Code of Business Conduct & Ethics

 

Scope

The Code of Business Conduct and Ethics (“the Code”) applies to Valeant Pharmaceuticals International and all of its worldwide divisions, subsidiaries and affiliated companies (“Valeant”) and is to be followed by all employees, members of its Board of Directors and third parties representing Valeant. These third parties include, but are not limited to, vendors and independent contractors.

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Policy

Our policy is to (i) require the highest standard of business ethics and integrity on the part of our employees, members of our Board of Directors and third parties, (ii) comply with all applicable laws and regulations of the countries where we do business in accordance with corporate policy, as referred to in the Code and (iii) maintain training and other related processes to ensure awareness and promote compliance with the Code. To that end, Valeant has adopted and implemented this Code.

Because Valeant is a U.S. based company, reference is often made in this document to U.S. laws or legal concepts. However, except where U.S. law mandates a particular result (for example, no employee of a Valeant subsidiary anywhere in the world may make a payment to a government official that would violate the U.S. Foreign Corrupt Practices Act, regardless of whether the payment would be permissible under local law), our policy is to follow local laws and practices with a view to adhere to the spirit of this Code to the greatest extent possible.

The Company’s management will vigorously enforce the Code and will take prompt and appropriate action, up to and including termination of employment or other relationship, of those found to be in violation. (See additional discussion in the “Reporting, Investigating and Disciplinary Procedures” section.)

Managers at each of Valeant’s operating units are responsible to ensure that their employees have received a copy of the Code and establish procedures to promote compliance with the Code, in addition to any Corporate-sponsored programs.

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Why a Code of Business Conduct and Ethics?

The Code is intended to accomplish the following objectives:

  • Emphasize our commitment to ethics and compliance with the law,
  • Establish basic standards of legal and ethical behavior,
  • Increase our sensitivity to legal and ethical issues,
  • Describe situations in which we need to be particularly careful and to indicate where and how to obtain help in dealing with those and other legal and ethical issues,
  • Inform us about procedures for reporting known and suspected violations of the Standards of Conduct or laws, and
  • Prevent and detect violations of the Standards of Conduct and the law.

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Our Responsibilities

We have important responsibilities with respect to the Code and must:

  • Be thoroughly familiar with applicable laws and regulations and our Standards of Conduct, and follow them at all times,
  • Be sensitive to - and avoid - situations that could lead us, or those around us, to engage in improper actions, and
  • Take action against improper behavior by reporting such improprieties immediately if encountered.

Valeant managers and supervisors must also:

  • Maintain a work environment that is respectful and one that encourages open communication regarding ethical problems and concerns,
  • Make a personal commitment to operate in accordance with the highest standard of ethical business conduct, and communicate this commitment to others,
  • Periodically discuss ethical issues and review the Code with employees and third parties reporting to them,
  • Ensure that employees reporting to them receive appropriate compliance and ethics training, and
  • Be familiar with the resources available to assist in the resolution of legal and ethical questions and concerns.

Many of our customers have standards of conduct of their own, and those of us who deal with employees of those customers must be aware of those standards (for example, a customer may forbid its employees from accepting business meals or gifts) and act in compliance with them.

Knowing the Standards of Conduct is particularly important when the customer is the United States federal government or a supplier to the federal government, or any country's governmental agencies. In those situations, very strict rules often apply, and we should view each circumstance in light of those rules – some may apply and some may not apply to any given circumstance. Therefore, when any regulation by the United States federal government or its agencies (e.g. Food and Drug Administration (FDA), Securities and Exchange Commission (SEC), Federal Trade Commission (FTC), etc.) or of other countries is involved, it is critical that those of us involved learn precisely which rules and regulations are applicable to us and that we comply.

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Standard of Conduct Number 1:

We will engage only in fair and open competition.

The Basic Standard

Valeant will in all respects compete fairly and ethically for contracts and other business opportunities.

We must deal fairly with the Company’s customers, suppliers, competitors and employees. As an example, all materials used in our sales and marketing will be truthful, in good taste and free from false or exaggerated claims or statements. This standard also means that we will not use any illegal or unethical practices, such as obtaining proprietary information on a competitor or price-fixing, coercion or collusion, in an attempt to obtain business.

Particular Areas of Concern

Gifts, Entertainment and Meals to Customer Representatives

Of course, we will not offer or make any payment, bribe or kickback, directly or indirectly. Such actions result in severe criminal penalties both for those individuals involved and Valeant.

Moreover, any meals, entertainment, gifts or favors we furnish customers, customer representatives, or healthcare professionals will be moderate, in good taste, in compliance with applicable laws, and in keeping with the principle of avoiding even the appearance of inducing customers, customer representatives or healthcare professionals to place their personal interests above that of their employer or their patients.

