Genzyme To Pay $32.5 Mln To Resolve Criminal Liability Relating To Seprafilm

(RTTNews) - Genzyme Corp., a wholly-owned biotechnology subsidiary of French pharmaceutical company Sanofi (SNYNF, SNY), agreed to resolve criminal charges that it violated the federal Food, Drug and Cosmetic Act or FDCA with regard to the unlawful distribution of Seprafilm, a surgical device it markets and promotes, the U.S. Justice Department announced.

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 $32.59 million. 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.

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.

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.