Chinese medicine patent 'limit' extended by 5 years! Exclusive analysis of the moat game in the trillion dollar market
On December 17, 2024, the China National Intellectual Property Administration announced that "Xinjiang Huachun Biological Pharmaceutical Co., Ltd." (hereinafter referred to as "Huachun Pharmaceutical") was approved to extend its core patent ZL03156365.1 (hereinafter referred to as "extended patent") for 1827 days based on the approval document of the 1.1 class innovative traditional Chinese medicine "Shenge Bushen Capsule" (GYZZ20220008) and the drug registration certificate No. 2022S01214, which really made other innovative drug holders envy. This article will explore China's drug patent extension system (PTE) and its impact on patent layout strategies from the perspective of drug research and development patent layout affairs, starting from the actual case of the drug.
Shen Ge Bu Shen Capsule is independently developed by Xinjiang Huachun Biopharmaceutical Co., Ltd. (hereinafter referred to as "Huachun Pharmaceutical") and the School of Life Sciences at Tsinghua University. It is the first innovative traditional Chinese medicine in China to treat mild/moderate depression of Qi Yin deficiency and kidney Qi deficiency syndrome type 1.1. This research has been designated as a "National Major New Drug Creation and Science and Technology Major Project". According to media reports, "Shenge Bushen Capsule" is the first traditional Chinese patent medicines and simple preparations in the world to treat depression with the combination of effective parts. This variety was approved for market on December 29, 2022, after a period of 22 years from its establishment in 2000.
During the development process, the drug underwent a randomized, double-blind, placebo-controlled multicenter clinical trial. The results of the clinical trial showed that the difference between the HAMD-17 score and baseline was the main efficacy indicator, and the efficacy of the experimental group was better than that of the placebo group [2].
The domestic antidepressant market will continue to grow rapidly in the future. Research and Markets, an authoritative organization, estimates that the market size of antidepressants in China will be about 17.2 billion yuan in 2022. With the increasing number of patients with anxiety and depression after the COVID-19 epidemic and the further improvement of the treatment rate, the market size of antidepressants in China is expected to reach 23.8 billion yuan by 2030, with a compound growth rate of 4.2% from 2022 to 2030, which is higher than the global overall level (2.5%) [1].
According to the product manual, technical evaluation report, and other information provided by Mo'en · Pharmaceutical, the main ingredients of this medicine are Taizishen, Gegen, and Epimedium, and it is a hard capsule. It has the effects of nourishing qi, yin, and kidney, and is suitable for the TCM syndrome differentiation of mild to moderate depression, which belongs to qi yin deficiency and kidney qi deficiency. Taizi ginseng is sweet, slightly bitter, calm, and returns to the spleen and lung meridians. It is used to nourish qi, yin, and produce fluids, targeting the core pathogenesis of qi and yin deficiency. It is a royal medicine. Ge Gen Gan, Xin, Liang, Gui Spleen, Stomach, Lung Meridian, Sheng Yang Sheng Jin; Epimedium is pungent, sweet, and warm, and it is beneficial for the liver and kidney meridians. It helps to elevate the yang energy of the emperor's medicine and promotes nourishment without stagnation, making it a common medicine for officials. The three medicines work together to nourish qi, yin, and kidney.
This variety was approved for clinical trials in 2005 and completed Phase III clinical trials in 2014, taking more than 9 years. From clinical completion to market application in 2022, the approval process has been lengthy and bumpy, involving multiple rounds of communication, exchange, and supplementary research.
The patent application date is September 5, 2003, and the theoretical expiration date is September 5, 2023. The authorized claims include 7 claims, among which claims 1-3 are "prescriptions" limited by the weight of 3 raw medicinal materials; Claim 4 limits the percentage of the main active ingredients in the compound; Claims 5 and 6 limit the dosage form of the drug; Claim 7 specifies the preparation method of the formulation, which is a very common method in the field of traditional Chinese medicine, namely water decoction and alcohol precipitation.
According to the "Drug Patent Term Compensation Approval Decision" of the State Intellectual Property Administration, the time for proposing PET is January 12, 2023, and the designated claims are 1-6. After examination, it was determined that the designated claims include new drug related technical solutions. The expiration date of the extended patent right is September 5th, 2028.95, which is equivalent to a full extension of 5 years.
