China’s New Patent Linkage System
COVID-19 caused significant delays in many industries as the world navigated unprecedented circumstances in the past couple of years.[1] However, on June 1, 2021, patent law in China underwent a momentous change.[2] Article 76 of China’s Fourth Amendment of Patent Law effected China’s patent linkage system.[3] Patent linkage refers to the relationship between market approval of a generic drug and the patent status of its branded, or innovative, equivalent.[4] Thus, patent linkage systems are a crucial element of balancing the interests of both innovators and the public.[5] This is significant because, historically, patent owners did not have a cause of action to bring a patent infringement suit before generic drug approval in China.[6] Innovators could not protect their intellectual property, which created an imbalance that favored generic drug manufacturers.[7] Therefore, this incentivizes therapeutic innovation in China.
China’s public procurement policies explain this historical imbalance.[8] The government had an incentive to improve the accessibility of new drugs to Chinese patients at a reduced cost.[9] Drug prices naturally fall when generic drug companies launch and then bid to get a spot in the government’s hospital procurement scheme.[10]
The established patent linkage system in the United States has interesting similarities and differences with the Chinese patent linkage system. Two acts control the approval pathway for drug and biological products in the United States: the Drug Price Competition and Patent Term Restoration Act (informally known as the Hatch-Waxman Act) of 1984 and the Biologics Price Competition and Innovation Act (BPCIA) of 2009.[11] The Food and Drug Administration (FDA) maintains databases for these products.[12] Hatch-Waxman-approved drug products enter the Orange Book, and BPCIA-approved biological products enter the Purple Book.[13] Those familiar with the Bluebook for legal citations might be dismayed to learn about these other colored books, but they have nothing in common!
China has a similar “Orange Book” called the China Patent Information Registration Platform for Marketed Drugs (“CPIRPMD”) with the new patent linkage system.[14] The CPIRPMD lists chemical drugs, biologics, and traditional Chinese medicines.[15] This differs from the U.S. Orange Book that exclusively lists small molecule drugs.[16] There are three other main differences between patent linkage systems in China and the U.S.[17] In the U.S., parties sue in Federal District Courts, and the first generic has 180 days of exclusivity, and there is a 30-month stay.[18] In China, parties sue in either the Beijing IP Court or the Chinese National Intellectual Property Administration (“CNIPA”).[19] A first generic has 12 months exclusivity (but none for biosimilars) and a nine-month stay (but here too, no stay for biologics).[20]
A key difference between China and the U.S. is that China does not have regulatory data protection (“RDP”).[21] RDP prohibits the FDA from approving a generic application for five years if the generic relied on the branded drug’s safety and efficacy data.[22] This difference means that inventors must count on patents to give them exclusivity in China.[23] Patent exclusivity is thus convention, but RDP provides further incentive in matters with little to no patent protection.[24]
China has a significant intellectual property market.[25] Intellectual property is a powerful economic driver, and this development in Chinese patent law will lead people to invest in building substantial and robust patent portfolios for their new drugs. This reform in the drug industry will allow for earlier resolution of drug patent disputes and accelerate growth in China.
Footnotes