One key test is not whether a particular meal, gift or other benefit was actually provided to obtain favorable treatment, but whether it might give the appearance of having been provided for that reason. We apply this test in order to maintain the trust and confidence of our customers and others in the industry. We must refrain from any conduct suggesting that we seek business based on considerations other than the quality of our employees, products and services.

In some situations, even stricter tests may apply, because the United States federal government and certain other customers have rules or standards that prevent their employees from receiving even nominal meals, gifts and other benefits from suppliers' representatives. Each of us who deals with customer representatives, or may otherwise be affected by a customer's rules and standards, must learn those rules and standards concerning the acceptance of meals, entertainment, gifts and other benefits. The meals, entertainment, gifts or favors provided representatives of customers or prospective customers must never be hidden from, or be in violation of, the rules or standards of their employers. In addition, the following guidelines must be followed:

  • With respect to non-government personnel, gifts, meals, entertainment or benefits must be reasonable and in accordance with the Company's Travel and Entertainment policy.
  • With respect to government employees, even modest gifts, meals, entertainment or benefits may be prohibited by law. Valeant will comply with the laws of each jurisdiction in which we operate.

Valeant will provide U.S. Valeant employees with training at least annually on relevant state and federal laws and Valeant’s policies and procedures related to the provision of gifts, entertainment or meals to customer representatives and/or healthcare professionals (or their staff). Any questions about appropriate conduct related to gifts, meals or entertainment should be directed to an employee’s supervisor, department head, Valeant’s Legal Department or the Corporate Compliance Officer.

Antitrust Laws

We must be aware of and comply with the antitrust laws as well as other applicable laws and regulations.

All antitrust laws, regardless of the originating country, are extremely important.

A wide range of transactions or practices are prohibited under these laws. No agreement or understanding may be made with competitors to fix or control prices, to allocate products, markets or territories, to boycott certain customers or suppliers, or to refrain from or limit the manufacture, sale or production of any product.

We must understand that the antitrust laws prohibit not only actions and discussions designed to fix prices or arrange market shares, but may also prohibit concerted actions by competitors with even beneficial objectives such as improved safety and more accurate testing of products. These kinds of actions can result in criminal penalties both for the individuals involved and Valeant. Accordingly, no concerted action with a competitor may be taken without prior input of the Corporate Legal Department.

Following are some examples of actions prohibited by the antitrust laws:

  • Agreeing with a competitor to divide up customers or territories.
  • Engaging in unfair methods of competition, which include making false comments about a competitor's products and making false or misleading advertising claims.
  • Agreeing with a competitor that both companies will jointly cease doing business with a customer unless the customer takes certain actions

The provisions of the antitrust statutes apply to both formal and informal communications. If we are involved in trade association activities or in other situations allowing for less formal communication among our competitors, customers or suppliers, we must be especially alert to the requirements of the law.

Anyone in doubt as to the application of the antitrust laws in the United States or globally should consult the Corporate Legal Department.

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Standard of Conduct Number 2:

We will record and report all data and information accurately and honestly.

The Basic Standard

All records, reports and other documents of Valeant must be prepared accurately and truthfully.

This applies both to everyday documents, such as time cards, expense reports, test reports, manufacturing records and accounting entries and to less routine documents or reports, such as cost estimates, contract proposals and other presentations to management, customers and the public. If we prepare such records or represent or certify the accuracy of information in such records, we must be diligent in assuring their accuracy and integrity.

Particular Areas of Concern

Financial Reporting and Accounting

We must comply with accepted accounting practices and internal controls, as established by the appropriate Company management, at all times. All assets, liabilities, revenues and expenses of Valeant are to be entered in the Company's books, records and other documents. These books, records and documents must also accurately reflect and properly describe the transactions they record. For example:

  • No undisclosed or unrecorded fund, asset or account of the Company will be established for any purpose.
  • No false or artificial entries will be made in the books, records or accounts of the company for any reason, and no employee will engage in any arrangement that results in prohibited entries.
  • No payment on behalf of the Company will be approved or made with the intention or understanding that any part is to be used for any purpose other than that described by the supporting document.

Where government accounting regulations apply, we must classify and allocate costs in accordance with those regulations, including cost principles governing cost allowability and relevant contract clauses.

Various federal laws, both civil and criminal, apply to those who make false statements or false claims to the United States government. There can be severe civil and criminal penalties for both those involved and Valeant if these laws are violated.

Pricing

Obviously, we will not submit or concur in the submission of any claims, bids, proposals, or other related documents that contain false or fictitious information. In particular, for individuals involved in pricing products and services for the government must comply with all applicable laws and regulations. For example, in the U.S., the Truth in Negotiations Act requires government contractors to provide "accurate, complete and current" cost or pricing data.

