Drug licensing dispute settles for $20 million

A 10-year battle over a novel drug treatment for a degenerative eye disease has settled for $20 million.
Massachusetts General Hospital had sued Canadian drug company QLT to enforce a provision in a 1998 license agreement for Visudyne, a drug with which MGH doctors had invented a treatment for age-related macular degeneration. The provision stipulated that if QLT granted a license for Visudyne to the Massachusetts Eye and Ear Infirmary, which had also helped develop the treatment, it would pay MGH the same royalty rate.
After contract negotiations between QLT and Massachusetts Eye and Ear soured, the latter successfully sued QLT for a 3 percent royalty on Visudyne sales. MGH subsequently sued the drug company in an effort to increase its own royalties to 3 percent.
But QLT denied that MGH was entitled to the higher royalties under the terms of the contract, arguing that a royalty paid as a result of a verdict is not the same as that paid under a licensing agreement.
After U.S. District Court Judge William G. Young issued a ruling that allowed MGH’s Chapter 93A claim against QLT to stand, the two sides reached a settlement on Nov. 24, with QLT agreeing to pay $20 million to cover all past royalty obligations.
MGH was represented by Paul G. Cushing of Partners Health Care and Thomas F. Maffei and Scott McConchie, of Griesinger, Tighe and Maffei in Boston.
“The idea for this blockbuster medical invention originated at MGH,” Maffei said. “And the case was about fairness in business dealings and demonstrates how powerful Chapter 93A is.”
– Julia Reischel