Corporate & Securities Law

BMS Executive Faces Criminal Charges in Connection With Plavix

By David Fischer

On Wednesday, a former Bristol-Myers Squibb vice-president was indicted by the United States Department of Justice one count for making a false statement to the FTC.  The New York Times reports:

Andrew G. Bodnar, a doctor, had made a false statement to the Federal Trade Commission in describing a 2006 agreement between Bristol-Myers and Apotex, a Canadian maker of generic drugs. Dr. Bodnar had led negotiations to stop Apotex from selling its own version of Plavix, a blood thinner that is Bristol-Myers?s top-selling drug.

Dr. Bodnar would not comment on Wednesday, but his lawyer, Elkan Abramowitz, said he would plead not guilty. ?All I can say is that we will vigorously contest these charges; we think they are baseless,? Mr. Abramowitz said.

…

The indictment stems from a federal investigation that led, in part, to the ouster of the previous Bristol-Myers chief executive, Peter R. Dolan, in September 2006.

Earlier that year, Apotex was threatening to sell its own generic version of Plavix before expiration of a patent that gave Bristol-Myers and its partner, Sanofi-Aventis, exclusive rights to the brand-name drug until 2011. The threat by Apotex, which had filed a lawsuit challenging the validity of that patent, was viewed as a serious problem for Bristol-Myers. In 2005, Plavix generated about $3.5 billion in United States sales.

Mr. Dolan dispatched Dr. Bodnar to Toronto to negotiate a settlement. During those meetings, in May 2006, the indictment charges, Dr. Bodnar made secret assurances to Apotex that Bristol-Myers would not issue its own generic version of the drug to compete with Apotex.

At the time, Bristol was bound by a federal consent order requiring it to submit such agreements to the Federal Trade Commission for clearance. The F.T.C. would have been looking for any deals that restrained competition and led to higher prices.

According to the indictment, Bristol-Myers never disclosed that part of the Apotex agreement to the F.T.C. And the indictment contends that after the investigation had begun, Dr. Bodnar certified to the F.T.C. that there had been no such secret deal.

The Department of Justice press release is available here.

Full post as published by Antitrust Review on April 25, 2008 (boomark / email).