Legal News

Former Bristol-Myers Exec Charged Over Secret Settlement

By Dan Slater

Back in the summer of 2006, drugmaker Bristol-Myers Squibb hit the skids when the feds investigated an agreement the company struck to delay the launch of a generic version of its blood-thinning drug, Plavix. The deal, which was made with generic drugmaker Apotex, in part led to the ouster of CEO Peter Dolan and GC Richard Willard.

Now, three years after the controversial deal with Apotex was made, the man who made it, a former Bristol VP, Dr. Andrew Bodnar, is being indicted for allegedly making a false statement to the Federal Trade Commission regarding the deal. (Here’s a story from the NYT; and one from the WSJ’s own Avery Johnson.)

According to the stories, then-CEO Dolan dispatched Bodnar to Toronto to negotiate a settlement agreement with Apotex, which had been challenging the validity of Bristol-Myers’ patent on Plavix. During those meetings, the indictment charges, Bodnar made secret assurances to Apotex that Bristol-Myers would not issue its own generic version of the drug to compete with Apotex. (Click here and here for past LB coverage.)

Yet, Bristol-Myers never disclosed that part of the Apotex agreement to the FTC, even though it was bound by a federal consent order requiring it to get FTC clearance for such agreements. The Bodnar indictment contends that after the investigation had begun, Bodnar certified to the F.T.C. that there had been no such secret deal. (Bristol-Myers pleaded guilty to charges in the case last June, and the company paid a $1 million fine.)

Bodnar’s lawyer, Elkan Abramowitz, reports that Bodnar will plead not guilty. “All I can say is that we will vigorously contest these charges; we think they are baseless,” Abramowitz said. If convicted, Bodnar, 60, reportedly could face penalties of up to five years in prison and a fine of up to $250,000.

A spokeswoman for Bristol-Myers said that the company wouldn’t comment on Bodnar’s indictment. But, in a letter to employees at the time of its guilty plea last year, the company said it had never entered into a secret deal but was taking responsibility for the actions of a former senior executive. Although that was an apparent reference to Bodnar, says the NYT, the letter did not name him.

Full post as published by Law Blog - WSJ.com on April 24, 2008 (boomark / email).