China Rolls Out Measures to Establish Drug Patent Linkage System

China tries to balance the patent protection of innovative drugs and the development of generics. MAHs of innovative drugs can bring a lawsuit or apply for an administrative ruling to protect patents. The first generics that successfully challenge the registered innovative drugs can enjoy 12-month market exclusivity.
by Grace Wang Jul 23, 2021

On July 4, the National Medical Products Administration (NMPA) and China National Intellectual Property Administration (CNIPA) announced the Measures for Implementing the Early Resolution Mechanism for Drug Patent Disputes (Trial) (hereinafter referred to as the Measures) with immediate effect.1

The document indicates an intent to balance the development and registration of generic drugs and the patent protection of registered innovative drugs. On the one hand, the Measures clarifies the bifurcated mechanisms (judicial or administrative) for innovative drug patentees to file a lawsuit or apply for administrative ruling against patent infringement by generics. On the other hand, the Measures promises successful generic challengers a 12-month market exclusivity period.

Along with other patent-relevant laws, regulations and policies, the document shows China's efforts to establish a drug patent linkage system linking the marketing authorization of generics and the patent expiration of innovative drugs. The linkage system requires that generic applicants should know the relevant patents before handing in the registration application to try to avoid patent infringement.

1. Chronology of Drug Patent Regulation in China

baipharm-chronology-of-policies-and-regulations-on-drug-patent-in-china.pngChronology of Drug Patent Regulation in China

2. Patent Regulations Largely Modeled on Hatch-Waxman Act

The Measures' critical contents include patent registration, patent statements for generics, patent challenge procedure and marketing exclusivity period. These contents draw on the U.S. Hatch-Waxman Act to a high degree, but differ in some details.

For instance, when a generic drug challenges an innovative drug patent, China NMPA will enforce a 9-month stay for only once on the generic drug registration application while not ceasing the technical review of the application. In contrast, the stay in the U.S. is 30 months.6 This difference implies China's stronger intent to encourage the marketing authorization of the first generics.

The inclination is even less veiled when the Measures defines the market exclusivity period for first generics. The first generics that successfully challenge the patents of innovative drugs will enjoy a 12-month market exclusivity period, during which China NMPA shall not approve other generic versions of the challenged innovative drugs. Unlike in the U.S., the first generic in China refers to the first drug products manufactured and marketed locally. 

It is also noteworthy that the Measures made adjustments to its draft for consultation. One significant adjustment is adding the obligation of notification: after making a patent statement, the generic applicant shall send the statement and its evidence in paper documents to the patent drug's marketing authorization holder (MAH). An electronic copy of the documents should also be sent to the MAH's email address registered on the platform.

3. To Balance Between Innovative Drugs and Generics

The Measures links the drug approval regulators and patent administrations to tackle the drug patent disputes at an early stage, thus avoiding the lengthy and complex litigations to some extent. 

On the one hand, the 12-month market exclusivity stipulated in the Measures is expected to encourage the development of generics. On the other hand, the exclusivity period can protect the innovative drugs. Otherwise, more generic drug competitors might swarm into the market and swoop for a bigger share.

The Measures has some imperfections. For example, it does not cover clinical trial data protection. But it is still a big step toward building a drug patent linkage system. With improvements in the future, the Chinese pharmaceutical industry could see more innovation.

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Grace Wang
ChemLinked Regulatory Analyst
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