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2007 |
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China challenging drug patents
As companies lose protection, some say local generic manufacturers are emboldened
By Paul Mooney
20 August 2004
BEIJING—Foreign pharmaceutical manufacturers in China are facing new challenges as local drug companies step up their efforts to overturn the validity of domestically issued patents.
The industry was rocked in July when China's State Intellectual Property Office (SIPO) revoked patent protection for Pfizer's Viagra (sildenafil citrate). A Chinese-language document on SIPO's Web site says the Patent Reexamination Board (PRB) revoked Pfizer's patent for insufficient disclosure, arguing that Pfizer's application had failed to accurately explain the use of the drug's key ingredients.
Pfizer contended that SIPO retroactively
applied a new amendment to the Patent Law when it ruled against
its patent. E. Allan Gabor, chairman of Pfizer in China, said the
company provided sufficient information in its patent manual to
meet Chinese regulations at the time of application, adding that
it appeared the PRB "used a higher standard this time around
than the first time."
"To take 7 years to evaluate our product and 2 years to review, and then assess insufficient disclosure is a bit disheartening," Gabor told The Scientist. "To some degree, it's mystifying how they came to this conclusion. But they did."
Cao Jinyan, vice president of the Patent Research and Development Center
of SIPO, denied that the amendment to the patent law was applied
in revoking the patent. "According to the examiner who was
in charge of the first examination, Viagra
was in accord with the requirement for granting a patent,"
she told The Scientist. "But this does not guarantee that the
former examinant's decision was totally right. And it is not sufficient
reason to hold back a new investigation."
Cao said that SIPO had determined that Pfizer didn't fulfill the requirements of the patent law regarding disclosure, explaining that the invention could not be reproduced by experts using the information provided in the patent manual submitted by Pfizer. She did not say why this was not discovered before SIPO granted the patent.
The Viagra decision comes more than 3 years after 12 Chinese pharmaceutical companies launched a petition to nullify the patent for sildenafil citrate. A Beijing lawyer familiar with intellectual property rights issues said Pfizer may have been caught in a catch-22: they may have provided just enough information to the patent office to meet local requirements, while holding back some key details to protect the process from counterfeiters in China.
Pfizer has faced many frustrations since bringing Viagra to the Chinese market. Cheap counterfeit products immediately appeared on shop counters and in airport shops around the country, despite regulations restricting sales to government-authorized doctors and hospitals. Pfizer says 90% of the Viagra sold in China is fake or counterfeit.
And the company is disappointed with the success of the product in China. "We have yet to see any return on our investment like we expected for a product like this," said Gabor.
Pfizer has 3 months to make an appeal in the Beijing First Intermediate People's Court, and Chinese lawyers say it could take 2 years for the court to make a ruling. If it loses this appeal, the company can take the case to the Beijing Higher People's Court for a final decision. Should Pfizer lose both appeals, Chinese pharmaceutical companies will be able to use sildenafil to produce drugs.
In August, 17 Chinese pharmaceutical companies announced the formation of an alliance to produce a generic version of Viagra. The alliance hopes to sell its product for 40 to 50 yuan (about USD $5) per tablet, and some industry sources predict the price per tablet could fall to as low as 20 yuan should local companies be allowed to produce the drug. Pfizer currently charges 99 yuan for its version.
Until a court ruling is made, Pfizer's patent will continue to be protected under Chinese law. Pfizer is expected to try to keep the case tied up in Chinese courts for much of the remaining validity of the patent, which expires in 2014. However, Chinese legal experts say that if local companies decide to produce the drug in the interim, the government may decline to take any action on the grounds that the patent is under dispute.
The company has hinted that the case could affect its future investment plans in China. Pfizer said in a statement that it had already invested more than USD $500 million in China and that over the next 5 years it was planning to introduce up to 15 innovative medicines. The company added, however, that "appropriate intellectual property protection is essential to these plans."
On July 19, the American Chamber of Commerce issued a statement to the media criticizing the decision as "a step backward for intellectual property protection in China."
"Amcham–China member companies are very concerned about the process behind this decision and believe it a case whose implications extend broadly to the entire business community," AmCham President Charles Martin said in the statement.
Should the court rule against Pfizer on appeal, experts say more Chinese drug makers will feel encouraged to challenge foreign-held patents for the right to sell their own generic products on the domestic market. Hou Dakun, president of Beijing KevinKing Management Consulting Co., told China Business Weekly in July that local companies that have been copying foreign products since before foreign companies were able to register their products stand to lose tens of millions of dollars unless they can challenge the patents. KevinKing is a leading pharmaceutical consultant in China.
"The number of cases will definitely increase as more and more domestic drug-makers try to break the monopoly of international pharmaceutical giants on compounds they are copying," Hou said.
In another case earlier this year, four Chinese companies filed invalidation requests against rosiglitazone, the major chemical component of the popular diabetes drug Avandia, produced by GlaxoSmithKline PLC. A hearing was held on August 18, but Glaxo decided not to defend its patent. "After careful assessment of the situation, we voluntarily abandoned the rosiglitazone formulation patent and withdrew from the PRB hearing," Lilian Xiao, spokeswoman for Glaxo, told The Scientist. Xiao said Glaxo still held two other patents for the product. source :-http://www.biomedcentral.com | 
