TCM IP Protection
The most painful lesson came from the Artemisinin (Qinghaosu) affair. Artemisinin is an internationally recognized anti-malaria TCM, first developed by Chinese scientists in the 1980s. When Chinese scientists published their research papers in international journals, foreign pharmaceutical companies immediately modified the drug’s structure slightly and applied for patent protection. This Chinese invention thus fell under foreign patents because Chinese companies did not immediately apply for patent protection in foreign countries.
To date, Artemisinin is available generically in more than 20 countries. The IP rights for Artemisinin are controlled by Novartis(www.novartis.com) and Sanofi (www.sanofi.com). Ironically, China has to pay patent fees to foreign countries when Chinese artemisinin products are exported to those countries. It is estimated that China has lost $200–300 million in exports each year as a result of the Artemisinin affair.
To protect the exclusive rights of TCM, China enacted the “Regulations on Protection of Traditional Chinese Medicine Varieties” in October 1992. The Regulations provide seven to thirty years protection for two categories of TCMs. Class I TCM protection periods are 30, 20, and 10 years, respectively. The Class II TCM protection period is seven years.
The concept of biogenerics in China is different from that of Western countries. Chinese biogenerics include both off-patent biological products and generic biological products developed by Chinese biopharms prior to China’s entry into the WTO. The biopharmaceutical industry in China is virtually a biogeneric industry.
China’s biopharmaceutical industry began in the 1980s when the Chinese government introduced a series of national programs (e.g., the 863 Program, 85 and 95 Key Tech R&D Program) and placed biotech and related industries as one of the major development sectors. Since the first Chinese-developed biotech drug, recombinant human interferon-a1b (Shenzhen Kexing Biotech), entered the Chinese market in 1989, China’s biopharmaceutical industry has undergone rapid expansion.
Today, Chinese biopharmaceutical companies have marketed 361 recombinant biogenerics (including therapeutics and vaccines) and 25 biotech drugs. More than ten innovative biotech drugs have been launched into the market, and more than 100 biopharmaceuticals are currently at clinical trial stages. Additionally, China is able to produce eight of the world’s top 10 genetically engineered drugs or vaccines.
Biopharmaceutical production value has also shown rapid growth. It surged from $30 million in 1986 to $200 million in 1996, and from $860 million in 2000 to $4.2 billion in 2005. Figure 1 and Table 4 summarize the sales revenue of biopharmaceuticals and pharmaceuticals between 2001 and 2005. Statistics show that China’s biopharmaceutical sales revenue has grown at a rate of 20–30% in the past five years. In 2005, biopharmaceuticals accounted for 7% of the pharmaceutical market. According to the “China Biopharmaceutical Engineering Industry Outline,” the country’s biopharma industry production value is projected to exceed $12.5 billion in 2015.
Chinese biochemical drug exports have also maintained a steady growth between 15% and 50% since 2001. In 2005, biochemical drug exports soared to $478 million, a 50.81% increase over 2004. Among them, Heparin Sodium experienced 54.48% growth over 2004, and recombinant insulin exports rose 61.27% over the previous year. However, some factors such as the appreciation of the RMB and a price increase for raw material still pose a big challenge to Chinese exports.
China’s SFDA databases have collected over 2,000 biological products made by more than 200 Chinese biopharmaceutical companies.
Tables 5 and 6 summarize major biogenerics and biogeneric manufacturers in China.