China – New CFDA Draft Policy Introduces Patent Linkage And “Orange Book” Type Record.

 

25 July, 2017

 

On 12 May 2017, the Chinese Food and Drug Administration (CFDA) issued a policy document titled "Policies Regarding the Promotion and Protection of Innovators' Rights in Drugs and Medical Devices (Consultation Draft)" ("the Policy Document") for public comment. Several key policies are outlined in the Policy Document including drug patent linkage, drug trial data exclusivity and the introduction of the Chinese version of the "Orange Book".

 

A summary of the relevant provisions are below:

 

Drug patent linkage – upon the filing of an application for drug registration, the applicant must submit a statement regarding the relevant patent rights of which the applicant is aware. Where the applicant seeks to challenge a patent, the applicant should declare non-infringement of the relevant patent and notify the patent owner within 20 days of filing. Where infringement is alleged, the patent owner should file an action within 20 days of receiving a notification from the applicant and notify the drug review board. Once the infringement action is accepted by the judiciary, the drug review board should stay the grant of approval for up to 24 months, during which time the assessment of the application will continue. Where the parties have reached a settlement or a decision has been issued during the period of stay, the drug review board shall take into consideration such settlement or decision as part of its approval process. However, if no infringement ruling is handed down within the 24-month period, the drug review board may grant a marketing authorisation in respect of the pending application. If the application did not file a non-infringement declaration but a patent owner has initiated a patent infringement action, the drug review board may also implement a stay period.

 

Improved drug trial data exclusivity – an applicant may apply for data exclusivity upon filing for marketing authorisation. The data exclusivity period starts from the date of marketing authorisation and lasts for:

 

• 6 years for new innovative drugs;
• 10 years for paediatric innovative drugs and innovative drugs for rare diseases;
• 10 years for innovative biologic products;
• 3 years for improved new drugs for rare diseases and children;
• 1.5 years for a generic drug which (a) has successfully invalidated a patent or (b) is the first generic drug that has been approved locally based on an originator which has been marketed abroad.

 

A Chinese version of the "Orange Book" – the register will categorise each of the approved drugs as an innovative drug, improved new drug or generic drug that has passed the review for equivalency in quality and efficacy. The record will also provide information on API, dosage, specification, the marketing authorisation holder, and proprietary data in relation to patents, trial data and data obtained during the drug monitoring period.

 

Under the current Drug Registration Rules (the Rules), there exists a moderate patent linkage system whereby an applicant for marketing authorisation must make a declaration of non-infringement with regards to relevant third parties' patents in China. The Rules require the applicant to submit their application during the last 2 years of the patent term, and the marketing authorisation will only come into effect upon expiration of the patent.

 

The Policy Document confirms the regulators intentions to enhance patent linkage by requiring the drug review board to take into account patent infringement disputes during its marketing authorisation approval process. The patent linkage thus prevents the regulator from approving a product that would infringe a valid patent.

 

For innovator companies, the patent linkage ensures the protection of their innovation, while data exclusivity prevents generic manufacturers from relying on the innovator's expensive clinical data for a prescribed period of time. As for generic companies, the Policy Document allows them to make an earlier filing for marketing approval and obtain approval based on findings of non-infringement or invalid patents. 

 

The creation of a Chinese version of the "Orange Book" will be useful for pharmaceutical companies during China's drug tender process, a process which can be both complicated and confusing. The new system would provide key information relating to drug status and patent information relevant to the tendered drug, which will improve the transparency and fairness of the tender process.

 

Following the end of the consultation period on 10 June, pharmaceutical companies seeking market entry into China may expect further CFDA announcements on the implementation of the Policy Document in due course.