by Ben Vernia | September 5th, 2015
On September 3, the Department of Justice announced that Genzyme Corp., which paid $22.28 million in January 2014 to settle civil allegations brought by two whistleblowers that the company marketed its Seprafilm adhesion barrier for off-label purposes. Under the deal, the company received a two-year deferred prosecution agreement, paid nearly $32.6 million, and will undergo unspecified compliance measures. According to DOJ’s press release:
Genzyme Corporation, a wholly-owned biotechnology subsidiary of French pharmaceutical company Sanofi, agreed today to resolve criminal charges that it violated the federal Food, Drug and Cosmetic Act (FDCA) with regard to the unlawful distribution of Seprafilm, a surgical device it markets and promotes, the Justice Department announced.
As part of the agreed resolution, the department filed a two-count criminal information in the U.S. District Court for the Middle District of Florida charging that between 2005 and 2010, Genzyme caused a medical device to become adulterated and misbranded while being held for sale. The conduct occurred prior to Sanofi’s acquisition of Genzyme, based in Cambridge, Massachusetts, in 2011. To resolve these charges, Genzyme agreed to enter into a deferred prosecution agreement with the government for a term of at least two years. As part of the agreement, Genzyme agreed to admit to and accept responsibility for the facts underlying the charges and pay a monetary penalty of $32,587,439. It further agreed to undertake several groundbreaking measures to enhance its internal compliance program. The agreement also acknowledges the significant level of cooperation Genzyme provided to the government during its investigation as well as the company’s independent remediation efforts.
Along with the information, the government also filed a consent motion with the court, requesting that its case against Genzyme be stayed during the term of the agreement. If Genzyme fulfills its obligations under the agreement, the government will dismiss the charges it filed today at the end of the agreement’s term.
Today’s agreement is in addition to a separate $22.28 million civil agreement the government reached with Genzyme in December 2013 to resolve allegations under the False Claims Act related to Seprafilm. After today’s agreement, Genzyme will have paid almost $55 million to resolve government allegations regarding Seprafilm. If Genzyme fulfills its obligations under the agreement, the government will dismiss the charges it filed today at the end of the agreement’s term.
* * *
According to the papers filed in the district court today, Seprafilm is a clear piece of film that can be applied to internal tissues during pelvic and abdominal surgeries to reduce the formation of adhesions—bands of scar tissue that can form between traumatized tissues and organs after surgery, causing them to stick together. Seprafilm was approved by the U.S. Food and Drug Administration (FDA) for use in patients undergoing open abdominal or pelvic laparotomy, which is a traditional surgical technique that utilizes a relatively large incision to permit the surgeon to open and view the patient’s abdominopelvic contents. Over time, laparotomy became a less common surgical technique in favor of laparoscopic surgery, which is perceived to have several advantages for the patient.
To respond to the diminishing number of laparotomies performed, some Genzyme sales representatives taught surgeons and other medical staff how to mix the Seprafilm sheets into a liquid “slurry” that could be squirted through the narrow tubes used during laparoscopic surgery, even though Seprafilm was never indicated or FDA-approved for use in laparoscopic procedures. Genzyme sales representatives’ participation in the preparation of slurry in the operating room caused Seprafilm to become adulterated, according to the criminal charges.
During the course of the government’s investigation regarding Seprafilm slurry, Genzyme voluntarily disclosed to the government that it had distributed promotional material for Seprafilm that implied that Seprafilm had been proven safe and effective for use in gynecologic cancer surgeries, even though Seprafilm’s FDA-approved label cautioned that the device had not been clinically evaluated in the presence of malignancies. Genzyme based its claim on a study that involved only fourteen patients, which was far too few to support such an assertion. A separate count in the government’s information charges that Genzyme’s use of this misleading promotional material caused Seprafilm to become misbranded while held for sale.
* * *