China Releases Draft Implementation Guidelines for the Drug Administration Law
The latest draft implementation guidelines for China’s Drug Administration Law (“Guidelines”) are out and open for comment. Previously, the new implementation measures for early dispute resolution mechanisms for drug patents (“Patent Linkage Measures”) came into effect on July 4, 2021.
The Guidelines indicate that the final approval of generic chemical drug applications for marketing approval will be stayed pending Paragraph IV litigation results. Technical review for things like safety and efficacy will proceed regardless. Although previously published Patent Linkage Measures indicate that the maximum stay period is 9 months, these Guidelines only say “a certain period.” The regulatory approval process for generic biologics and traditional Chinese medicines will not be stayed pending Paragraph IV litigation results.
First Generics: Similar to the US, China also gives “first generics” market exclusivity. Under the new proposed Guidelines, the first generic chemical drug applicant to (1) successfully challenge an innovator patent and (2) obtain marketing approval will obtain 12 months of market exclusivity. This exclusivity period of time is twice as long as the US’s version, which gives 180 days of exclusivity. Furthermore, the exclusivity period cannot exceed the original term of the challenged patent.
It’s no surprise that the China would like to promote lower cost access to medicines to its people, even including in the preamble “[t]he State encourages the development of generic drugs.”
Pediatrics: Any new variety, dosage form or specification designed specifically for pediatric use; or an existing drug approved for any new indication or use specifically for children, can enjoy up to a maximum of 12-month marketing exclusivity.
Orphan Drugs: Any new drug approved for treating a rare (orphan) disease can enjoy up to a maximum of 7 years marketing exclusivity, provided that the manufacturer can guarantee supply. If supply is not guaranteed, then the marketing exclusivity will be terminated.
The new proposed Guidelines also set out more details on exclusivity for confidential data, including providing 6 years for “newly approved drugs.” The NMPA will not approve any new drug application that uses data that a marketing authorization holder (“MAH”) used to obtain drug marketing approval without the MAH’s prior approval, unless if the data was acquired independently.
The Guidelines seems to recognize that confidentiality of clinical data is important. It has set forth strong language stating that no one from the NMPA may disclose any clinical data unless if it is (1) in the interest of the public or (2) steps are taken to protect the data against unfair commercial use.
The Guidelines further set forth penalties for data disclosure (experimental or other), making the NMPA liable for losses/damages arising from the NMPA (or its staff’s) violation of the regulations. It further emphasizes that personnel/staff who intentionally or negligently disclosed data shall also personally provide compensation and even potentially suffer administrative sanctions.
A Few Comments
“Newly Approved Drugs” replaced “New Chemical Entity”
Since 2002, The Chinese Patent Law has provided a 6-year data exclusivity period for new chemical entities (NCE’s), added as a condition for China joining the WTO. In the past, it has been said that the 2002 data exclusivity provisions for NCEs had no teeth for a few reasons.
Data Exclusivity in the Past
One is that the term “new chemical entity” was narrowly interpreted as a new to the world (not new to China). As such, foreign drugs whose first clinical trials were not done in China were not considered new chemical entities when they entered China.
Second, China’s regulatory agencies considered data obtained from the public disclosures as being obtained “independently.” Therefore, if a foreign company published the results of a clinical study, a generic company could arguably use that publicly available data for its own clinical filings without running afoul any data exclusivity protections, since the data was acquired “independently” from the public.
“New Chemical Entity” to “Newly Approved Drug”
In these new data exclusivity draft provisions, the change from “new chemical entity” to “newly approved drug” implies that the NMPA is adding more weight behind data exclusivity protection, clarifying that protection is given to any “newly approved drug,” not just new chemical drugs. Furthermore, “newly approved” implies newly approved by NMPA, which gives room to foreign drugs previously approved in other jurisdictions.
The exception “unless if the data was acquired independently” is a bit unclear.
We should note that the exception for data “acquired independently” is still in the new version of the regulations, and uses pretty much the same language “自己获得”. We think it is worth asking the NMPA to clarify that “acquired independently” does not include using data from published clinical trials. Otherwise, this potential loophole still exists.
Confidentiality of Data
Finally, we know there has been concern about the confidentiality of data that is submitted to the NMPA. At least these draft Guidelines acknowledge importance of confidentiality, strongly supports the protection of such data, and clearly lays out certain consequences to those who do not protect data confidentiality. At the same time, broad and vague exceptions, such as for “public interest”, no data protection if “acquired independently”, and trying to figure out what “unfair commercial use” really means, still provides reasons for concern. It shall remain to be seen how things will really play out.
We will keep you updated on any further developments. Stay tuned for more important updates on IP law in China.
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This article is for general informational purposes only and should not be considered legal advice or a legal opinion on a specific set of facts.