Gilead ordered to pay Merck $200 million in hepatitis C drug patent dispute

SAN JOSE, Calif.,/NEW YORK 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.

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.

The damages award is far less than the $2 billion Merck had demanded. To calculate the figure, the jury said Merck deserved a 4 percent royalty on $5 billion in sales of the drugs.

The verdict gives Merck a boost as it tries to catch up to Gilead, which dominates the market on a new generation of hepatitis C drugs that can cure well over 90 percent of patients with the liver disease.

Merck, which in January won approval on its own hepatitis C drug, Zepatier, is also asking for a 10 percent royalty on Gilead’s sales going forward. That issue will be argued over in a non-jury trial before U.S. District Judge Beth Labson Freeman starting next week.

Gilead, which continues to sell the drugs, has promised to appeal the case.

Insurers, politicians and patient groups have denounced the list prices of the new drugs. Harvoni, at $1,125 per pill before discounts, costs $94,000 for a 12-week regimen.

(Reporting by Andrew Chung in New York and Rory Carroll in San Jose; Editing by Alexia Garamfalvi)

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