Despite the fact that Plavix’s US patent does not expire until 2012, the Canadian generics company was trying to overturn the patent so it could launch a generic version of the drug long before then, claiming it was invalid and uninforceable. In an aim to halt the litigation, Sanofi and BMS entered into an arrangement with Apotex earlier this year that would allow it to launch a generic copy before the patent expired in exchange for the current lawsuit being dropped.

Under the reverse settlement deal, Apotex was to receive a payment of at least $40 million, and its generic would be allowed to hit the market almost a year before the patent expires in mid-2012. However, the US Federal Trade Commission had to approve the deal, because of previous infringements of the generics rules by BMS. Claims by Apotex that BMS had offered a further, secret, deal (which it denies) not to launch its own generic version led to the Department of Justice launching a criminal investigation into the circumstances. As a result, the regulators blocked the original settlement between the three companies.

After the failure of the agreement, in August Apotex took the market by surprise and launched a generic version of Plavix regardless. Part of the original agreement, which remained in effect despite the regulators having blocked it, was that the patent holders could not try to stop the sales of the generic for the first five business days after its launch. This gave Apotex the opportunity to flood the market with its own product. Analysts believe that it has already shipped enough of the drug to satisfy the market for the next four to six months. Expiry dates on the drug packs indicate that it has been manufacturing product since late last year in anticipation of such a scenario.

At the end of August, Sanofi and BMS were granted an injunction to stop Apotex selling the generic, saying that Apotex’s arguments did not seem sufficiently persuasive that they would be able to overturn the patent, and Sanofi had demonstrated a likelihood of success in the case. However, the judge did not order a recall of the product that had already been shipped. He did, though, set a trial date of 22 January for the patent challenge to be heard.

Plavix is a crucial part of the profit streams of both Sanofi-aventis and BMS, last year representing as much as 14% of Sanofi’s profits and more than 30% of BMS’s, according to analyst estimates. It is currently the world’s second biggest selling drug after Pfizer’s cholesterol lowering agent Lipitor, and total sales this year were expected to be more than $6 billion before the surprise generic hit the market. Preliminary data indicate that the Apotex generic has already taken a market share in excess of 75%.