In a Delaware court battle that pitted two of the world’s biggest pharmaceutical companies against each other, Merck has triumphed with royalties of $2.54 billion ordered to be paid by rivals Gilead.
The case concerned Gilead’s super-successful treatments for hepatitis C, Sovaldi and Harvoni. Merck’s lawyers argued that sofosbuvir, the active ingredient in Gilead’s drugs, infringes two of Merck’s patents and so Merck was owed some of the billions of dollars that Gilead has made on the preparations.
This pharma versus pharma battle has a long history. Merck’s lawyers said in papers before the court that Merck had filed applications as far back as 2002 on particular compounds to be used for hepatitis C patients. Specific patent applications were granted in 2014. Merck’s lawyers argued for a 10% royalty on the sales of the Gilead drugs as a result.
Gilead’s lawyers countered, suggesting that this claim was “prohibitive” and that the applications that Merck had filed were not sufficient to cover its drugs Sovaldi and Harvoni. Gilead cited research and development at the Gilead-owned Pharmasset Inc., which developed sofosbuvir.
After a two week trial, the Delaware jury disagreed with Gilead. The Merck patents were valid, the jury found. The court ordered that billions of dollars in royalties be paid, agreeing that Merck was owed the 10% the company’s lawyers had claimed.
Merck expressed satisfaction at the result. A company spokesperson said: “The jury’s verdict upholds patent protections that are essential to the development of new medical treatments.”
Patents on new drugs are the very lifeblood of the pharmaceutical industry which is why, big pharma watchers said this case was so important. Gilead plans to appeal, according to company sources.
The market for hepatitis C drugs is both large and lucrative. Gilead’s drugs Sovaldi and Harvoni have proven effectiveness in some 90% of patients – but treatment comes at a high cost.
Harvoni’s list price is $1,125 per pill and $94,500 for a 12-week course of the drug and Gilead has no plans to stop marketing its hepatitis C preparations. Alternatively, Merck has its own hepatitis C treatment known as Zepatier.
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