Probe Stings Bristol-Myers

Generic competition chewed into sales of several products, most notably the cholesterol treatment Pravachol, whose revenue plunged 48% to $323 million. Last year, Pravachol was the company's second-biggest drug.

The Apotex agreement is just one issue that has prompted legislators and regulators to complain that brand-name companies are finding loopholes in generic-drug laws at the expense of consumers.

Last month, four U.S. senators introduced legislation they say would stop the practice of brand-name companies paying generic firms to refrain from entering the market.

Separately, senators introduced a bill to prevent the practice of authorized generics, a situation in which a brand-name company licenses its product to a maker of generics. The FTC has started examining this practice.

Also, last week, Jon Leibowitz, an FTC commissioner, told a Senate committee that instances in which brand-name companies are, in effect, paying generic-drug companies to stay out of the market are on the rise.

"In the current fiscal year, we have seen significantly more settlements with payments and restriction of entry," he said. "Seven of 10 agreements between brand-name and generic companies included a payment from the brand-name to the generic company and an agreement to defer generic entry."

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