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What Does Watson CEO Paul Bisaro Know and Why Won't He Tell the FTC?

A federal judge has ruled that Watson Pharmaceuticals (WPI) CEO Paul Bisaro must sit for an FTC deposition about his pay-for-delay dealings with Cephalon (CEPH), ending his long, conspicuous silence on the matter.
The backstory is complicated: In essence, the FTC wants to find out whether Cephalon has paid Watson not to launch a generic version of its sleep disorder drug Provigil. The FTC believes such "reverse payments," which are common in the drug industry, are anti-competitive because they delay the entry of new, cheap versions of popular drugs, thus harming patients by keeping drug prices high.

Although Watson's lawyers have repeatedly said there is no deal with Cephalon, and although the judge previously said there was a "strong possibility" that the FTC abused its power in its pursuit of Bisaro (and although I clearly guessed wrong on this issue), Bisaro must now journey to a mutually acceptable conference room and answer a bunch of annoying questions from the feds.

When he does so, it will end Big Pharma's current favorite guessing game: What does Bisaro know about Provigil and why won't he tell anyone?

So here are the as-yet unanswered questions that Bisaro will likely face as the FTC attempts to unravel the central mystery in all this: Even though Watson's lawyers have said several times in sworn statements there is no deal with Cephalon, for some reason Bisaro himself has kept completely silent on the matter. Why?!

  • Watson and four other companies challenged the Provigil patent and signed an agreement with Cephalon in 2006 allowing them to introduce a generic version at a later date. But in 2007, Cephalon filed a new patent for Provigil and Watson was the only company to challenge it in time to win a period of marketing exclusivity for a generic version. How did Watson beat everyone else to the second Provigil patent?
  • Watson has said it has no deal with Cephalon regarding the second patent. What is Bisaro's understanding of the way Watson's challenge to the second patent intersects with the 2007 agreements?
  • The COO of another generic drug company, Apotex's Jack Kay, tried to speak Bisaro directly about jointly marketing a generic version of Provigil based on the second patent matter, but Bisaro refused. Why?
  • Bisaro received an email written by Apotex's Kay that described why he and the FTC were so puzzled by Bisaro's silence: "The reason for silence truly evades us and the FTC." Why didn't Bisaro respond to that email?
  • Watson's lawyers have sworn there is no deal, but Bisaro himself has made no personal statement on the matter. Why not just come out and say on the record that Watson has no deal with Cephalon?
  • Does Bisaro have any unwritten, oral agreement with Cephalon that Watson's lawyers do not yet know about?
Don't hold your breath waiting for the moment when Bisaro is asked if he'd like a glass of water before he begins testifying. Watson's allegations that the FTC tried to force it to deal with Apotex in order to prove it had no exclusive agreement with Cephalon, and the judge's reversal of his position on that, are so unusual they provide fertile grounds for a Watson appeal.

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Image by Flickr user haz photos, CC.
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