In Win for Gilead, Fourth Circuit Affirms Injunction Blocking Drug Importation Scheme

The U.S. Court of Appeals for the Fourth Circuit recently affirmed a preliminary injunction against a network of companies involved in importing foreign-market Gilead Sciences medications into the United States. The ruling bars entities including Meritain Health, ProAct, and Rx Valet from facilitating the distribution of these drugs, which were often sourced from Turkish pharmacies.

This legal battle began after a patient received a Turkish version of Gilead’s HIV medication Biktarvy instead of the domestic product. Gilead filed suit alleging trademark infringement and unfair competition under the Lanham Act. The company argued that the imported drugs lacked critical domestic safeguards, such as black box warnings for Hepatitis B, specific storage instructions, and mandated National Drug Code numbers. Because these imported versions bypassed Gilead’s quality-control protocols and temperature-monitoring systems, they were not considered genuine goods under the law.

Defense arguments centered on whether the companies could be held liable for contributory infringement without prior formal notice. The court rejected this, pointing to internal communications where employees at Meritain and ProAct explicitly discussed their involvement in the unauthorized sourcing despite internal policies forbidding it. The judges found the evidence showed these companies continued to facilitate the scheme while fully aware of the material differences between the domestic and international products.

This decision marks a significant legal milestone for intellectual property rights in the pharmaceutical sector. It is the first time the Fourth Circuit has adopted the material-differences doctrine, and the court ruled that consumer cost savings do not justify the distribution of non-genuine goods that threaten manufacturer reputation and patient safety. By affirming the injunction, the court has set a precedent that service providers remain responsible for their role in infringing distribution networks when they possess actual or constructive knowledge of the activity.