Price Erosion Likely Even If Plavix Stay Granted

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun

NEW YORK — An economics professor at the Massachusetts Institute of Technology testified Monday that there will be “significant price erosion” in the drug Plavix, even if a federal judge grants a request to stop a Canadian company from marketing a less expensive, generic version of the blood-thinner.

Testifying at a hearing in federal court in Manhattan, Jerry Hausman, who has taught at MIT since 1973, said that drug makers Bristol-Myers Squibb Co. (BMY) and Sanofi-Aventis (SNY) may be forced to offer rebates to keep name-brand Plavix from being assigned to a higher-pricing tier for co-pays at third-party payment providers, which administer drug plans for health insurers. Drug makers’ profit margins would decline as a result.

It’s also likely that the third-party providers are stockpiling supplies of the generic, so they could have as much as a year’s supply of the drug on hand by the time an injunction is issued, said Mr. Hausman, testifying as an expert witness for Bristol-Myers and Sanofi-Aventis. As a result, Mr. Hausman said, the third-party providers won’t feel immediate pressure to return to a more favorable price for the drug makers and may insist that they keep a rebate in place, even though there’s no generic competition.

Bristol-Myers and Sanofi have asked U.S. District Judge Sidney H. Stein in Manhattan to issue a preliminary injunction to stop Apotex Inc. from selling a generic version of the drug.

Apotex launched a generic version of Plavix last week, renewing a 4-year-old patent fight over the drug. The companies had reached a deal earlier this year under which Apotex would delay launching a generic version of Plavix until 2011, when Sanofi’s key U.S. patent expires.

However, the proposed settlement was rejected by state antitrust regulators. Last month, the U.S. Department of Justice launched a criminal investigation into the proposed settlement.


The New York Sun

© 2025 The New York Sun Company, LLC. All rights reserved.

Use of this site constitutes acceptance of our Terms of Use and Privacy Policy. The material on this site is protected by copyright law and may not be reproduced, distributed, transmitted, cached or otherwise used.

The New York Sun

Sign in or  create a free account

or
By continuing you agree to our Privacy Policy and Terms of Use