AG Gansler: Genzyme Corp. Pays $22.28 Million for
Fraudulent Marketing of "Slurry" Improperly Used in Surgery
Maryland Medicaid to receive $85,000 from Seprafilm allegations
Baltimore, MD (March 7, 2014) - Attorney General Douglas F. Gansler announced today that Maryland, joined by other states and the federal government, has secured a settlement resolving allegations that Genzyme Corporation triggered false claims to be submitted to federal and state health care programs for unapproved use of a "slurry" version of its Seprafilm adhesion barrier. Genzyme will pay $22.28 million under the settlement. Maryland Medicaid will receive $84,627.69, to be shared with the federal government, which provides funding for the program.
"Cutting corners shows little concern for the wellbeing of the people who used this product and for the general public whose tax dollars support the Medicaid program," said Attorney General Gansler. "The profit from the fraudulent sales of this product will be forfeited and returned to its intended use."
Seprafilm is intended to reduce post-surgical adhesions by forming a bio-resorbable (broken down and assimilated back into the body) barrier between abdominal tissue and organs. This Food and Drug Administration (FDA)-approved product is for use in open abdominal surgery, but not for minimally invasive procedures such as laparoscopic surgery.
The settlement resolves allegations that Genzyme sales representatives taught doctors and other staff to cut the Seprafilm sheets into small pieces, add saline and allow the pieces to dissolve until the desired consistency was reached. This mixture was referred to as "slurry." Genzyme sales representatives traded recipes for slurry and trained each other how to produce it. The slurry was used in laparoscopic surgeries by inserting a catheter filled with the mixture into the body and applying it into the abdominal cavity. As a result of this conduct, Genzyme knowingly caused hospitals and other purchasers of Seprafilm to submit false and fraudulent claims to federal health care programs for uses that were not FDA-approved and therefore, not reimbursable.
Genzyme is a biotechnology corporation based in Cambridge, Mass., and was acquired by Sanofi-Aventis SA in April 2011.
Attorney General Gansler thanked Medicaid Fraud Control Unit Deputy Director Shelly Marie Martin for her work on this case. A National Association of Medicaid Fraud Control Units (NAMFCU) team participated in the investigation and conducted settlement negotiations with Genzyme.