Apotex And Bristol-Myers SquibbPeter Dolan survived many crises in his 5-year tenure as CEO of drug giant Bristol-Myers Squibb, including a corporate accounting scandal, allegations of insider trading, Federal Bureau of Investigation (FBI) raids of his office, and a stock price that dropped 60 percent during his tenure. But in the end, what may have done Dolan in was his negotiation performance against the head of Apotex, a Canadian drug company founded by Dr. Barry Sherman.At its peak, Plavix-a drug to prevent heart attacks-was Bristol-Myers’s best-selling drug and accounted for a staggering one-third of its profits. So when Apotex developed a generic Plavix knockoff, Dolan 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 Sherman. Bodnar and Sherman developed a good rapport and at several points in their negotiations asked their attorneys to leave them alone. At one key point in the negotiations, Bodnar flew to Toronto alone, without Bristol-Myers’s attorneys, as a “gesture of goodwill. The thinking was that the negotiations would be more effective this way.”As Dolan, Bodnar, and Bristol-Myers became increasingly concerned with reaching an agreement with Sherman and Apotex, they developed a blind spot. Privately, Sherman was betting that the Federal Trade Commission (FTC) wouldn’t approve the noncompete agreement the two parties were negotiating, and his goal in the negotiation was to extract an agreement from Bristol-Myers that would position Apotex favorably should the FTC reject the deal. Indeed, he nonchalantly inserted a clause in the deal that would require Bristol-Myers to pay Apotex $60 million if the FTC rejected the deal. “I thought the FTC would turn it down, but I didn’t let on that I did,” Sherman said. “They seemed blind to it.”In the meantime, Apotex covertly began shipping its generic equivalent, and it quickly became the best-selling generic drug ever. Thus, Sherman also managed to launch the generic equivalent without Bristol-Myers even considering the possibility that he would do so while still engaged in negotiations.”It looks like a much smaller generic private company completely outmaneuvered two of the giants of the pharmaceutical industry,” said Gbola Amusa, European pharmaceutical analyst for Sanford C. Bernstein & Company. “It’s not clear how or why that happened. The reaction from investors and analysts has ranged from shock to outright anger.” Within a few months, Dolan was out at Bristol-Myers (Carreyrou & Lublin, 2006; Saul, 2006).Based on the above reading and the knowledge gained from your assigned readings, respond to the following questions:What principles of distributive negotiation did Sherman use to gain his advantage?Do you think Sherman behaved ethically? Why or why not?What does this incident tell you about the role of deception in negotiation?

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