Reporting of Expenses

All expense items associated with travel or local business matters, including airfare, hotel expenses, taxi/limousine services, car rental, business meals and entertainment, must be accurately and fully documented on the expense report (whether or not they are paid directly) with applicable receipts attached. The documentation must include identification of the customer involved, where a customer is involved and a brief description of the business matter that supports the expense.

All relevant expenses related to marketing Valeant products to physicians in the United States must be tracked and reported based on applicable state and federal laws and Valeant policies and procedures. Valeant U.S. employees who participate in marketing products to physicians shall be made aware of the current (and changing) state and federal laws related to tracking and reporting physician marketing expenses via annual (or more frequent if necessary) training.

Any questions related to tracking and reporting expenses (including expenses related marketing products to physicians) should be directed to an employee’s supervisor, department head, Valeant’s Legal Department or the Corporate Compliance Officer. Also, see the Company’s Record Retention policy with respect to the period of time required to maintain the Company’s records.

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Standard of Conduct Number 3:

We will ensure that we comply fully with all applicable securities laws, rules and regulations globally, including with respect to press releases, disclosure, export control and the Foreign Corrupt Practices Act.

The Basic Standard

As a publicly traded company, Valeant must ensure that all of its public disclosures comply with the U.S. federal securities laws. These laws apply not only to disclosure documents that are filed with the SEC, but also to press releases, presentations to securities analysts and other disclosures that are reasonably likely to be disseminated to investors in Valeant securities. No disclosure document may misrepresent a material fact or omit a material fact needed to avoid misleading the reader. A fact is "material" if a reasonable investor would consider it to be significant when deciding whether to purchase, sell, or hold Valeant securities.

In addition, we must comply in all respects with the laws, rules and regulations regarding trading in the securities of publicly traded corporations and must specifically refrain from trading while in possession of material, non-public information. The use of non-public information for personal financial benefit or to "tip" others who might make an investment decision on the basis of this information is both unethical and illegal. For more detailed guidance see the Company's Insider Trading Policy.

We are also committed to full compliance with all applicable laws governing our international transactions.

Particular Areas of Concern

Press Releases and Other Public Communications

Before making public statements regarding the status or disposition of an application filed with the FDA, Valeant must first submit such statements to the FDA for review and approval. This obligation applies to (1) press releases that are disseminated to the financial media, (2) prepared presentations and remarks including prepared questions and answers, to be used in connection with meetings or telephone conferences with securities analysts, industry conferences and meetings with investors and (3) letters to shareholders. None of us can make or disseminate any public statement regarding the operations of the Company unless the prior approval has been obtained from Corporate Investor Relations. Press releases that mention drugs are particularly sensitive and require prior approval from both Corporate Investor Relations and the Legal departments. (See the Company's Media Policy for additional information)

Selective Disclosure

The U.S. federal securities laws prohibit the selective disclosure of financial and other corporate information. We cannot selectively disclose non-public information to securities analysts or members of the media. (See the Company's Media Policy for additional information)

Export Control

Many countries in which we do business have established export controls, which govern the export, sale and transfer of Valeant's products and technology (including know-how) from the country to a foreign destination or foreign end-user (in cases of technology) and the re-export of such items from one foreign destination to another.

Failure to comply with these controls may result in civil or criminal penalties as well as the loss of export privileges. Prior to engaging in a transaction, which might possibly involve any of the foregoing restrictions and prohibitions, responsible Valeant employees must ensure that the transaction is not prohibited and that any and all regulatory approvals or licenses have been secured.

Specifically, U.S. law puts restrictions on the types of products and destinations to which Valeant may export. For instance, U.S. law prohibits Valeant from undertaking any transactions (including answering customer support calls by phone) with anyone or any company in certain countries, including Cuba, Iran, Libya and Sudan although it is currently possible for Valeant to obtain a license to export certain pharmaceutical products to certain of these countries. Please note that the list of embargoed countries may change. Our Export Control Administrator will assist you in evaluating whether proposed transactions are prohibited or restricted. Although they are not subject to outright embargoes, we must also consult the individuals responsible for export controls, before engaging in transactions with North Korea or Syria.

We also need to be alert to transactions globally which we know or have reason to believe will result in Valeant products being diverted to the embargoed countries listed above. To avoid diversion, we must check all transactions and customer support calls.

In addition to these basic controls, some Valeant products are subject to stricter licensing controls. Responsible Valeant employees must ascertain the controls for products at their location and knowing whether a license is required before a given transaction can take place.

Antiboycott

The United States maintains two antiboycott laws that prohibit U.S. companies and individuals from supporting or participating in boycotts of countries friendly to the United States. While these laws are prepared without reference to any particular boycott, their principal target is the Arab League's long-standing economic boycott of Israel. These laws impose far-reaching restrictions on boycott-related actions, agreements and even the furnishing of information. Penalties for violations can include civil and criminal fines, imprisonment and the loss of tax credits or export privileges.

