China adopts revised patent law with Hatch-Waxman-like incentives for innovative drugs

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On October 17, the National People’s Congress (NPC) formally adopted a revised patent law, which will take effect on June 1, 2021. The new law includes significant changes in the intellectual property legal framework with regard to pharmaceuticals in the world’s fastest growing consumer market. As we reported here, the most significant change for life science companies is adoption of Hatch-Waxman-like incentives to encourage companies to develop and seek approval in China of new, innovative drug products, and to encourage generic companies to challenge reference product patents.

In particular:

  • Reference product sponsors will be able to assert their patents during the generic approval process and at least temporarily block final approval of a generic competitor;

  • Sponsors of new drugs will be able to add up to five years to the term of a patent to make up for time spent in the approval process, with the extended patent term capped at 14 years after the drug’s approval; and

  • Patent-challenging generic companies will be eligible for exclusivity against other follow-on products.

This final version of the law generally tracks the proposed patent law provisions (see our previous post), but without a 30-day deadline for the reference product sponsor to initiate its patent challenge or the 9-month timeline for the dispute to the revolved. Removal of these timing provisions presumably is intended to allow effect to be given to related provisions in proposed regulations published by China’s National Medical Products Administration (NMPA, formerly “China Food and Drug Administration”) on September 11, 2020. Under the NMPA proposal:

  • Applicants seeking approval of a generic or biosimilar product would have to submit a statement regarding patents listed with the reference product. If the applicant asserts either that the patent should be invalidated or that the proposed generic/biosimilar is outside the scope of the patent, the reference product sponsor would have the opportunity to challenge that assertion within 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 that 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 new Chinese Patent Law and proposed regulations fundamentally change the legal framework governing how drugs are approved in China. Comments to the NMPA proposal may be submitted through October 25, 2020, so there is still a little time for companies to make their views known. Please contact any of the authors of this alert or the Hogan Lovells attorney with whom you regularly work to learn more about the likely impact of the new Chinese Patent Law and the NMPA proposal, or if you are interested in submitting a comment to the NMPA.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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