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Focus on Regulation

Pharma Companies May Benefit from Proposed Patent Law Changes in China; Public Comment Invited

On January 4, China’s National People’s Congress (NPC) released draft amendments to the Chinese Patent Law, proposing expanded and enhanced protections that may provide real benefits to companies that develop new drugs.  A potentially important condition to one of the key proposed changes specific to new drugs is that it would be available only for products that are submitted for marketing approval concurrently in China and other countries.  Although clearly intended to motivate companies to prioritize seeking new drug approvals in China, the proposed patent term extension would appear to be limited to products that are first submitted for marketing approval to China and another country, and would not apply to products first filed only in China.  As a practical matter, this may limit the usefulness of the provision.

The most significant change that’s targeted to drug products would be the possibility of extending the 20-year term of invention patents for new drugs.  As proposed, companies would be able to add up to five years to the patent term to make up for the time spent waiting for approval, when the drug product couldn’t be commercialized.  The extended patent term could not go beyond 14 years after the drug’s approval.  Pharmaceutical companies would also benefit from proposed enhancements to the available damages for patent infringement:  punitive damages of up to 5X actual damages would be available for serious willful infringement, and where actual damages can’t be proven, the maximum damages a court can impose would be increased from 1 million to 5 million RMB Yuan (around $700,000 USD).

These proposed patent law revisions complement ongoing efforts to establish and strengthen incentives to develop new, innovative drug products, consistent with the Opinions on Deepening the Reform of the Examination and Approval System and Encouraging the Innovation of Pharmaceutical and Medical Devices, issued by the General Office of the State Council in October 2017.  As discussed in our previous post, for example, the National Medical Products Administration (NMPA, formerly China Food and Drug Administration) last year issued a draft guidance regarding exclusivity for pre-clinical and clinical data submitted to the government.  The government is expected to finalize rules on data exclusivity protection for new drugs this year.

The proposed patent law changes could be significant, and the public comment period, which runs through February 3, offers companies an opportunity to voice support and/or suggest revisions to enhance the proposal.  If we can help evaluate the likely impact of the proposals, consider possible improvements to suggest, or draft a comment, please let us know by contacting any of the authors of this blog or the Hogan Lovells attorney with whom you regularly work.