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September 4, 2006
Plavix Plot Twists
The mighty Plavix battle has taken another unexpected twist. In the last installment, Canadian generic company Apotex had snookered (a completely accurate description) Bristol-Meyers Squibb and Sanofi/Aventis into an ill-advised agreement that ended up destroying the drug's patent protection. Apotex had begun gleefully shipping their generic, while the two larger companies sought relief in court from what appears to have been largely a problem of their own making.
To my surprise, that relief has been granted. Last week, a judge issued an injunction against further sales by Apotex in the U.S. until the patent infringement trial is completed. That's not even going to begin until early next year, and you can be sure that BMS and S-A are going to drag it out as much as possible. No legal bills can compare with the hit they've taken over generic Plavix. Sanofi-Aventis, for example, has lowered its profit forecast to a 2% increase over last year, instead of 12%, claiming that Apotex has clogged up all the distribution channels with their generic. I'm a little sceptical of the size of that effect - it's not unheard of for companies to unload other types of bad news under a convenient banner, given the chance - but there's no doubt that it's been a nasty experience.
Apotex may have just had its moment of glory, at least as far as Plavix is concerned. I'm sure that they made money during this adventure, so if they were going to lose the patent case anyway, they're still ahead. No doubt they'd have been even happier to go on selling it, but they'll take what they can get.
Meanwhile, the Federal Trade Commission is making threatening noises about investigating other pay-the-generic-to-go-away deals. The courts have ruled that such deals are legal if they don't push past the patent expiration of the drug, so I'm not sure what the FTC is going to be able to do. But they're clearly unhappy about the situation. For my part, I'd as soon see the generic companies go ahead and challenge the patent-holding ones, as long as the decisions are made in a competent legal venue. By which I mean, not like the one that upheld Ariad's patent. Keeping everyone on their toes is a good thing, as long as it's done fairly.
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