China is the second largest market for pharmaceuticals on the planet, behind the United States. In one of its first concessions to U.S. trade pressure, China has extended patent protection for drugs to 25 years, up from 20 years. The change brings China into line with the U.S. and Europe, which allow a drug maker extra patent life in recognition of the years of clinical trials required for a new drug.
China has resisted longer patent life for drugs because the change will increase the cost of drugs to Chinese consumers and will disadvantage Chinese generic drug companies. Currently, the principal beneficiaries of the change will be Japanese, European and American drug companies.
We believe that the change is consistent with the push of the Chinese government to expand the Chinese economy into one based on innovation and creation of new products and that it will encourage the emergence of a research-based Chinese drug industry.
— Robert Yarbrough, Esq.