Gilead wins reversal in $2.5 billion dispute with Merck

A U.S. district court judge in Delaware has overturned a $2.54 billion jury award against Gilead Sciences after determining that its hepatitis C drugs Sovaldi and Harvoni did not violate a Merck & Co. patent. The judge also invalidated a patent through which Merck asserted its claim to royalties on sofosbuvir, the active ingredient in the two drugs.

The disputed patent was originally awarded to Idenix Pharmaceuticals, which Merck acquired in 2014. Gilead obtained sofosbuvir as part of its acquisition of the biotech firm Pharmasset in 2011. The legal decision turned on whether Pharmasset derived sofosbuvir from an Idenix patent or whether it developed the compound on its own.

“We believe the judge’s ruling does not reflect the facts of the case,” Merck said in a statement. The company plans to appeal. Gilead issued its own statement saying that it agrees with the judge’s decision.

In his ruling, Judge Leonard Stark said that the Idenix patent claims were too broad. The law requires a patent to enable a skilled chemist to develop a drug without considerable experimentation. Stark determined that sofosbuvir could not be easily derived from the Idenix patent.

The dispute started in 2013 when Merck filed a complaint against Gilead and has gone through a series of twists and reversals. After a trial over Merck’s claims, a federal jury in California ordered Gilead to pay $200 million to Merck for patent infringement in March 2016.

A few months later, Gilead appealed that award and argued that a Merck attorney, who is also a chemist, lied under oath. But then in December 2016, a federal jury ordered Gilead to pay Merck the $2.54 billion infringement judgment that now has been overturned.

Since Sovaldi debuted in 2013, Gilead’s hepatitis C drugs have been heralded for their high cure rates. But they have also been criticized for their high prices. Gilead introduced Sovaldi at a list price of $84,000 for a 12-week course of treatment, while Harvoni came on the market at $50,000 per treatment course.