Valeant's policy is not to comply with or support any unsanctioned foreign boycott. In addition, it is the policy of Valeant to maintain records, establish internal controls and make required reports to ensure compliance with U.S. antiboycott laws.

There are two government agencies that require Valeant to file reports under certain circumstances. First, the U.S. Commerce Department requires us to report the receipt of requests to support or further a boycott. We also must file reports with the U.S. Internal Revenue Service if participating in a boycott were to become a condition of operating in boycotting countries. Currently, the countries listed as boycott countries for tax reporting purposes are Bahrain, Iraq, Saudi Arabia, Syria, United Arab Emirates, Republic of Yemen, Oman, Qatar, Kuwait, Lebanon and Libya. However, operations in other countries may be implicated if participation in a boycott is a condition of conducting operations.

Corrupt Payments to Government Officials

We are committed to complying with the letter and spirit of the United States Foreign Corrupt Practices Act ("FCPA"). The FCPA is aimed at upgrading the ethical behavior and accountability of business enterprises and applies to corporations as well as individuals.

The FCPA prohibits the making or offering of any payment to any foreign official to induce that official to influence any governmental act or decision to assist the Company in obtaining or retaining business, including efforts to grant the Company an unfair commercial advantage in obtaining or retaining business. The FCPA also requires the Company to maintain accurate records, books and accounting controls. The penalties for violation of the FCPA include large fines and/or imprisonment and we must be mindful of the FCPA's requirements. Please refer to the Company's FCPA policy for additional information.

Compliance to Legal/Regulatory Enforcement Actions

If the Company is restricted in normal actions through a government enforcement action, all employees will comply with such restriction.

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Standard of Conduct Number 4:

We will perform services and manufacture products with a commitment to a high level of quality.

The Basic Standard

We are responsible for maintaining excellence in the quality of our products and services. To do so, we must comply with all customer requirements and specifications, meet all design, inspection and test criteria and conduct all required inspection and testing.

Our careful attention to product quality and safety has a direct and substantial effect on our reputation and performance and allows us to meet or exceed the expectations of our customers. Valeant is totally committed to achieving product quality and safety.

Particular Areas of Concern

Production

We must never inappropriately substitute materials, components, procedures or products, or intentionally fail to provide the required quality controls.

Approval from the appropriate level of management must be obtained before deviating in any way from the requirements of a contract, standard procedure or work order.

Managers and supervisors must not place pressure on subordinates that might cause them to deviate from these requirements. Employees or third parties should never be pressured into compromising on quality.

Testing

We must always perform the testing specified to meet customer and governmental requirements and the documentation in support of that testing must be accurate and complete. There must be no unauthorized changes in the testing requirements and no false or inaccurate testing documentation.

Once again, managers and supervisors must avoid placing pressure on subordinates that might cause them to deviate from requirements.

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Standard of Conduct Number 5:

We will avoid conflicts of interest.

The Basic Standard

Conflicts of interest can arise in virtually every area of Company operations. We must avoid personal interests that conflict with the interests of the Company, or that might influence or appear to influence our judgment or actions in performing our duties.

Therefore, individually, we should not have any business, financial or other relationship with any individual or entity, including suppliers, customers or competitors, that might impair or even appear to impair the independence of Valeant. The word "appear" is most important. Even where there is no actual conflict of interest, the appearance of such a conflict is damaging because it can undermine trust among employees and cost the Company the respect of customers, potential customers and others in the industry.

Particular Areas of Concern

Acceptance of Gifts and Gratuities

Our purchasing decisions and related activities must be based solely on quality, performance and price.

Employees and members of their families should not accept gifts of more than a token value, loans, excessive entertainment, or substantial favors from any outside concern or individual that does or is seeking to do business with Valeant, or is a competitor.

Accordingly, relations with suppliers are to be maintained on an objective basis, free from the influence of gifts and favors. Only nominal gifts and moderately priced meals or entertainment may be accepted from suppliers and even that must be done within established guidelines and with the full knowledge of our manager. We can never accept meals, entertainment, gifts or favors when such actions might reasonably be construed as attempts to secure favorable treatment, or when they create an appearance of impropriety. No gift or benefit in excess of $50.00 in value shall be accepted without the prior written approval of the appropriate General Manager or division President or, in the case of the corporate office, a Corporate Executive Vice President or above.

The same principles apply to all of us whether in Purchasing or in other areas of the Company as well as third parties.

