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Mixed fortunes for pharma in China

Emma Barraclough

China is getting richer and its population is ageing. That’s a dream combination for pharmaceutical companies. But while there are plenty of opportunities for the drugs industry in the country, companies also face challenges

Pharma industryI have been meeting IP practitioners in Shanghai ahead of Managing IP’s second IP and Innovation Summit later this week and hearing about some of those challenges.

There’s the scandal rocking GSK’s China operations, of course, after employees of the British pharmaceutical company were accused of bribing doctors to prescribe its medicines and maintain high prices. The story is either one of corruption, or of western companies being targeted by Chinese officials (or perhaps both). Whichever way you look at it, it’s a sorry tale. But that’s not how one optimistic patent lawyer in Shanghai views it.

“Pharmaceutical companies have will have to be far more cautious about paying hospitals to help them boost profits and see off their rivals,” he says. “Instead, they are going to have to take IP protection more seriously as a way of defending market share. I think they will have to patent more”.

If that’s a prediction to make private practitioners happy, then news of a preliminary injunction granted to Eli Lilly last month might do the same for in-house counsel.

Chinese reports say that the US company secured the first preliminary injunction granted in a trade secrets case in China. Preliminary injunctions are notoriously difficult to obtain in China, so the order was something of a coup for the company and its legal advisers and should give IP owners greater confidence about asserting trade secrets rights in China.

Teresa Stanek ReaBut lawyers are also concerned about a provision in China’s patent examination guidelines that requires applicants to submit experimental data for a new pharmaceutical compound or pharmaceutical composition at the time the application is made. Critics say that constraints on what additional data applicants can later submit to SIPO make it easy for generic drugs companies to challenge and invalidate patents granted to originator companies on the grounds of insufficient disclosure.

Cynics suggest that the rules are designed to protect China’s generic drugs industry. Whatever the reason, it’s an issue that foreign drugs companies have been lobbying the USPTO’s acting chief Teresa Stanek Rea (left) about to encourage the US to pressure China to change its rules. She is understood to be meeting representatives of some of Shanghai’s growing originator pharma sector while she is in the city this week. If the US can show that the examination guidelines also harm Chinese innovators, so the thinking goes, it might have more success lobbying for a change in the rules.


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