Patent Linkage System in Chinese Genetic Drugs Registration Procedure and Its Improvement

Abstract

The main reason for the high cost of medical treatment in China is the cost of drugs. Drugs accounted for more than 40% (and up to 50%) of per capita medical expenses, whether for outpatients or discharged hospital patients. To combat this, the government hopes to control drug costs; inexpensive generic drugs are key to accomplishing that goal, since there is a direct connection between drug prices and the availability of generics.¹ Therefore, how to simultaneously protect drug intellectual property rights (to encourage R&D) while promoting the development of generic drugs is not only the hot issue for drug manufacturers and drug research institutes, but also the focus of the public health policy.

Drug patent linkage system means that the drug registration supervision department shall review the security, effectiveness, and controllability of drugs in the approval process while also considering whether the drug(s) infringe(s) any patents. The system has two meanings: the linkage of drug registration approval to the corresponding drug patent review process; and the linkage of the drug registration supervision department to competent patent department functions.² Patent linkage has different models. The United States established a relatively complete patent linkage system based on Hatch-Waxman Act. The distinguishing features of the U.S. patent linkage system are: (1) the patent status referral source (Orange Book); (2) four types of certifications based on patent status; (3) different pathways for small molecule drugs and biological drugs; (4) 180 days exclusivity for the first generic applicant to challenge the validity of a patent; (5) 30 months stay of marketing approval after a suit filed by the originating drug company, or until the case has been disposed of; and (6) finality of judgment on patent validity for all purposes.³

In contrast, the European Union (EU) does not have a system of patent linkage. Under EU law, linking marketing authorization to the patent status of the originator reference product is not permitted. The European Medicines Agency (EMEA) is the entity with drug-marketing approval authority; it may approve the registration application of generic drugs within the patent period, but shall indicate on the instructions that the drugs can only be listed after expiry of the patent.

China's basic position on the patent linkage issue in drug registration is as follows: China State Intellectual Property Office (SIPO) and China Food and Drug Administration (CFDA) shall perform their own duties—that is, SIPO is responsible for acceptance and approval of drug patent applications, while CFDA is responsible for approval and market supervision of drug registration applications. They may not consider the patent in the approval process of drug registration, but are obligated to remind manufacturers applying for production to respect the drug patents of others and to not infringe.⁴ China defined the system of linkage of drug registration to drug patents for the first time in the Drug Registration Regulation enacted in 2002, and later preliminarily established the patent linkage system in the drug marketing approval process in revisions in 2005 and 2007.

1. Patent Description and Declaration of Non-Infringement Must be Submitted for Drug Registration Application

The applicant shall provide a description of the patent ownership status, as well as about about the drug's prescription, manufacturing process, and use during the registration application. If the drug is patented by others in China, the applicant shall submit a declaration of non-infringement.⁵ It can be seen from this that the drug registration applicant shall submit the ownership status, description of the patent(s) involved, and technical materials and data required for registration approval. In practical operation, the description covers related patents protected in China, as well as foreign patent information, according to the requirements of the “Drug Registration Form.” If the patent of another patentee is implicated, the applicant must indicate whether the patent is licensed.

The biggest problem in the above is that the reliability of the statement submitted by the applicant is difficult to guarantee. The registration applicant is required to submit the drug patent status and declaration of non-infringement, but is not required to provide a relevant patent search report, and there is no requirement for a review of the content of the declaration. Thus, if the applicant fails to make the necessary search before submitting the registration application, the proffered patent status and declaration of non-infringement may be unreliable.

2. Announcement of Patent Description and Declaration of Non-Infringement

CFDA shall publicize the description or declaration submitted by the applicant on its website.⁶ This provision ensures (to a certain degree) that drug patentees keep abreast of potential infringement of their patent rights through drug registration applications, and provides a communication channel between patentees and potential infringers.⁷ Publication makes it easier for patentees to check on and supervise the status of their patents, strengthening their patent protection and increasing the transparency, justice, and equity of drug registration approval.

3. Dispute Resolution

Patent disputes arising in the process of drug registration shall be resolved according to relevant patent laws and regulations.⁸ In case of infringement found by drug patentees during the approval process for drug registration applications, whether or not CFDA suspends the approval is not mandated by law, and there are no clear procedures. In practice, CFDA will issue a notice that the application infringes another's patent rights and require self-resolution of the patent dispute before further review. But after Chinese Patent Law (CPL) developed the drug experiment exception system in 2008, CFDA believed that patent infringement did not exist in the drug registration process, so it proposed modifying the description of “in the drug registration process” as “after drug listing,” in order to define the resolution principles for patent disputes arising after drug listing.⁹

It is noteworthy that drug registration in China is only one of the hurdles that drug manufacturers must leap, and that production approval documents are also required for batch production. For a long time, CFDA issued production approval documents to generic drug manufacturers after the expiration of the drug patent, which timeframe did not satisfy generic drug manufacturers. For example, Pfizer Pharmaceutical's patent for “sildenafil citrate” (Viagra) expired in May 2014. As early as in 2003, many Chinese generic drug manufacturers obtained drug registration, but could not immediately market their generic drugs after expiration of the patent due to the lack of production approval documents. It was therefore expected that the first batch of generic Viagra could not be listed for sale until the end of September 2014 at the earliest, and the bulk of generic versions would not be listed until 2015.

To improve this situation, generic drug manufacturers hope that CFDA can issue the production approval documents during drug registration. The specific production listing data will be determined by the applicant according to the patent situation. Disputes over patent infringement would be resolved by the courts according to patent law. But the opponents of this approach argue that this would make it difficult for consumers to distinguish between the original drugs and the generic versions, and also make it difficult to ensure the quality of the generic drugs.

In general, China's patent linkage system subject to formal examination gives more space for development of the generic drugs. However, the situation is still not ideal, and the system needs to be refined and improved to better harmonize with the reality of the Chinese pharmaceutical industry and the nation's health care priorities.

Footnotes

Acknowledgment

This paper is sponsored by Ningbo Soft Science Research Program (NO.202014A10003).