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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: derekb.lowe@gmail.com Twitter: Dereklowe

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August 10, 2006

The Great Plavix Disaster

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Posted by Derek

I've been remiss in not covering the Plavix situation, which is quite a story. The huge-selling anticoagulant is marketed in the US by Bristol-Meyers Squibb and in the rest of the world by Sanofi-Aventis. It's been the target of the Canadian generic firm Apotex, who've maintained that key parts of its patent coverage are invalid. They won the right from the FDA back in January to sell their generic form - but keep in mind that the FDA is not concerned with patent law, only the drug's manufacturing standards and identity with the original version.

The company was in the middle of their patent suit with BMS and S-A, and were holding back to see how that would go. In March, though, a deal was cut: Apotex agreed to wait until 2011, the lifetime of the (unchallenged) patent, and in return they got paid by the larger firms and received a guarantee that they wouldn't be undercut until then.

Paying generic firms to go away is not unheard of, but companies can put themselves at risk when such deals are made too blatantly. This one fell apart, big-time, last month. Not only was it rejected by various state attorneys-general, but a criminal investigation was launched into the whole matter.

The ceiling tiles really began to rain down at that point. There was a clause in the agreement that if the deal didn't go through, Apotex could start selling its generic version with five days notice, and that's exactly what they've started doing as of earlier this week. The generic isn't all that much cheaper, but it's enough to torpedo the branded version.

What's more, it appears that BMS and Sanofi-Aventis limited their potential recourse. Under the usual rules, they'd be able to sue and obtain triple damages if they won, but they seem to have waived that right, along with several others. This would seem to be an indicator of just how much they wanted to keep the generic off the market, and how hard a bargain Apotex drove. It's enough to make you wonder if Apotex factored in, up front, the chance of the whole thing being rejected and decided to give their rivals enough rope with which to hang themselves.

Update: as pointed out in the comments, the CEO of Apotex is making it sound like that was exactly the plan. Perhaps he's laying it on a bit thick, but he's in a position to, isn't he?

Shares of both Bristol-Meyers Squibb and Sanofi-Aventis took a fine hammering, as you can well imagine, since Plavix represents about 30% of BMS's profits. (Here's a read-'em-and-weep chart). Apotex is privately held, which is a shame in a way, because it would have been something to see what the trading in their stock would have been like. Sanofi may try to obtain an injunction to stop the generic sales, but no one seems to think that it will be granted - partly because of all those Apotex-favoring terms that the companies agreed to originally.

It's difficult to see how this could have worked out more horribly for the two big companies here: their best-selling drug is under attack five years early, they've signed away their rights to do much about it, the analysts are downgrading their stock and the financial rating agencies are looking at lowering their credit ratings, and the criminal investigation is rolling right along. Short of a meteor strike or a plague of frogs, I'm not sure what else could go wrong. And the worst part is, they brought it on themselves. Their patent position should have been stronger in the first place to protect a compound of this importance, and they shouldn't have pushed the envelope so much with their go-away payments to Apotex. It didn't have to be this way. Did it?

Comments (36) + TrackBacks (0) | Category: Business and Markets | Cardiovascular Disease | Patents and IP | The Dark Side


COMMENTS

1. Kevin on August 10, 2006 9:16 PM writes...

Apotex was in fact thinking that this deal would not be approved; a few paragraphs into the NY Times story today we get this from Barry Sherman, Apotex's chief executice:

"Mr. Sherman, in a telephone interview, all but ridiculed his two big rivals, saying they had naïvely agreed to conditions that allowed his company to bring its product to market even though the deal was rejected by regulators.

“I think they acted foolishly in a number of ways,� said Mr. Sherman, a Toronto billionaire who amassed his fortune in the generic drug business.

Mr. Sherman said that he had never expected the American government to approve the deal, but that he had conducted the negotiations in a way to let him push the Apotex drug onto the market."

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2. Petros on August 11, 2006 2:06 AM writes...

It's been something of a surprise to me that no-one tried tackling Plavix sooner.

The original patent, which claimed the racemic form and explicityly both enantiomers of clopidogrel, expired in July 2003, while BMS and Sanofi have relied on the valiidty of a patent, US4,847,265, filed in July 1989 but valid until 2011, which only claims the marketed enantiomer.

