How Does China Tackle the Issue of Patent Protection? A Deepdive into China’s Patent Trends

The number of medical patents in China has significantly increased over the years. Yet, patent protection laws still need to be improved. Looking at the pharmaceutical market in China, it is quite evident that generic medicines are the most developed and invested medication, which in turn conveys that China lacks local R&D power and incentive to develop innovative drugs.

“For China to transform from generic drugs to innovative drugs based development, it has to deal with huge R&D cost, long product life cycles, and a high risk of failure,” said Dr. James Hou, General manager of China IPIC. Besides investing heavily in the industry, the China government should refine patent protection laws and safeguard a company’s right to promote innovation.

China’s Moves to Tackle the Issue

China has undertaken several measures to deal with the patent issues at hand. The General Office of the Central Committee of the Communist Party of China (CPC) and the General Office of the State Council issued a “Opinions on Strengthening the Protection of Intellectual Property Rights” report, in which a proposal for including the patent linkage and patent term extension in the system was discussed.

In April 2020, the China National Intellectual Property Administration (CNIPA) released a plan to implement the “Opinions on Strengthening the Protection of Intellectual Property Rights” from 2020 to 2021. Among them, five articles were about medical patent protection and related to disputes, which bosts the protection level of medical patents, thereby empowering the pharma industry towards new drug development.

In October 2020, China’s National People’s Congress resolved to amend the Patent Law, which will take effect in June 2021. With that, China is now entering a new era of patent linkage and patent term extension.

The Power of Patent Linkage in China

Patent linkage plays an important role in patent protection and solving early medical patent disputes, and it’s established by Article 76 in China’s Patent Law.

Patent linkage is critical in two ways. Firstly, China’s 1.4 billion population has put a huge amount of pressure on the local healthcare and insurance system. Therefore, the lesser the dispute among pharma manufacturers, the smoother it is for patients who can be supported with the medicines.

Secondly, unlike Japan, the United States, and the EU, China concentrated mostly on generics. The arrival of patent linkage is beneficial to protect patents of innovative drugs from being quickly copied by generics. With that, companies won’t end up with revenue loss or lose the motivation to innovate.

What’s more, patent linkage offers a clearer picture of how to play the game in the pharmaceutical industry, so generic manufacturers won’t accidentally trespass the law and result in large compensations.

Patent Information Disclosure Platform

On the other hand, China has established an information disclosure platform for patentees to list drug-related patent information of chemical drugs, biomedicine, and traditional Chinese medicine.

Under the platform, the following information can be listed: active pharmaceutical ingredients (APIs), compositions containing APIs and formulations of chemical medicines, sequence structure patents of biologics, and traditional Chinese medicines.

Four Criteria for Generics Authorization

At the time of seeking authorization for generics, the following four criteria should be met:

1. No relevant patent is listed on the platform.
2. The relevant listed patent has expired or was invalidated.
3. The generic drug will not enter the market before the expiration of the relevant listed patent.
4. The generic manufacturer believes the relevant listed patent to be invalid or not infringed.

Patentee Concerns Over Certification Statements

If patentees have any concerns with the certification statements, they can file lawsuits or complaints with the CNIPA within 45 days. And this will make generic marketing authorization suspended for nine months at most. However, if the patentee cannot get a favorable ruling from CNIPA before then, the NMPA can grant marketing authorization for the generic drug.

Besides, if generics are authorized but cause a medical patent dispute, then it’s up to the Patent Law to decide. However, patent linkage is not fitted for biomedicines or traditional Chinese medicines. The NMPA can make decisions on the authorization of the medicines after reviewing the situation.

Handling Slow Authorization of Drugs

As stated in Article 42 of the amended patent law, “In order to compensate for the time taken for the review and marketing approval of the drug, the patent administration department of the State Council may, at the request of the patentee, grant compensation for a period of time for new drug invention patents that have been approved for marketing in China. The compensation period shall not exceed five years, and the total effective patent right period after the new drug is marketed shall not exceed 14 years.”

Earlier, it took a long time to authorize new drugs in China, which shortened the patent protection time. This might discourage new drug manufacturers because one can’t receive the expected payoff for the exclusive marketing time available.

The US and EU fixed this problem by introducing patent term extension to foster the R&D of innovative drugs. With its amended Patent Law, China has also brought in the system that could possibly benefit the pharmaceutical industry and push for transformation.

Requirements to Go Global with Patenting?

In summary, China has taken several measures to enrich innovation and offer incentives to the pharma industry. China has increased patent protection that safeguards the right of companies which aim for innovative drugs. Other than that, China accelerated the transformation of generic companies and balanced the development of generic and innovative drugs. It has also put efforts into overseas patent strategy and market expansion.

To achieve all the goals, pharma companies in China need to optimize their ability to manage patents, construct plans and understand the target markets. Furthermore, laws and regulations of patent violation, confirmation, and requirements are critical for a company’s knowledge to go overseas.

Click below to takes a closer look at how and why the dominance of generic drug manufacturing in China has hampered the quest for innovation

Related Article: Mainstream Generic Drugs Become Stumbling Blocks for Drug Innovation: A Deepdive into China’s Patent Trends

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Author

Tyler Chen

"Never go to a doctor whose office plants have died."- Erma Bombeck