Merck's Gardasil Wins Legal Battle, Expands Manufacturing Amid Market Challenges

Court Rules in Favor of Merck in Gardasil Safety Lawsuit

A federal court in North Carolina has ruled in favor of Merck & Co. in a significant lawsuit concerning the safety of its human papillomavirus (HPV) vaccine, Gardasil. Judge Kenneth Bell of the District Court of North Carolina found insufficient evidence to support claims that Merck had misrepresented the vaccine's safety to patients and healthcare providers.

The ruling, which will apply to over 200 similar cases nationwide, concluded that Merck did not have enough data at the time to definitively link Gardasil to alleged side effects. Judge Bell stated, "Federal law requires more than speculative inferences prior to adding dire warnings to lifesaving vaccines that discourage their use." This decision marks a crucial victory for Merck in the ongoing legal challenges surrounding Gardasil.

Merck Invests $1 Billion in U.S. Vaccine Manufacturing

On the same day as the court ruling, Merck announced a substantial $1 billion investment to boost its vaccine manufacturing capacity in the United States. The funds will be used to construct a new production facility at the company's campus in Durham, North Carolina. This investment is part of Merck's broader strategy to strengthen its U.S. footprint, with the company having invested more than $12 billion since 2018 and planning an additional $8 billion by 2028.

The expansion of manufacturing capabilities comes at a critical time for Merck's vaccine portfolio, which includes not only Gardasil but also other important vaccines such as Capvaxive (21-valent pneumococcal vaccine), Vaqta (hepatitis A vaccine), and shots for measles, mumps, rubella, and Ebola.

Gardasil Faces Market Challenges and Patent Expiration

Despite its legal victory and manufacturing expansion, Merck's Gardasil franchise faces significant challenges in the global market. The vaccine, which was Merck's second-best-selling product in 2024 with nearly $8.6 billion in sales, has encountered headwinds in key markets, particularly China.

In August 2024, Merck reported a "significant step down" in Chinese shipments for Gardasil, attributed to weak demand. The situation deteriorated further, with Merck announcing in February 2025 that Gardasil shipments to China would be suspended until at least mid-2025. This development is particularly concerning given that China represents approximately 67% of Gardasil's total international sales.

Adding to these challenges, Gardasil is set to lose key patent protections in 2028, potentially opening the door to generic competition. This looming patent cliff, combined with the current market difficulties, underscores the importance of Merck's investments in manufacturing and ongoing efforts to navigate legal and regulatory landscapes.