Bristol pleads guilty; Plavix probe ends
Bristol-Myers Squibb admits to trying to block Apotex from generic Plavix production; drugmaker will pay fine.
NEW YORK (CNNMoney.com) -- The drugmaker Bristol-Myers Squibb said on Monday that it pleaded guilty to federal charges of trying to block another drug company from producing generic versions of its top-selling drug Plavix.
New York-based Bristol-Myers (down $0.22 to $32.48, Charts) pleaded guilty to two counts of attempting to settle with Apotex, Inc. to stop the Canadian drugmaker from producing a low-cost generic version of the blood thinner Plavix. Plavix sales totaled $3.8 billion in 2005, the most recent year with no generic competition.
The settlement didn't work, and Apotex temporarily flooded the market with generic Plavix in 2006, driving down sales. Bristol came under investigation by the antitrust division of the U.S. Department of Justice in Washington, D.C., for making the settlement offer. Bristol-Myers paid a $1 million fine as part of its guilty plea.
This was one of the circumstances that led to the forcing out of Chief Executive Peter Dolan, who has since been replaced by James Cornelius.
The Food and Drug Administration gave the green light for Apotex to produce generic Plavix, but the company had no legal clearance to do so because Bristol held the patent until 2011. Apotex went ahead and manufactured the generic anyway, until Bristol was able to get production blocked by a federal judge in New York.
Bristol is the sixth-largest U.S. drugmaker in terms of annual sales, behind Johnson & Johnson (Charts, Fortune 500), Pfizer (Charts, Fortune 500), Merck (Charts, Fortune 500), Abbott (Charts, Fortune 500) and Wyeth (Charts, Fortune 500).