Drugmakers Merck and Johnson & Johnson have reached a settlement, ending a multibillion dollar arbitration dispute over rights to two lucrative drugs for immune disorders. Merck will pay J&J $500 million, and the companies will divide distribution rights for Remicade and Simponi, which treat chronic inflammatory diseases like rheumatoid arthritis. J&J will have exclusive marketing rights for the drugs in Canada, Central and South America, the Middle East, Africa and Asia Pacific territories.
Merck retains the exclusive rights through Europe, Russia and Turkey and will divide the profit from those territories with J&J. When you consider the two drugs generate combined sales of several billion dollars annually, it’s easy to figure out why the companies did battle. Schering-Plough had split revenue with J&J before Merck bought Schering-Plough in 2009. J&J had started an arbitration bid to gain all global revenue from the drugs. The matter has now been settled.
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