This year, Peter R. Dolan, the chief executive officer of Bristol-Myers Squibb Co. (BMS), was faced with the threat of generic competition for Plavix, a blockbuster anti-clotting drug with about $3.2 billion in annual U.S. sales. In responding to this threat, he committed several errors that have cost BMS more than $500 million in sales, have cost him his job and may yet cost him his freedom. This story gives a rare look at the currents that swirl around executives at pharmaceutical companies who must make huge gambles in the face of an uncertain legal and regulatory environment.

Before the Plavix matter came to a boil, the attorneys general of 35 states filed suit against BMS in 2001 and 2002, alleging that BMS had excluded generic competition for two proprietary drugs through manipulative Food and Drug Administration filings and baseless lawsuits. These cases were settled in 2003 for more than $125 million, and left BMS and its practices subject to close scrutiny by the state attorneys general.

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