Genzyme Seprafilm: A Sales Recipe for a Different Device

In the Genzyme Seprafilm slurry settlement, Genzyme agreed to pay $22.28 million to resolve allegations that its sales representatives taught surgical staff to turn an approved adhesion barrier into an unapproved laparoscopic mixture and caused false claims to government health care programs. The sales instruction reached right into the operating room: representatives allegedly exchanged recipes, trained one another and taught staff how to prepare the mixture while patients underwent surgery.

The Justice Department announced the civil settlement on December 20, 2013. Under a separate criminal deferred prosecution agreement dated August 31, 2015, Genzyme admitted that employees guided surgical staff and directly participated in preparing the slurry.

Seprafilm Was Approved for Open Surgery

Seprafilm was a thin film designed to reduce adhesions after open abdominal or pelvic surgery. Adhesions are bands of internal scar tissue that can cause organs and tissues to stick together. The barrier physically separated injured surfaces while they healed.

Genzyme Biosurgery handled the product’s sales, marketing and promotion. The statement of facts Genzyme accepted in the criminal agreement describes a clear film made from chemically modified sugars. The approved product was placed against internal tissues during open surgery. It then became a gel on contact with body fluids and was gradually absorbed.

The opening in an open operation gave surgeons access to place the film. Laparoscopic surgery worked through small incisions and narrow tubes, with long instruments and a camera. The same statement says the Food and Drug Administration had never approved Seprafilm for laparoscopic procedures.

That distinction mattered commercially. The statement records a shift toward minimally invasive abdominal surgery that gained momentum beginning in 2005. As open procedures became less common, the market for Seprafilm’s approved use shrank. The slurry offered a way to get the product into the operation that was taking its place.

How the Seprafilm Slurry Reached the Patient

The government alleged that Genzyme representatives taught doctors and other staff to cut Seprafilm into small pieces, add saline and let the pieces dissolve to the desired consistency. Staff could then deliver the mixture through a catheter into the abdominal cavity during laparoscopic surgery. The civil settlement announcement says representatives traded recipes and trained each other in making it.

The alleged payment chain followed those instructions into the hospital. In that account, Genzyme promoted the altered product, doctors and staff used the slurry, and hospitals and other purchasers submitted claims to federal health care programs. The government alleged that Genzyme knowingly caused those claims for uses that were not reimbursable.

The Criminal Agreement Described a Different Device

Under its deferred prosecution agreement, Genzyme admitted that cutting, hydrating and agitating Seprafilm transformed it into a new and different Class III medical device whose safety and effectiveness the Food and Drug Administration had not determined. Genzyme also acknowledged that it had not supplied the agency with evidence giving reasonable assurance that the slurry was safe and effective for laparoscopic use.

The statement of facts makes the representatives’ involvement unusually concrete. In October 2007, a sales representative emailed instructions to a subordinate who was in the operating room during a procedure. The email began:

The rest of the message explained the syringe and catheter handling. These were instructions for making the mixture during surgery. Another admitted email exchange, from September 2007, showed a representative checking the preparation with a colleague as it happened, followed by a later exchange asking how it went.

Genzyme acknowledged that the employees acted within the scope of their employment and intended, at least in part, to benefit the company.

Slurry Preparation Continued After the Ban

Genzyme’s admitted statement of facts describes representatives preparing slurry despite the company’s efforts to stop it.

In early 2007, compliance training allowed representatives to remain in an operating room where slurry was being used, but told them not to comment on that use. By January 2008, representatives were told that field discussions about slurry were no longer permitted.

In February 2009, Genzyme prohibited representatives from attending operations where slurry might be used, including laparoscopic procedures. Yet in May 2009, the same admitted statement places a representative in a Florida hospital, helping make the mixture that had led to the ban.

Genzyme also reduced sales quotas to reflect the shrinking market for approved use. In late 2009, before learning of the government’s investigation, it fired its most successful Seprafilm sales representative for promoting slurry. That employee had generated millions of dollars in annual sales and trained district managers and other representatives.

After learning of the investigation, Genzyme conducted a broader internal inquiry and dismissed additional sales personnel.

A Brochure Called a Small Study Proof

In its criminal agreement, Genzyme also admitted that a sales brochure overstated what a small study could show. The company-approved brochure was available to the sales team from around January 2008 through 2010.

The brochure described a prospective series of 14 patients undergoing radical oophorectomy, with results compared against historical controls. On the sales page, that became:

The company admitted that the claim was misleading because the study’s patient population was too small. A sales or clinical employee would recognize both sides of that comparison: the study and the language approved for use with healthcare providers.

Radical oophorectomy is cancer surgery. The approved label cautioned that Seprafilm’s safety and effectiveness had not been evaluated in clinical studies in the presence of malignancies.

In the fall of 2013, Genzyme voluntarily disclosed the brochure’s promotional use to the government and took steps to prevent those claims from being made again.

The Civil Settlement and the Whistleblower Cases

The civil settlement resolved allegations originally raised in two qui tam cases under the False Claims Act.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

How Does Reimbursement Work for Medical Devices?

Medicare commonly pays for an implanted device within the hospital’s payment for the procedure or stay. In Genzyme’s civil case, the Justice Department alleged that hospitals and other purchasers submitted the false claims. Our work with an insider connects the sales instruction and surgical use to the provider’s payment request.

The representative also occupies a practical position in that chain. A Senate Finance Committee staff report on device distribution describes representatives ordering, delivering and stocking products, deploying instruments and assisting surgeons in the operating room. In the Genzyme admissions, representatives crossed directly into preparing the altered product. The person selling the film could also be the person telling staff how to change it.

What Kind of Proof Is Needed to Be a Whistleblower?

Our whistleblower experts work with you to assess what your knowledge and documents show about the device’s use and the government payment. The admitted emails show the first links in detail: who gave the instruction, who was present during surgery and what staff were told to do. The civil allegations supply the separate connection to claims by hospitals and purchasers.

The policy records add another dimension. A compliance employee may know when guidance changed and how management responded. A sales or clinical employee may know whether representatives continued to direct preparation after those changes. A reimbursement employee may see the institution’s claims. We work with those different views to establish how the conduct and payment fit together.

The 2020 Journal of Forensic and Investigative Accounting paper A Forensic Accountant’s Guide to the Most Potent Federal Laws Used Against Healthcare Fraud explains the value of qui tam cases in bringing inside information to the government and supplementing its investigative resources. Genzyme’s emails show why that perspective matters here: they place the sales instruction inside an operation, where a public product description would never show it.

You Saw How the Product Was Changed

If you know how a device sales instruction became operating-room practice, speak to one of our Whistleblower Experts about what you saw. We connect the product, the company’s decisions and the government claim to build your strongest medical device whistleblower case. We bring in medical-device whistleblower lawyers who know False Claims Act cases and work alongside you and that team throughout your case.