Biopharma's China plan gets a boost from patent protections sealed in now official trade deal
As international relations experts continue to cast skepticism on the “phase one” US-China trade deal signed Wednesday, multinational drugmakers found much to be cheerful about.
Specifically, the document includes three provisions related to pharmaceutical patent dispute resolution, patent term extension and counterfeit medicines, promising to strengthen protection for drugs at a time China’s regulatory agency has sped up reviews and shortened the time gap between overseas and Chinese OKs.
“The trade agreement has resolved many long-controversial issues,” Chang Lee, VP of consulting for the Asia Pacific region at the CRO Parexel, told Endpoints News. “These changes all reflect the unprecedented protection of drug patents of innovative drugs, and they are not a small step forward.”
For instance, he noted, one of the key review criteria for biotech IPOs in either Hong Kong or Chinese markets. Any biopharma looking to raise money via that avenue could benefit from the new rules.
Very nice rally in China bio stocks last night on the IP news from the trade war. IP is the lifeblood of biotech!
— Brad Loncar (@bradloncar) January 16, 2020
The first provision, Article 1.11, stipulates that China would set up a mechanism commonly known as patent linkage in the US, as established in the Hatch-Waxman Act of 1984. According to LEK Consulting, it functions “much like a traffic control system” involving the FDA, the USPTO and the court.
To set it up, China would need to ensure three things:
- A patent holder or licensee would be notified when someone is looking to market a generic or biosimilar during the patent term of their approved product
- There is enough time and opportunity for the patent holder to seek remedies before the marketing of the allegedly infringing product
- Procedures for judicial or administrative proceedings are in place to resolve the disputes in a timely manner
Furthermore, according to Article 1.12 of the trade deal, China has committed to extending patent terms for unreasonable, lengthy delays that aren’t the applicant’s fault. The compensation will not exceed 5 years and the resulting effective patent term — counting from the date of marketing approval in China — will be no more than 14 years.
Lastly, Article 1.18 prods China to take quick action against counterfeit pharmaceutical products including API, bulk chemicals or biological substances. Among them is a requirement to share inspection information with the US and publish data on enforcement measures online every year, “including seizures, revocations of business licenses, fines, and other actions.”
The crackdown on counterfeit medicines come amid increased FDA scrutiny on Chinese manufacturers after a carcinogen scare forced a recall on some common heart pressure pills with API from China.
Furthermore, Lee pointed out, the deal allows suuplemental experimental data, which was forbidden in the past — meaning drugmakers can now add new evidence to support consideration of their patents after they first filed for it.
“Literally, Article 1.10 of the Agreement is a major adjustment to the previous supplementary data policy,” he said. “This means that no matter whether it is the examination procedure of the Intellectual Property Office, the review procedure of the Reexamination Board, or the administrative procedure, the patentee can supplement the data.”
On the other end of the spectrum are major pharma players such as AstraZeneca and Bayer, for whom China has become a “CEO-level priority” both for its massive market and fertile ground for drug development.