By early 2006, Bristol-Myers and France's Sanofi, 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. That's 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 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. Apotex unsuccessfully fought the injunction in hopes of later reintroducing its generic Plavix.
In September 2006, Bristol's board forced out CEO Peter Dolan at the recommendation of a monitor, former federal judge Frederick Lacey, and then-U.S. Attorney for New Jersey Chris Christie, who had appointed Lacey. Christie, now New Jersey's 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 to the Federal Trade Commission regarding the settlement with Apotex and paid a $1 million fine to resolve the Justice Department probe.
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.
Along the way, Bristol-Myers won a six-month extension on the patent's U.S. term by doing tests of Plavix in children. That blocked generic sales of Plavix here until May 2012.
Bristol-Myers and Sanofi reported a total of about $9.8 billion in Plavix sales in 2011. The drug already has generic competition in much of the European Union, where Sanofi sells it.
Both companies, and most of the other top pharmaceutical companies, face "patent cliffs," periods where new generic rivals will quickly eat into sales of their aging blockbusters, resulting in overall revenue declining or holding flat at best. Drugmakers have been working hard to develop new drugs and slash costs in an effort to return to revenue growth and boost profits in the future.