Bristol-Myers CEO MUST be crying like a baby now!
Peter Dolan, CEO of embattled BMS, who just got his office searched by the FBI, MUST be crying like a baby right now. Not because of the FBI raid, but because of what happened because of the deal he made that resulted in the FBI raid.
I first wrote about this story in How a small generic drug maker tricked the big guys into a deal that may land the big guys in jail.
BMS agreed to give the generic drug maker Apotex five days on the market before they would seek a preliminary injunction to stop Apotex, giving Apotex time it has used to flood drugstores with its version of Plavix.
In March this year, the parties announced a deal in which Bristol-Myers and Sanofi would pay Apotex a minimum of $40 million and give the company the right to sell generic Plavix months before their patent was set to expire in 2011.
Apotex said it was because they never believed the deal would be approved that they insisted on concessions if it was not.
Their main goal was to reduce the sizable risk that generic companies typically face when they sell at risk; the threat of triple damages, based on three times a generic drug’s sales.
Bristol-Myers and Sanofi negotiated away most of that threat, agreeing to limit damages to 50 percent of Apotex’s sales if their agreement was rejected. "
Read that line again!
You saw the right words. There is NO DOWNSIDE to Apotex to launch their generic, which of course they just did. And there is no wonder the analysts are calling for Mr. Dolan's head.
But it gets worse. For Mr. Dolan.
According to Reuters, "the latest sales data show that 78 percent of all new prescriptions filled for the blood clot medicine -- whose chemical name is clopidogrel -- on Aug. 18 were for the Apotex generic."
BMS sales have been virtually wiped out in just a few days!
"In terms of the number of total prescriptions written for the medicine -- which includes refills of old prescriptions and filling of new prescriptions -- the Apotex drug claimed a 65 percent share, with Plavix accounting for 35 percent. Hausman said the data were provided by IMS Health, which tracks prescription trends."
"the shelf life of the drug is "at least two years," so distributors and drugstores could be able to sell the cheaper generic for an extended period even if Bristol-Myers wins an injunction against future Apotex shipments to distributors."
Surely Mr. Dolan MUST be crying.