Bristol-Myers Squibb's Bold Move

In a replay of an attempt four years ago, Bristol-Myers Squibb (BMY) is asking the federal government to allow its prescription cholesterol drug Pravachol to become an over-the-counter medication.

The company is hoping for a better outcome than in 2000. Bristol-Myers Squibb's petition was rejected by advisory committees of the Food and Drug Administration because the company failed to prove the drug could be used safely without a doctor's prescription.

Bristol-Myers Squibb, which announced its latest move after markets had closed Friday, is the second drugmaker to seek the FDA's approval to convert a prescription cholesterol drug to over-the-counter, or OTC, status. Two FDA advisory committees are scheduled to hold joint hearings on Jan. 13 and Jan. 14 on Merck's (MRK) request that Mevacor become an OTC drug. At the moment, Pravachol isn't on the advisory committees' calendar.

Mevacor also was rejected as an OTC candidate by FDA advisory panels four years ago.

Bristol-Myers said little about its OTC application except that it has signed an agreement with Germany's Bayer (BAY) to handle OTC sales and marketing for Pravachol in the U.S.

Pravachol is one of the oldest member of the cholesterol drug class known as statins, which includes Mevacor and Zocor.

Merck is working with Johnson & Johnson (JNJ) to market OTC Mevacor in the U.S. The two companies are selling a nonprescription version of Merck's Zocor in the U.K., the first country to permit an OTC statin.

Pravachol will lose U.S. patent protection in April 2006. Mevacor has already lost patent protection, and its sales have been significantly eroded by generic competitors.

Last year, Pravachol produced $2.83 billion in sales, or nearly 14% of total corporate revenue at Bristol-Myers Squibb. However, the drug's sales have begun to fade. For the nine months ended Sept. 30, Pravachol recorded $1.93 billion in worldwide sales, down 8% from the same period last year. In the U.S., sales dropped 18% from the same period last year. For the three months ended Sept. 30, worldwide sales fell 24% to $598 million; the U.S. component fell by 31%. (Mevacor's sales are so small that Merck doesn't include them in its quarterly financial press releases.)