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3. Bryan on August 11, 2006 4:59 AM writes...

In my view, this was a very elaborate and deliberate scheme by sanofi-aventis to drive down the stock price of BMS so that s-a can buy BMS. There's no other explanation as to why they would have had so many concessions to Apotex.

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4. tom bartlett on August 11, 2006 8:06 AM writes...

"Sanofi have relied on the valiidty of a patent, US4,847,265, filed in July 1989 but valid until 2011, which only claims the marketed enantiomer."

I think Knoll extended patent life on Verapimil that way, if memory serves..

Whatever works...

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5. david on August 11, 2006 8:53 AM writes...

I few observations:

1. The CEO of BMS is Peter Dolan, who hasn't made a major value-enhancing move for BMS since he became CEO six years ago. Why should he break his streak now?

2. BMS didn't want Plavix--it went with Avapro as part of its deal with s-a.

3. BMS has few other products in the pipeline, so when the dividend goes, so does the company, leading to the question: what's somebody buying if BMS is bought? Why would they buy it? That's been the enigma of BMS for some time. What exactly are the assets and do they indeed have any value? BMS has nice real estate (or did, before the sale), but not $40 billion worth.

4. S-a has a 4th gen antiplatelet compound in the clinic, I think. I doubt it cares that much about Plavix at this point.

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6. Derek Lowe on August 11, 2006 8:55 AM writes...

So let me get this straight, Bryan. . .you're saying that Sanofi-Aventis wants BMS? De gustibus non disputandum est.

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7. schinderhannes on August 11, 2006 9:30 AM writes...

Looking at clopidogrel something very different annoys me a lot more:
"The results of the Clopidogrel for High Atherothrombotic Risk &
Ischemic Stabilization, Management & Avoidance (CHARISMA) trial were
released at the Annual Scientific Session of the American College of
Cardiology in Atlanta, Ga. and published online in New England
Journal of Medicine March 12."

In this study it is shown that for the largest part of our population clopidogrel is not more effective than aspirin!
This had no effect on the stocks!
That is what bothers me, cause it shows how much more important the marketing power of pharma companies is compared to scientific insight!
It seems this study is of no threat to BMS as long as they can bribe doctors into perscribing their drugs by inviting them to "scientific education" events in Cancun!

@ Bryan This is certainly a severe blow for BMS (and SA) and might in fact open the opprtuity for SA to buy them (which has been a rumor for some time now), but I cannot imagine that SA might have done this on purpose...

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8. Still Scared of Dinosaurs on August 11, 2006 10:42 AM writes...

I know of a company that got bought out a few years ago. The buyer wanted to pay all cash, the seller wanted all stock, so they split about 50-50.
That was a deal good for both parties.
Anybody wanna say BMS is worth $40,000,000,000? Tell'em to put it up in CASH.
How about $30B cash or $50B stock in the buyer with the stipulation that it can't be sold for five years. Which one would you take?

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9. Still Scared of Dinosaurs on August 11, 2006 10:45 AM writes...

As the greatest band ever once sang:

I'm lookin' for
pound notes,
loose change,
bad checks,
anything.

Gimme some money!
Gimme some money!
Gimme some money!

Permalink to Comment

10. Insider on August 11, 2006 11:40 AM writes...

schinderhannes

You are on the money about CHARISMA.

And there's more:

A POEM published in the BMJ in May 2005 presented the results of a study comparing aspirin and PPI with Plavix. The study showed that while there were bleeding complications in the Plavix group there were none in the aspirin and PPI group.

Conclusion: In patients with significant GI history who need an antiplatelet for secondary prevention, consider using aspirin and omeprazole in combination instead of Plavix.

"The message is clear; that warfarin is superior to Plavix," said Stuart Connolly, the lead investigator and director of the cardiology division at McMaster University in Hamilton, Ontario at the last AHA meeting.

BMS had hoped to show that Plavix could be substituted for warfarin in atrial fibrillation patients as warfarin use requires extensive monitoring, a special diet and inconvenient lifestyle changes for patients due to a high risk of bleeding.

Rather than demonstrating that Plavix was just as good at stroke prevention in that patient population, however, the planned four-year study was stopped after about 17 months when safety monitors found a 47% increase in a range of adverse heart events (stroke, MI, embolism or death), including a 75% increase in stroke in the Plavix group.


