Gilead Sciences Inc. (GILD.O) and the U.S. government have reached a settlement in a high-profile patent dispute involving the pharmaceutical company’s HIV prevention drugs, Truvada and Descovy.
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The agreement, filed in a Delaware federal court on Wednesday, resolves claims that Gilead undercompensated the U.S. Centers for Disease Control and Prevention (CDC) for its contributions to developing the drugs’ pre-exposure prophylaxis (PrEP) regimen.
Background
The lawsuit stemmed from allegations that Gilead failed to acknowledge and compensate the CDC for discovering that Truvada could prevent HIV transmission in addition to treating the virus. The government accused Gilead of overstating its role in developing the PrEP regimen and of refusing to license CDC patents.
The government initially sought damages of up to $691 million for Truvada and $311 million for Descovy. Gilead earned over $1.8 billion from U.S. sales of the two drugs in 2023.
Legal History
In 2022, a Washington, D.C. federal court ruled that the government breached its research agreements with Gilead by applying for patents without providing the company with adequate notice. Gilead subsequently won a jury trial in 2023, defeating the government’s claims of patent infringement.
Statements and Implications
Gilead’s General Counsel, Deborah Telman, emphasized the company’s commitment to its mission in a statement:
“This settlement allows Gilead to continue focusing its resources on discovering, developing, and delivering innovative therapeutics to people with life-threatening diseases.”
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Officials from the Department of Health and Human Services and the CDC have not yet commented on the settlement.
Conclusion
The settlement resolves years of legal contention between Gilead and the federal government, ensuring that both sides can now move forward. While the financial terms remain undisclosed, the agreement underscores the complex interplay between public research contributions and private pharmaceutical development.