In another stirring chapter of the on-going Plavix debacle, the Bristol-Myers Squibb pleaded guilty to two criminal counts of two violations of the federal False Statements Act and will pay a $1 million fine (the maximum penalty) for lying to the federal government about a patent deal involving the anticoagulant drug Plavix (clopidogrel bisulfate).
The Department of Justice claimed that Bristol-Myers acted to supress competition for Plavix that could have reduced the cost the drug. In 2006, Bristol-Myers and Apotex were in litigation over the validity of the patent for Plavix and were negotiating a settlement of that litigation. However, at the same time, Bristol-Myers was subject to a separate consent decree for unrelated conduct with the Federal Trade Commission that required it to submit any proposed patent settlements for review and approval by the FTC.
The FTC warned Bristol-Myers that it would not approve a settlement of the Plavix litigation if the company agreed not to launch its own generic version of Plavix that would compete against Apotex for generic sales.
Bristol-Myers wanted to protect its patent and struck a deal with Apotex to refrain from selling generic Plavix in the U.S. until mid-2011. But the proposed deal was rejected by state regulators in the U.S., leading Apotex to sell generic Plavix in August 2006. A federal judge issued a injuction three weeks later.
After entering into the agreement, Bristol-Myers allegedly concealed it from and then lied about its existence to the FTC. The Department of Justice charged Bristol-Myers with filing two false statements to the FTC as part of its effort to hide part of its agreement with Apotex.
The plea remains subject to a judge’s approval, and authorities continue to investigate the deal. At the same time, the injunction against Apotex remains in place while a federal judge decides a patent-infringement claim against.
The FTC has challenged similar arrangements, arguing that they are anti-competitive and hurt consumers, and asked the Supreme Court to hear a case involving Schering-Plough in which a similar deal was struck. Although the Supreme Court declined to take on that case, the FTC has signalled that it will continue to strike down deals between big drug companies and generic manufacturers that involve so-called “reverse payments”.
Meanwhile, Sanofi-Aventis SA was last seen acting like it doesn’t know Bristol-Myers.
