Inside of a Gilead Sciences Lab
Gilead Sciences has been dominating the hepatitis C drug market. Photograph by David Paul Morris — Bloomberg via Getty Images

Gilead Ordered to Pay Merck $200 Million in Hepatitis C Dispute

Mar 24, 2016

A federal jury on Thursday ordered Gilead Sciences Inc to pay Merck & Co $200 million in damages for infringing two Merck patents related to a lucrative cure for hepatitis C.

The damages amount was far less than the $2 billion Merck had demanded. On Tuesday, the same jury in San Jose, California, upheld the validity of the patents, which lie at the heart of the dispute over Gilead's blockbuster drugs, Sovaldi and Harvoni. Together the medicines had more than $20 billion in U.S. sales in 2014 and 2015.

Still, as Fortune reported yesterday, "the suit centers on a pair of Merck and Ionis patents on compounds which are similar to the main active ingredient in Sovaldi and Harvoni. Merck has argued that it should be entitled to 10% in royalties from U.S. sales of the two drugs, which cure hepatitis C in the vast majority of patients and have dominated the market."

Even though damages amounted to a tenth of what Merck proposed, its own hep C drugs have gotten some positive news of late: The FDA approved the company’s next-gen hep C therapy Zepatier in January even, as Fortune reports, that drug was third-to-market behind Sovaldi and AbbVie’s Viekira Pak, putting it at a disadvantage.

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