According to the indictment, Andrew Bodnar – who left Bristol-Myers Squibb (BMS) in May last year – held a meeting with Canadian company Apotex in 2006 to discuss BMS’s plans to launch its own generic version of its blockbuster blood-thinning drug Plavix.
The Department of Justice says that at the meeting, Bodnar reassured Apotex that BMS would not launch a generic version of Plavix until 2011, when its patent was due to expire.
At the time of the meeting, the two companies were in litigation over the validity of the patent on Plavix and were negotiating a settlement to end the legal action.
BMS was also subject to a consent decree with the US antitrust watchdog the Federal Trade Commission (FTC) that required it to submit any proposed patent settlements for review and approval. The FTC had warned BMS that if it agreed with Apotex not to launch a generic version of Plavix – meaning that BMS would not compete against Apotex for generic sales – then the FTC would not approve a settlement of the Plavix litigation.
The Department of Justice says that Bodnar “knowingly and willfully made a false statement to the Federal Trade Commission about the existence of his representations to Apotex”.
Bodnar has been charged with violating the Federal False Statements Act, which carries a maximum sentence of five years of imprisonment and a fine of $250,000.
“Lying to the federal government is a serious felony that obstructs the law enforcement process,” said Thomas Barnett, assistant attorney general in charge of the Department’s antitrust division. “The Department of Justice will vigorously prosecute such illegal activity.”
The indictment is the latest stage of a long-running battle over Plavix. It began in January 2006 when Apotex won approval from the US Food and Drug Administration to produce a generic version of the drug, called Clopidogrel.
Following the breakdown of a so-called reverse payment deal agreed between Apotex and BMS in which the generic drug maker was to be paid at least $40 million if it kept its version of Plavix off the market until 2011, Apotex began manufacturing Clopidogrel in August that year.
Two weeks later a US court ordered it to stop production and the Plavix patent was subsequently upheld in June 2007 by the US District Court in New York. Bristol-Myers Squibb later fired chief executive Peter Dolan and general counsel Richard Willard over the botched reverse payment deal.
Plavix is the most widely prescribed blood-thinning drug in the world and is used by approximately 48 million Americans daily to prevent potentially fatal blood clots. It generated revenues of $7.3 billion last year and $6.1 billion in 2006.