It aint about the data.....it's about the Benjamins!

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11. peej on August 11, 2006 11:50 AM writes...

Just to clarify a few things-

1. Sanofi CERTAINLY cares about Plavix.. it is a huge revenue source, no other competition should hit the market for at least 18 months if not more, and it has no late stage antiplatelet in development.

2. CHARISMA showed Plavix and aspirin is no better than aspirin alone in a certain subset (stable) of patients, and the usage and stock did not go down because these patients were largely not ever treated with clopidogrel in the first place. The drug is quite useful in unstable patients, and always will be.

3. There are no scientific confernces in Cancun and no bribing of doctors. Any of those practices went out years and years ago, if they ever really did exist.

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12. Andrew Kitchin on August 11, 2006 1:05 PM writes...

I think BMS's next move should be to broadcast "We've Been Had" by the Walkmen on their intercom. As for the deliberate self-sabotage arguments, I don't know whether ANYONE is that tactless. Even if S-A do want to buy BMS, surely they've heard of subtlety?

I'm just an undergrad chemist, but I figured I'd mention that I enjoy this blog. It's a nice escape from the confines of physical chemistry. Thanks Derek.

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13. sciwriter on August 11, 2006 1:49 PM writes...

even before this plavix debacle, bms was in trouble-- between pravachol losing patent protection in april and a generally lackluster portfolio (outside of plavix and perhaps orencia), their second-quarter earnings were way down. i can't imagine they'd be a good acquisition target for sanofi--they do have some interesting oncology drugs in the pipeline, but come on-- the french taking on a business in jersey?

Permalink to Comment

14. sciwriter on August 11, 2006 1:52 PM writes...

and andrew, i think perhaps a more appropriate walkmen song for bms is "the rat," no?

Permalink to Comment

15. Bryan on August 11, 2006 3:16 PM writes...

Derek: Yes, sanofi wants BMS. Sanofi currently splits the profit of Plavix and Avapro. If the companies combine, no more splitting. There are also numerous synergies in Oncology and cardiovascular.

Permalink to Comment

16. sciwriter on August 11, 2006 4:16 PM writes...

if there are no longer any substantive profits from plavix, why would it be as attractive? sure, an interesting oncology synergy, but...

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17. Anonymous BMS Guy on August 11, 2006 5:09 PM writes...

I've been in Drug Discovery at BMS for over 8 years, and the timing of this is just horrible. After many years of various tribulations and scandals, our drug discovery machine had finally stabilized and become extremely productive -- but now all that is threatened.

If Peter Dolan were drowning in the East River, I doubt many of us would lift a finger to help him out.

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18. secret milkshake on August 11, 2006 6:14 PM writes...

you got some nice oncology compounds there in BMS - please don't be upset if you see other groups churning out a related stuff, and remember that plagiarism is the sincierest form of flattery

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19. bryan on August 11, 2006 6:55 PM writes...

and the french taking on a business in Jersey? sanofi-aventis US headquarters is in NJ (Bridgewater) AND they just moved to the old AT&T complex at 55 Corporate Drive. They also have approval to build 3 new buildings there, in addition to the 3 already there. Mark my words, Sanofi will make a play for BMS.

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20. curious on August 13, 2006 2:55 PM writes...

Peter Dolan? Wasn't he one of the Monkee's? There was Naismith (the one with talent), the cute little guy, the bad guy with a scragly beard and Peter Dolan, the goofy one.

So that's what happened to him.

Permalink to Comment

21. Another anonymous BMS researcher on August 13, 2006 6:44 PM writes...

If Peter Dolan were drowning in the East River, I doubt many of us would lift a finger to help him out.

Drowning in the East River? How about drawn, quartered and hung from the windows of his Park Ave office for the pigeons? "Clusterf*ck" doesn't even begin to describe this debacle.

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22. schinderhannes on August 14, 2006 2:10 AM writes...

@ peej

Your prespective of how useful colpidogrel is might be different to mine and that is fine...

But you comment on bribing is self-deception!

