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Genzyme to Challenge Medicare Code and Reimbursement Decision for Synvisc


October 30, 2006 - Genzyme Corp. (Nasdaq: GENZ) today announced that it will work with the Centers for Medicare and Medicaid Services (CMS), government officials and, if necessary, through legal channels to dispute a CMS decision to group all viscosupplementation products into a single reimbursement code. This decision specifically impacts Synvisc® (hylan G-F 20), Genzyme’s market-leading viscosupplement used to treat pain due to osteoarthritis of the knee, which has had its own reimbursement code since 1999. If unchanged, the effect of CMS’s decision will be to reduce the reimbursement rate for Synvisc below its current market price, thereby discouraging doctors and patients from using the market leader in viscosupplements.

“We strongly disagree with this decision by CMS,” stated Ann Merrifield, president of Genzyme Biosurgery, the division of Genzyme Corp. that manufactures and markets Synvisc and other biomaterial products. “We believe that a single code for reimbursement unfairly compromises patients, limits physician choice, and imposes an undue financial burden on the Medicare system.”

Genzyme officials stated that there are clear clinical benefits of Synvisc that are not shared by other viscosupplementation products, such as its well-established six months of pain relief from only three injections. Synvisc’s chemical and physical properties also are different. These include a higher molecular weight that contributes to a longer residence time in the joint.

The CMS decision is likely to result in inequitable reimbursement for all viscosupplementation products that also adds significant costs to both patients and the Medicare program. Creating financial incentives for physicians to use products that require a greater number of treatment injections, or result in shorter periods of pain relief, is not in the best interest of patients and will ultimately be more costly to the Medicare system.

“This change also stifles innovation,” added Merrifield. “For this product class, companies should be encouraged to develop therapies that have increased duration of pain relief with fewer injections. The CMS decision runs contrary to this clinical goal by supporting the development of products that require more injections.”

Genzyme plans to pursue this issue directly with CMS and other government officials, and will take legal action if necessary. The company notes that Synvisc coding, coverage and payment will remain the same until January of 2007.

About Genzyme

One of the world’s leading biotechnology companies, Genzyme is dedicated to making a major positive impact on the lives of people with serious diseases. This year marks the 25th anniversary of Genzyme’s founding. Since 1981, the company has grown from a small start-up to a diversified enterprise with more than 8,500 employees in locations spanning the globe and 2005 revenues of $2.7 billion. Genzyme has been selected by FORTUNE as one of the “100 Best Companies to Work for” in the United States.

With many established products and services helping patients in more than 80 countries, Genzyme is a leader in the effort to develop and apply the most advanced technologies in the life sciences. The company’s products and services are focused on rare inherited disorders, kidney disease, orthopaedics, cancer, transplant and immune diseases, and diagnostic testing. Genzyme’s commitment to innovation continues today with a substantial development program focused on these fields, as well as heart disease and other areas of unmet medical need.

This press release contains forward-looking statements, including the statements regarding Genzyme’s efforts to reverse the coding decision by CMS and those regarding the future impact of CMS’s decision if not reversed. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. These risks and uncertainties include, among others, how Synvisc’s customers and competitors react to the decision by CMS if not reversed, and the risks and uncertainties described in reports filed by Genzyme with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. Please see the discussion under the heading “Factors Affecting Future Operating Results” in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of the Genzyme Quarterly Report on Form 10-Q for the quarter ending June 30, 2006 for a more complete discussion of these and other risks. Genzyme cautions investors not to place substantial reliance on the forward-looking statements contained in this press release. These statements speak only as of the date of this press release, and Genzyme undertakes no obligation to update or revise the statements.

Genzyme® and Synvisc® are registered trademarks of Genzyme Corporation. All rights reserved.


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