Bristol-Myers Squibb (BMS) is one of the largest pharmaceutical companies in the world, with 28,000 employees and $15.9 billion in sales in 2014.
Headquartered in New York City, Bristol-Myers Squibb operates research facilities in several countries, including Belgium, France, the UK and Japan. Its mission – “to discover, develop and deliver innovative medicines that help patients prevail over serious diseases” – is funded by a commitment to research.
The company is well known for innovation in biological and pharmaceutical research, including the antipsychotic Abilify (which it helps market) and its blood thinners Plavix and Eliquis.
But it has also run into some trouble along the way. During the 2000s, the company faced legal trouble over deceptive advertising campaigns and FDA violations. BMS has also had to deal with litigation related to two of its successful diabetes products, Byetta and Bydureon.
As reports of people suffering adverse events related to Eliquis and the Type 2 diabetes drug Farxiga grow, Bristol-Myers is expected to face even more litigation.
The two companies that combined to form Bristol-Myers Squibb in 1989 share long histories of research and product development. In 1858, a young U.S. Navy doctor named Edward Robinson Squibb became so dissatisfied with the poor quality of medicines available during the Mexican War that he created his own pharmaceutical laboratory. E.R. Squibb, M.D., was founded in Brooklyn to produce consistently pure medicines. During the Civil War, Squibb became a major source of medicines for the Union Army. He invented the “Squibb pannier,” a compact medical kit that doctors could use on the battlefield.
|Fast Facts about Bristol-Myers Squibb|
|Established: 1858; 1887|
|Founders: Edward Squibb, William Bristol and John Myers|
|Headquarters: New York City|
|Size: 28,000 employees worldwide|
|2014 Revenue: $15.9 billion|
William McLaren Bristol and John Ripley Myers founded the second half of the company in 1887. After investing $5,000 in a failing drug manufacturing firm called Clinton Pharmaceutical Company, the friends installed themselves as president and vice president. Within a decade, they developed a national bestseller: “Sal Hepatica,” a mineral salt laxative. In 1898, the company changed its name from Clinton Pharmaceuticals to Bristol, Myers (the comma was eventually replaced with a hyphen).
The company struggled during the Great Depression and refocused its efforts on more lucrative consumer products such as laxatives and deodorant. E.R. Squibb and Sons continued to produce medical products and drugs such as castor oil and antibiotics. During World War II, both companies became leading suppliers of penicillin for the war effort. By 1943, Squibb operated the largest penicillin production plant in the world in New Brunswick, New Jersey.
After the war and into the 1960s, both Squibb and Bristol-Myers expanded their production and research of antibiotics. They merged in 1989, creating a powerhouse pharmaceutical company that was the second-largest in the world at the time. Since then, Bristol-Myers Squibb has continued to pursue cutting-edge clinical research while maintaining a significant philanthropic program.
In 2001, BMS spun off a medical devices division, Zimmer Holdings Inc. In 2012, in the culmination of a series of deals over the years to buy or partner with other drug companies, Bristol-Myers Squibb announced the acquisition of Amylin Pharmaceuticals, a biopharmaceutical company focused on research, development and commercialization of Type 2 diabetes drugs, including the troubled Byetta and Bydureon.
Missteps and Scandals
A solid record of research and performance stretching back more than 100 years has not made Bristol-Myers Squibb immune to scandal.
In 2001, BMS reportedly persuaded wholesale customers to purchase about $2 billion more of drugs than they needed so the company could meet its sales goal that year. The accounting gimmick, known as “channel stuffing,” resulted in a sharp drop in revenue the next year and investigations by the U.S. Securities and Exchange Commission and the U.S. Justice Department. Frederick Schiff, the former chief financial officer, was indicted on securities fraud charges. The company agreed to pay a total of $839 million in restitution.
In 2007, BMS agreed to pay more than $515 million to resolve a broad array of cases involving its drug marketing and pricing. In addition to overcharging the government for drugs, Bristol was also accused of promoting off-label use of the antipsychotic Abilify and setting inflated prices for a wide array of drugs.
The U.S. Food and Drug Administration (FDA) in 2010 sent a warning letter to Bristol-Myers Squibb demanding compliance with regulations, citing microbiological contamination of drug products, environmental contaminations in facilities, and a lack of a scientifically sound standard for sampling plans and test procedures. Some of these infractions were repeat violations from inspections in 2005 and 2009.
