directors shall continue to assist the Board with its oversight responsibilities regarding the integrity of the Company's financial statements and the Company's compliance with legal and regulatory requirements generally.
3. Review and evaluate internal reports and external data to assess whether there are significant concerns regarding the Company's regulatory and/or compliance practices, including:
   1. Receive details and factual reports on relevant government investigations, including the conduct at issue and whether it reflects a regulatory or compliance issue at the Company.
   2. Receive relevant lawsuits and an analysis from management of the factual allegations of the claims, a review of any potential legal exposure the claims present for the Company, and whether the claims reflect a regulatory or compliance issue for the Company.
   3. At least annually, receive a report from the Chief Compliance Officer regarding significant compliance investigations.
   4. At least annually, receive a report on healthcare compliance audits undertaken by the Company that year. This report will include an analysis of relevant healthcare compliance risks raised by the audits undertaken that year.
   5. At least annually, receive all FDA warning letters and the responses to such letters, as well as a report on the steps taken to implement the responses and an evaluation of whether the letters, as responded to by the Company, raise any healthcare related regulatory and compliance issues.
   6. Receive in its discretion reports from management on internal messaging to employees regarding the Company's commitment to behavior and practices that comply with law, as well as the Company's efforts to promote a compliant culture.
   7. Evaluate and report to the Board of Directors on the adequacy of compliance staffing at the Company.
   8. Review the policies and procedures designed to provide protection against retaliation for raising compliance related issues.
   9. Receive reports from management with respect to any significant disciplinary action against any of the Company's compliance personnel, including the nature of the conduct that led to the disciplinary action, the disciplinary action and the reason for it, and an analysis of whether the underlying conduct reflects any compliance or regulatory concerns or issues.
4. The Committee shall report at least annually to the Board of Directors on (i) the state of the Company's compliance functions, (ii) relevant compliance issues involving the Company of which the Committee has been made aware, including a summary of the results of any compliance investigations conducted by the Company, (iii) any potential patterns of non-compliance identified within the Company, (iv) any significant disciplinary actions against any compliance personnel, and (v) any other issues that may reflect any systemic or widespread problems in compliance or regulatory matters exposing the Company to substantial compliance risk. In advance of such report, the Committee and the Audit Committee, either through their respective Chairs or otherwise, shall confer on any matters of mutual interest in light of their respective responsibilities.
5. The Committee shall at least annually perform an evaluation of the performance of the Committee and its members, including a review of the Committee's compliance with this Charter.
6. The Committee shall at least annually review and reassess this Charter and submit any recommended changes to the Board for its consideration.
7. Nothing in this Charter shall expand the duties and liabilities of any Company directors or officers beyond any duties and liabilities otherwise imposed by law.

 

Committee Members

Scott M. Whitcup MD
Stephen C. Farrell
Virgil D. Thompson