At its peak, Plavix was Bristol-Myers’s best-selling drug. So when Apotex, a Canadian company, developed a generic Plavix knockoff, Peter Dolan, CEO of drug giant Bristol-Myers Squibb sought to negotiate an agreement that would pay Apotex in exchange for a delayed launch of Apotex’s generic competitor. Dolan sent one of his closest lieutenants, Andrew Bodnar, to negotiate with the head of Apotex,
Dr. Barry Sherman. Bodnar and Sherman developed a good rapport, and at several points in their negotiations asked their attorneys to leave them alone.
In the meantime, Apotex covertly began shipping its generic equivalent to the United States. Thus, Sherman also managed to launch the generic equivalent without Bristol-Myers’s even considering the possibility that he would do so while still engaged in negotiations. The company was only able to sell
Apotex in the United States for three weeks before a federal judge stopped sales, but in that short period of time, about a six-month supply of the drug had entered the US market. This cost Bristol-Myers about $1 billion in lost sales.
Ultimately, a much smaller generic private company was able to outmanoeuvre a pharmaceutical giant.
1. What principles of distributive negotiation did Sherman use to gain his advantage?
2. Do you think Sherman behaved ethically? Why or why not?
3. What does this incident tell you about the role of deception in negotiation?