Bristol-Myers Squibb, the US pharmaceuticals giant, has sacked its chief executive and top lawyer in the wake of a botched deal to block the launch of a copycat version of its best-selling drug, Plavix.
The departure of Peter Dolan after five years as chief executive comes less than two months after the FBI raided his office looking for evidence of anti-competitive collusion.
BMS is already facing prosecution over a $2.5bn (£1.33bn) accounting fraud, but the US attorney for New Jersey, Christopher Christie, agreed to drop the charges if it stays out of trouble for two years.
The independent ombudsman appointed to monitor BMS's behaviour during that time, the former federal judge Frederick Lacey, demanded Mr Dolan and the general counsel, Richard Willard, be fired over the Plavix debacle. Mr Christie also attended parts of the two-day board meeting that decided their fate.
James Cornelius, former finance boss of Eli Lilly and a non-executive at BMS since last year, was appointed interim chief executive.
Mr Dolan and Mr Willard are accused of suggesting a secret side deal over Plavix to Barry Sherman, chief executive of Apotex, the Canadian firm planning to launch a copycat version of Plavix. The drug was vital to BMS because it had sales of almost $13m a day and growing. Apotex says the patents protecting Plavix are invalid.
An earlier deal between the two sides, which would have kept generic Plavix off the market for the rest of the decade, was vetoed for being anti-competitive.
Dr Sherman had negotiated concessions allowing him to flood the market with his cut-price version if competition authorities blocked the deal. That happened last month, and an injunction granted to BMS came too late to prevent a profits warning.
The fraudulent scheme to inflate earnings by oversupplying wholesalers, which had begun in 1999, continued on Mr Dolan's watch until regulators became involved in 2002. BMS had to restate $2.5bn of revenue, pay $450m in fines and settle shareholder lawsuits. The finance chief was among the executives sacked, while Mr Dolan was forced to relinquish the chairmanship. In 2002, regulators refused to approve the launch of the cancer drug Erbitux, which Mr Dolan had agreed to buy from the biotech ImClone for up to $2bn. It took until 2004 to get the drug on the market.Reuse content