I now the business from the big pharma side and through friends and relatives from the MD side, and I can assure you even if us researchers are ashamed by it, this kind of bribing does still take place big time! (They use a different verb though).
All this personal experience is from Europe and you might argue that North America is different, but when I was in Cancun in November, there was a 3 day conf for Canadian doctors in the same hotel, I walked past their "conference" a dozen times and never saw anybody attending! (I bet those Canadian doctors hated to get out of the dark into the Mexican sun).....

It´s a sad fact but it still seems to be more profitable to spend money on "informing" doctors than to spend it on R&D.

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23. Kay on August 14, 2006 6:59 AM writes...

Dear Peej,

Baksheesh drives sales of many of the products in this industry because many of the products are undifferentiated from generics and because prescribers have been trained to expect it. It's one of the few remaining privileges of the license.

Kay

Permalink to Comment

24. Anonymous BMS Guy on August 19, 2006 7:04 AM writes...

There has been, as yet, nearly zero from up the food chain beyond what's been reported in the news media. The only actual fact that I have not seen in the news media is that BMS has obtained some Apotex product with an October 2007 expiration date, suggesting they were making it for some time. The in-house patent people that I know are just as stunned as everybody else about the waiver deal -- apparently very few of our senior management were privy to that.

The last couple of times BMS had layoffs a few years back, I learned about them from sources OUTSIDE the company days before I heard anything from inside -- it seems half of Bayer and Pfizer knew before WE did. That history does not give us a warm and fuzzy feeling about how honest top management will be in the current mess.

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25. Anonymous BMS Guy on August 19, 2006 1:38 PM writes...

An article in today's Wall Street Journal summariazes the current legal situation, describes several of Dolan's past blunders, speculates about who might acquire us, and ends by observing that "given his track record," we'd better not have Peter Dolan handle any merger negotiations!

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26. Craig on August 19, 2006 9:08 PM writes...

Generic or not this is the biggest scam in pharma history. It has never been proven to work in stroke!

Caprie trial subgroup negative in both MI and stroke, only PAD show positive results
Match trial negative
Charisma trial negative

It's sad to think doctors use this drug and patients THINK its giving them proven protection!

Permalink to Comment

27. Kay on August 22, 2006 4:03 PM writes...

Dear Craig,

Baksheesh drives sales of many of the products in this industry because many of the products are undifferentiated from generics/OTCs and because prescribers have been trained to expect it. It's one of the few remaining privileges of the license.

Kay

Permalink to Comment

28. Almost an employee... on August 24, 2006 8:19 PM writes...

I just had my final interview today and was told that I got the job! I then was that due to the Plavix disaster the position I won is now not going to be filled. I have been interviewing for this goddamn position for two months! The final kick in the ass was that I got a call from Sanofi-Aventis on Tuesday that they are interested in setting up a first interview. I can't win.

Permalink to Comment

29. Anonymous BMS Guy on August 30, 2006 8:58 PM writes...

Another anonymous BMS researcher wrote:

> How about drawn, quartered and hung from the
> windows of his Park Ave office for the pigeons?

At a meeting today I quoted the above remark to an Associate Director in my part of Drug Discovery. This Associate Director said he thought this too cruel -- we might get in trouble with the SPCA for poisoning the pigeons. The silence from our top management is deafening this week.

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30. aaron on January 17, 2007 1:35 PM writes...

anonymous bms guy. how many of your relatives have tested plavix, knowing that you would tell them it's safe to take. my 82 year old mother was given this quack drug and bled for 3 days and she has no heart or stroke problems. her doctor gave it to her supposedly for atril fibrillation. yea right. our attorneys will atril yalls fibrillation. We need 1.5 billion dollars from you, your company and whomever else at your company that can spell plavix you fuckers.

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31. G. Coop on October 4, 2007 11:07 AM writes...

