Can the dividends of the drug patent term compensation system benefit the new drugs already on the market, attracting attention to expert advice
"Transition Clause" is added to the Implementing Regulations of the Patent Law
● The patent term compensation system can be formally written into the patent law, which is a matter of quick success for innovative pharmaceutical companies. It will strengthen the capital market’s confidence in the investment in new drug R&D and make the Chinese pharmaceutical industry undergoing transformation and upgrading a benign future cycle
● The establishment of the patent term compensation system has ushered in the spring of innovative pharmaceutical companies, which made them rejoice.
However, as to whether they can be applied to new drugs that have been on the market since April 2018, the current regulations in the consultation draft make them a little uneasy.
● Taking into account the current situation of my country's generic drugs as the mainstay, it is understandable that the system design is biased towards generic drugs, but this does not mean ignoring the reasonable demands of innovative pharmaceutical companies
Our reporter Zhang Wei
Can the dividends of the drug patent term compensation system benefit the new drugs already on the market?
This issue has been widely discussed by people in the industry since the State Intellectual Property Office published the "Proposals for Amendments to the Implementation Rules of the Patent Law (Draft for Comment)" (hereinafter referred to as the Draft for Comment).
The latest revision of the "Patent Law of the People's Republic of China", which will be implemented on June 1 this year, has established a "pharmaceutical patent term compensation system", which has cheered innovative pharmaceutical companies.
However, when the compensation is calculated and applied to the new drug on the market, it depends on the specific provisions of the subsequent implementation rules that coordinate with the amendment of the Patent Law.
The Draft for Opinions stipulates that if the patentee requests compensation for the duration of drug patents, they shall submit a request for compensation for the duration of drug patents to the Patent Administration Department of the State Council within 3 months from the date of approval of the drug marketing license application.
This means that the draft for comments only draws a red line of time "within 3 months". If this one is finally passed, it will be listed before March 1, 2021 (there are also views that before June 1, 2021) New drugs will not have the right to apply for patent term compensation.
This point makes many innovative pharmaceutical companies feel disappointed. The reporter of the "Rules of Law Daily" learned that they have submitted relevant amendment proposals to the State Intellectual Property Office: setting a "transition period" to retroactively apply to new drugs listed after April 2018 .
The main reasons for this are: In April 2018, the State Council executive meeting decided "to provide compensation for the patent protection period of up to 5 years for innovative drugs that are simultaneously applied for listing in China and abroad."
Since then, as many as 31 Class 1 new drugs have been developed and marketed by local pharmaceutical companies.
Intellectual property experts also expressed concern about this.
"The above-mentioned provisions of the draft for comments will enable early response to policy requirements, completion of the research and development of innovative drugs earlier, more active application for marketing approval, and early benefit of innovative drug companies that benefit related patients. After obtaining listing approval in two or even months, one-third to one-half of the patent protection period is lost. This is unreasonable for innovative companies, and it is likely to dampen the innovation enthusiasm of these companies." Beijing Pragmatic Intellectual Property Said Cheng Yongshun, director of the Development Center.
The patent system continues to escort
The best time to make innovative drugs has arrived
When "I'm Not the God of Medicine" was released in 2018, it once aroused heated discussions in the society, and the issue of drug patents and pricing was even more concerned by professionals.
The price of the original Swiss drug Gleevec for the treatment of chronic myelogenous leukemia is much higher than that of the generic drug, the latter being only 17% of the former.
Why is it so?
The approval time and initial investment for R&D drugs are huge, and companies often can only offset the initial R&D costs by obtaining high economic returns 10 or several years after the drug is on the market.
Gleevec’s manufacturer, Novartis, Switzerland, has an investment cycle of several decades to produce the drug, with a total amount of more than 5 billion U.S. dollars. After its entry into China, according to the previous patent protection system, only 12 years of patent protection remain. , Gleevec’s high price is hard to avoid.
In the long term, if there is no enterprise to research and develop innovative drugs, it will not be able to protect the people's right to life and health for a long time.
Coupled with the improvement of domestic research and development level, the number of original research drugs is increasing, and the time is ripe for my country to establish a drug patent term compensation system.
Previously, Zhang Hongchun, member of the National Committee of the Chinese People’s Political Consultative Conference and director of the Health Care Department of the China-Japan Friendship Hospital, revealed in an interview that as of January 2018, there were more than 4,100 new drug research and development companies in the world, and the number of new drug research and development companies owned by China was tied for third place with Canada. , Accounting for 5% of the world.
Obviously, innovative pharmaceutical companies have the highest enthusiasm in this regard.
As early as 2015, Ding Lieming, deputy to the National People's Congress and chairman of Betta Pharmaceuticals Co., Ltd., proposed to establish a new drug patent period extension system at the third meeting of the 12th National People's Congress to encourage independent innovation by pharmaceutical companies.
For many years thereafter, this was the focus of his attention at the National Congress of the People's Republic of China.
"International experience has proved that the pharmaceutical patent term compensation system is actively established by the pharmaceutical powers at a certain stage of the development of pharmaceutical innovation capabilities, and has become an important policy to further enhance pharmaceutical innovation capabilities." Ding Lieming said.