The legal basis of China's PTE system includes：
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Article 42 (3) of the Patent Law (implemented from June 1, 2021);
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Articles 80 to 84 of the Implementing Regulations of the Patent Law (effective from January 20, 2024);
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Guidelines for Patent Examination (to be implemented from January 20, 2024) Part V Chapter 9 Section 3；
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Article 13, Paragraphs 2-3 of the "Transitional Measures for the Handling of Examination Business Related to the Implementation of the Revised Patent Law and its Implementing Regulations" (Office Announcement No. 559) and the "Notice on the Handling of Patent Term Compensation Business" (January 18, 2024).
According to Chapter 3.1 of Part V of the Examination Guidelines, if a new drug is to propose a PTE, it should also meet the following conditions:
(1) The announcement date of patent authorization requesting compensation shall be earlier than the date of approval of the drug marketing authorization application;
(2) When making a compensation request, the patent right (designated claim) is in a valid state; (Patents that have been invalidated but have not been decided to take effect can request compensation)
(3) The patent has not yet received compensation for the expiration of drug patent rights;
(4) The claims for compensation for patents include new drug related technical solutions that have obtained marketing authorization;
(5) If a drug has multiple patents at the same time, the patentee can only request compensation for the duration of the drug patent for one of the patents;
(6) If a patent involves multiple drugs at the same time, only one drug can be requested for compensation of the patent term for that patent.
Among the above conditions, it should be noted in Article 2 that even if the patent is invalid or there are invalid decisions that have not yet taken effect, compensation requests can still be made. However, in terms of strategy, attention should be paid to considering the risk of future patent stability.
The establishment of Articles 3, 5, and 6 is aimed at balancing the interests of patent holders and the public, innovative drug companies, and generic drug companies. On the one hand, it affirms innovation and grants exclusive benefits for extension, while on the other hand, it does not allow for excessive extension of the duration of such exclusive benefits.
The content of point 4 needs to be reviewed by the actual audit department, and if necessary, there may be review opinions that need to be responded to. The method for determining whether a claim "includes" a new drug related technical solution includes the following situations:
1. The designated claims are identical to the corresponding technical features of the new drug related technical solution;
2. Although there are differences in the description of the corresponding technical features between the specified claims and the new drug related technical solution, it is only a simple textual transformation, and the two have the same substantive meaning;
3. The technical features of the new drug related technical scheme belong to the subordinate concepts of the corresponding technical features of the specified claims;
4. The numerical or numerical range characteristics of new drug related technical solutions refer to specific point values or ranges in the corresponding numerical range characteristics of the specified claims.
Regarding the content of the "Approval Decision on Compensation for Drug Patent Term Extension" for "patent extension", the designated claims that have been extended are 1-6, and after examination, they include new drug related technical solutions. The ingredients of Shen Ge Bu Shen Capsule are Tai Zi Shen, Ge Gen, and Yi Yin (see drug instructions). It is speculated that claims 1-4 should belong to the fourth situation, and claims 5-6 should belong to the third situation.
The patent authorization text actually includes claim 7, while the announcement only specifies claims 1-6 as technical solutions related to new drugs, and does not include claim 7. The current preparation process is not the process protected by the extended patent claim 7, and the holder has made improvements to the original process during the lengthy development process.
According to Article 82 of the Implementing Regulations of the Patent Law, the basic calculation method for PTE is:
The PTE compensation period is equal to 5 years from the date of approval of the new drug marketing authorization to the date of patent application, while meeting the two conditions of PTE being less than or equal to 5 years and the actual commercial protection period of the drug being less than or equal to 14 years.
For 'Shen Ge Bu Shen Capsules', the extended patent application date is September 5, 2003, the theoretical expiration date is September 5, 2023, and the drug was approved for market on December 29, 2022. Therefore, before the extension, its actual commercial protection period was only 250 days, less than 1 year. Therefore, a maximum extension of 5 years of PTE period can be directly given, which is equivalent to 1827 days in days.
