The China Food and Drug Administration (the “CFDA”) issued the Relevant Policies on Encouraging the Innovation of Drugs, Medical Devices and Protecting the Rights of Innovators (Circular No. 55, 2017) (the “Draft”) on 12 May 2017. The Draft clarifies the Chinese ‘Patent Linkage’ regime, improves the data protection regime, emphasises the confidentiality obligations of national staff and states that a Marketed Drug Catalogue should be established in China.
The key elements of the Draft are summarised below:
- Establishing the Patent Linkage Regime for Drug Registration
When submitting an application for drug registration, the applicant should submit a statement regarding relevant rights relating to the drug that the applicant knows or ought to know. If the applicant wants to challenge the relevant patent rights, the applicant should declare that the applicant does not infringe the relevant patents, and inform the relevant patentees of their current application within 20 days of submitting the application for registration.
If any of the relevant patentees consider that their patent rights have been infringed, they should instigate patent infringement litigation with the judicial authorities and inform the drug evaluation authority within 20 days of receiving the information from the applicant.
When the drug evaluation authority has received the documents that prove that a patent infringement case has been successfully filed, the drug evaluation authority may decide to instigate a waiting period in relation to approval of the drug registration. The maximum length of such waiting period is 24 months. During the waiting period, the technical evaluation of the filed drug registration application will not be suspended. If, during the waiting period, the parties reach a settlement or the judicial authority reaches a valid judgment of infringement or non-infringement, the drug evaluation authority shall approve or refuse the drug registration application according to the settlement or the valid judgment. If, during the waiting period, the judicial authority does not reach the conclusion that there has been an infringement, the drug evaluation authority may approve the drug registration.
If the party who is applying for drug registration does not declare the relevant patent rights and the relevant patentee subsequently files an infringement lawsuit, the drug evaluation authority may apply the waiting period for the application in accordance with whether the judicial authority has accepted the case or not. If intellectual property litigation is instigated by the sale of a drug, the decision of the judiciary will prevail.
- Improvements to the Data Protection Regime
The data protection period starts from the date of approval of the application for drug market registration. During the data protection period, the evaluation authority will not approve market registration applications for the same type of drug filed by other applicants, unless the applicant has obtained trial data themselves.
Applicants for drug market registration may submit a trial data protection application when they submit the drug market registration application. The authority may authorise different data protection periods depending on the properties of the drug:
- For innovative drugs that have been approved for market, a 6 year data protection period will be granted;
- For innovative drugs that are also rare disease medication or special medicine for children, a 10 year data protection period will be granted;
- For improved drugs that are also rare disease medication or special medicine for children, a 3 year data protection period will be granted;
- For innovative biological products for treatment, a 10 year data protection period will be granted; and
- For drugs that have successfully challenged relevant patents or are the first Chinese imitative drug of an overseas marketed drug, a 1.5 year data protection period will be granted.
- In relation to new drugs that have been granted market approval from the EU, US or Japanese authorities, in order to be granted the appropriate data protection period according to the category of the drug, the applicant must file the applications for drug market registration and data protection within 1 year of the date the drug obtained the overseas market approval. If the application is filed after 1 year from the date that the overseas market approval was obtained, the data protection period granted will be deducted according to the amount of time that the application exceeds the 1 year anniversary of initial approval. 1.5 years is the minimum data protection period that will be granted meaning that if, after deducting the relevant amount of time, the data protection period is less than 1.5 years, a data protection period of 1.5 will be granted regardless.
- Reinforcing the responsibility of national staff to protect confidentiality
National staff who are involved in the examination and approval of drug or medical device registration as well as staff who participate in the verification, inspection and administration of drug registration, are under an obligation to ensure technical secrets and trial data submitted by the applicants are kept confidential. If this duty of confidentiality is breached, the drug authority can punish the perpetrator according to the relevant laws and regulations, and such punishments will be made public.
- Establishing the Marketed Drug Catalogue (the “Catalogue”)
The Catalogue would be the Chinese equivalent to the ‘Orange Book’ in the US. Drugs that are approved for marketing in China would be included in the Catalogue, along with the category of the drug (for example innovative drugs, improved drugs or generic drugs). Further details such as the active ingredients, dosage forms, specifications, Market Approval Holders and exclusive rights (such as patents, monitoring periods and trial data protection) would also be included.
Although the Draft is not in final form, the Draft is the first time that Chinese legislation has clarified the ‘patent linkage’ regime or formalised the establishment of an equivalent to the US ‘Orange Book’ regime. The trial data protection regime is also a significant development. Undoubtedly, innovative pharmaceutical companies will greatly benefit if the abovementioned provisions of the Draft are made effective. In particular, the Draft will benefit multinational pharmaceutical companies as these companies are specialists in drug research and development. The Draft reinforces the authority’s current approach of encouraging overseas drugs to be registered in China as soon as possible in order to benefit from favourable policies. It is hoped that this policy will encourage multinational pharmaceutical companies to place greater focus on China in their global marketing strategy.