Federal Jury Awards Merck $200 Million in Patent Case Against Gilead

A federal jury in California has ordered Gilead Sciences to pay Merck $200 million in damages for infringing upon patents related to compounds used in Sovaldi, the blockbuster hepatitis C drug.

The case was heard in the United States District Court Northern District of California and involved a patent lawsuit that claimed that Gilead Sciences developed sofosbuvir-based hepatitis C drugs, including Sovaldi and Harvoni, using patents that were held by Merck and Ionis Pharmaceticals, according to a statement from Merck. Sofosbuvir is the generic name for the drug Sovaldi, which has generated billions in revenue since it was approved by the FDA in late 2013.

The $200 million damages awarded by the jury covered compensation for infringement through Dec. 31 of last year, Merck officials said. A separate court hearing on royalties owned by Gilead is slated for Jan. 1, 2016.

Sovaldi and Harvoni are among a new crop of antiviral drugs that are more effective than traditional treatments for hepatitis C, a bloodborne virus that can cause serious liver damage over time. Both drugs have reportedly generated billions in revenue for Gilead amid criticism from law makers and others who complain that the drugs are priced too high.

“The jury’s verdict upholds patent protections that are essential to the development of new medical treatments,” states the Merck release. “Given that it guarantees a firm a period of return on investment, patent protection provides the research-based pharmaceutical and biotechnology industries with an incentive to invest in research and development.”

According to Merck the compounds and methods granted in the patents enabled “significant advances” in treatment of the virus. “Achieving these advancements required many years of research and significant investment by Merck and its partners” states the Merck release.

Sovaldi is a nucleotide analog inhibitor that blocks a specific protein needed for replication of the hepatitis C virus. Gilead acquired the drug before it had FDA approval when in 2011 it paid $11 billion to buy Pharmasset, which had discovered sofosbuvir.

The lawsuit was initiated by Gilead to invalidate Merck’s claims to the patents. Officials with Gilead maintain that their company has the sole right to commercialize sofosbuvir-containing products and that Merck is not entitled to damages.

“Since Merck made no contribution and assumed none of the risk in the discovery and development of sofosbuvir, we do not believe Merck is entitled to any amount of damages,” Michele Rest, a Gilead spokeswoman said in an emailed response. “We continue to believe the Merck patents are invalid. In the event the judge maintains the jury's verdict, we will appeal.”

The jury award followed a trial that ended March 22 with a unanimous verdict that all of Merck’s claims to patents involving a compound of sofosbuvir were valid.

In January, Merck was granted FDA approval for its new hepatitis C drug called Zepatier. At $54,600 for a 12‑week course for a single patient, the drug is priced far below that of Sovaldi, which in the US is priced at $84,000.