Corporate Disclosure in Compliance with the California Transparency in Supply Chains Act

The California Transparency in Supply Chains Act requires large retailers and manufacturers conducting business in California to provide information to consumers regarding their efforts to eradicate slavery and human trafficking from their direct supply chains. 

Otsuka promotes ethical labor practices and the highest standards of business conduct both internally and within our direct supply chain.  Otsuka’s parent company, Otsuka Holdings, Ltd, is a signatory to the United Nations Global Compact, a voluntary initiative that unites companies in their commitment to create a sustainable and inclusive global economy.  By signing this compact, Otsuka has pledged to advance numerous human rights principles, including the elimination of all forms of forced and compulsory labor and the effective abolition of child labor.  These principles are consistent with Otsuka’s long-standing values and the expectations stipulated in our Code of Ethics and Professional Conduct, on which relevant Otsuka suppliers are trained and certified. 

Furthermore, all manufacturing of Otsuka pharmaceuticals approved for distribution in the United States complies with United States Food and Drug Administration (FDA) Current Good Manufacturing Practice (cGMP) regulations governing the methods, facilities, controls, and personnel qualifications necessary for the manufacturing, processing, and packing of a drug product.  These regulations not only set high quality thresholds for the work environment, but also impose stringent training requirements for the individuals working in these facilities. 

Verification 

All Otsuka employees are required to complete training and certify annually to our Code of Ethics and Professional Conduct.  The Code follows the principles set forth in the United Nations Declaration of Human Rights and prohibits any employment by Otsuka of underage children or forced labor, as well as any form of physical punishment or abuse.  Otsuka also maintains a Code for suppliers, which stipulates that all third parties with whom Otsuka does business are expected to provide a workplace free of human rights abuses, provide wages and benefits that comply with national laws and industry standards, and comply with all applicable labor and employment laws—including those that prohibit human trafficking and the employment of forced, bonded, enslaved, indentured, or involuntary prison labor.  Relevant suppliers must also train and certify annually to the Code. 

Additionally, the sourcing, manufacturing, and packaging of Otsuka pharmaceutical products for distribution in the United States is governed by FDA cGMP regulations, which include specific personnel and workplace qualifications.  Otsuka verifies manufacturing suppliers’ compliance with FDA cGMP regulations through regular audits and site inspections. 

Supplier Audits  

Otsuka conducts due diligence on all suppliers prior to their engagement, as well as throughout the period of their engagement.  This includes initial screening and audits if appropriate, as well as regular audits and site inspections of manufacturing and packaging suppliers to ensure compliance with our quality agreements.  Otsuka suppliers are also subject to ad hoc audits and inspection by government agencies, including FDA. 

While slavery and human trafficking are not specific targets of these audits, Otsuka personnel would be required to escalate any such observations or suspicions immediately. 

Supplier Certification 

All contractual arrangements between Otsuka and our suppliers stipulate compliance with local laws, rules, and regulations, which would include those concerning labor and employment in the region where the supplier operates. 

Where Otsuka third parties are also required to complete training on our Code of Ethics and Professional Conduct for suppliers based on their role and the services they provide, they must certify to their understanding and adherence.  Otsuka Ethics & Compliance monitors adherence to this requirement and third parties who fail to comply may be disengaged. 

Internal Accountability 

Otsuka requires all employees and suppliers to report, via our third party Integrity Line or directly to Otsuka Ethics & Compliance, any actual or suspected violations of the Code or any applicable law or policy in connection with the work done for us.  Reports to the Integrity Line can be made anonymously. 

Violations are escalated to a cross-functional investigations committee and handled through appropriate corrective and preventive actions such as procedural modifications, training, disciplinary measures or contract termination, and/or self-reporting if required by law.  

The following workplace standards apply: 

Code of Ethics and Professional Conduct for employees
Code of Ethics and Professional Conduct for suppliers

Training 

Otsuka employees at every level, relevant Otsuka suppliers, and our Board of Directors are required annually to review our Code of Ethics and Professional Conduct and certify to their understanding and adherence.  The Code outlines specific expectations and prohibitions concerning labor and human rights, including slavery and human trafficking. 

Otsuka Ethics & Compliance monitors adherence to this annual training and certification requirement, and noncompliance may result in disciplinary action or termination.  Our supplier contracts may also stipulate compliance training requirements or alternative training assurances, including audit rights.