Bristol-Myers Squibb Company

UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580
Office of the Secretary
PUBLIC RECORD VERSION
May 24, 2004
Mr. Richard J. Stark, Esq.
Cravath, Swaine & Moore LLP
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019-7475
Re: 	In the Matter of Bristol-Myers Squibb Company, Docket No. C-4076
Dear Mr. Stark:
On April 12, 2004, Bristol-Myers Squibb Company (“BMS”), pursuant to the
requirement of the second proviso to Paragraph XII of the above-referenced order (“Order”) that
it obtain from the Commission an advisory opinion related to specified settlements, submitted its
proposed agreement with Teva Pharmaceuticals USA, Inc. (“Teva”) to settle their litigation over
the validity of BMS’s patent for the drug Carboplatin. Specifically, as relevant to the proposed
settlement, Paragraph XII and its proviso prohibits BMS from:
. . . being a party to any Agreement resolving or settling a Patent Infringement Claim in
which:
A. 	An ANDA Filer receives anything of value; and
B. 	The ANDA Filer agrees not to research, develop, manufacture, market, or
sell, the ANDA Product for any period of time.
PROVIDED, HOWEVER, that nothing in this Paragraph XII shall prohibit:
. . .
(2) 	Respondent BMS from resolving or settling a Patent Infringement
Claim after the Commission, in response to a request by
Respondent BMS for an advisory opinion . . . determines that the
settlement Agreement would not raise issues under Section 5 of the
Federal Trade Commission Act.

In the Matter of Bristol-Myers Squibb Company, Docket No. C-4076
Advisory Opinion of the Commission (Public Record Version) 	Page 2
1 Memorandum Opinion and Order, Bristol-Myers Squibb Company and Research
Corporation Technologies, Inc. v. Pharmachemie, B.V., C.A. No. 01-3751 (MLC) (D.N.J. July
29, 2002).
2 Decision, Bristol-Myers Squibb Company and Research Corporation
Technologies, Inc. v. Pharmachemie B.V., Appeal No. 03-1077 (Fed. Cir. Mar. 17, 2004).
3 See NDA 20-452 (ready to use forms); NDA 19-880 (lyophilized (freeze-dried
forms)).
This Order provision arose from BMS conduct that included an agreement to settle
certain patent litigation by paying the alleged infringer millions of dollars for the alleged purpose
of eliminating competition from a generic drug. Paragraph XII of the Order therefore bars,
unless an applicable proviso applies, such payments to an ANDA filer in exchange for an
agreement not to market its product for some period of time.
According to BMS, the proposed settlement with Teva that is the subject of this request
for an advisory opinion will be entered into to resolve an ANDA patent litigation concerning the
drug Carboplatin and U.S. Patent No. 4,657,927 (the “‘927 patent”), 1 in which the U.S. Court of
Appeals for the Federal Circuit vacated and remanded a district court determination on summary
judgement that the ‘927 patent was not invalid. 2 BMS has filed a motion for a rehearing en banc.
BMS has also informed the Commission that, although the ‘927 patent expired on April 14,
2004, the dispute with Teva is not moot, because BMS has filed with the Food and Drug
Administration (“FDA”) for pediatric exclusivity, which, if granted, would result in an additional
six months of exclusivity (“exclusivity period’) for BMS. No company therefore could enter the
Carboplatin for Injection market prior to the expiration of the exclusivity period, i.e., until
October 14, 2004. The parties are, however, uncertain whether a final determination that the
‘927 patent is invalid would affect the exclusivity period, and that uncertainty has led the parties
to reach the proposed settlement.
The terms as proposed provide that BMS and Teva agree to dismiss the litigation and that
as of June 24, 2004, BMS will appoint, and qualify under BMS’s NDAs, Teva (or its designee)
as a distributor of Carboplatin for Injection. 3 Morever, Teva has the option to purchase
[redacted] its requirements of BMS’s NDA drugs from June 24, 2004, until [redacted], in
exchange for sharing its profits with BMS. Finally, upon expiration of the exclusivity period, on
October 14, 2004, Teva may begin to sell its ANDA drugs and cease to purchase the BMS NDA
drugs.
Unlike the settlement that led to entry of the Order, in which BMS allegedly paid the
generic challenger to defer entry beyond the date that would represent an otherwise reasonable

In the Matter of Bristol-Myers Squibb Company, Docket No. C-4076
Advisory Opinion of the Commission (Public Record Version) 	Page 3
4 See also Opinion of the Commission, In the Matter of Schering-Plough
Corporation et al., Docket No. 9297
litigation compromise,4 this settlement does not involve a payment to Teva in exchange for
Teva’s agreement not to enter the market. Thus, we presume that the entry date, three months
prior to the expiration of the exclusivity period, reflects a reasonable assessment of BMS’s and
Teva’s respective litigation positions.
The settlement agreement provides no mechanism for BMS to share supracompetitive
profits with Teva. Teva earns profits only by competing. Because Teva’s payments to BMS
likely will reduce Teva’s profits, Teva will have the incentive to bring its ANDA drug products
to the market as soon as possible after the exclusivity period. Importantly, the settlement
agreement does not prevent Teva from marketing its own product under its ANDA at any time
after October 14, 2004. Even while selling BMS’s products, Teva retains the ability and
incentive to price independently.
The Commission therefore has determined that the proposed agreement between BMS
and Teva to settle the aforementioned litigation concerning the drug Carboplatin and the ‘927
patent does not raise issues under Section 5 of the Federal Trade Commission Act, and
accordingly, BMS may enter the proposed settlement.
By direction of the Commission.
Donald S. Clark
Secretary
SEAL: