Protection of Pharmaceuticals
in China
Published in National
Law Journal, September 1999
by Laura W. Young
For
many years China's authorities considered the best means to protect
the health of its citizens was to encourage the dissemination
of medicines, and therefore prohibit any monopolies on pharmaceutical
products. Thus the Patent Law of China specifically excluded pharmaceuticals.
However, as part of a massive reform of its entire intellectual
property regime in order to enter the World Trade Organization,
China revised its patent law and created other laws and systems
to protect pharmaceuticals and chemical products. These protections
are intended to encourage foreign companies to enter the Chinese
market and transfer foreign pharmaceutical technology.
Therefore,
under the current regime in China, pharmaceutical makers can
protect their products with a varied arsenal of laws and regulations,
including intellectual property laws, and pharmaceutical protection
laws and regulations. Among these are the 1995 Trade Secrets
Law, the 1992 Patent Law, and the 1993 Pharmaceutical Protection
Act. The Act specifically targets foreign pharmaceuticals and
related technology. In addition to taking advantage of protective
measures, pharmaceutical companies must abide by specific pharmaceutical
industry regulations. Foreign drugs to be imported into China
must qualify under the Rules on Imported Medicines, which list
the specific documents needed for obtaining a permit to import
medicines. All medicines distributed in China must obtain a
distribution permit from the State Pharmaceutical Administration.
While
a review of the laws and regulations may create the impression
that China's medicine market is very restrictive, that is somewhat
belied by the comparatively lax traditional attitude towards
dispensing medicines in China. Traditionally, a visit to the
doctor concludes with the nurse handing the patient a bag of
packets of customized daily doses of medicine. The packets are
generally not labeled, and patients are not encouraged to inquire
about the dosage. Each day's dose may contain as many from three
to seven different pills that the patient should take daily.
Unfortunately, there is little attention paid to drug allergies
or drug interactions. These habits have carried down from China's
traditional medical practices in which various herbs are blended
together, and given to the patient to boil into a brew. Even
today's modern hospitals in China derive most of their income
from dispensing medicines. In this context, foreign pharmaceutical
companies want a predictable set of rules protecting their products
while they try to enter this very foreign market.
I.
Patent Law
China's
current Patent Law, promulgated in 1992, treats pharmaceuticals
like any other patentable item. Nevertheless, the categories
"methods of treatment of diseases" and "scientific discoveries"
are still prohibited from patent protection. (Patent Law, Article
25.) These exceptions have not been invoked against pharmaceutical
product patents, and they are interpreted as prohibiting a monopoly
on techniques of surgery or other patient treatment, or scientific
experiments, not on the manufacture of pharmaceuticals that
result from scientific discovery or that may be used as part
of a patient treatment protocol.
The
Patent Law has been revised so that it is generally in conformity
with TRIPs, granting a twenty year term for patent of inventions,
allowing review of patent rejections, and other administrative
provisions (Patent Law, Articles 45, and 43). In addition, the
law allows priority applications on a reciprocal basis with
other nations, invalidations by any person, and recognizes works-for-hire
as belonging to the employing entity (Patent Law Articles 29,
48 and 6). However, contrary to the requirements of TRIPs there
is no judicial level of review for Patent appellate decisions.
The final level of appeal is the Patent Reexamination Board.
(Patent Law, Article 43.)
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