Saturday, August 28, 2004

Enhanced patent scrutiny in China bad for Big Pharma?

Pfizer is "extremely disheartened" by the decision revoking the patent on Viagra in China and will appeal, the New York-based company said in Beijing. The patent remains in force during the appeal.

China's pharmaceutical industry had attracted $2 billion in investment in about 1,800 ventures by the start of 2004 according to the country's State Food and Drug Administration. Of the 25 leading multinationals, 20 are represented, including AstraZeneca, Roche Holding and Novartis.

According to Janice Mueller, an intellectual property professor now at the University of Pittsburgh, the patent lawsuits are a "healthy development" because they show Chinese companies are starting to play by global trade rules. She continued: "Rather than willfully infringe the patents, as Chinese firms have notoriously done in the past, these firms have mounted what appears to be a legal challenge. The U.S. wants other countries to play by our intellectual property rules; that seems to be exactly what is taking place here."

This analysis may be questioned. In two recent determinations, somewhat hypertechnical rules were applied, suggesting that patent protection in China may be weak.

The issue in the Viagra case was that Pfizer failed to prove in its Viagra application that a key ingredient, sildenafil, was the primary factor in preventing erectile disfunction. Pfizer's 20-year local patent for Viagra, granted in 1994, is in force pending the appeal.

In a different case on the drug Avandia, prior art in the form of a 1995 article in the U.S. Journal of Clinical Pharmacology showing that rosiglitazone, one of three patented ingredients in the drug, was used to show that the scientific knowledge was already in the public domain. (Avandia, which reduces the body's resistance to insulin, is priced at 90 yuan, or $11, for seven pills in Shanghai.
[In the U.S., one can obtain valid patent protection on a combination of KNOWN ingredients for a drug, provided the combination was not known.]

There is a chance that a perception by Big Pharma of weaker patent protection (in the form of easily obtained determinations of invalidity) may prompt overseas companies to reduce investment.


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