Gilead Must Pay $200 Million to Merck in Patent Dispute
On Thursday, a federal jury ordered Gilead Sciences Inc to pay Merck & Co $200 million from damages stemming from infringing on two Merck patents that are related to a profitable cure for hepatitis C.
The award in damages is much less, than Merck demanded in its lawsuit, which was $2 billion. On Tuesday, the same San Jose, California jury upheld the patents’ validity, which lies at the center of this dispute over the blockbuster drugs Harvoni and Sovaldi from Gilead.
Together the two medicines had over $20 billion in sales in just the U.S. in 2014 and 2015.
Merck is attempting to catch Gilead, which is the dominant force in the industry for new generation drugs for hepatitis C that are able to cure more than 90% of users with the sickness.
Merck, which this past January won the approval for its own drug for hepatitis C known as Zepatier, is asking as well for a royalty of 10% on sales of Gilead going forward.
This issue will have arguments in another trial that will be non-jury in district court beginning next week.
A spokesperson for Gilead said the company feels Merck should not be entitled to damages and said if the judge keeps the jury’s verdict, Gilead will appeal it.
Merck, in a prepared statements, said they were pleased with the jury’s recognizing of how important patent protections are to the developing of new treatments.
Insurers, patient groups and politicians have denounced the prices for the latest drugs. Harvoni costs $1,125 for each pill prior to any discounts, with a cost of $94,000 for a regimen of just 12 weeks.
Gilead obtained sofosbuvir the drugs’ active ingredient through its acquisition of Pharmasset during 2011. Merck said that Pharmasset had developed the chemical from a patent Merck had filed back in 2002.
At the same time, Gilead said that Merck’s patents came from Pharmasset’s work.
Following Merck’s lawsuit royalties in 2013, the two companies sued one another in California. In February a judge ruled Gilead drugs infringe on patents of Merck.