Tina Wu July 27 2022 Implementation of China's drug patent linkage system Haiwen & Partners | Healthcare & Life Sciences - China Tina Wu Healthcare & Life Sciences OverviewKey highlightsCommentThis article highlights how China's newly implemented drug patent linkage system attempts to resolve drug patent disputes in the early stages, which will have a sweeping impact on market entry strategies for chemical drugs in China.OverviewThe newly launched Chinese drug patent linkage system, the so-called "drug patent dispute early resolution mechanism", links Chinese drug marketing authorisations to the patent status of an originator's brand name drugs. This system intends to resolve drug patent disputes between originators and generic drug applicants in the early stages through a judicial or an administrative proceeding before the relevant generic drugs are approved for marketing. The aim is to strike a balance between protecting originators' brand name drugs and promoting generic drugs of high quality.In 2017, the Chinese central government announced that it would introduce a drug patent linkage system in China, and subsequently amended the Patent Law in 2020 to codify it. On 4 July 2021, in accordance with the Patent Law, the National Medical Products Administration (NMPA) and the China National Intellectual Property Administration (CNIPA) jointly issued the Implementing Measures for the Mechanism for the Early Resolution of Pharmaceutical Patent Disputes (Trial Implementation) (the Patent Linkage Measures), which came into force on the same day.On 5 July 2021, to further support the implementation of the drug patent linkage system, the Supreme Court issued the Provisions on Several Issues on the Application of the Law Concerning the Trial of Civil Disputes over Patents of Pharmaceuticals Applying for Registration to specify the judicial proceedings for the drug patent linkage system. On the same day, the CNIPA issued the Measures for the Administrative Rulings in Connection with the Mechanism for Early Resolution of Pharmaceutical Patent Disputes to clarify the administrative proceedings for the drug patent linkage system.Key highlightsThe highlights of the Patent Linkage Measures are discussed in more detail below.What is the "Chinese Orange Book" under the Chinese drug patent linkage system and what drug patents are eligible to be listed in this book?The NMPA is responsible for establishing and maintaining the "Chinese Orange Book" (also known as the "Chinese marketed drug patent information record platform"). Originators (ie, drug marketing authorisation holders (MAHs)) may voluntarily list the following drug patent information in the Chinese Orange Book within 30 days of receiving market authorisation from the NMPA, and must update any changes to such information within 30 days of their occurrence:chemical drugs – patents claiming active pharmaceutical ingredient (API) compounds, compositions containing APIs and drug indications;biologics – patents claiming sequence structure of active ingredients; andtraditional Chinese medicines (TCMs) – patents claiming compositions, medicinal herb extracts and indications.The Chinese drug patent linkage system does not apply to drug patents that are not recorded in the Chinese Orange Book. Notably, patents claiming intermediates, metabolites, crystal forms, manufacturing methods or testing methods are explicitly excluded from being listed in the Chinese Orange Book. This means that originators are encouraged to develop core patents for their drugs.What statements are generic applicants required to make upon generic applications? The Chinese drug patent linkage system requires generic applicants to make one of the following statements on each of the applicable drug patents listed in the Chinese Orange Book upon their submission of generic drug applications with the NMPA:category one – no applicable patent is listed in the Chinese Orange Book. The NMPA may grant market approval at its discretion after an abbreviated new drug application (ANDA) technical review;category two – the applicable listed patent has expired or was invalidated, or the generic applicant has obtained a licence from the applicable patent owner. The NMPA may grant a market approval at its discretion after an ANDA technical review;category three – the generic applicant undertakes not to market its generic drug prior to the expiration of the applicable listed patent; orcategory four – the generic applicant believes that the applicable listed patent will be invalidated or the generic drugs do not fall within the protection scope claimed by the applicable listed patent.Generic applicants are required to notify MAHs of originator drugs (or the patentee in cases where the MAH is not the patentee) of the statements made by them, even though the Patent Linkage Measures do not impose a timeline for generic applicants to notify MAHs in a timely manner. Instead of waiting for notifications from generic applicants, patentees or MAHs of originator drugs are also recommended to monitor generics statements, which are published by the NMPA within 10 working days after its acceptance of the corresponding ANDA applications.How can a patentee or MAH of a brand name drug respond to a category four statement? In general, within 45 days (not working days) from the date of disclosure or publication of the relevant generic application by the NMPA, the patentee or MAH of a brand name drug may either file a lawsuit with the Beijing IP Court (ie, initiating a judicial proceeding) or file an opposition with the CNIPA (ie, initiating an administrative proceeding) against a category four statement as to whether the concerned generic drug falls within the protective scope of the applicable listed patents. Further, within 15 working days after the initiation of the foregoing judicial or administrative proceedings, the patentee or MAH of a brand name drug must notify the NMPA of the proceeding initiated by it. These actions will trigger a regulatory approval stay.It is worth noting that a patent invalidation proceeding under a category four statement would not trigger a regulatory approval stay. The regulatory approval stay only applies to a patent protective scope dispute claim under a category four statement – that is, whether the concerned generic drug falls within the protective scope of the applicable listed patent.If a patentee or MAH of a brand name drug, for any reason, does not take judicial or administrative action within the aforesaid 45-day period, the NMPA may grant market approval for that generic drug at its discretion after an ANDA review. Alternatively, in this scenario, a generic drug applicant may also file a lawsuit with a Chinese court or file a complaint with the CNIPA to request the court or the CNIPA to confirm that its generic drug does not fall within the protective scope of the applicable listed patent.What happens if the patentee triggers a regulatory stay for an ANDA application? With respect to ANDA applications for chemical drugs, the NMPA, upon receipt of a notice of the initiation of judicial proceedings or administration proceedings by the patentee or MAH of a brand name drug, will stay the regulatory approval of the corresponding ANDA application for up to nine months. This nine-month stay would not affect the ANDA review process, but the NMPA will stay the market approval for the affected generic drug during the nine-month period. This nine-month regulatory approval stay can only be applied once.If a patentee receives a favourable decision from a court or the CNIPA within nine months, the NMPA will only grant an ANDA approval for the generic drugs upon the expiration of the applicable listed patent. The NMPA will resume its ANDA approval process if:the patentee cannot obtain a favourable decision from a court or the CNIPA;the parties settle the case within nine months;the applicable listed patent has been invalidated; orthere is no valid court or CNIPA decision within the nine-month stay period (this is a likely scenario because judicial proceedings concerning complex drug patent disputes usually take more than nine months).The nine-month regulatory stay does not apply to TCM generics and biosimilar applications. For TCM generics and biosimilars, no matter whether such drugs would fall within the protective scope of the applicable listed patent, the NMPA may grant market approval at its discretion after its technical review even though TCM generics and biosimilar MAHs are not expected to market their TCM generics and biosimilars prior to the expiration of the applicable listed patents. If, in any case, TCM generics and biosimilars MAHs market their TCM generics and biosimilars prior to the expiration of the applicable listed patents, the patentees may resort to a Chinese court or the CNIPA for any patent infringement dispute.What is the market exclusivity right for a chemical generic applicant who has successfully challenged a listed patent based on a category four statement? A generic chemical applicant who receives the first ANDA approval for a chemical drug from the NMPA and who is the first one to successfully challenge the applicable listed patent is entitled to a market exclusivity right for up to 12 months, provided that such market exclusivity period does not exceed the term of the listed patent being challenged.During such a market exclusivity period, the NMPA will stay the ANDA approval of other similar generic chemical drugs except for the drugs of co-challengers.CommentUndoubtedly, this newly established Chinese patent linkage system will have a sweeping impact on market entry strategies for both innovative and generic chemical drugs in China. Innovative and generic drug applicants are advised to proactively and comprehensively evaluate and assess their patent prosecution and enforcement strategies, as well as their regulatory and product market access strategies, at an early stage.Many questions concerning the implementation of this newly established Chinese patent linkage system are yet to be answered – for example, how to interpret the "double first" concept for market exclusivity designation and how to define "co-challengers". It remains to be seen to what extent patentees or MAHs of brand name drugs can leverage the Chinese patent linkage system to resolve potential patent disputes at an early stage.For further information on this topic please contact Tina Wu at Haiwen & Partners by telephone (+86 10 5089 2216) or email ([email protected]). The Haiwen & Partners website can be accessed at www.haiwen-law.com.