By early 2006, New York-based Bristol-Myers and France's Sanofi - which has an R&D facility in Malvern - then called Sanofi-Aventis, reached an out-of-court settlement to pay Apotex at least $40 million to delay selling generic Plavix until at least 2011, when the primary patent for Plavix was to expire.
Federal authorities caught wind of the deal and started a criminal antitrust probe. In August 2006, Bristol-Myers disclosed that FBI agents had raided its headquarters and confiscated documents and that the company, some senior executives, and Sanofi-Aventis all had been served grand jury subpoenas to produce additional documents.
With the deal among the companies unraveling, Apotex did what's called an "at-risk launch" of a copycat version of Plavix, called clopidogrel. Distributors quickly stocked large amounts of the generic pills, which cost nearly 20 percent less than the brand-name ones.
After a few weeks, Bristol-Myers and Sanofi-Aventis won an injunction in September 2006 blocking further sales of the generic version. But the federal judge granting the injunction refused to require Apotex to take back all the generic pills distributors had, costing Bristol and Sanofi significant revenue.
In September 2006, Bristol's board forced out CEO Peter Dolan. Chris Christie, then-U.S. attorney for New Jersey and now governor, had spent three years earlier in the decade investigating a $2.5 billion scandal at Bristol-Myers over "channel-stuffing," or overloading wholesalers with inventory to meet quarterly sales targets.
That probe ended with a deferred prosecution agreement under which Bristol-Myers was supposed to stay out of trouble for two years to avoid an indictment. Bristol's deal with Apotex to delay generic Plavix violated that agreement. Bristol later pleaded guilty to making false statements regarding the settlement with Apotex.
Meanwhile, the Plavix patent fight continued, with the federal judge ruling in 2007 that the patent was valid. Apotex challenged that, but the U.S. Court of Appeals for the Federal Circuit upheld the patent's validity in December 2008. The case dragged on until October 2011, when the same appeals court upheld the payment of damages just made by Apotex.
