On October 17, China’s National People’s Congress (NPC) formally adopted the revised patent law, which will take effect on June 1, 2021.  The formal passage of the new Chinese Patent Law marks the most significant change in the intellectual property legal framework of the world’s fastest growing consumer market over the past decade.  For readers of this blog, the most significant change is the Chinese “Hatch-Waxman” system that is designed to provide incentive to develop new, innovative drug products.  In particular, the regulatory scheme will allow reference product sponsors to assert their patents and at least temporarily block final approval of a generic competitor, and give generic companies exclusivity against other follow-on products, as an incentive to challenge reference product patents. Under the new Chinese Patent Law, 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.

Compared to the previous draft version, the final version continues to provide that an innovator can sue to protect their patents while a proposed generic product is undergoing review.  However, the final version has removed the specific timelines including the 30-day for a competitor’s challenge to be launched and the 9-month timeline for the dispute to the revolved in the draft.  Interestingly, while the final patent law has removed these timelines, in the proposed regulation published by China’s National Medical Products Administration (NMPA, formerly “China Food and Drug Administration”) on September 11, 2020, NMPA has proposed these specific timelines.  According to the NMPA proposal:

• Applicants seeking approval of a generic or biosimilar product would have to submit a statement regarding the listed patents. If the applicant asserts that the patent should be invalidated or that the applicant’s product is outside the scope of the patent, the reference product sponsor has the opportunity to challenge that assertion with 45 days.
  • For small molecule drugs, this starts a 9-month period during which NMPA cannot approve the proposed product, although the agency’s technical review will continue.
  • For biologics, NMPA can approve the drug even if there is a patent dispute. 
• The first applicant with a small molecule generic product who successfully challenges a reference drug patent receives a 12-month exclusivity period against approval of another generic version of the same drug.
  • There is no such exclusivity for the first biosimilar applicant successfully challenging a reference biologic patent.

The implications of the new Chinese Patent Law and the NMPA proposal are significant, and the Chinese “Hatch-Waxman” system will fundamentally change how to enter and retain market share in the world’s fastest growing consumer market for life science companies.  Comments to the NMPA proposal may be submitted through 25 October 2020 so there are still time to have your voiced heard, but you need to hurry.