Big pharma is the ‘winner’ from US-China deal, say lawyers

Phase one of the US-China trade deal agreed last week is a major win for pharmaceutical companies, lawyers have told LSIPR.

“Pharmaceutical companies are the big winners from the agreement,” Doug Clark, global head of dispute resolution at IP consultancy Rouse, told LSIPR.

Alison Wong, partner at Bird & Bird, agreed that the deal was likely to benefit originator pharmaceutical companies, which develop new drugs.

As part of the deal, China has agreed to introduce patent term extensions (PTEs) to compensate for any delay in granting regulatory approval for pharmaceutical products.

The trade deal marks another step towards the introduction of PTEs, which had already been mooted in a draft patent law last year.

Wong said the move would bring China in line with other jurisdictions, and allow patent owners more time to recuperate their investment in bringing the drug to market.

Patent linkage

Patent owners will also be able to sue for patent infringement when an application is filed for a new generic of their product, as is the case with abbreviated new drug applications in the US—a system known as ‘patent linkage’.

At present, patent owners must wait until the generic product is being offered for sale on the Chinese market before suing for infringement.

Wong said that the likely outcome of the trade deal was that “more patents will be upheld and, with the implementation of patent linkage and PTEs, originators will have greater ability to protect their pharmaceutical products”.

China will also allow patent applicants to submit post-application test data to prove that a patent is inventive.

“While an arcane area of law, this is actually very important,” Clark said.

“Many foreign pharmaceutical companies have had their patents invalidated in whole or in part because of very strict rules prohibiting post-application test data.”

Clark added: “The nitty-gritty of the agreement reflects real change to many areas that have been of real concern to foreign (and indeed many Chinese) companies.”

Did you enjoy reading this story?  Sign up to our free daily newsletters and get stories sent like this straight to your inbox.