Gilead loses to Merck & Co in hepatitis C drug dispute

Gilead Sciences has been ordered to pay $200 million (£139 million) in damages to Merck & Co after a US court ruled that its hepatitis drugs Sovaldi (sofosbuvir) and Harvoni (ledipasvir and sofosbuvir) were developed using patents held by Merck.

Both drugs have been incredibly lucrative for Gilead. Sovaldi has been one of the most commercially successful drugs ever, generating over $10 billion in sales in the first year after its launch at the end of 2013. Gilead gained access to sofosbuvir – an active compound in both drugs – in 2011 by acquiring US-based Pharmasset. Merck argued that Pharmasset developed sofosbuvir using two Merck patents and demanded compensation in 2013. Gilead contested this and sued Merck, asking for the patents to be declared invalid.

Last week, a federal court ruled in Merck’s favour and ordered Gilead to pay $200 million in damages, although this was less than Merck had initially sought. The company demanded that Gilead pay $2 billion, 10% of the $20 billion in sales generated by both drugs in 2014 and 2015.

Gilead has said it intends to appeal, meaning the conflict is likely to continue for years to come.

Separately, Merck is also seeking royalties of 10% on future sales of Sovaldi and Harvoni. A win would be significant for Merck, whose own hepatitis C treatment Zepatier (elbasvir and grazoprevir) was only recently approved, and has much lower projected sales as a result. That case will be argued in a separate trial.