Patent conditions amended for drugs

The country has amended a patent regulation to give a clear definition of "patented pharmaceuticals" that are subject to compulsory licensing, amid a system that allows parties to exploit patented inventions without the permission of the patent's owner.

The existing Patent Law granting a compulsory license for patented pharmaceuticals in China for the purpose of public health. It applies to manufactured products in China as well as exports to qualified countries under international treaties to which China is a member.

But the law fails to give a clear definition of "patented pharmaceuticals" that are subject to such practice.

The latest move, which was released on Jan 9 and took effect on Monday, makes it clear that "patented pharmaceuticals" are "any patented products or products directly obtained according to patented processes in the medical and pharmaceutical field to address public health issues, including patented active ingredients needed in the production of the product and diagnostic supplies necessary for the application of the product".

"The purpose is to make the compulsory licensing system compatible with the need to cope with public health crises," Yin Xintian, director of legal affairs department of the State Intellectual Property Office, said at a press conference on Wednesday.

China's amendment to the compulsory licensing is based on a World Trade Organization (WTO) protocol agreed in December 2005 that allows WTO members to issue compulsory licenses for the production and export of pharmaceuticals to an eligible importing member. China accepted the protocol in December 2007.

When patented foreign drugs are deemed too expensive for domestic consumers, compulsory licensing is usually adopted to help provide relatively cheaper generic counterparts.

China's newly amended law clears the way in legal issues for the use of generic versions of patented drugs domestically, but whether a mature compulsory license system is able to develop in the country relies on the specific operations of the law, said Jia Ping, founder and CEO of the China Global Fund Watch Initiative and a leading researcher on HIV/AIDS, law and human rights in China.

"Demand for HIV/AIDS, cancer, hepatitis and cardiovascular diseases drugs are currently high in China, but patents of most major drugs are held by a number of international manufacturers, which push domestic ones downstream in the industrial chain," Jia said.

He said a number of big Western companies adopt an "evergreen" method to prolong their patent periods.

"The standard patent protection period is 20 years. When the deadline approaches, the companies patent an improvement on the drug - sometimes just a small step - which grants another 20 years," Jia said.

So far, compulsory licenses have never been issued in China, leading to a lack of generic versions of these drugs, Jia said.

"Take HIV/AIDS as an example. China is highly dependent on government procurements and internationally donated drugs. Two years ago, there was an outcry demanding more lamivudine around the country. To fulfill domestic needs, local production of such drugs under compulsory licensing is necessary," Jia said.

But Jia said the government needs to do more to motivate local pharmaceutical factories.

"You have to ensure the factories that the law will be fully carried out to protect their rights when it comes to legal disputes. The compulsory licensing has been in the law for long, but some insiders complained that the regulations were not detailed enough. Now that they have further amended the law, the question will be how other government bodies will make use of it," he said.