Merck Pays J&J $500 Million in Settlement

April 15, 2011
Ends dispute over profit-sharing for two anti-inflammatory drugs

Merck said on April 15 that it has agreed to pay fellow pharmaceutical giant Johnson & Johnson $500 million to end a two-year tussle over profit-sharing deals for two anti-inflammatory drugs.

The resolution ends a dispute over the Remicade and Simponi drugs, which treat chronic inflammatory diseases such as rheumatoid arthritis, which began in May 2009 when J&J launched an arbitration process.

Friday's deal also amends the distribution rights for the two drugs in question. The old deal whereby global profits were shared is replaced by a new system whereby each operates in separate geographic regions. Under the new agreed terms, Merck keeps its rights to market the drugs in Europe, Russia and Turkey while Johnson and Johnson won marketing rights in Africa, Asia, Canada, Central and South America and the Middle East -- along with the one-off payment.

Previously the two companies shared the global rights, with Merck receiving 58% of sales income and the other 42% going to Johnson subsidiary Centocor Ortho Biotech Inc.

In the joint statement issued by Merck, both company CEOs said they were "pleased to have reached" the agreement.

"These important medicines provide very meaningful benefit to the patients who depend upon them, and our first priority will be to ensure the continued availability... to healthcare providers and patients around the world," said Johnson & Johnson chief executive officer Bill Weldon.

"We are working closely with Merck to make certain this is a seamless transition in the relinquished territories," he added.

Copyright Agence France-Presse, 2011

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