A federal jury in Delaware on Tuesday found that the federal government did not have an ownership claim to lucrative drugs to prevent H.I.V. that are sold by the pharmaceutical company Gilead Sciences.
The verdict in an unusual patent infringement case marked a defeat for the government and activists who have pushed it to more aggressively assert its financial and legal rights to medicines developed with the help of public funding. The Trump administration brought the lawsuit in 2019 in part because of concern over the high price Gilead was charging.
The legal dispute centered on who devised the idea of using a Gilead medication for people at high risk of contracting H.I.V., or the human immunodeficiency virus, which causes AIDS. The two versions of the drug — Truvada and the newer Descovy — have generated huge profits for Gilead.
Lawyers for the federal government had argued that Gilead had violated three government patents that protected the concept of using Truvada to prevent H.I.V. through what’s known as PrEP, or pre-exposure prophylaxis. The patents were granted to researchers at the Centers for Disease Control and Prevention for inventions stemming from experiments they conducted on monkeys in the mid-2000s.
But the jury found that Gilead had not violated any of those patents and that they were invalid. The government had been seeking more than $1 billion in damages from Gilead, equivalent to the C.D.C.’s annual budget for preventing H.I.V. in the United States.
Patent law experts said the government’s defeat could embolden drug companies to refuse to enter licensing agreements with the government to share in profits that stem from taxpayer-supported research.
Jeremiah Johnson, executive director of the advocacy organization PrEP4All, on Tuesday urged the government to appeal the verdict, saying that it risked “encouraging other drug companies to privatize and profit from publicly developed technology with impunity.”
The United States already collects royalty payments for some inventions made by government scientists, but companies sometimes won’t pay, claiming that the finished product was the result of private-sector research and development.
In the case of Truvada, officials at the Department of Health and Human Services tried to get Gilead to license the rights to the C.D.C. patents, but the two sides never reached an agreement.
Gilead’s general counsel, Deb Telman, said in a statement that the jury’s verdict confirmed the company’s “longstanding belief” that it has always had the rights to the drugs for PrEP. The company has said that it spent $1.1 billion on research and development related to Truvada.
The six jurors reached their verdict after a week of listening to dense scientific minutiae and testimony from leading H.I.V. experts. While drug companies commonly sue one another over patent disputes, the case appeared to be the first of its kind brought by the government, experts said.
Gilead was represented by WilmerHale, an elite corporate law firm. In his closing argument on Monday, Gilead’s lead lawyer, David Bassett, said the government had exaggerated the importance of an inexpensive “monkey study.”
“The government has acted like an adversary, a sharp-elbowed competitor that wants to claim for itself the right to use Gilead’s own drugs for PrEP,” he said.
Walter Brown, the lead lawyer for the federal government, told the jury the company had spent years “profiting handsomely” from the C.D.C.’s inventions, without paying back its fair share. Since 2017, which is the point at which the government said Gilead began infringing on the C.D.C. patents, the company has collected $10 billion in revenue from selling its drugs for PrEP in the United States.
In addition to the patented C.D.C. research, the government also spent about $143 million funding key clinical trials and other studies that paved the way for Truvada’s approval for use preventing H.I.V., according to a recent analysis.
H.I.V. activists said the public had paid multiple times for PrEP, first by contributing to its development and later by shelling out for the drug as Gilead repeatedly increased prices.
“Those billions of dollars of revenue that Gilead was making each year on Truvada came from the deductibles and health insurance premiums and tax dollars that every single American pays,” said James Krellenstein, a longtime H.I.V. activist.
More than 30,000 people in the United States are newly diagnosed with H.I.V. each year. PrEP, taken daily as a pill, reduces the risk of infection by 99 percent and is seen as crucial to ending the H.I.V. epidemic.
One big reason for the low uptake was that Gilead’s sticker price for Truvada rose to as high as $22,000 a year, according to Elsevier Health, a data provider. From 2012 through 2020, Gilead had a monopoly on PrEP for H.I.V. in the United States.
Then, in 2021, a wave of competition from generic versions of Truvada sent the drug’s price to less than $400 a year.
A supply of Truvada for one person can be manufactured and distributed, at a modest profit, for about $72 per year, according to an estimate from Dr. Robert Grant, a University of California researcher who helped pioneer PrEP and testified on behalf of the government at the trial.
Gilead first won approval for Truvada to treat H.I.V. — not to prevent transmission — in 2004. At that time, scientists doubted that the drug could also protect people from being infected in the first place, and the company did not plan to develop it for that use.
In 2005, C.D.C. researchers began experiments in macaques to see if Truvada could block transmission of a version of H.I.V. Gilead provided free doses of Truvada and placebo pills but was not otherwise involved in the research.
The C.D.C.’s studies showed that Truvada could prevent infections, a discovery that shifted the direction of several human studies on preventing H.I.V.
The government successfully applied for several patents related to the research. The government’s monkey experiments and patent applications cost about $10 million, according to Gilead’s lawyers.
In 2012, Gilead began marketing Truvada as a drug to prevent H.I.V.
Between 2014 and 2018, officials with the Department of Health and Human Services repeatedly notified Gilead about the C.D.C. researchers’ inventions and urged the company to acquire a license, which would likely involve paying royalties on Truvada to the government, according to correspondence presented in court. Gilead never did.
At a congressional hearing in 2019, Daniel O’Day, Gilead’s chief executive, told lawmakers that “Gilead invented Truvada, no one else.” Soon after, Gilead unsuccessfully sought to get the C.D.C. patents canceled, arguing that other researchers had already thought of using Truvada to prevent H.I.V.
A few months later, the Trump administration sued.