Outside Activities

Activities we participate in outside our employment with Valeant can give rise to conflicts of interest. We cannot compete or help others to compete with the Company. The following are types of outside activities that can create conflicts:

  • Ownership by an employee or any member of the employee's family of a substantial interest in any concern that does business with Valeant, whether as a supplier, dealer or customer, or are a competitor (except in the case of a publicly owned corporation whose securities are traded on the open market).
  • Serving as a director, officer, employee, consultant, advisor, or in any other capacity for any business or other organization with which Valeant currently (or potentially) has a business relationship or which is, or can expect to become, a competitor of Valeant.
  • Engaging in an outside activity with an individual, business or organization which currently (or potentially) has a competitive or business relationship with Valeant where such activity is likely to decrease the impartiality, judgment, effectiveness or productivity expected from an employee.
  • Performance by an employee or a member of the employee's family of services for any outside concern or individual that does business with Valeant, e.g., a relative working for a travel agency doing business with Valeant.
  • Outside employment which conflicts or might be reasonably expected to conflict with the normal duties of a Valeant employee.

Anytime your outside activities may present a conflict, you must make full written disclosure of those activities and receive prior written approval from your local General Manager or division President or, in the case of the Corporate office, a Corporate Executive Vice President or above. Further, you must advise your local General Manager or Human Resources Department of any other positions you hold outside the Company.

Inside Information

As required by securities laws, we must not buy or sell the securities of Valeant, directly or indirectly, on the basis of inside information, or communicate such information to others for that purpose. In addition, we must not trade in the securities of any other company on the basis of undisclosed information obtained in the course of our employment with Valeant, or communicate such information to others for that purpose. For more information regarding what constitutes inside information and our obligations regarding such information please see the Company's Insider Trading Policy.

Former Government Employees

Before any former government employee or military officer is hired, approval must be obtained from the division President or, in the case of the corporate office, a Corporate Executive Vice President or above. In addition, former government employees and military officers working for Valeant (and their supervisors) should familiarize themselves with the relevant laws and regulations which may prohibit them from representing Valeant with the government or taking on assignments relating to matters they worked on in the government.

Corporate Opportunities

We may not personally take advantage of or benefit from any business opportunity that may be of interest to Valeant. Strong indications that the business opportunity would be of interest to Valeant include:

  • The business opportunity is the result of an existing relationship or business with Valeant,
  • The business opportunity is closely related to an existing line of business of Valeant, or
  • The business opportunity represents a desirable avenue of expansion of Valeant's activities.

This means that we may not personally take opportunities that are discovered through the use of corporate property, information or position for personal gain; or compete with the Company. We have a duty to Valeant to advance its legitimate interests when the opportunity to do so arises.

Potential Conflict of Interest Relationships

Personal relationships, which create actual or potential conflicts of interest, are to be avoided by all employees. Personal or romantic involvement with a competitor, supplier or any employee of Valeant, which impairs an employee's ability to exercise good judgment on behalf of Valeant, creates an actual or potential conflict of interest. Supervisor-subordinate romantic or personal relationships also can lead to potential conflicts of interest and morale problems. In those situations where two or more family members are employed by Valeant, they should not:

  • Work in the same department,
  • Serve as a direct supervisor of the other family member, or
  • Supervise the family member's manager.

In other words, no family member should serve in a supervisory capacity one or two levels over another family member. In those rare circumstances in which it may be in the Company's best interest to allow an exception to this policy, the exception must be approved in writing by the Chief Executive Officer and reported in writing at the next meeting of the Finance and Audit Committee of the Board of Directors.

Prohibition of Loans and Extending Credit

In accordance with the provisions of Section 402 of the Sarbanes-Oxley Act, the Company will not make any personal loans or extend credit to any executive officer or director of the Company.

An employee involved in any of the types of relationships described in this policy should immediately and fully disclose the relevant circumstances to his or her immediate supervisor or the Corporate Compliance Officer (see "Reporting, Investigating and Disciplinary Procedures" section) for a determination as to whether a potential or actual conflict of interest exists.

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Standard of Conduct Number 6:

We will protect company assets and the assets of others entrusted to us against loss, theft and misuse and endeavor to ensure their efficient use.

The Basic Standard

We are personally responsible and accountable for the proper expenditure of company funds, including money spent as travel expenses or for customer entertainment. We are also responsible for the proper use of company assets over which we have control and assets that customers or others have entrusted to our custody. Company assets must be used for proper purposes only, both during and after employment with the Company and by third parties involved with the Company.

Company assets should not be used for personal benefit, sold, loaned, given away or otherwise disposed of, regardless of condition or value, without proper authorization.

Particular Areas of Concern

Proprietary Information

We are responsible for protecting the company's proprietary information as well as proprietary information that is entrusted to the company by others. Most of the information that we learn or develop as part of our job is proprietary - that is, it is Company property useful in Valeant's business. Such information is a valuable business asset that must be protected, because its unauthorized disclosure could destroy its value to the Company and give others an unfair advantage. In addition to refusing to disclose such information without authorization, we must take affirmative steps to assure that such information is strictly safeguarded. Other business-sensitive and confidential information should be given the same protection.

