In the Spotlight

A settlement in principle has been reached between the FTC and giant drug manufacturer Bristol-Myers Squibb Company (whose total domestic net sales last year exceeded $13 billion). On March 7, 2003, the FTC announced the settlement. It resolves allegations filed by the FTC (In the Matter of Bristol-Myers Squibb Company) that the company violated federal antitrust laws and abused FDA's regulatory process in preventing generic drug manufacturers from competing against three of its widely prescribed products ' Taxol ' (paclitaxel) and Platinol (anti-cancer drugs), and BuSpar' (an anti-anxiety drug). The result of Bristol-Myers' conduct, according to the government, was that consumers were forced to pay hundreds of millions more than they needed to had generic products been available.

In announcing the settlement, FTC Chairman Timothy J. Muris remarked that '[t]his case, and others we have brought and will bring, stands for an important proposition: competition must be on the merits, not through misusing the government to stifle your competition.' Joe Simons, Director of the FTC's Bureau of Competition, summarized the wrongful conduct as follows:

'Through Bristol's decade-long pattern of alleged anticompetitive acts, [it] avoided competition by abusing federal regulations ' to block generic entry; deceived the U.S. Patent and Trademark Office (PTO) to obtain unwarranted patent protection; paid a would-be generic rival over $70 million not to bring any competing products to market; and filed baseless patent infringement lawsuits to deter entry by generics.'

For a more thorough analysis of this developing area of health care fraud, see Michael E. Clark, Steering a Course Between Antitrust and Patent Laws: Generic Drugs and Patent Fraud, 5 Health Care Fraud & Abuse News l. 3 (Nov. 2002) ('[H]ealth care fraud can take on various forms if the financial incentives are large enough to motivate parties to take advantage of apparent vulnerabilities in the various complex statutes and regulations in which the industry operates.').

As part of the settlement, Bristol-Myers will be subject to a 10-year consent order (if approved by the Commission after a public comments period ends on April 7, 2003) that limits its ability to file patents on existing products (but not to sue for patent infringement).

An FTC press release and related documents are posted at www.ftc.gov/opa/2003/03/bms.htm; a press release from Bristol-Myers is available at www.bms.com/news/press/data/fg_press_release_3433.html

A settlement in principle has been reached between the FTC and giant drug manufacturer Bristol-Myers Squibb Company (whose total domestic net sales last year exceeded $13 billion). On March 7, 2003, the FTC announced the settlement. It resolves allegations filed by the FTC (In the Matter of Bristol-Myers Squibb Company) that the company violated federal antitrust laws and abused FDA's regulatory process in preventing generic drug manufacturers from competing against three of its widely prescribed products ' Taxol ' (paclitaxel) and Platinol (anti-cancer drugs), and BuSpar' (an anti-anxiety drug). The result of Bristol-Myers' conduct, according to the government, was that consumers were forced to pay hundreds of millions more than they needed to had generic products been available.

In announcing the settlement, FTC Chairman Timothy J. Muris remarked that '[t]his case, and others we have brought and will bring, stands for an important proposition: competition must be on the merits, not through misusing the government to stifle your competition.' Joe Simons, Director of the FTC's Bureau of Competition, summarized the wrongful conduct as follows:

'Through Bristol's decade-long pattern of alleged anticompetitive acts, [it] avoided competition by abusing federal regulations ' to block generic entry; deceived the U.S. Patent and Trademark Office (PTO) to obtain unwarranted patent protection; paid a would-be generic rival over $70 million not to bring any competing products to market; and filed baseless patent infringement lawsuits to deter entry by generics.'

For a more thorough analysis of this developing area of health care fraud, see Michael E. Clark, Steering a Course Between Antitrust and Patent Laws: Generic Drugs and Patent Fraud, 5 Health Care Fraud & Abuse News l. 3 (Nov. 2002) ('[H]ealth care fraud can take on various forms if the financial incentives are large enough to motivate parties to take advantage of apparent vulnerabilities in the various complex statutes and regulations in which the industry operates.').

As part of the settlement, Bristol-Myers will be subject to a 10-year consent order (if approved by the Commission after a public comments period ends on April 7, 2003) that limits its ability to file patents on existing products (but not to sue for patent infringement).

An FTC press release and related documents are posted at www.ftc.gov/opa/2003/03/bms.htm; a press release from Bristol-Myers is available at www.bms.com/news/press/data/fg_press_release_3433.html