In October 2017, good news came: the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council issued the "Opinions on Deepening the Reform of the Review and Approval System and Encouraging Innovation in Drugs and Medical Devices", proposing to "launch a pilot program for drug patent term compensation systems."
In April 2018, the executive meeting of the State Council decided to “give a maximum of 5 years of patent protection period compensation for innovative drugs that are simultaneously applied for listing in China and abroad”. This is the first time that the country has clearly granted patent term compensation protection to innovative drugs at the policy level. .
Since then, the R&D enthusiasm of local pharmaceutical companies has reached a new climax: According to statistics, there are 31 Class 1 new drugs developed and marketed by local pharmaceutical companies, including Hengrui, Hausen, BeiGene, and Hutchison Whampoa. The number of enterprises developed by the Ministry is the largest.
By last year, the newly revised Patent Law formally established a drug patent term compensation system.
Article 42 of the New Patent Law clearly stipulates: In order to compensate for the time occupied by new drug marketing review and approval, the national patent administration department shall, at the request of the patentee, grant compensation for the duration of patent rights and compensation for new drug-related patents that have obtained marketing authorization in China. The term shall not exceed five years, and the total effective patent right term after the new drug is approved for marketing shall not exceed 14 years.
"The patent term compensation system can be officially written into the patent law. It can be said that it has exceeded our expectations. It is a matter of quick success for innovative pharmaceutical companies. This will strengthen the capital market’s confidence in the investment in new drug research and development, and make it transform and upgrade. The Chinese pharmaceutical industry in China will form a virtuous circle in the future." said Zhang Lianshan, senior vice general manager of Hengrui Pharmaceuticals and president of global research and development.
Lan Hong, vice president of Betta Pharmaceuticals and head of Beijing R&D Center, sees that China’s new drug patent term compensation system and drug patent linkage system are gradually in line with international standards, and he is very pleased: “We have a large number of people leading the development of innovative drugs. With experience and capital returning to China, it can be said that it is catching up with China's best era of innovative drugs."
Lan Hong has presided over the research and development of several new drugs in several well-known multinational pharmaceutical companies. He believes that domestic innovative drugs are in a period of rapid development. If the patent system can always protect innovation, it will greatly enhance the innovation confidence of the entire industry. In the next few years, China's accumulated advantages will be gradually revealed."
China's new drug application achieves blowout
Whether the new regulations can be applied has attracted much attention
The establishment of the patent term compensation system has ushered in the spring of innovative pharmaceutical companies, which made them rejoice.
However, they are a little uneasy about whether they can be applied to new drugs that have been on the market since April 2018, and the current regulations in the draft for comments.
And this impact is not small.
Since 2018, with drastic medical policy reforms and patent policy blessings, China's new drug applications have begun to blow out.
According to Chen Kaixian, an academician of the Chinese Academy of Sciences, in 2018, 10 new Class 1 drugs were launched in my country, 12 new drugs were added in 2019, and 15 new drugs were added in 2020.
Among them, there are 31 Class 1 new drugs developed and marketed by local pharmaceutical companies.
“Not only is the number of new drugs increasing, some of them are also quite innovative.” Chen Kaixian took the rosastat capsules listed in China as an example. The rosastat capsules were developed by Beijing Fabojin Company and are the first based on the award of 2019. The "Global New Drug" developed by the Nobel Prize in Medicine's "Cell Perception and Adaptation to Oxygen Supply" mechanism.
In December 2018, Roxastat capsules were the first to be approved for marketing in China, making my country the first country in the first batch of drugs for the first time.
"This indicates that some of China's drug research and development have taken the lead in the international arena." Chen Kaixian said.
For the developers of Roxastat capsules, whether they can obtain the protection of the patent term compensation system is the issue they are most concerned about at the moment.
Zhong Li Yunhua, general manager of Beijing Fabojin Company, said: "We have invested more than ten years of time, manpower and huge financial resources for this. If this new drug with breakthrough innovation value can be compensated for the patent period, it will fully mobilize the innovation of the enterprise. Enthusiasm can also benefit more patients with anemia."
It is understood that Roxastat capsules are currently listed in China and Japan, and will be listed in the United States and Europe, and these countries and regions have implemented patent term compensation systems.
"Roxastat was the first to be approved for listing in China, and I hope to be the first to obtain the support of the country to implement patent extensions, demonstrating the country's support for innovation." Zhong Li Yunhua said.
"In fact, the current domestically marketed new drugs have made a significant contribution to the country, and have solved a large part of the problems of drug accessibility and people's livelihood. If we can't give these innovative drugs that have been actively appealing in the early years and have contributed to the national economy and people's livelihood, Compensation with the patent period will dampen the innovation enthusiasm of enterprises." Zhang Lianshan said.
According to Zhang Lianshan, Hengrui Medicine has now developed 7 new drugs on the market, and most of the core patents have been more than 10 years from application to approval for listing. "There is not much time left for companies after listing."
