Published on:

Genzyme Corp. Settles Qui Tam Suits

Massachusetts-based Genzyme Corporation has agreed to pay $22.28 million to settle two separate suits brought by three whistleblowers under the qui tam provisions of the False Claims Act.  Genzyme, a biotechnology company, was acquired by Sanofi-Aventis SA in April 2011. According to Sanofi’s website, it is a global entity that engages in research, development, manufacturing and marketing of innovative therapeutic solutions.

According to the qui tam complaints, the whistleblowers’ allegations involved Genzyme’s Seprafilm adhesion barrier.  Seprafilm is a thin film used after abdominal surgery to reduce adhesions between the patient’s abdominal tissue and organs.  According to the Justice Department, Seprafilm was approved by the Food and Drug Administration for use in open abdominal surgery only.  The whistleblowers alleged in their qui tam complaints that Genzyme encouraged medical professionals to make a Seprafilm “slurry” by diluting small pieces of Seprafilm with saline for use in laparoscopic surgeries.  However, according to the government, Seprafilm is not FDA-approved for use in laparoscopic surgeries or in a diluted slurry form.

The whistleblowers alleged that Genzyme knowingly promoted the off-label use of Seprafilm to surgeons and as a result, caused hospitals and medical professionals to submit false claims to Medicare, TRICARE, Medicaid, and other government health care programs for the unapproved surgical use of Seprafilm slurry.

Two former sales representatives for Genzyme, Joseph Fuentes and Christopher Russo, filed their qui tam lawsuit in the United States District Court, Middle District of Florida in 2009.  A surgeon who used Seprafilm in the course of his surgical practice, Scott Kelley, filed a separate qui tam lawsuit in 2010.

According to the whistleblowers, Genzyme sales representatives routinely invited surgeons to free dinners where they would hype the benefits of Seprafilm and market the use of Seprafilm slurry in minimally invasive procedures – knowing Seprafilm had not been approved by the FDA as safe and effective in those type of procedures.

In settlement of both of the pending False Claims Act cases, Genzyme has agreed to pay $22.28 million to state and federal healthcare programs.  The whistleblowers will be entitled to share in a percentage of the settlement proceeds pursuant to the qui tam provisions of the False Claims Act.

To read more about qui tam and whistleblower cases, click here.

Business Litigation | False Claims Act & Whistle-blower Cases