Bristol has also faced serious problems with some of its drugs. Two of these products — Byetta and Bydureon — resulted in lawsuits against Amylin, and BMS could face liability as well. The first Eliquis lawsuit was filed in 2015, and experts expect people harmed by Bristol-Myers’ new Type 2 diabetes drug Farxiga to seek justice as well.
Byetta and Bydureon
Byetta is a twice-daily injection approved by the FDA to treat Type 2 diabetes. Bydureon – a longer-lasting version of Byetta – is injected once a week. With $517.7 million in sales in 2011, Byetta was a tremendous success for its developer, Amylin Pharmaceuticals. When BMS acquired Amylin in August 2012, it gained control of its blockbuster diabetes medications – and possibly liability for the drugs.
In a 2011 study, patients taking Byetta were found to be six times more likely to contract pancreatitis, a dangerous condition that causes the pancreas to become inflamed and can lead to hospitalization or death. Data also indicated Byetta patients could be up to 49 times more likely to contract pancreatitis than patients taking other drugs in the same class.
These dangerous side effects resulted in lawsuits that could affect Bristol-Myers. Dozens of cases have been filed, and more are expected as more patients and their families become aware of dangerous complications that may have resulted from their use of Byetta or Bydureon.
Courts consolidated cases against Byetta and Bydueron, as well as other Type 2 diabetes drugs, into a multi-district litigation court in the U.S. District Court Southern District of California where more than 300 cases are pending.
Eliquis, a newer blood-thinning drug, is prescribed for the prevention of dangerous blood clots and stroke in patients with a common type of abnormal heart rhythm. Developed in partnership with Pfizer as an alternative to the blood thinner warfarin, Eliquis joins Pradaxa and Xarelto as a next-generation anticoagulant.
The FDA approved Eliquis in 2013, two years after Pradaxa and one year after Xarelto. Sales of Eliquis grew from $146 million in 2013 to $774 million in 2014. But studies linked Pradaxa and Xarelto to a very dangerous side effect — uncontrollable bleeding. Patients on warfarin can take vitamin K to counteract bleeding, but there is no known antidote for next-generation anticoagulants.
The manufacturer of Pradaxa settled thousands of lawsuits claiming the drug causes uncontrollable bleeding and death for $650 million in 2014. Hundreds of lawsuits have been filed against the manufacturer of Xarelto claiming the drug caused the same side effect. Those cases have already been consolidated in multidistrict litigation.
The first lawsuit claiming Eliquis caused uncontrollable bleeding and death was filed in 2015 and experts expect many more will be filed.
After being rejected twice by the FDA because of concerns with its association with bladder cancer, BMS finally received approval to market its Type 2 diabetes drug Farxiga (dapaglifozin) in January 2014. Farxiga is a sodium-glucose co-transporter 2 (SGLT2) inhibitor which stops glucose from being reabsorbed.
Less than a year after Farxiga entered the market, the FDA warned SGLT2 inhibitors could cause a potentially-fatal condition called ketoacidosis. Other studies also indicated people taking Farxiga have a high risk of developing bladder cancer.
In 2015, the FDA warned a similar SGLT2 inhibitor, Invokana, could increase the risk of bone fractures and decrease bone mineral density. It said it would investigate the safety of other SGLT2 inhibitors like Farxiga.
Bristol-Myers Squibb has taken a hard hit in the last couple of years because of expirations on several of its most lucrative patents – including Plavix.
Less than a month after the FDA approval of Farxiga, BMS sold it global diabetes business that was part of its collaboration with AstraZeneca. AstraZeneca purchased the business for $2.7 billion, but BMS will receive royalties and sales-based milestones for its diabetes drugs until 2025.
Going forward, the company plans to focus on a strong research pipeline and double down on its “String of Pearls” strategy. The String of Pearls plan is an effort to accelerate discovery and development of new therapies by partnering with or acquiring both small and large pharmaceutical competitors. Today, more than 40 percent of BMS’s research pipeline comes from partnerships or alliances with other companies.
Although legal liabilities from some of its products present problems for Bristol-Myers Squibb, the company’s strong reputation and heavy investments in research and corporate cooperation put it in a position to continue to grow.