BMS's Bodnar Caught in His Own Lies on Apotex-Plavix Deal
Former Bristol-Myers Squibb svp/strategy Andrew Bodnar faces a year in prison after he pled guilty to lying to the FTC about BMS's generic deal with Apotex.
The conviction carries a lesson for senior drug company executives hoping to put one over on the government: If you're going to lie to the feds, make sure that everybody tells the same lie.
BMS and Apotex employees can download the "superceding information" document here. It describes exactly how Bodnar screwed himself into this mess. Here's what happened:
In 2006, BMS tried to negotiate a deal for generic Plavix with Apotex, which was threatening to bring a cheap version of BMS's thus-far exclusive blood-thinner to market.
The first deal BMS struck, which Bodnar negotiated, included an agreement in which Apotex would get a license from BMS to make Plavix, and in return BMS would not launch its own generic competitor for six months.
The FTC didn't like that deal, because it felt that the restriction on BMS competing against Apotex was an antitrust issue. The parties had to renegotiate.
So Bodnar went back to Apotex. As the feds describe it:
... the parties discussed that the FTC would not approve a Revised Plavix Agreement that contained a written term committing BMS not to launch an authorized generic. However, during the meeting on May 12, DEFENDANT made representations to Apotex to reassure it that BMS would not launch an authorized generic version of Plavix during Apotex's period of exclusivity in the event that the parties reached a Revised Plavix Agreement.So BMS and Apotex made a written agreement that had no clause about BMS not competing, even though they had an oral agreement that BMS would not compete.
It all went belly-up for Bodnar when BMS and Apotex submitted slightly different versions of their agreement to the FTC for approval. The feds:
BMS ... did not disclose any of the representations made by DEFENDANT regarding the launch of an authorized generic that occurred during the meeting on May 12.D'oh! So the FTC gave Bodnar another chance to clear it up, asking him for a written certification from BMS that it had not reached an agreement not to compete with a generic. Here's what he did:Apotex submitted the Revised Plavix Agreement to the FTC as required ... together with a letter disclosing certain alleged oral agreements reached between Apotex and BMS relating to the Revised Plavix Agreement. In its letter, Apotex alleged that it had reached an oral agreement with BMS whereby BMS agreed that it would not launch an authorized generic version of Plavix during the license period ...
... the DEFENDANT knowingly signed a written certification dated June 12, 2006, in his capacity as Senior Vice President of BMS that stated that no representations had been made to Apotex that BMS would not launch an authorized generic version of Plavix during Apotex's period of exclusivity ...With Apotex's written statement in one hand and Bodnar's contradictory statement in the other, the feds reached for the nearest grand jury, and the rest is history.