China Proposed Measures To Implement Its Drug Patent Linkage System
China has recently passed the amendment to its patent law and formally established a drug patent linkage system. The amended patent law, to become effective on June 1, 2021, contains only three short paragraphs describing the principles of the patent linkage system without providing any details on how to implement the patent linkage system.
The implementation details are set out separately, under a rule recently proposed by the National Medical Products Administration (NMPA) and the China National Intellectual Property Administration (CNIPA), which jointly issued the "Implementing Measures for Drug Patent Dispute Early Resolution Mechanism (Tentative)" (the Draft Measures) on September 11, 2020, to seek public comment until October 25, 2020.
The Proposed Measures probably will be finalized prior to the June 1, 2021 effective date of the amended patent law, in order to implement patent linkage system set out under the amended patent law. When finalized, the Draft Measures will present significant challenges and opportunities for both innovator and generic drug companies doing business in China.
According to the Draft Measures, the NMPA will create a publicly available database, the Chinese Marketed Drug Patent Information Listing Platform (Platform), for marketing authorization holders (MAH) to list patent information for their drugs marketed in China.
The Draft Measures set time limits and procedures for submitting and updating patent listing information: (a) if a patent has already been granted, patent listing information may be submitted together with the new drug application (NDA); (b) if the patent has been newly granted and the NDA is pending, patent listing information may be submitted within 30 days of receiving the notice of patent grant, (c) if the NDA has already been approved, the Draft Measures do not specify a deadline for submitting patent information; and (d) for patents already listed, updates should be submitted within 30 days of any changes to the patent listing information.
The Draft Measures provide that if a drug is not in the NDA process or has not yet received marketing authorization in China, it will not be eligible for patent listing; if a patent is not listed, it will not be eligible for patent linkage protection.
The Draft Measures also limit the types of patents that can be listed on the Platform: applicants for small molecule drugs can list compound, composition, and indication patents; and biologic product applicants can only list sequence structure patents. The patent listing information will include the drug name, patent number, patent type, patent status, patentee, MAH, patent expiry date, and contact information.
It appears that the NDA applicant or the MAH for the approved NDA can list and update the patent information directly on the Platform without NMPA review. The Draft Measures make the NDA applicant or the MAH responsible for the truthfulness, accuracy, and completeness of the patent listing information, and impose penalties for intentionally listing unrelated patents, or intentionally making untrue patent certifications.
A generic drug applicant filing for marketing authorization will be required to make certifications regarding each related innovator drug patent listed on the Platform, and provide supporting evidence for the certifications. The certifications are classified into four categories, similar to the US Hatch-Waxman framework:
No innovator drug patent information on the Platform.
The innovator drug patent information on the Platform has expired or been invalidated.
There is innovator drug patent information on the Platform, but the generic drug applicant certifies that the generic drug will not go on the market before the expiration of the patent.
There is innovator drug patent information on the Platform, but the generic drug applicant believes the patent should be invalidated or the generic drug does not fall within the scope of the patent protection.
Opposition Period and Waiting Period
The generic drug application and patent certification will be publicly disclosed on the information platform of the Center For Drug Evaluation (CDE). Generic drug applicants have no obligation to notify innovator drug MAHs. Therefore, innovator drug MAHs should closely monitor the CDE information disclosures in order to avoid inadvertently missing the deadline for filing opposition.
For Category I and II certifications, the generic drug application can be approved immediately. For Category III certifications, the generic drug application can also be approved immediately, but must contain a notation that the generic drug applicant can launch its product only after the patent expiration date.
For Category IV certifications, the innovator drug MAH can oppose the patent certification made by the generic drug applicant within 45 days from the date of the CDE public disclosure. This opposition is filed either with a People's Court or the CNIPA. For small molecule drugs, the NMPA will set a 9-month waiting period before approving the generic drug application, starting from the date the case is accepted by the People's Court or the CNIPA. Although the NMPA will wait to approve the generic drug application, the CDE will not stop its technical review during the waiting period.
For Category IV certifications, the NMPA will follow the judgment of the People's Court or the decision of the CNIPA in deciding whether to approve the application. If the generic drug falls within the patent protection scope, the NMPA will not approve until the patent expiration date. However, if (i) the generic drug does not fall within the patent protection scope or the parties settle the case; (ii) the patent is invalidated; or (iii) the court or the CNIPA does not issue an effective judgment, decision or mediation within the 9-month waiting period, the NMPA will approve the application immediately.
For biosimilars, marketing authorization applications may be approved immediately without any waiting period; however, if (1) the innovator has opposed the patent certification within the 45 day period, and (2) the biologic patent is found to have been infringed by a court judgment or CNIPA decision before the marketing authorization is approved, the approval should contain a notation that the biosimilar applicant can launch its product only after the patent expiration date.
Effectiveness of Approval
After a generic drug application is approved, if the innovator drug MAH believes that the generic drug infringes its patent rights, the dispute shall be resolved in accordance with the PRC Patent Law and other relevant laws and regulations, and the marketing authorization approval will not be revoked and its effectiveness will not be affected.
Incentives to Patent Challenge
The first chemical generic drug to successfully challenge an innovator drug patent can enjoy a 12-month market exclusivity period, during which the NMPA may review but will not approve other generic drug applications. This exclusivity period will not exceed the term of the innovator drug patent being challenged.
Patent Term Extension
The Amended Patent Law adds a patent term extension to compensate the time that the NMPA and its CDE (Center for Drug Evaluation) spent in the review and approval of the marketing authorization for a new drug. The maximum extension shall not exceed five years, and the total patent term after adding the extension shall not exceed 14 years at the time of receiving marketing authorization.
Data or Marketing Exclusivity
China does not give data or market exclusivity to an innovator or improved drug that is manufactured and imported into China. A generic drug application can be filed and approved in China as soon as the foreign innovator or improved drug is approved either in or outside China, and the generic drug can be commercially manufactured and launched if the foreign innovator drug is not protected by any patents in China.
In contrast, China gives or at least used to give market exclusivity to an innovator or improved drug that is manufactured in China. When such a drug is approved in China, it will be placed under a New Drug Monitoring Period running from three, four, or five years, during which time the NMPA will not grant approval of its generic version prior to the expiration of the new drug monitoring period.
The provisions for the new drug monitoring periods were set out under the Drug Registration Regulation (DDR) amended in 2007. The provisions, however, have been removed from the DDR that was most recently amended in 2020. A notice from the NMPA indicates the continuous validity of the 2007 DDR provisions that are not in conflict with the 2020 DDR, but it appears that the NMPA has viewed the new drug monitoring provisions as conflicting, and has stopped granting any new drug monitoring periods for domestic innovator or improved drugs approved after the July 1, 2020 effective date of the 2020 DDR. Unlike the Orange Book system in the US, China does not publicly list the starting and ending date of the new monitoring periods. Pharmaceutical companies should closely monitor whether the new drug monitoring period or some other types of data or market exclusivity will be set up in the near future.
The patent linkage system set out under the Draft Measures presents significant opportunities and challenges for both innovator and generic drug companies doing business in China. Companies should closely monitor the development of the Draft Measures, and any provisions on data or market exclusivity that may be proposed. Please contact us if you have questions on any of these topics.
《征求意见》规定的专利链接制度对在华经营的原研药企和仿制药企而言，既是重大机遇也是巨大挑战。药企应密切关注《征求意见》的发展，以及可能出台的数据或市场保护期相关制度。若您对上述话题有任何疑问，欢迎随时联系我们。© Arnold & Porter Kaye Scholer LLP 2020 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.