So where does lying to the Federal Trade Commission (FTC) get you? For the former vice president of Strategy and Medical and External Affairs of Bristol-Myers Squibb Company (BMS), Dr. Andrew G. Bodnar, it gets you a book deal, or at least a request by the Judge to spend the two years of his probation sentence writing a book. According to the New York Times, Judge Urbina of the United States District Court for the District of Columbia ordered Dr. Bodnar to pen a book cautioning other pharmaceutical executives not to lie to the FTC. Court documents show that on June 8, 2009 Dr. Bodnar was sentenced to two years of unsupervised probation and pay a fine of $5,000. All of this arose out of a secret deal allegedly negotiated between BMS and a generic competitor, Apotex, Inc. Dr. Bodnar brokered the deal, but then lied to the FTC to conceal parts of the agreement.
In 2006, BMS entered into a settlement with Apotex, Inc. resolving a patent infringement lawsuit involving the drug Plavix. (Plavix is a blockbuster prescription medication used to prevent blood clots in people who have suffered a heart attack or stroke. In 2008, BMS made $4.9 billion selling Plavix in the U.S. alone.) A 2003 consent order required BMS to submit any agreement resolving a patent infringement lawsuit to the FTC for an advisory opinion on whether it was anti-competitive. In March 2006, pursuant to the 2003 consent order, BMS submitted an initial agreement with Apotex to the FTC. This March 2006 agreement included a provision in which BMS agreed to refrain from introducing an authorized generic version of Plavix for six months thereby allowing Apotex, Inc. to exclusively sell the generic version. The FTC thought this agreement looked a little suspicious and questioned BMS. BMS sidestepped the FTC’s concerns and retracted the agreement.
However, BMS was not giving up that easily. In May 2006, Dr. Bodnar entered into further negotiations with Apotex, Inc. in which he orally assured Apotex that BMS would not bring an authorized generic to the market for six months. On May 30, 2006, BMS submitted a Revised Plavix Agreement to the FTC pursuant to the 2003 consent order and reporting requirements of the Medicare Modernization Act (MMA). BMS’ Revised Plavix Agreement did not include any reference to BMS refraining from bringing an authorized generic to market for six months. A few days later, on June 5, 2006, Apotex filed their copy of the same agreement with the FTC, but also included a letter disclosing the oral agreements not to compete made with Dr. Bodnar. The FTC did not buy into BMS’ strategy. Due to the suspicious inconsistencies of the two filings, the FTC requested BMS to certify under oath that the Revised Plavix Agreement BMS filed was the complete and final agreement representing the understandings of both parties. On June 12, 2006 Dr. Bodnar certified to the FTC that the terms of the Revised Plavix Agreement were representative of the totalities of the agreement with Apotex. Still unsatisfied with BMS’ promises, the FTC notified the Department of Justice (DOJ) which conducted an investigation. The DOJ’s investigations and charges led to BMS entering a guilty plea to two counts of perjury for failing to disclose that it made assurances to Apotex not to launch an authorized generic for six months. BMS paid $1 million in criminal fines and $2.1 million in civil penalties as a result of all charges against them.
Subsequently, the U.S. filed criminal proceedings against Dr. Bodnar for his part in making false statements to the FTC. On April 6, 2009, Dr. Bodnar entered into a plea agreement with the government where he agreed to plead guilty to making false certificates or writings. With the guilty plea, Dr. Bodnar faced up to a maximum of one year in prison and a $100,000 fine. However, in a June 8, 2009 sentencing, Dr. Bodnar was relieved to find out that he would not be going to jail, but would instead face two years of unsupervised probation possibly writing a book about his experience with lying to the FTC.
Drug companies and their executives cannot continue to receive a mere slap on the wrist when they enter into settlement agreements that diminish the availability of generic drugs. Last year brand-name prescription drug prices rose by an unprecedented 8.7% in part due to deals delaying the availability of some generic drugs. Consumers are left with mounting drug costs while drug companies continue to negotiate these deals. Adding to the problem is the fact that these agreements are submitted to the FTC, but are not publicly available. Advocates working to illuminate shady pharmaceutical company tactics can often only guess at the jaw-dropping price of the payments made and the length of market delay included in this type of agreement. Likewise the FTC may not have caught on to BMS’ devious plans to conceal parts of the agreement if they were not under the 2003 consent decree to file agreements. Since 2005, drug companies have resorted to more and more of these settlements, which pass the costs onto consumers who, deprived of the option to purchase a generic, must pay for a costly brand name drug.
Getting back to Dr. Bodnar, we hope his book (if he actually writes it) and this unusual sentence will send a message to other pharmaceutical executives that the feds are not messing around.