Two whistleblowers used the qui tam provisions of the False Claims Act (FCA) to file lawsuits against biotechnology company Genzyme Corp. for teaching doctors and other medical staff how to create a "slurry" version of its Seprafilm product. In response, the company has agreed to pay the government $22.28 million to resolve allegations such off-label marketing led to FCA violations.
Seprafilm is a thin film intended to reduce adhesions after surgery by forming a bio-resorbable barrier between abdominal tissue and organs and is FDA-approved for use in open abdominal surgery. Genzyme representatives, however, were marketing and teaching medical professionals how to alter the product for use in minimally invasive procedures — specifically, laparoscopic surgeries. The government contends this marketing of an altered, untested device led to the submission of false claims to federal and state health care programs.
The FCA makes it illegal to knowingly submit false or fraudulent claims to the government for payment. Since federal healthcare programs generally cover only drugs or devices that the FDA has determined to be safe and effective, billing for non-FDA approved uses is a violation of the FCA. Liability for violations can be significant, with the potential for treble damages and penalties of between $5,500 and $11,000 per claim.
The government frequently uses the FCA to fight off-label marketing of drugs and other products in an effort to both reduce healthcare fraud and enhance patient safety. While many drug manufacturers may purposely promote off-label uses, those concerned with compliance must ensure that their employees understand that such marketing is against the law. Medical professionals also need to understand the law's requirements to avoid unwittingly exposing themselves to liability through reliance on drug company representatives for information as to the proper use of a product.