Supreme Court rebuffs appeals from Merck, Gilead in 2 high-profile drug battles

Monday was a good-news-bad-news day for Gilead Sciences at the U.S. Supreme Court, with the justices handing down multiple decisions about which appeals they would take up as they headed back to work after the holiday break.

SCOTUS refused to hear Gilead’s appeal in a whistleblower case alleging it lied to the FDA about unapproved Chinese ingredients in some of its HIV drugs. But the court also turned back Merck & Co.’s appeal in a long-running dispute with Gilead over its patents to hepatitis C blockbusters Sovaldi and Harvoni—a victory for Gilead, which had faced several defeats in the patent challenge in lower courts.

Merck had appealed a 2016 district court ruling in which a $200 million jury verdict in favor of the company was overturned. The case revolved around two Merck patents that the company alleges Gilead infringed in developing Sovaldi and Harvoni.

A jury sided with Merck, but then Gilead revived the case by alleging a pattern of misconduct at Merck. Gilead alleged that one of Merck’s patent lawyers had talked to hep C drug developer Pharmasset—the company Gilead later purchased—and then altered a Merck patent application. U.S. District Judge Beth Labson Freeman promptly overturned the $200 million verdict, citing Merck’s "pervasive" misconduct.

Merck appealed to SCOTUS on the argument that Labson’s action violated the Seventh Amendment, meaning the right to a jury trial, because the original jury had heard those misconduct allegations and still ruled in favor of Merck. With the Supreme Court’s decision on Monday, however, Labson’s decision stands.

Spokespeople for Merck and Gilead did not immediately respond to a request for comment from FiercePharma. But the two are still battling in court. In a separate patent case, a federal judge ruled earlier this year that one of Merck’s hep C patents is invalid—a decision that overturned a $2.5 billion verdict against Gilead. Merck vowed to appeal.

The disappointing SCOTUS decision for Gilead came later in the day, when the court said it would not take up the company’s appeal in the whistleblower case involving its HIV medications. That case will now move forward.

The whistleblower action was filed by Jeff and Sherilyn Campie, two former Gilead employees who alleged the company bought a key ingredient for the drugs Emtriva, Truvada and Atripla from an unapproved Chinese supplier, but told the FDA the substance came from a South Korean manufacturer. Jeff Campie was fired, he said, for resisting the company’s purchasing actions.

A U.S. District Court actually dismissed the case twice in 2015, but a federal appeals court revived it in 2017 on the grounds that the allegations by the two former employees were plausible under the False Claims Act. That’s when Gilead appealed to the Supreme Court.

The first sign that Gilead might be losing some support in its bid to have the higher court review the case came just last month, when the Justice Department said in a filing to the Supreme Court that it would no longer review it. The DOJ suggested that the FDA would be better served by dealing with the allegations in the suit "through less disruptive mechanisms" than a full-blown SCOTUS matter.

The DOJ’s filing stated that "if this suit proceeded past the pleading stage, both parties might file burdensome discovery which would distract from the agency’s public-health responsibilities."