Proprietary information includes, but is not limited to, intellectual property, strategic business plans, financial results, marketing strategies, pricing decisions before being made public, customer lists, personnel records, engineering development plans, blueprints, upcoming acquisitions and divestitures, new inventions and manufacturing costs, processes and methods. It may take the form of records, practices, letters, plans, emails, drawings, or computer programs, or it may be conveyed orally. The general rule is if we question whether company information is proprietary, we should treat it as proprietary. In addition, we must respect the proprietary rights of others.

Particular care should be taken with respect to meetings of industry associations and other situations in which we come into contact with representatives of competitors.

Finally, review Valeant's Record Retention policy for additional information pertaining to the period of time that we need to retain Company information, including proprietary information.

Competitor, Procurement-Sensitive and Classified Information

We will not attempt to obtain, actually obtain, or use a competitor's proprietary information or any procurement-sensitive information, from any source. This includes information on a competitor's prices, bids or proposals in circumstances where there is reason to believe the release of such information was illegal or unauthorized.

Often it will be clear from the face of documents and/or the circumstances that they are proprietary or procurement-sensitive and that they therefore should not be used. For example, if you receive a competitor's proposal in the mail from an unknown source, don't read it or use it. Turn it over to your supervisor immediately.

Particular care should be taken in connection with government procurements, including subcontracts to government contractors.

Severe criminal penalties can be imposed on the individuals involved and Valeant if proprietary, procurement-sensitive or classified information is used when release was unauthorized. Accordingly, if we question whether information involved in governmental procurement is proprietary, procurement-sensitive or classified, we must not use the information without the approval of an appropriate procurement manager.

Government Classified, Technical and Sensitive Data

We are required by law to safeguard U.S. government classified information and various unclassified technical data. We must also comply with international laws as established by each country where Valeant conducts business relative to the specific country's government requirements. Government classified information must be handled in accordance with the U.S. government security requirements, the regulations and practices of the FDA and in a manner consistent with the applicable laws of the country.

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Standard of Conduct Number 7:

We will act with respect and consideration.

The Basic Standard

We have a fundamental responsibility to show respect and consideration for each other. This means that all of us should be treated fairly and with dignity, at all times. In addition, our beliefs and concerns should be respected.

Particular Areas of Concern

Equal Employment Opportunity

Valeant is an Equal Opportunity Employer as a matter of law, ethics and good business practice. We will not discriminate against another employee, prospective employee, a third party or make disparaging comments or criticisms on the basis of race, color, creed, sex, sexual orientation, national origin, age, handicap, disability, or veteran status. These principles apply to all aspects of the employment relationship, including the application process and initial employment, promotion and transfer, selection for service, retirement, seniority and employee benefit plan policies.

Harassment

How we treat each other is important. Our work environment should be a place where we respect each other and ourselves. Any harassment - including sexual harassment - will not be tolerated. Similar to the Equal Employment Opportunity discussion above, these principles apply to all aspects of the employment relationship.

Political Activity

The Company encourages political activity and participation in electoral politics by employees. However, such activity must occur in an individual and private capacity and not on behalf of the Company. We may not conduct any political activity during working hours or use Company property for such purposes.

Illegal Drugs, Narcotic Substances and Firearms

Any use or possession of illegal drugs, narcotic substances and firearms is strictly prohibited.

Drug abuse and firearms threatens the welfare of other employees and is detrimental to the work environment and work ethic. Applicable laws prohibit the use or possession of illegal drugs, narcotics and firearms in the workplace. Under no circumstances may such drugs, substances, or firearms be brought onto Company premises. Of course, we must never work when impaired by illegal drugs or alcohol.

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Standard of Conduct Number 8:

We will be sensitive to the effects of our operations on the environment and will strive to prevent injury and illness in the workplace.

The Basic Standard

We have a fundamental responsibility to be sensitive to the effect of our operations on the environment and to strive to prevent injury and illness in the workplace.

Each facility has a workplace safety program as well as an environmental and waste disposal program that ensures compliance with all applicable laws, regulations, permits or licenses. Those of us having responsibilities in these areas must familiarize ourselves with these programs and the applicable laws and follow them strictly.

Valeant is committed to provide a safe and healthy workplace, which can only be realized through the dedication and participation of each of us.

Particular Area of Concern

Transporting Hazardous Materials

We are prohibited by law to transport hazardous materials without meeting certain requirements. These requirements include registration, classification, labeling and packaging requirements pursuant to U.S. Department of Transportation and other applicable regulations of Valeant's locations. Prior to shipping hazardous materials, Valeant will insure that it complies with such requirements.

