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article imageGilead resolves patent dispute over hepatitis drug

By Tim Sandle     Apr 4, 2016 in Business
After a long-running court battle, pharmaceutical company Gilead must pay another company, Merck & Co, £200 million for breach of patent. The case has been complicated, and both pharma companies lost some ground.
Gilead had been accused by Merck of infringing a patent for two sofosbuvir-based drugs — Sovaldi and Harvoni — over a two-year period (2013 to 2015.) Merck accused Gilead of infringing two patents that it, and a partner company called Ionis Pharma, held.
Sofosbuvir is a nucleotide used in combination with other drugs for the treatment of hepatitis C virus infection. The drug stops the virus from replicating. Hepatitis C is an infectious disease caused by the hepatitis C virus that primarily affects the liver. The virus is spread by blood-to-blood contact associated with intravenous drug use, poorly sterilized medical equipment, needlestick injuries in healthcare, and transfusions.
The drug was discovered at Pharmasset and developed by Gilead Sciences, upon Gilead’s acquisition of Pharmasset for $11 billion. However, Merck claimed that the technology was based on some of its existing patents (numbered 7,105,499 and 8,481,712, as registered in the U.S.)
As part of the legal action, PM Live says Merck was pushing for a royalty rate of 10 percent from an estimated $20.7 billion in sales that Gilead had apparently made from selling its own hepatitis C medication.
However, the jury that heard the case in the U.S. court was not totally swayed, and instead award a royalty rate of 4 percent based on sales of $5 billion. This is because the jury took into account Gilead’s investment in setting up the research program into the drug product.
There is some further legal decisions to come, relating to the royalty rate for 2016. However, Gilead still disputes the patent infringement and is set to appeal to the Court of Appeals for the Federal Circuit.
In statement, Gilead said: "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. We continue to believe the Merck patents are invalid.”
Merck recently launched its own hepatitis C drug called Zepatier (made from two generic named drugs — elbasvir and grazoprevir) which recently reached the market.
There is further patent controversy, however. In February 2015 Doctors of the World submitted an objection to Gilead's patent at the European Patent Office. Here the charge was that the structure of sofosbuvir was based on previously known molecules. The claim was brought so that developing world countries can make their own generic versions of the drug.
More about patent dispute, Gilead Sciences, Merck, Hepatitis, Hepatitis C
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