America has become lost in the name of Profit and Greed when we don't put the welfare of the average man or women who labors to provide most of the countries standard of living. De-regulation banking started it all, then there is what followed. Heating fuel for homes and business, water supply cost, and electric for personal use. Then, the gas pump high cost per gallon. Next, All Business wanting the same take of a bigger piece of the pie of Greed. They would tell each other at their Golf Clubs take why the taking good noone is watching this individuals are worse then any person during a black out and reit breaken a window and walking in and taking anything they could grap hen running home with the merchandise, what you can take from the market regardless of the ethics or moral issues that once drove america's dreams take it and take it now. Next, Housing market went crazy with a good concept helping all Americans, lower to lower middle class families, but with total deception. Three one buy down but, the housing industry raised all the prices if the homes to fraud levels because they wouldn't be able to keep up with the demand or they seen the wave of money coming their way if they raised all the prices to unbelieveable prices. So the marked up the house 40 % higher or higher on all homes being built most families lost there homes not because they couldn' pay but because the house pricing scam which mean the true cost of the house and property taxes. If you build a house for $40,000 and you sell it for $160,000 then who really cheated who and they got to control the whole process? Who was watching the legal store of ethics the companies making the super large profit, the goverment looking for a guy with a grey/black beard, and fill in the blank _______?
Maybe would should let car dealership approve everyone for a new care, but before we do that raise the prive of that car from 40,000 to 100,000 follow the money, who gets rich. The care dealership, the bank, the car buyer, car maker, or the used car salemen that gets all the repo's. If you can find the answer to that question you have the answer to all the above. Have a super day. I lost five jobs in the apartment business, lost a new M/I home, my kids have been arrest because of new car laws and drinking laws, and I had a heart attack with bad health insurance, then I lost that job and now I have no health insurance to get the rest of my surgeries. The average man working man is being slowly killed off by the richiest and wealthies indivduals who have lost focus on takening care of the ones who pay for it all. The average man or women of their families. May God help us all!

Permalink to Comment

32. Arthur on June 24, 2008 11:13 AM writes...

I now pay $145.00 more than Clopedrigel which I was perscribed.
What about us that overpay each month becaus the Drug Commmpanies bribed one another? I can barely afford my scrip now.

Permalink to Comment

33. Arthur on June 24, 2008 11:14 AM writes...

I now pay $145.00 more than Clopedrigel which I was perscribed.
What about us that overpay each month becaus the Drug Commmpanies bribed one another? I can barely afford my scrip now.

Permalink to Comment

34. Alex on April 28, 2009 1:58 PM writes...

I have recently had a stent installed. The doctor didn't tell me I would be paying so much ($165.00) out of pocket forever or until 2011. Does all the data really support giving this drug out with the premise that if you don't take it you will surely die. I can't afford it. I have completely changed my life style. Low to no fats, no salt,no alcohol,no smoking. The only meats are turkey breast and fish and a whole lot of fruits and vegetables. Am I committing suicide by no taking this?

Permalink to Comment

35. neostent on April 22, 2010 8:51 PM writes...

Thanks for this enlightening dialogue... but why has the discussion ended... No comments from educated professionals in months... is there a happy ending which I am not privy to? Or has some unseen hand silenced all those who challenge the plavix paragigm? more or better "informing" no doubt. I just bought my first prescription... and immediately smelled another bad smell in pharmville. Keep us posted!

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36. Michael on July 25, 2012 5:17 PM writes...

My doctor said I had to take 80mg Plavix for the rest of my life. I'm 39 and had one stent placed in my leg last year. After two weeks on Plavix I became very depressed, lathargic, and belicose. I have never felt any of those symptoms ever before in my life until the Plavix. Also, I began to bruise badly on my arms and my urine was unusually dark. My doctor tells me the bruising is normal and pretty much dismissed all the other symptoms I had execpt for the depression. He had me start taking Prozac for depression. I took him up on that and started with the Prozac. It made me feel even worse. The depression was magnifyed, I gained weight, couldn't sleep and had deep thoughts of suicide. Now I was having problems with work, my relationship with my wife of five years was slipping, and I was dipping into the darkest pit of depression. I was very frank with my doctor upon the next visit with him. He pretty much poo-pooed the whole thing saying Prozac is a "beautiful" med and it "will" help me given time. And that I must never stop taking the Plavix or I may die of a heart attack or stroke. I told him flat out that the treatment is over and I left his office. I never returned. I found myself a new doctor who's very open minded (a rarity in the med community) and she got me off the Plavix and Prozac. I now take a daily low dose aspirin which is doing a fine job. I'm no longer depressed, tired or brusing anymore. Some doctors can be such arrogant, uncaring ass*****. Always shop around and get a second or even a third opinion. There are good doctors out there, just be VERY choosy and you'll find a good one.

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