FRENCH PHARMA SUBSIDIARY COMPANY TO PAY $32 MILLION TO RESOLVE CHARGES OF VIOLATING FDCA

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, September 3, 2015

Genzyme Corporation to Pay $32.5 Million to Resolve Criminal Liability Relating to Seprafilm

Sanofi Subsidiary Admits Unlawful Conduct and Agrees to Enhance its Compliance Program

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.

“Today’s action demonstrates that the Department of Justice will evaluate the facts of each case and choose the most appropriate tool of the several available to it to best address criminal misconduct,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of  the Justice Department’s Civil Division.  “The deferred prosecution agreement with Genzyme is yet another example of the department’s continuing efforts to ensure that pharmaceutical and medical device manufacturers adhere to laws and regulations that have been put in place to protect the health and safety of the American public.”

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.

“Patients rely heavily on the integrity and efficacy of claims made by manufacturers of medical products,” said U.S. Attorney A. Lee Bentley III of the Middle District of Florida.  “When manufacturers make misleading statements about using their products in ways that have not been approved by the FDA, patient care, confidence, and safety are put at risk.”

The case has been handled by Trial Attorney Ross S. Goldstein of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Simon Gaugush, Chief of the General Crimes Section at the U.S. Attorney’s Office of the Middle District of Florida, with support from FDA’s Office of Criminal Investigations and Office of Chief Counsel.