For example, the effective patent period of the second independent new drug, apatinib, is less than 8 years after the market. "If it cannot generate sufficient commercial returns during the remaining patent period, what motivation does the company have to continue to innovate?"
There is also Betta Pharmaceuticals that has the same concern.
In November 2020, it launched the company's second self-developed blockbuster Class 1 new drug, Ensatinib, which is the first self-developed domestic ALK inhibitor. After 13 years of research and development and approval, it was launched on the market.
Its compound patents will expire in 2031, and the remaining valid patent period after listing is nearly 11 years.
If the drug can be included in the scope of the exclusive supplement period compensation, the market exclusivity period will be extended for more than 3 years.
Su Yantao, Intellectual Property Director of Betta Pharmaceuticals, said: “It would be unfair for innovative pharmaceutical companies to lose more than 3 years of patent protection just because of the approval of listing a few months in advance.”
It is recommended that the compensation system be retroactive
Encourage pharmaceutical companies to strengthen R&D and innovation
In the eyes of experts, are the concerns of innovative pharmaceutical companies justified?
Cheng Yongshun said that in 2015, China began to emphasize encouraging innovation in the pharmaceutical industry and adopted a series of measures.
Innovative pharmaceutical companies respond to national policy requirements, carry out drug innovation, and finally pass the review of the drug regulatory authority to realize the listing of drugs in China, and their innovative behavior should be encouraged.
The provisions of the draft for comments are unfair to innovative drug companies that respond to policy requirements early, complete the research and development of innovative drugs earlier, apply for marketing approval more actively, and enable them to benefit relevant patients earlier.
Cheng Yongshun suggested that with reference to international practices and domestic past practices, the patent protection period compensation system can be traced back to the past. For example, the second paragraph of Article 85seven of the Implementing Regulations of the Patent Law is added, which stipulates that the patent law has been in China before the patent law comes into force. For new drugs that have obtained marketing authorization and meet the requirements for compensation for the patent application period specified in the first paragraph of this article, they may submit a request for compensation for the drug patent period to the Patent Administration Department of the State Council within 3 months from the effective date of the Patent Law.
A separate transition clause has been added to the Implementing Regulations of the Patent Law, stating that: new drugs that have been approved for marketing in China before the Patent Law comes into force shall comply with Article 42 Paragraph 3 of the Patent Law and Article 85-7 of the Implementing Regulations of the Patent Law Where the prescribed conditions for compensation for the duration of patent application are filed, a request for compensation for the duration of drug patents may be submitted to the Patent Administration Department of the State Council within 3 months from the effective date of the Patent Law and its implementation rules.
The State Intellectual Property Office announced the extension of the term of the invention patent, but did not update the patent certificate, and the original patent certificate continued to be valid.
"These are all conducive to further stimulating pharmaceutical companies to invest in innovative drug research and development." Cheng Yongshun said.
According to Zhang Xiaoyu, head of the Intellectual Property Department of Hausen Pharmaceuticals, in order to reflect fairness and encourage and support innovative leading companies by the state, it is very necessary to add transitional clauses in the implementation rules of the Patent Law to retroactively extend the system dividends to 2018. The State Council clearly granted new drugs on the market after the patent term compensation decision was made.
Zhang Lianshan also said: “Since the state clearly proposed compensation for patent term in April 2018, and the legislation objectively requires a period of time to process, after the legislation is determined, these new drugs on the market that respond to the policy should be compensated for. Promise of."
It is understood that in European and American countries, legislation or judicial precedents have clarified that the application of the compensation system for drug patent protection period is retrospective.
For example, while the European Union issues new regulations for supplementary patent protection certificates, the European Patent Office has issued a "transitional period", stipulating that if a marketing authorization has been obtained in a member state and the patent is still valid, it is entitled to apply for protection in accordance with the regulations.
Is it possible to postpone the listing of generic drugs by adding a transitional period and extending the retroactive effect to April 2018?
Lan Hong believes that these new drugs will be on the market for no more than 3 years, and they are still within the 20-year patent protection period, which will not affect generic drugs. Usually, after a new drug is listed for 5 years, generic drug companies will decide whether to deploy according to market conditions. .
BeiGene patent attorney Xu Yang said: “Most of the domestic new drugs are me too or me better of similar innovative drugs abroad. In this way, the patents of foreign innovative drugs usually expire earlier than the patents of similar new drugs in China. The best choice must be imported drugs that expire earlier." In Xu Yang's view, the biggest threat to domestic new drugs in the future and competition from generic drugs of similar imported drugs.
Cheng Yongshun added: "The purpose of the new patent protection period compensation in the Patent Law is to encourage and protect innovation. Considering the current situation of my country's generic drugs dominated by generic drugs, it is understandable that the system design is biased towards generic drugs, but this does not mean ignoring innovative drug companies. Reasonable demands. To improperly restrict the patent protection period compensation system that was originally beneficial to innovative drugs, and to consider or even cater to the interests of generic drugs. This in itself runs counter to the purpose of the system design, and is also unreasonable and unscientific. ."