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Reporting, Investigating and Disciplinary Procedures

Where to go for Additional Information and Assistance

Those of us with questions relating to the Code or any of the Standards of Conduct within the Code, or to any other legal or ethical issue, generally should first raise the matter with our supervisors. In some cases, supervisors will need to refer questions elsewhere in the Company to have them answered fully. Certain types of questions should be referred to the appropriate functional department.

For example, questions relating to the proper reporting of costs or other accounting and finance matters should be referred to the Finance Department. Likewise, questions relating to possible conflicts of interest should be referred to your division President, or, in the case of the corporate office, to an Executive Vice President. Questions relating to other subjects covered by the Code, or to other legal or ethical issues, should be raised with your supervisor, your General Manager or President, or, in the case of the corporate office, to an Executive Vice President. You also can contact the Corporate Compliance Officer, as noted below.

It is important to emphasize that if you have a question as to whether a particular action you are considering might be inconsistent with the Code, or be improper for any other reason, you should raise that question and get it resolved before taking the action.

Obligation to Report Possible Violations

We should all be alert and sensitive to situations that could result in actions by ourselves or others that might violate applicable laws, or the Standards of Conduct set forth in the Code. Employees who believe their conduct or that of a fellow employee or a third party may have violated any such laws or any portion of the Code have an obligation to report the matter.

Generally, such matters should be raised first with your immediate supervisor. This may provide valuable insights or perspectives and encourage resolution of problems within the appropriate work unit. However, if you are not comfortable bringing the matter up with your immediate supervisor, or do not believe your supervisor has dealt with the matter properly, raise the matter with the appropriate department head, division President, or to the Corporate Compliance Officer as follows:

Philip Sefchovich
Valeant Pharmaceuticals International
One Enterprise
Aliso Viejo, CA 92656
Email: philip.sefchovich@valeant.com

An anonymous Reporting Helpline is also available and can be reached in the United States and Canada at 1-800-461-9330 or from other locations (collect) at 1-720-514-4400. The Reporting Helpline is monitored by an independent company and has staff that speaks all the languages where we do business.

The most important point is that all possible violations are reported. Regardless of how such a report is made, the Company's policy is that the reporting employee or third party is informed of the outcome of the investigation relative to his or her report, unless the report is made anonymously.

The Corporate Compliance Officer and the General Counsel will be responsible for managing the immediate investigation of any alleged violations of the Code in conjunction with the appropriate representatives of the local offices.

Confidentiality

Valeant will not disclose a reporting person's identity without his or her permission unless disclosure is unavoidable during an investigation. However, anonymity can be assured for a report made to the Reporting Helpline.

No Reprisals

In no event will Valeant take or threaten any action against an employee or a third party as a reprisal for making a complaint or disclosing information in good faith. However, if a reporting individual was involved in improper activity, the individual may be appropriately disciplined even if he or she was the one who disclosed the matter to the Company. In such a case, a voluntary disclosure would be given favorable consideration in any resulting decisions.

Disciplinary Actions

The Standards of Conduct set forth in the Company's Code shall be consistently enforced through appropriate disciplinary mechanisms. The Company may implement interim measures to address alleged violations of the Code pending completion of an investigation. Disciplinary actions for violations of the Code can include oral or written reprimands, suspension, or termination. Such disciplinary actions may also be taken (1) when an employee or third party fails to report or withholds relevant information concerning a violation of the Standards of Conduct, laws or regulations, or fails to cooperate with a related investigation, or (2) when there has been inadequate supervision or lack of diligence by a supervisor or manager in connection with a violation of such standards, laws, or regulations. The violation of laws (which can subject Valeant to significant fines and other penalties) can result in criminal prosecution of the employee or third party involved.

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Compliance Acknowledgement

CODE OF BUSINESS CONDUCT AND ETHICS COMPLIANCE ACKNOWLEDGEMENT

I have received, read and understand the Valeant Standards of Conduct set forth in the "Code of Business Conduct and Ethics." In addition:

I. I understand and acknowledge that the work for which the Company employs me includes access to information (such as customer, supplier, sales and pricing information, manufacturing drawings and processes), which is private, confidential and/or trade-secret property belonging to the company. I promise to receive such information in confidence and will not, during or after my employment, make use of such information outside of my specific work for the Company. I understand that my obligations will continue whether or not my employment with the Company terminated voluntarily or involuntarily, or with or without cause.

II. To the best of my knowledge, information and belief, neither I nor any member of my family has any interest or connection, or has within the past year engaged in any activity, that constitutes a conflict of interest as this term is described in the Code, including employment by me outside the Company, except as indicated. (Write "NONE" if appropriate - attach separate page as required)



III. To the best of my knowledge, information and belief, I am not now engaged in any actions and during the past years have not engaged in any actions that could be considered as violating the Code, except as indicated. (Write "NONE" if appropriate - attach separate page as required)




Signature

Date:

Name (Print)

Title

Location

Please sign and forward the original copy of this page and any attachments to your local Human Resources Department.