In practice, if there is PTA while extending the patent, PTA needs to be calculated first, and then PTE needs to be calculated. (Note: PTA， According to Article 42 (2) of the Patent Law, "If the invention patent right is granted after four years from the date of application for the invention patent and three years from the date of request for substantive examination, the patent administration department under the State Council shall, at the request of the patentee, compensate for the unreasonable delay in the granting process of the invention patent for the duration of the patent right, except for unreasonable delays caused by the applicant
Although the core patents of drugs have been extended, unlike PTA, during the compensation period of drug patent rights, it does not mean that all designated patent claims have been extended as a whole. Instead, the protection scope of the extended patent is limited to new drugs approved for market by the State Council's drug regulatory department, and is limited to the approved indications related technical solutions of the new drug; Within the scope of protection, the rights and obligations of the patentee are the same as before the compensation for the patent term.
Specifically, regarding the content of the "Approval Decision on Compensation for Drug Patent Term" for Shen Ge Bu Shen Capsules, during the compensation period for drug patent term, its protection scope is limited to new drugs approved for market by the drug regulatory department, namely the product with the generic name "Shen Ge Bu Shen Capsules", national drug approval number Z20220008, and drug registration certificate number 2022S01214. In other words, if a company also uses the three medicinal herbs of Panax ginseng, Pueraria lobata, and Epimedium, but the dosage ratio of the three is completely different from that of "Shen Ge Bu Shen Capsule" (National Medical Products Administration Approval No. Z20220008), even if it is commercialized between 2023.9.5 and 2028.9.5, it will not fall within the scope of its patent protection.
1. Once a drug is approved, the patent department or patent agent of the enterprise should be notified in a timely manner to assist in filing a PTE within the statutory time limit. According to the Notice on the Handling of Patent Term Compensation Business issued by the State Intellectual Property Administration in January 2024, the deadline for submitting PTE is within three months from the date of obtaining marketing authorization for the new drug in China. If the above deadline is delayed, there is no recovery period. That is to say, once the opportunity to raise it is missed, it will cause irreparable serious consequences.
2. Any changes to the technical solution during the development process should be promptly notified to the patent team to prevent the modified technical solution from falling outside the authorized scope of the patent. In practice, the more core patents are, the earlier their applications are in the drug development cycle, and the scope of authorization is often determined early. But the drug development cycle is long, and it is very common for technical changes to occur during the development process. If there is a significant change in the technical solution, it may result in the modified solution not falling within the scope of protection of the earlier authorized patent. For example, the failure to apply for an extension of claim 7 in the extended patent of this variety indicates a significant change in its preparation process, which exceeds the scope of protection of the original patent, resulting in claim 7 being unable to cover the technical solution of the marketed product.
Therefore, throughout the entire development process, close communication between the technical team and the patent team is required to ensure that the patent can ultimately cover the technical solutions of the listed products.
3. If it is necessary to change to a technology solution that is not protected by existing patents due to the technical or approval needs of drug development, the new technology solution should be promptly patented to provide a rich patent pool for products that will be launched in a few years. Especially for product related claims, it is important to confirm at all times that the patent scope can cover the entire product development process of the intended market product.
In addition to confirming the text content, it is also important to timely deduce the time of product approval. One of the requirements for obtaining PTE for a patent is that the patent authorization announcement requesting compensation should be earlier than the date of approval of the drug marketing authorization application, and the patent right (designated claim) is in a valid state when the compensation request is made. If it is predicted that the core patent may expire and become invalid when the product is approved, a new patent layout should be made as soon as possible, and it should be ensured that the new patent can be authorized before the product is approved for market.
4. The connection between patent protection and administrative protection can better extend the exclusive period of a product. In China, in addition to patent protection, there is also protection for traditional Chinese medicine varieties. According to the information from the MoYun Pharmaceutical Database, the holder also proposed protection for traditional Chinese medicine varieties by the end of 2023. If approved, it will receive at least 7 years of administrative protection, which is undoubtedly another layer of strong exclusive protection for exclusive varieties whose patents are about to expire.
In short, under the new patent system, patent application, layout, and maintenance have become a moat that runs through the entire process of research and development, registration, and listing. This not only tests the hard power of the R&D team and patent team, but also puts high demands on the overall management ability of drug R&D companies.
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