Nestled among the skyscrapers in midtown Manhattan is the headquarters of Bristol-Myers Squibb. If you enter at Lexington Avenue—away from the austere grand entrance—you'll meet Ralph, an elderly security guard who has stood watch there since Peter Dolan joined BMS in 1988.
The fact that Dolan has managed to smile and extend pleasantries, even in the midst of a media hailstorm, is a testament to his good nature—but probably even more so to his endurance. After all, just days before Dolan met with Pharm Exec for an interview, BMS struck an agreement with the US Department of Justice (DOJ) to settle criminal charges related to the allegation that, by giving wholesalers incentives to stockpile drugs, it had inflated revenues by billions of dollars. The DOJ agreed to defer prosecution. BMS agreed, among other things, to pay $300 million, bringing the total penalties associated with the incident to $839 million—and closing a nearly three-year investigation.
Dolan maintains his post as CEO, but he hasn't walked through these issues unscathed. As part of the agreement with federal prosecutors, Dolan has turned over his title of chairman to long-time board member James D. Robinson III. He also has what Deutsche Bank's pharmaceutical analyst Barbara Ryan calls "a full-time cadre of baby-sitters" to ensure the company stays on the straight and narrow.
"Until 2007, BMS will lose between $1 to $1.5 billion a year," says Dolan. "But 2007 to 2011 looks like a potentially attractive period for the company."