Plavix Ruling is Good News for Innovator Drug Companies

The value of shares in Sanofi-Aventis and Bristol-Myers Squibb (collectively, Plaintiffs) rose after a US District Court Judge issued a preliminary injunction against Canadian manufacturer Apotex, ruling that it must cease selling its generic version of blood thinner Plavix (clopidogrel bisulphate) until trial, which is expected to take place in January 2007. With $5.9 billion of sales in 2005, Plavix is currently the second best selling drug in the world. Recently, US regulators rejected a three-way patent settlement agreement between Apotex and the Plaintiffs, which would have seen Apotex delay market entry of its clopidogrel product until 2011, in exchange for a minimum payment from the patent holders of $40 million. That move left the legality of patent settlement agreements in doubt. Despite appellate decisions that have held that such agreements are not anti-competitive, the Federal Trade Commission has continued to question their legality on the grounds that they substantially increase drug costs. (See E-TIPS®, "Questions Remain Over the Legality of Patent Settlement Agreements", Vol 5, No 5, August 30, 2006.) In making his decision that Apotex must cease sales of its generic product, District Judge Sidney Stein rejected Apotex's argument that it should be allowed to continue to sell because it will eventually be able to prove that the Plavix patent is invalid. However, Judge Stein did not order Apotex to recall any of the product it has already sold since August 8, 2006 (which, reportedly, quickly captured 85% of the market) and the Plaintiffs were required to post a $400 million bond as security against a possible adverse result at trial. Apotex stated that it will appeal the ruling and seek an emergency injunction that will allow it to continue to sell its generic product. For the full text of relevant news articles, see: http://makeashorterlink.com/?C53A21FBD Summary by: Heather Watts