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Appendix - Code of Ethics for CEO and Senior Financial Executives/Certification

CODE OF ETHICS FOR THE CHIEF EXECUTIVE OFFICER AND SENIOR FINANCIAL EXECUTIVES

Policy and Scope

This Code of Ethics for the Chief Executive Officer and Senior Financial Executives applies to the Company's principal executive officer, principal financial officer, principal accounting officer, controller and all Vice Presidents and above in the Finance Department worldwide (collectively the "Covered Executives"). The Company expects its Covered Executives to conduct business in a highly ethical and responsible manner. This Code of Ethics is intended to supplement, but does not replace, the Code of Business Conduct and Ethics and the policies referenced therein.

Standards

All Covered Executives covered by this Code of Ethics will:

  1. Engage in and promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
  2. Produce, or cause to be produced, full, fair, accurate, timely and understandable disclosure in reports and documents that Valeant Pharmaceuticals International files with, or submits to, the Securities and Exchange Commission and in other public communications made by Valeant Pharmaceuticals International;
  3. Comply with applicable governmental laws, rules and regulations;
  4. Promptly report violations of this Code of Ethics as provided below; and
  5. Be held accountable for adherence to this Code of Ethics.

Covered Executives are prohibited from (i) directly or indirectly taking any action to fraudulently influence, coerce, manipulate or mislead the Company's independent public accountant engaged in the performance of an audit of the Company's financial statements for the purpose of rendering the Company's financial statements materially misleading and (ii) altering, destroying, mutilating, or concealing a record, document or other object, or attempting to do so with the intent to impair the object's integrity or availability for use in an official proceeding.

Failure to observe the terms of this Code of Ethics may result in disciplinary action, up to and including termination of employment. Violations of this Code of Ethics may also constitute violations of law and may result in civil and criminal penalties for the Covered Executives.

The Covered Executives are responsible for seeking an interpretation of this Code of Ethics, as needed, including whether this Code of Ethics is applicable to a particular situation, from the Corporate Compliance Officer. Questions regarding this Code of Ethics should be directed to the Corporate Compliance Officer. In addition, staff members with questions regarding the best course of action in a particular situation should promptly contact the Corporate Compliance Officer. The Corporate Compliance Officer may consult with other officers or staff members of Valeant Pharmaceuticals International or legal counsel as necessary or appropriate with respect to this Code of Ethics.

Waivers of compliance with this Code of Ethics may only be granted by the Finance and Audit Committee of the Board of Directors(the "Finance and Audit Committee"). The Company will publicly disclose any waiver or implicit waiver of compliance with items 1, 2, 3, 4 or 5 above (each a "Covered Provision"), granted to any of the Company's principal executive officers, principal financial officer, principal accounting officer or controller (as applicable). Prior to any such disclosure, the Corporate Compliance Officer will present to the Finance and Audit Committee such proposed disclosure. For purposes of this Code of Ethics, a "waiver" shall mean the Company's approval of a material departure from compliance with a Covered Provision; and "implicit waiver" shall mean the Company's failure to take action within a reasonable period of time regarding a material departure from compliance with a Covered Provision that has been made known to an executive officer. Notwithstanding the foregoing definition of "implicit waiver", violations of this Code of Ethics should be promptly reported to the Corporate Compliance Officer as provided below.

Covered Executives shall certify compliance with this Code of Ethics on an annual basis by signing the attached certification.

If you are aware of a situation that you believe may be unlawful or unethical, you should immediately contact Valeant Pharmaceuticals International's Reporting Help Line at 1-800-461-9330 for U.S. and Canada, or from other locations you may call collect at 1-720-514-4400. Staff members may choose to remain anonymous in reporting any violation, or suspected violation, of this Code of Ethics. The Corporate Compliance Officer is responsible for advising the Finance and Audit Committee of any violations or alleged violations of this policy no later than the Finance and Audit Committee's next regularly-scheduled meeting following receipt of such violation or alleged violation. No one will be retaliated against for raising issues in good faith.

This Code of Ethics is intended to be a code of ethics that complies with Section 406 of the Sarbanes-Oxley Act of 2002 and Item 402 of Regulation S-K promulgated under the Securities Act of 1933, as amended.

In my capacity as a "Covered Officer", I, the [insert title] of the Company, do hereby certify that for [year] I have adhered to and complied with the requirements of the Code of Ethics for the Chief Executive Officer and Senior Financial Executives, in all material respects.

I further certify that I have not been granted a waiver from compliance with the Code of Ethics for the Chief Executive Officer and Senior Financial Executives.

Date:

Signature:

Name:

Title:

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